Special Report
School Choice & Charters

Financial Freedom

Flexibility comes at a price for charter schools, whose operators frequently face protracted battles over funding.
By Caroline Hendrie — January 04, 2005 7 min read
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Since returning from teaching at Harvard University to start a charter school in his hometown, Lawrence P. Hernandez has become well-known for two things: coaxing top-flight test scores from his mostly low-income and Latino students, and fighting like a pit bull for the money to do it.

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Now in its fourth year, the Cesar Chavez Academy consistently outshines the city’s regular public schools on state tests, posting scores last year that placed it in the top 10 of Colorado schools receiving federal Title I anti-poverty aid. Particularly noteworthy were last spring’s 3rd graders: All scored at or above the “proficient” level on the state’s reading exam.

Achieving those results—in a pre-K-8 school where more than two-thirds of students come from poor families and more than three-fourths are Hispanic—has required a relentless focus on student performance, Hernandez says. But while academics top his priority list, finances take a close second. Much of his energy has been consumed by recurrent battles with the local school board over money. Equally important has been figuring out how to spend those hard-fought resources to get the most academic bang for the buck.

Although his combativeness has earned him plenty of enemies, Hernandez, 40, takes pride in going to the mat for money he thinks his campus has coming. Indeed, fights over money, in the courts and the political arena, have been nearly routine between him and the 17,000-student Pueblo school district, which granted his charter in 2001 and is the conduit under state law for his school’s public funding.

Still, Hernandez says that how he uses the spending flexibility that comes with charter status is of greatest significance to him. Compared with many other states, Colorado allows charter schools a high level of fiscal autonomy, so that the independent but publicly financed schools can do pretty much what they want with the money they get.

As he begins to expand the Cesar Chavez Academy model to other campuses in Pueblo and beyond, Hernandez says he aims to use his freedom in a manner that is both efficient and entrepreneurial. “That’s really what autonomy is all about,” he says.

Investing in Performance

Steering resources toward instruction is the overriding concern at Cesar Chavez Academy, school leaders say, whether for providing training for teachers in the school’s curriculum, buying classroom supplies, or addressing students’ learning needs. The same is true for Dolores Huerta Preparatory High School, which Hernandez and his wife, Annette, opened last summer next door to the academy.

“We spend a lot to help our teachers get what they want,” says Jason Guerrero, the business manager for both schools. Last school year, he says, Cesar Chavez Academy spent $917 per student on classroom supplies and materials, more than five times the state-mandated minimum for K-12 schools.

The school follows the curriculum developed by the Charlottesville, Va.-based Core Knowledge Foundation. Shannon Shelton, the school’s Core Knowledge coordinator, says the school doesn’t stint on the training and materials to make the national model work.

“In any other school I’ve been in, you have to beg for everything,” she says.

Tutoring is also an area emphasized by the school’s budget. Nearly all staff members tutor children in reading. Paid tutors are also brought in to work one-on-one with students.

“Our first year, I had 12 reading tutors. I only have five now,” says Hernandez, who taught at Harvard’s graduate school of education for four years as an assistant professor before returning to Pueblo, where he grew up. “They’ve worked themselves out of jobs.”

The academy’s budget also includes positions for staff members who work directly with families. With the title of “prevention specialist,” for example, Velia Venegas works to prevent academic failure by dealing with behavior and family issues that are interfering with learning. “We do everything possible to solve the problems for our kids,” she says.

Fostering a family atmosphere has been important to Lawrence and Annette Hernandez since they co-founded Cesar Chavez Academy in 2001. Two of their own four school-age children go to the 550-student school, as do the children of many of the teachers.

Steering resources toward instruction is the overriding concern at Cesar Chavez Academy, whether for providing training for teachers in the school’s curriculum, buying classroom supplies, or addressing students’ learning needs.

The two founders admit they ask a lot of their nonunionized staff. Besides working a longer school day, lasting from 7:30 a.m. to 4:30 p.m., teachers have 25 training days beyond the regular 183-day school year. Moreover, teaching is often not the extent of their duties.

“When we interview, we say, ‘What else can you do besides teach?’ ” says Annette Hernandez, the school’s operations coordinator.

To help make it easier for teachers to stick around, the academy runs an on-site child-care program that’s open from 7 a.m. to 6 p.m.

On the salary front, teachers start at the same $28,000 per year as their district counterparts. But teachers can earn up to $3,000 in annual performance bonuses, which depend on such factors as how well their students score on tests, whether they meet their own goals for professional development, and what projects they complete to benefit the whole school.

Kindergarten teacher Lori Montañez, a single mother, burst into tears last summer when she got her $2,000 bonus, which she planned to use to help buy a house. “Not only does Lawrence take care of his students, but he takes care of his staff as well,” she says. “We’re a family, from the kids to the adults.”

Leveraging that family feeling to make ends meet has been something the Hernandezes have not been shy about. Labor and materials donated by parents shaved thousands of dollars off the cost of the temporary facility for the new high school put up over the summer.

Another fiscal strategy has been to spend money to bring in more. Writing grant proposals is a big part of Guerrero’s job, for example, resulting in nearly $675,000 in grants from private foundations for the two schools since 2001. The K-8 school has received more than $1.4 million in competitive federal grants over the same period, while the new high school got $354,000 this year in federal start-up money.

So while the business manager earned more after bonuses than Lawrence Hernandez did last year, the school leader sees that expense as paying for itself. He hopes it will continue to pay off as the high school gears up to raise money to build a permanent home.

Tense Relations

Similarly, school officials consider the legal fees spent on wrangling with the Pueblo district over funding for facilities, special education, and anti-poverty programming as money well-spent. In Colorado, funding for charter schools passes through local districts and is supposed to equal 95 percent of the district’s per-pupil revenue.

“That’s one of the most important investments a charter school can make—to invest in legal fees,” Lawrence Hernandez says.

Some of those legal fees have resulted from accusations of fiscal irregularities leveled against the charter school from district leaders and their political allies. Those allegations led to a series of audits and even an inquiry by the district attorney’s office.

After those audits and an investigation cleared the academy of impropriety, the Hernandezes filed a defamation suit that is slated to go to trial this June. The charter leaders have also accused the district of mishandling funds, especially from a $98.5 million bond issue in 2002 for school construction.

Over the past year, the funding dispute between the district and the Hernandezes’ schools has focused on the share that they received from that bond issue. Under state law, charter schools are allowed access to districts’ capital funding. At issue has been money to expand and address facilities problems at Cesar Chavez Academy—located in a former district-run elementary school still owned by the system—and to build the new high school.

While the Hernandezes say their schools are being shortchanged, some school board members accuse the couple of demanding too much and misspending what they have. Kathleen Kennedy, the president of the Pueblo School District No. 60 board, contends that Lawrence Hernandez “has not acted in good faith on numerous occasions,” and she criticizes him for using what she sees as “divisive tactics.”

‘It’s a battle. If you’re going to be in this business, you’d better be thick-skinned.’

The tactics Kennedy resents were on full display at a meeting of the school board last August. Surrounded by sign-toting supporters, Hernandez called on the board to pass funding resolutions that he had drawn up and gotten two of his allies on the board to introduce.

“You cheated us from the start,” he declared. “This is not following the law.” After two hours of often rancorous debate, Hernandez got what he had come for: By a one-vote margin, the board agreed to hand over the full $1.4 million he had demanded.

Despite the vote, though, the feud over that money kept up in the ensuing months. In early October, the charter schools sued the district, complaining that they hadn’t gotten a dime. Shortly afterward, the district agreed to hand over some of it to fix a district-owned access road, but the two sides were still battling over money for the high school.

Jim Griffin, the executive director of the Denver-based Colorado League of Charter Schools, says the openness and the intensity of the funding conflicts in Pueblo are unusual. Still, he says that in pressuring the district for dollars, the Hernandezes have set an example that too few charter operators follow.

“It’s a battle,” Lawrence Hernandez says. “If you’re going to be in this business, you’d better be thick-skinned.”

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