Fulton Science Academy, State Don't Agree
While the middle school's governing board believes it has met requirements and answered all questions for its state charter application, the Department of Education still sees problems.
Fulton Science Academy Middle School has spent $5.78 million to buy land and start construction of a new campus that its students seem unlikely to ever occupy. By mid-summer, there may be no school at all.
The state Board of Education will receive a recommendation to deny the school's charter petition at its May 10 meeting. A month later it is scheduled to vote on the petition.
The school's current charter with Fulton County Schools expires June 30.
The school sent a response to the recommendation for denial — "Supplemental Information for the FSA MS State Chartered Special School Petition", signed by Governing Board president Ayhan Korucu — but that may not sway the state board. (A pdf version of Korucu's plea, without supporting documents, can be found with this article.)
Lou Erste, Charter Schools Division director for the Georgia Department of Education, says the information in the May 4 letter wasn't enough to change the recommendation for denial.
"The answers provided by FSAMS in their unsolicited response to our April 30, 2012 denial letter are almost completely nonresponsive to the issues we raised in our letter," Erste said via email to Patch.
The state School Board will vote on June 14 on the charter application.
The Department of Education had 11 reasons listed for the recommendation for denial, which included (The complete list is included with this article as a pdf file):
- The FSAMS governing board jeopardized the financial sustainability of
FSAMS and its two sister schools when it rushed to float $19 million in bonds despite its failure to have secured a charter renewal from Fulton County Schools.
- The FSAMS governing board failed to ensure that State guidelines for
facilities site and building approval, even after the Department of Education said it had concerns and that prior approval by GaDOE was required before construction began.
- Fitch Ratings in its second bond downgrade report referred to its assessment “that FSA management inaccurately assessed their obligation to comply with state construction guidelines.” The firm concluded “Such instances of misinterpretation suggest FSA's management is either unable or unwilling to operate effectively in a highly regulated charter school environment.”
- FSA failed to provide an accounting for all of the bond proceeds when asked by the state.
The school spent at least $2.7 million to buy land on Fanfare Way in Alpharetta. The school bought the land before the state approved the site, and started construction before a site plan and building design were even submitted for approval, all of which the state said were required.
But to pay for the land and build the school, $18.9 million in bonds were sold, and that has put its sister schools — Fulton Sunshine Academy and Fulton Science Academy High School — at risk, as all three schools are liable for the bond repayments.
The Governing Board said since it met all the requirements of its previous charter contracts, had a strong bond rating and support from parents and the community, "FSA MS had no reason to anticipate the denial of its renewal petition.
"In hindsight, FSA MS could have awaited FCSS’s decision on its renewal petition, but as of the closing date of the bond financing [Nov 3, 2011], denial of the renewal petition seemed an extremely remote possibility," the letter from FSA Board of Governors said.
The Governing Board also said it was concerned about a possible bond default and what impact that may have on the other schools.
"At present, it is unclear whether a bond default will have a negative impact on the other FSA schools. According to FSA’s legal counsel, that will depend on the investor’s actions and the result of any workout negotiations," the response said.
Alternatives to meet bond obligations include leasing the planned middle school space to another school or entity, selling the land on Fanfare Way, and using the approximately $1.5 million in cash reserves to help negotiate a bond workout.
In many of the 11 issues raised by the state Department of Education, the Governing Board responded in part that it did not understand the requests, or believed what had been required was different, based on state documents.
On one point, the Governing Board's response said, "FSA MS did not understand Ms. Felts’ request to be seeking the status of the bond proceeds already spent, and we apologize for any misinterpretation on our part."
Yet the request for the information in the April 18 letter to the school from state Department of Education Charter Division staff attorney Morgan Felts seems clear. It begins:
"Please disclose the status of the $18.9 million in bond proceeds, including any amounts expended to date. Please explain how these funds are being accounted for by the Bond Trustee."
Erste said claims by the Governing Board in its letter are misrepresenting what the Department of Education stated in its recommendation.
"Although we noted their 'discrepancy in the accounting of such funds', we never suggested that there had been a 'misappropriation of bond funds' – as FSAMS falsely claimed in their Friday letter. We said simply that the school failed to account for the full $19 million when specifically asked to do so," Erste said.
The Governing Board said in its letter — and in comments on Patch — that it has accounted for the $5.78 million in funds already spent.
A parent meeting will be held on Wednesday, May 9, at 7 p.m. at the school. And earlier that day, the state Board of Education Charter Committee meets at 2:30 p.m., where the school's charter application will be presented.
"Please plan to attend if your schedule permits," the Governing Board said in its comments on Patch.