Charter schools can bring big profits

Now that the cap has been lifted, dozens of applications to start new charter schools have been submitted.
Now that the cap has been lifted, dozens of applications to start new charter schools have been submitted.
While there is still a profit to be made, charter schools operate on a significantly smaller budget than their traditional public school counterparts, largely because they have to pay to rent school buildings and classroom space.
While there is still a profit to be made, charter schools operate on a significantly smaller budget than their traditional public school counterparts, largely because they have to pay to rent school buildings and classroom space.

WILMINGTON, NC (WECT) - The state legislature lifted the cap on public charter schools last year, which used to limit the number of charter schools to 100.

Charter schools are essentially privately run schools - funded by public dollars.  In our area there are four - Cape Fear Center for Inquiry and the Wilmington Preparatory Academy in Wilmington, Charter Day School in Leland, and Columbus Charter School in Whiteville.

Now that the cap has been lifted, dozens of applications to start new charter schools have been submitted.  A regulatory board in Raleigh reviews the applications, and then decides which ones get to proceed for final approval by the state board of education.

As this is happening, we are learning some interesting things about how charter schools are selected, and just how much money there is to be made running one.

Baker Mitchell is a retired computer industry CEO who now runs Roger Bacon Academy, managing two charter schools in Brunswick and Columbus Counties.  Last year, the state paid him more than 3 million dollars to manage the schools and rent his facilities.  "I think we squeeze pretty good value out of the money," Mitchell said, adding that he so no problem in making a profit.

The $3 million covered the salaries of about two dozen employees, as well other legal and management expenses.  It's still a lot of money.

Since Roger Bacon Academy is a private company, Baker Mitchell's pay is not public record.  He implied that it's in the range of what local public school superintendents make, but that's as close as we could get.

We asked Mitchell if he felt there was a lot of money to be made in charter schools from a business standpoint.  "I think it should be," he answered, "if you have a properly run school and run it efficiently."

Roger Bacon Academy has a very successful track record at its existing schools, and is trying to expand into New Hanover County.  In fact, Roger Bacon applied to run the proposed DC Virgo Charter School, but the New Hanover County School Board opted not to use them.

So that's why some people, including former State Senator Eddie Goodall, were concerned when the State Charter School Advisory Committee rejected Virgo's application to become a charter school.  One of the members on that committee?  Roger Bacon Academy's CEO, Baker Mitchell.

Goodall was at the meeting the day the Advisory Committee voted on DC Virgo, and was surprised to see Mitchell speak up against the application.  "I thought that he would probably have to recuse himself in that situation.  I thought that odd that he voted in the negative for a school that he tried to get for his management organization,"  Goodall said.

At a recent Advisory Committee meeting in Raleigh, Baker Mitchell insisted he did recuse himself from the Virgo vote.  "I didn't make the motion and I abstained [from the vote], but I did point out that they did not specify the Board of Directors and they did not have the by-laws in the application, and those were mandatory required components of the application."

The minutes from the meeting in question seem to contradict Mitchell's memory, specifically stating that he made the motion that the Virgo application be ruled incomplete.  While Mitchell says he did not vote, there is no record of exactly how each member voted.

As we witnessed in person, the way the voting is done is a bit confusing.  The board chair simply asks for a show of hands as to who votes yes, who votes no, and who abstains regarding each charter school application.  While the vote tally is recorded, there is no record of who votes how.

New Hanover County Schools Superintendent Tim Markley is another board member with a vested interest in DC Virgo.  He was not present for the Advisory Committee's December vote on Virgo's charter application, but he did call in by phone for part of the meeting.

There are still other board members with potential conflicts of interest.  Some of them run charter schools across the state that are looking to expand.  Some board members have spouses who are running the schools they regulate.

Baker Mitchell says there are times when board members should - and do - recuse themselves, but he doesn't see any problems with the make-up of the board itself.  "I think we are all trying to pull the wagon in the same direction," he said.

Moving forward, Goodall warns these are issues the state charter school system will have to deal with.  With more competitors coming on to the charter school scene, efforts will need to be made to ensure the public that the voting process is transparent, and that there is an even playing field for these lucrative charter school contracts.

"We want to get started off on the right foot," said Goodall.  "We don't want there to be a perception of anything that isn't above board."

While they lost their bid to run DC Virgo, Roger Bacon is still trying to open a charter elementary school in downtown Wilmington.  We may see that application as soon as April.

While there is still a profit to be made, charter schools operate on a significantly smaller budget than their traditional public school counterparts, largely because they have to pay to rent school buildings and classroom space.

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