Milwaukee College Prep Sticks With MPS

Milwaukee College Prep (MCP) charter schools told the Milwaukee Public Schools (MPS) that it wanted out. It was terminating its charter with the district; the letter of termination would be received by the Milwaukee school board at its July 29 meeting. In the end, MCP stayed with MPS. It all came down to money. 

MCP’s existing contract stated that it was to receive additional funding based upon academic performance of its students. MCP received an additional $650 per student for the 2019-2020 academic year, over $1.72 million. But MPS said it couldn’t give the additional money for this past year because there were no standardized tests given during the pandemic; there was no performance data.

MCP filed a lawsuit and told MPS it was walking away, taking its charter to UW-Milwaukee. MCP has threatened to leave the district before, but this was the closest it came to carrying out such action. The latest move to leave MPS was not just a recent decision. It came much earlier than much of the public or even the school board realized.

School board director Megan O’Halloran was on the charter review committee this year whose task was to review existing charters. It was a busy year for the review committee, says O’Halloran, since a significant number of charters were up for renewal. The timetable for review included MCP in December and January. But all of a sudden, MCP was dropped from the list. O’Halloran questioned the change, but got no answer. Without a review, the school board would not renew MCP’s charter. In retrospect, O’Halloran realizes that MCP had probably made the decision to leave MPS no later than February.

Federal ESSER funding comes into play

In March, the federal Elementary and Secondary School Emergency Relief Fund’s (ESSER) final allocation was passed and signed into law. ESSER funds support schools for the cost of the COVID pandemic. By April, the Wisconsin Department of Public Instruction announced how the money would be distributed.

MPS was receiving $500 million in ESSER funding and MCP could receive $10 million under the relief provisions; 90% of the funds must be distributed by the state to school districts mostly based upon the percentage of students with special needs and living in poverty. Districts, in turn, use the money to mitigate  the impact of COVID on the children in the district. The money is not directly given to individual schools.

If MCP walked away from MPS, it would receive no ESSER funds from the district and would discover that UW-Milwaukee had little funding to make up the difference. The school was about to lose $10 million. MPS held most of the cards in the short run — even though the district stood to lose some state funds if it lost the 2,000 MCP students.

The district was to formally receive MCP’s termination letter at the board meeting of July 29. But there were indications, even days and weeks before the board meeting, that negotiations were continuing. O’Halloran states that the charter review committee was quickly called in to do a rush evaluation of MCP. They were able to attend one MCP school that was in session for a summer school program and talk to some parents remotely.

During the July 29 board meeting, the school board went into executive, closed-door session to discuss a settlement of the existing lawsuit. It approved the settlement in open session not giving the dollar amount and only referring to the court case number. The exact terms of the settlement are not known at this time, but it appears that  MCP got some or all of the incentive funding.

The board raises contract questions

When the MCP contract was discussed in open session, no mention was made concerning the settlement reached in closed session. Yet it was clear the provisions for academic achievement payments were gone in the new contract.

Instead, the board members turned their attention to the administration fees the charter was to pay. For MCP, this was 1% of its total allocation. Board members questioned Superintendent Keith Posley on why different charter schools had different administration fees ranging from 1% to 3%. Board directors stated that the district should be following a master contract for all charter schools. Some school providers like Carmen are paying only a 1% administration fee while newer charters like Milwaukee Excellence are paying at 3%. At 1%, MCP is paying over $184,000in administration fees; at 3%, it would pay over $552,000.

Posley responded that the percentage for administration fees was part of the give and take of contract negotiations.  Not every charter school requires the same level of support. This is especially true when considering whether a charter owns its own building or whether it rents a building from the school district. Long-term charter providers just require less support.

O’Halloran questions some of this logic. La Causa charter school in her district has been a MPS charter since 2003, owns its own building, yet is paying a 3% administration fee.

The removal of the incentive payment for academic performance brings MCP more in line with other charter contracts. It was the only charter school that had academic incentive payments built into its contract and was receiving one of the highest dollar amounts per student of any MPS charter. MCP has gained a reputation with many school board members over the years for conducting aggressive negotiations. School board directors believe that several high achieving charters have used their status to command better contract provisions such as the 1% administration fee.

These charters may see better contract provisions as rewards for academic achievement. Board members often see the demand for better contract provisions as undo pressure – “Give us what we want or we will go somewhere else.”

O’Halloran says she understands that contract negotiations require some give and take. “As a governmental entity, we are always trying to find the lowest bid. And sometimes in how the charter negotiations are set up, between UWM and the city [other charter providers], we are put into these positions where we are intended to out-bid one another.” O’Halloran reflects on how MCP has approached contract negotiations and that many people think that the board should embrace a charter school provider as its own. “No, this a contractor,” concludes O’Halloran. “As any other service that would be provided, we would be taking the lowest bid as a governmental entity, taking on our responsibility.”

MCP did not win any friends on the school board when its CEO, Robert Rauh, opposed the passing of the school tax increase through a ballot referendum. 

Whether the school district would have won on denying incentive payments in court is questionable. Left unresolved is the issue of whether the district can ignore the lack of performance data going forward for evaluating other charter schools whose contracts will be coming up in the near future. Charter schools with compliance and academic records problems before the pandemic are likely to claim that they should be held harmless during the pandemic and have their contracts renewed. Any court decision on MCP could have settled or complicated these issues.

Policy changes examined

Changing how MPS evaluates charter schools will be taken up by the board through two resolutions, one by O’Halloran, another by Leonard.

O’Halloran’s resolution seeks to establish additional guidelines in charter renewal including more rigorous reporting standards and a minimum wage of $15/hour, more aligned discipline procedures with the district. Leonard’s resolution  goes one step further, looking at the role of charters in the school system, asking what the optimal number of charters should be to ensure the academic, financial and organizational performance of the district. Both amendments are likely to be taken up in August or early fall.

Discussion on both of these resolutions at the committee and board level is likely to result in vigorous community input and additional amendments. In the meantime, it is unlikely other existing charter schools will threaten to leave MPS at this time given the money at stake.

“MCP is not staying in MPS for any loyalty to the district. They are staying because the finances did not work out for them,” says O’Halloran. “I hope, if and when they leave us next time, that they do so in a way that doesn’t actively seek to hurt MPS.”

Milwaukee College Prep sticks with Milwaukee Public Schools was originally published by the Wisconsin Examiner.