The ongoing dispute initiated by the Ohio Department of Education (ODE) concerning the “operational independence” of conversion community schools from their school district sponsors has widely been considered to threaten the continued existence of many such schools.

However, at a March 26, 2010, meeting of Bricker & Eckler LLP Attorneys Susan Greenberger and Nick Pittner with ODE representatives Francis Pompey (Chief Operating Officer), Kimberly Murnieks (Executive Director of the Center for School Options and Finance), and Kimberly Hall (Legal Counsel), ODE conveyed a very different message regarding the consequences for failure to satisfy ODE’s standards with respect to “operational independence,” as well as a different message concerning the nature of the standards themselves.

First, with respect to consequences, ODE has confirmed as follows (see attached April 6, 2010, letter):

ODE did not intend through its “operational independence” letters to suggest that any conversion community school is at risk of closure in school year 2010-2011 by ODE for failure to address, to ODE’s satisfaction, the issues that are the subject of the “operational independence” letters.

Second, with respect to the nature of ODE’s “operational independence” standards, ODE has confirmed that it will not require every conversion school to establish absolute independence from its sponsor. Rather, ODE will consider the rationale for instances of collaboration between conversion schools and sponsors and will determine, on a case-by-case basis, whether to permit such collaboration to continue.

While these new understandings as to the nature of ODE’s intent and expectations regarding “operational independence” should alleviate fears concerning the immediate fate of the conversion schools, it is still the case that ODE expects the schools to submit, by May 1, plans addressing certain of the “operational independence” issues identified in the letters sent by ODE to the schools.

We continue to believe that ODE lacks the legal authority to require “operational independence” of conversion schools.1 That said, in light of the more recent communications from ODE, it is possible that many conversion schools may now find that they can satisfy ODE’s current, more moderate expectations about “operational independence” without adverse impact to their schools.

“Operational Independence” Indicators

There appear to be four general categories of “operational independence” indicators – facilities, staff, records and funds – which ODE is asking conversion schools to address in the current plans.2 Three other indicators of “operational independence” previously identified by ODE – treasurers, superintendents and board members – are on hold pending an opinion of the Ohio Attorney General and need not be addressed in the plans prepared by schools at this time.

With respect to those issues that must be addressed now, each school need only address the specific items specified in ODE’s most recent letter to the school on the topic of “operational independence” (and schools that were only cited in connection with their treasurers, superintendents and/or board members need not address any issues at this time). We also would note that some schools were cited for miscellaneous items that do not concern facilities, staff, records or funds; these schools will need to address such additional items in the plan submitted to ODE by May 1.

Within each of the general categories of independence indicators, there lies a spectrum of possible configurations of resource sharing, ranging from complete independence of the conversion school to comprehensive collaboration between the school and its sponsor district. ODE has indicated that it believes conversion community schools should operate at the independence end of the spectrum. However, ODE also has indicated to us that it understands that not every conversion school can or should operate with this degree of independence. Thus, it is our understanding, confirmed in the correspondence we have exchanged with ODE (and attached to this alert), that ODE will permit some conversion schools to continue to operate somewhere between the complete independence and comprehensive collaboration extremes, depending upon local needs and circumstances.

Plans Requested by ODE

With the foregoing in mind, a conversion community school that has been asked to submit an “operational independence” plan to ODE at this time might approach each of the issues it has been asked to address as suggested below. Please note that these suggestions are intended only as “food for thought,” and each school and sponsor will need to determine for themselves whether to approach the development of their “operational independence” plan in this or in some other manner.

  1. Consider where on the independence/collaboration spectrum the school presently falls.  
  2. Consider whether it is possible to move the school in the direction of greater independence from the sponsor district without adverse consequences for students, for the long-term solvency of the school, or in other respects. If such possibilities are identified, the school should explain in the plan submitted to ODE how the school intends to implement such changes. Among other options, schools might explore the possibility of acquiring services currently provided by the sponsor district from other entities. For example, conversion schools might look to a pre-existing school district or conversion school COG or other consortium, or to one newly formed for this purpose; or an exchange might be established whereby conversion schools acquire services from one another. Such collaborations could even prove capable of delivering efficiencies that exceed those currently realized by sponsors and conversion schools, especially in connection with those services to the schools that sponsor districts may find burdensome.  
  3. To the extent that a conversion school cannot decrease its collaboration with the sponsor district without adverse consequences, the school should explain to ODE, in the written plan submitted to ODE and through communication with the school’s ODE consultant, why the school operates as it does. Upon receipt of this information, ODE may approve the school’s continued collaboration with the sponsor district. (See examples in the attached letters exchanged with ODE.)

Additional Considerations

Notwithstanding ODE’s assurance that it did not intend in its letters to suggest that conversion schools are at risk of closure in the 2010-2011 school year if they fail to establish sufficient “operational independence,” some conversion schools may nevertheless be contemplating closure due to these issues (or for other reasons). Alternatively, schools that expect to remain open may be planning consequential changes as a result of ODE’s letters. In either such case, schools and sponsors should consider whether, how and when to communicate with their constituencies regarding the future of the school.

Other planning also may be warranted. For example, a school contemplating closure should give thought early in the process to the disposition of its assets. The school may also wish to pursue potential strategies for facilitating the continuation, by the sponsor or others, of at least some aspects of the school’s educational program.

Finally, and on an unrelated note, there is as yet no short- or long-term resolution of ODE’s opposition to “blended” community schools (by which ODE means community schools that combine classroom-based instruction with instruction delivered to students in their homes, by computer.) For now, ODE has indicated to us that it is “actively analyzing the issues, which have far-reaching funding and programmatic implications.”

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