Flunking Out

Charter school scandals are teaching Texas a tough lesson -- one the state should have known four years and $77 million ago.

No bell rang to mark the beginning of class. It was just one of many things missing from this high school.

For two months, as winter segued into spring, about 40 students who had either dropped out or been kicked out of Arlington public high schools attended class inside a decrepit, two-story gray stucco office building that sat woefully along a busy commercial street. The city of Arlington had declared the second level of the vacant building unsuitable for habitation, so the school set up shop in two large rooms on the ground floor.

The building had no heat. Plate-glass windows ran the length of the east wall, intensifying the chill inside.

Deborah Lott, principal of the Renaissance Charter School in Arlington, is still a believer in charter schools -- despite horrendous problems at Renaissance, and provided that the state provide better oversight.
Mark Graham
Deborah Lott, principal of the Renaissance Charter School in Arlington, is still a believer in charter schools -- despite horrendous problems at Renaissance, and provided that the state provide better oversight.
Students at the Renaissance school in Arlington opted to walk to a nearby public toilet rather than use this one on campus.
Mark Graham
Students at the Renaissance school in Arlington opted to walk to a nearby public toilet rather than use this one on campus.
Students at the Renaissance school in Arlington didn't even have folding chairs to sit on when the school opened.
Mark Graham
Students at the Renaissance school in Arlington didn't even have folding chairs to sit on when the school opened.
State Board of Education member Alma Allen, a critic of charter schools, says the board was pressured to open them quickly by some legislators and the governor.
Phillippe Diederich
State Board of Education member Alma Allen, a critic of charter schools, says the board was pressured to open them quickly by some legislators and the governor.
Renaissance Charter School founder Don Jones says he created the school to reach middle-of-the-road students neglected by traditional public schools.
Mark Graham
Renaissance Charter School founder Don Jones says he created the school to reach middle-of-the-road students neglected by traditional public schools.
Christopher Barbic, founder of the YES College Preparatory School in Houston, says it takes more than good intentions to build a successful school.
Phillippe Diederich
Christopher Barbic, founder of the YES College Preparatory School in Houston, says it takes more than good intentions to build a successful school.

The classrooms had no desks, no chairs. The few students lucky enough to call shotgun would sardine themselves onto the only piece of usable furniture, an aged white velveteen sofa stained curious shades of beige. The rest would sit on the cold cement floor or stand throughout their lessons.

One day in March, irritated teachers gave the students an assignment: Write a short letter to the Texas Education Agency and describe the conditions.

"This place is a dump," wrote one student. Another suggested, "The board of health should shut it down."

"We don't even have a dictionary," another student wrote. "And the bathroom you would not even think about looking at."

The school had a single toilet that barely flushed and no tap water. Students opted to walk a couple of blocks to the public library to use the bathroom.

Lights inside the building were dim. "This school is like learning inside a garage," one student wrote.

There were no textbooks, no chalkboards, no overhead projectors, no trash cans. Supplies like paper were limited to what the students and teachers paid for and brought themselves. The principal and teachers had no phones, no filing cabinets, no desks, no offices.

No gymnasium, no lunchroom, no vending machines. Certainly no computers. "If you name it," wrote one student, "we don't have it." The school did have holes in the ceiling, stains on the walls, and bugs that seemed to get a rise out of both. "I don't know about anyone else," a student wrote, "but I can't learn in here."

The operator of this Arlington "campus" was Irving-based Renaissance Charter School -- named to suggest a great revival in Texas public education.


When the Legislature created charter schools in 1995, it did so with the belief that they would bring academic innovation and give parents a fresh choice in educating their children. But evidence is mounting that taxpayer money spent on charter schools may not be well spent and, what's more, that children who attend them may not be well served.

Many of the problems could have been prevented had state officials applied rudimentary forethought before allowing charter schools. With Gov. George W. Bush leading the charge, charter schools opened hastily across Texas. The result: Taxpayer money has been squandered by a handful of schools that by all rights should never have been granted the right to open.

As of last spring, 88 independent charter schools (those not affiliated with local school districts) were open in Texas, serving about 17,600 students. Another 79 are to open during the next school year.

Charter school students represent less than one-half of 1 percent of the state's public school student population. More than three-quarters of the students are minority, and two-thirds have been deemed dropout risks. For many high school students, such as those at the Renaissance Arlington campus, a charter school provides their last chance to get an education and a diploma. When charter schools fail, the students and parents hurt the most are those least able to withstand another setback.

As the number of charter schools increases, the state embarks on a clean-up cycle. A handful of campuses are under investigation for financial failures, student abuses, fund misappropriation, and forgery. Each investigation leaves the Texas Education Agency with less time and fewer resources for its other job -- overseeing the 1,042 school districts that educate more than 99.5 percent of the state's public school students.

"We are expending a disproportionate amount of resources on oversight of charter schools," says Tom Canby, senior director of TEA's financial audit division.

A TEA investigation uncovered widespread financial problems at the Emma L. Harrison Charter School in Waco, which was $300,000 in debt even though it opened just last fall. Recently, the State Board of Education shut the school down -- the first time a charter was pulled from an operating school. It was headed by a woman with a history of financial troubles, of which the state was unaware when it granted the charter.

The same week, TEA officials recommended that the board revoke the charter of Rameses School in San Antonio. Among other things, the agency accuses the school's chief executive officer, Patricia L. Fennell, of inflating school attendance records to grab more state money. The agency referred the Harrison and Rameses cases to prosecutors and the FBI.

Charter school proponents are quick to point out that the troubled schools are a small fraction of the total. "Governor Bush does not believe the failures of a few should take away from the overall success of the program," says Linda Edwards, a Bush spokeswoman. "Some charter schools are among the best schools you'll find."

Mike Shepherd, a board member of the Texas Language Charter School in Dallas, wrote a May 30 editorial in The Dallas Morning News headlined "Failing charter schools are the exception." He cited two examples of quality charter schools. One is the Dallas Can! Academy. But TEA's audit division is investigating that charter school and its sister school in Houston for undisclosed transgressions. Shepherd's other example of quality is Renaissance -- also under investigation.

State officials also considered Renaissance to be a model school until they learned of the situation in Arlington. Alma Allen, a State Board of Education member from Houston, was aghast at the conditions there.

"I held Renaissance up as a beacon light," she said at the board's meeting in May. "I'm very, very disappointed today. It really tarnishes charter schools for me even more, not just Renaissance but charter schools [in general]."


During his first few months as governor in 1995, Bush helped persuade the Legislature to allow nonprofits, colleges, and some government entities to create special public schools that would operate independently of local school districts. Called "charter schools" because the Board of Education issues what effectively is a charter for them to open, they would operate relatively free from many state regulations.

Charter schools are given more latitude in creating a curriculum and do not have to adhere to a minimum seven-hour school day for students. They can hire just about anyone they want as teachers and pay them whatever they want. The goal is to give charter school operators enough flexibility to create a learning environment that best serves a student niche, whether it is high achievers or dropouts.

Critics complain, however, that for each public school student who attends a charter school, taxpayer money is transferred from the local school district to the charter school. The Houston Independent School District estimates that it lost about $17.6 million last school year because 4,400 students left the district to attend charter schools. (The Dallas Independent School District does not keep such records.) The state pays charter schools about $4,000 to $5,000 per student. Since September 1996, when the first checks were sent, the state has paid $77 million to charter schools, $50.8 million of it since September 1998.

The 15-member Board of Education issued the first 20 charters in spring 1996 -- Renaissance owns the distinction of obtaining the first -- and has granted another 150 since then. The Legislature gave the board a maximum number of charters to hand out to schools with open enrollment and set no limit on those predominantly serving at-risk students. The board has filled every available slot and then some.

Allen, a critic of the charter school movement, is nevertheless unwilling to blame the board for the failures. She says Bush and certain legislators pressured the board to dole out charters without the proper safeguards and screening in place. At the same time board members were hashing out rules for issuing charters, Allen says, "People from the governor's office were standing over us saying, 'Let the charters go -- it's OK.' And, 'You better approve all those charters.'"

Edwards takes issue with that.

"These were independent decisions by independently elected officials who could have approved as many charters as they chose," she says. "Governor Bush would not pressure anyone to support bad schools." (Bush, who is spending four or five days a week out of state in his quest for the presidency, could not fit an interview for this story into his schedule, a campaign official said.)

During this past legislative session, lawmakers debated whether to issue a moratorium on the granting of charters or expand the program. They opted to do neither. Rep. Dora Olivo of Rosenberg in Fort Bend County pushed the moratorium.

"The argument you hear is that public schools are so bad because they have so many rules," Olivo says. "Charter schools say, 'Don't give us regulations, and we'll do a great job.' Well, who holds them accountable? The children are at the mercy of these people. I thought it was a disservice to the children to not step back and take a long, hard look at charter schools before we open any more."

Before the session, the Board of Education voted 8-7 in favor of a resolution supporting the moratorium but reversed itself in March by the same 8-7 vote. Allen says Bush pulled the strings to persuade the board to switch gears -- something Edwards denies.

Under state law, the board may issue an unlimited number of charters to schools that specifically serve students at risk of dropping out. The next batch, however, probably won't be granted until late 2000 or early 2001. In September, the board is to consider a more stringent, albeit still imperfect, screening process for charter school applicants -- a process the board wishes it would have started using four years ago.

Bush says he would never pressure the Board of Education about charter schools, although his actions on the presidential campaign suggest otherwise. Bush led an embarrassingly large entourage of reporters and photographers inside a Massachusetts charter school last month. And two weeks later, he visited a Los Angeles charter campus to extol the virtues of those schools.

"Governor Bush believes innovation and competition will inspire our public schools while offering more choices for parents and students," says Mindy Tucker, a Bush campaign spokeswoman. "That's why he strongly supports charter schools and chose to highlight two successful charter schools on recent campaign stops."

Texans, however, might be better off if the governor had been paying more attention to charter schools that were failing in his own state.


Four charter schools under the umbrella of Houston-based Life's Beautiful Educational Centers Inc. -- P.O.W.E.R., H.O.P.E., L.O.V.E., and F.A.I.T.H. -- are finding that life's ugly these days. In less than one year, the nonprofit corporation has racked up debts totaling several hundred thousand dollars.

All the power, hope, love, and faith in the world may not be able to salvage the good intentions of the recently deceased founder, Sylvia L. Terry, a teachers' union activist who started the schools as an alternative for African-American youths who were failing in traditional public schools.

"Some of the people who applied for charters said, 'Well, I want to help children,'" explains Allen, the Board of Education member. "Sure, there are a lot of people out there who want to help children, but they have no sense of the business side of education. And that's basically where they're getting in trouble."

Running a charter school is like running a business. Although free of many teaching regulations, charter schools still must strictly follow state and federal guidelines related to accounting and finance.

"Understanding even the minimum requirements is very difficult," says Bill Outlaw. "This field is very specialized." Outlaw was a public school budget officer from Houston who retired with more than 30 years' experience. He was hired by TEA to help clean up the Life's Beautiful mess.

Unlike the charter schools in Waco and San Antonio, Life's Beautiful appears to have made honest accounting mistakes. Still, it demonstrates the operator's appalling lack of financial sense and savvy.

"I haven't seen any evidence of misappropriation of funds," Outlaw says. "But I will say that, in my opinion, the wisdom of their spending is in question. I don't think they had a budget. I never saw it. If they did, they didn't pay a lot of attention to it."

Last fall, Life's Beautiful opened P.O.W.E.R. in the Pleasant Grove section of Dallas, H.O.P.E. in northeast Houston, and L.O.V.E. in Denton. F.A.I.T.H. was to open this fall in Carrollton. The future for the schools remains hazy as TEA auditors assess the corporation's debts. A recommendation to revoke the four charters is possible.

The amount of money a charter school receives from the state is based on the school's average daily attendance. Since September, the state has paid Life's Beautiful about $775,000. The charter operator was zapped when it grossly overestimated the number of students who would attend the three schools opening last fall. As a result, it took in far less money than anticipated. Yet Life's Beautiful officials inexplicably waited as long as three or four months to reduce expenses accordingly. Bottom line: Life's Beautiful spent its entire year's income in about four or five months, says Canby of TEA's audit division.

Life's Beautiful is several months behind in meeting payroll. Even when it was paying employees, it deducted money for health insurance from employees' paychecks -- even though the coverage had been canceled for failure to pay the insurance premium. For a while, Life's Beautiful paid no contributions to the state teachers' pension fund nor payroll withholding taxes to the IRS. Rent was late, as were payments to the bus company that transported students.

The corporation's bookkeeping was unbelievably shoddy. "Financial records had to be reconstructed from the beginning," Outlaw says. "Every receipt and every disbursement had to be re-coded. The student attendance records were the same way. Unless they can prove they had these kids in classes and taught them, the state is not going to pay for them."

Sherwin Allen of Dallas, who was on the board of Life's Beautiful, disputes the auditors' enrollment counts. At P.O.W.E.R., for example, auditors reported an average daily attendance that is far shy of the projected enrollment of 300 upon which the school based its expenses.

"From what I understand, the auditors said we had 35 kids at P.O.W.E.R.," Allen says. "Well, shoot. Please. I just finished doing a student roster for P.O.W.E.R., and we have 129 kids on it. That's how many kids were enrolled."

Allen says the state is basing P.O.W.E.R.'s attendance estimate on a head count done when auditors visited the school. The auditor counted heads a full hour before many of the students arrived at the campus, he claims.

However, Allen admits that the books aren't in good enough shape to back him up. He says one reason is that attendance records were stolen during a burglary earlier this year. Asked two weeks ago about the missing records, TEA officials shook their heads and said that's a new one on them.

"To be honest with you, the black market on school records isn't very good," says Brooks Flemister, who runs the agency's charter school division. "I don't know anything about it."

Sherwin Allen has worked in education for about 30 years in Dallas, Arkansas, and Arizona. He held positions ranging from teacher to principal and assistant superintendent. None of those posts, however, dealt directly with school finances. He is now assistant superintendent of Children First Academy of Dallas and director of Children First Academy of Houston. They are charter schools with a combined enrollment of about 180.

He wants the Board of Education to take P.O.W.E.R., H.O.P.E., L.O.V.E., and F.A.I.T.H. out from under the Life's Beautiful umbrella to allow them to operate independently. His thinking is that the emancipation would free the schools of the debt, which belongs to Life's Beautiful. But TEA lawyers have warned the board that it's not that easy to absolve debt. If the assets transfer, the debt probably would too.

Further muddying the situation, Life's Beautiful ceased to exist. According to Allen, the board voted a few months ago to dissolve the corporation.

Allen attributes the problems of Life's Beautiful to the untimely death of Terry, which he says led to an internal power struggle that crippled the organization. He says she erred by hiring a staff for the schools before knowing how many students would be enrolled. But he holds TEA auditors responsible for making a bad situation worse.

"The only time you know there's a problem is when the auditors come and say, 'You have a problem.' Then it's left to the auditors' discretion to make you or break you," he says.

Alma Allen, the Board of Education member, finds Sherwin Allen's comments ludicrous.

"They have to blame somebody," she said, "so they blame the auditors."



Grendolyn Carol Harper is listed as the chief executive officer of Impact Charter School in southwest Houston. Her name -- even her signature -- is right there on the charter application that the Board of Education approved last year.

There's one problem, though. Harper says it's all news to her.

At a state board meeting in May, Harper revealed: "I am not the CEO of Impact Charter. I did not know I was the CEO. I've never attended a board meeting. I've never been to Impact Charter. I cannot tell you when the school opened. I cannot tell you how many students are at the school."

But the signature? "That is not my signature. It was forged. I gave no one permission to put my signature on any type of document."

As board members' jaws dropped, TEA auditors braced themselves for yet another investigation of a charter school. The audit is not yet final.

Efforts by the Dallas Observer to reach Harper were unsuccessful. Impact Charter School director Amy Moten, the other player in this soap opera, declined to be interviewed. Harper had told the board in May that Moten is not telling the truth when she says Harper gave her permission to put her name on the application as CEO.

"Why would I give her permission [to put my name] on an application, an application that is full of grammatical errors -- and I'm an English instructor," Harper said with exasperation.

If it wasn't bad enough that the Board of Education approved a charter school with a CEO who didn't know she was CEO, it awarded a school based on a written application that featured this jumble of grammatical mumble: "Impact Charter target grade level 3 year old -- fourth grade...Our focus will be that of Intervention by reaching the children at earlier age will prevent failure of later years."

Moten sheepishly told the board that the application was completed right at deadline and therefore not proofread.

The bizarre Impact episode illustrates how lax the charter school screening process has been in the past.

Not since awarding the first 20 charters has the board demanded the CEOs or other key officers of proposed schools to come before them for face-to-face interviews. Instead, the board has relied on a 45-member application-review committee, appointed by board members and the education commissioner, to grade the written applications. Only now, at a time when embarrassing audits of charter schools threaten the entire movement, is the board leaning toward supplementing the committee evaluation with a return to in-person interviews.

In addition, the board wants to expand the written application to better assess the financial aptitude of a proposed charter holder. The proposed new application, for example, would require school officers to reveal any bankruptcies and the charter holders to disclose liens against them. The state also would require a rundown of lawsuits involving the applicants.

These are responses to the fiasco at the Harrison school in Waco. The Waco Tribune-Herald reported this month that at the time the state granted that charter, the Texas Workforce Commission had a lien against the East Waco Community Center, which held Harrison's charter. The newspaper also reported that Ida Nell Smith Pinkard, the school's chief officer until she resigned three days before the state revoked the charter, filed for Chapter 7 bankruptcy in 1992 and had been sued in the past for defaulting on rent.

There is no guarantee that a revamped application process would ferret out these kinds of details, however. The state would have to rely on the applicant's word, because TEA would not conduct an independent background check. The agency simply doesn't have the resources.

During the past legislative session, Education Commissioner Mike Moses told lawmakers that he needed 24 additional full-time employees at TEA to oversee charter schools adequately. The Legislature gave him only six.

Charter school oversight already is taxing TEA's financial audit division, led by Canby. In addition to conducting the half-dozen investigations of charter schools, Canby's auditors visited 51 campuses during the 1998-'99 school year to take a cursory look at their books and offer basic accounting tips. Had they not made the visits, the number of charter schools in financial straits would be even higher.

"We accomplished a tremendous amount of damage control giving free consulting advice," Canby says.

Canby's auditors hope to curb one problem by making sure charter schools are reducing their expenses accordingly if enrollment is lower than expected -- the same bug that bit Life's Beautiful. "It is rather shocking to see how a few of the charter schools -- I'm not generalizing here -- seemed oblivious to the reality of what a fewer number of students meant to their budget," Canby says.

Charter school officers should at least have an inkling of the financial challenges they face. TEA gives every new charter holder a thick three-ring binder that doubles as the state's official "charter school handbook." It covers a range of information pertaining to financial management. The books are handed out at a two-day orientation workshop that school officers are invited -- but not required -- to attend.

In Canby's professional opinion, a thick notebook and a two-day training session don't even come close to keeping a charter school financially solvent. Canby thinks state policymakers might want to think about requiring the schools to have someone on board with advanced degrees in school finance.

Outlaw, who is trying to piece together the financial puzzle left by Life's Beautiful, says the state might want to require charter holders to post a bond as a condition of being awarded a school.

"If I was starting a business, I would have to show financial responsibility," he says. "A bank is not going to give me any money unless I can show I can do the job."

Placing more restrictions on people who want to start charter schools is a tricky deal for state policymakers, since the concept behind charter schools is to limit regulation.

"The legislative intent was to make it easy to start a charter school," says state Rep. Joe Nixon of Houston. He is on the board of Houston Advantage, a charter school scheduled to open this fall. "Charter schools are not intended to be mini-replicas of public schools. They also are not designed to set up a new structure of administration and overhead and forms that need to be filled out. What we don't want to see is an application process that is so arduous and full of red tape that it would take years for any charter to be approved."

No process is perfect. Even though the first 20 charter applicants were interviewed by the Board of Education, a bad one slipped through. Cypress Lodge in East Texas never opened, although it gladly accepted checks from the state -- about $240,000 worth. The Texas attorney general has been trying to recover that money for more than two years. The state learned its lesson and now pays a charter school only after it opens.


The motto at YES College Preparatory School, an exemplary charter school in the downtown area of Houston, is "Whatever It Takes." It's a message to the school's nearly 400 students. It takes hard work, strict discipline, and respect for others to get the full benefit of what school has to offer. It takes braving the rigors of what its founder calls "the hardest school in Houston" to survive the college experience that lies ahead.

"Whatever It Takes" also is a message to those who operate the charter school.

"I don't want to come across as cocky, but it takes some brains to pull this off," says Christopher Barbic, the school's founder and director. "It takes more than good intentions and a good heart."

For one thing, it takes money.

Unlike lesser charter schools, YES College Prep raises several hundred thousand dollars a year from foundations, corporations, and other sources to help its well-rounded educational program. The money helps pay for sending students on extensive field trips. Last year, 10th-graders visited Boston and New York and toured Harvard, Massachusetts Institute of Technology, Columbia, and New York University. It also pays for cultural enrichment classes on Saturday, which students are required to attend every other week. And it pays for extra supplies and food to keep students well-stocked and well-nourished.

YES employs a teacher who spends half of the workday promoting the school and soliciting contributions. It pays off. For example, students have access to 100 used laptop computers, donated by the Arthur Andersen consulting firm.

About 90 percent of YES College Prep students are Hispanic, and almost all of their families live in poverty. "We're not taking the superstar magnet school kid," says Barbic, a tall 29-year-old with a bald head, goatee, and J. Crew necktie. "We look for the middle-of-the-road student."

YES students include those who, had the school not nabbed them first, could easily join a gang. Even though the drab campus consists only of several nondescript modular buildings scattered across an asphalt parking lot, there is a long waiting list of children whose parents want them to go there.

The school teaches fifth- through 11th-graders and, based on TAAS test results, is doing a good job of it. Barbic proudly displays the 1998-'99 scores showing that all 43 10th-graders passed the math and writing portion and that 95 percent passed reading. Nine students got at least 95 percent of the questions right on the reading test, and 14 did the same in math. Scores are similarly stellar among the sixth- through eighth-graders.

YES students go to school Monday through Friday from 7:30 a.m. to 5 p.m. and attend the biweekly Saturday classes and one month of summer school. Suspended kids are required to attend classes -- although they must bear the scarlet letters of having to wear their shirts inside out, stand up throughout class, and keep silent around their classmates.

"The first couple weeks, parents of new students think I'm a monster," Barbic says.

But they tend to change their minds as their children are transformed from mediocre to high achievers. YES College Prep is being held out by charter school advocates as a model, especially now that the Renaissance era has collapsed. But the qualities behind the success of YES are tough to bottle.

The school began in 1995 as Project YES, a middle school affiliated with the Houston Independent School District. For three years, it operated under HISD's wing and was able to take advantage of numerous administrative benefits of the relationship, such as being able to use the district's contract services for transportation and food.

Although the relationship had its rocky moments, Barbic admits that the school's success today is in part due to the fact that YES administrators were able to cut their teeth for three years while under HISD's security blanket.

It's different today. Barbic points to a large city street map hanging in his office. It's been violated with hundreds of pushpins, each one representing the home of a YES student. Forty different ZIP codes have pins in them. Barbic had to study that map for hours on end in order to chart the school's busing system. Then he had to drive the six routes himself to make sure his plan worked.

"It was the logic puzzle from hell," he says.

Barbic would rather be teaching students. At Vanderbilt University in Nashville, he majored in English and pre-law. After graduating, he hooked up with Teach for America, an AmeriCorps program that allows young people to earn teacher certification in exchange for a two-year commitment to teach in a poor neighborhood. Barbic landed at Rusk Elementary in Houston. He took over a class of sixth-graders who had all flunked the TAAS. He inspired them to do better only to find out after they graduated that some had joined gangs. That's when he and other dejected Rusk faculty members got together to form Project YES.

Of the 16 teachers at YES College Prep, 10 are Teach for America graduates.

"Everybody here works ridiculous hours," Barbic said recently while playing host on a campus tour. "I got home last night at 9:30, and the summer school classes end at 1. I have no life. I mean, I just got married, but other than that, I have no life. This is my life."

It takes commitment. It takes people who care.


Deborah Lott cared. In fact, she cared so much about the students attending the neglected and nauseating Arlington branch campus of Renaissance Charter School that she nearly broke down in tears while speaking to the Board of Education in May.

"You really have to excuse me," she said after her voice began to crack, "because I'm really upset about all of this, and it's been very traumatic for all of us. But no child, not anywhere, regardless of who they are, should ever have to try to be educated under these circumstances."

Lott was the principal of the Arlington school. Or is she still the principal? She's not sure.

"I have no idea what my status is," she said recently. "They are not cooperating with me."

"They" is basically one man: Renaissance CEO Don Jones, a gray-haired philosopher with a professorial moustache, beard, and pot belly. Jones talks about the "paradigm shift in public education" that led to the birth of Renaissance in 1996. He talks about the need that exists to "think outside the box." He talks about how the Irving Independent School District where he worked as a teacher for 14 years was neglecting its middle class of students and how all the attention was paid to jocks and cheerleaders and troublemakers, leaving "the forgotten half," well, forgotten.

Those are the students Renaissance has tried to attract. The middle. The branch campus in Arlington, however, was bottom-feeding. As a result, it never quite fit in.

Operating inside a sharp, 55,000-square-foot former office complex on North Belt Line Road in Irving, Renaissance's reputation as a top-notch charter school came despite many shortcuts to make financial ends meet. The school purchased a $250,000 computer data network to link the school's four campuses to the Internet, but the tricky system is run by a baby-faced guy who looks as if he should be in high school. Actually, he and his three full-time assistants range in age from 19 to 24, and Jones admits the salaries he pays them take their ages into account.

"That's part of it -- bringing in people who cost less," he says. Renaissance may well be the most resourceful school in Texas -- for better or worse. Instead of buying triple-beam balance scales, the school had students make some from scratch out of drinking straws, a small plastic cup, and a wooden base. Jones reasons that the students understand more about the science by building the instrument. "We cannot provide the same levels of educational opportunity that a traditional school has. What we lack in that, we make up in depth of understanding."

He calls that the "constructionist view of education."

In another effort to cut costs, the school has its students bring sack lunches rather than feeding them a hot meal. Jones says the school meets federal requirements of providing a free meal to underprivileged students by serving breakfast instead of lunch. He maintains that no student goes hungry at lunch as the Renaissance family will pitch in to provide a free meal.

Also to save money, Renaissance opted to ditch school buses in favor of providing kids a reduced-price bus pass with Irving's city transit. Jones says few kids take advantage of the option, choosing instead to drive to school themselves, carpool with friends, or commute with their parents, some of whom work in nearby Las Colinas.

Renaissance's annual budget is more than $4 million, Jones says. The school receives about $300,000 in federal grants and $150,000 in corporate donations a year. He says corporations are hard-sells because they prefer to give to traditional public schools, where their benevolence is rewarded with greater visibility.

Traditional public schools have other financial advantages. They can pay for their facilities through voter-approved bonds, while charter schools must pay for them out of their operating budgets. Jones says 18 percent of Renaissance's budget is for rent payments.

"Running a charter school is a tremendous, tremendous -- and I underline tremendous -- financial challenge," he says.

Sometimes resourcefulness in the face of financial challenge leads to questionable tactics. Renaissance operates on a four-hour school day at its XLR8 Learning Center, a branch campus for high school students who have fallen behind in their studies. One group of students attends in the morning and another in the afternoon. That means only one shift of teachers needs to be hired for two shifts of students. It's a cost-saver.

"The idea is that I can have two shifts of students in there and therefore double our income," Jones says. He is oblivious to the fact that the strategy is repulsive to charter school operators like YES' Barbic, whose students attend school for nine and a half hours each day.

Beginning next month, Renaissance will operate four Irving campuses inside nearly 100,000 square feet of building space. In addition to the main campus and XLR8, it has an elementary school and a fine arts academy. During Renaissance's first three months of operation in 1996, students sat on donated chairs and at the cheapest folding tables Jones could buy at Sam's Club.

In spite of the modest beginnings, word of Renaissance spread so fast that student attendance leaped from about 300 its first year to 950 last year. Jones projects enrollment at 1,200 this coming year.

But like any business that grows too fast, Renaissance experienced pains. The first mistake was a decision to open the branch campus in Arlington. Charter schools must operate within specified geographic boundaries, and Arlington falls outside the legal limit for Renaissance. Jones says that Renaissance officials thought TEA had approved expanded boundaries and that the school only realized its mistake in March.

That was about the same time the Arlington students were writing their letters to TEA. At the Board of Education meeting in May, Jones said he was unaware of the dire conditions. Lott says he is lying.

"Don Jones was fully aware of what was going on, because I was in constant contact with him letting him know what the status was," she says.

Although Jones denies he knew of the problem, he is accepting responsibility for it. "This is the most significant problem we've had. The problem should not reflect on Renaissance as a whole, but instead it identifies the weakness in my ability to carry out my duties effectively."

Still, he has an explanation that sounds a lot like plausible deniability.

Jones says the Renaissance board wanted to close the Arlington school a few months after it opened because enrollment was less than half of what was projected as necessary for the venture to be cost-effective. In addition, the school was housed temporarily at Tarrant County College and was about to get uprooted. Jones says, however, that the passions of Lott, her staff, and the parents of the students persuaded him to keep the school open. He says he told them to find a new building where the school could operate for the remainder of the year.

"We really believed those additional students were going to appear," Jones says. "We were gambling. We were running a risk. We were investing in a hope that things would work out." Lott says the Arlington campus would have met enrollment projections had parents not pulled students from the school, frustrated because it had no permanent home.

As students hopped from building to building, a parent came across the vacant, gray stucco office building on East Abram Street, about two miles south of the Ballpark in Arlington. Jones says he left it up to Lott and the parents to work out a lease. During that time, the landlord did not provide heat or plumbing.

Lott says Jones took every opportunity during the school year to make sure a lease never was signed for an Arlington campus. Another of his cost-saving measures, she figures.

"We would find locations and get the kids in there," Lott says. "People were kind enough to let us move in expecting that a contract would be signed, and then Don didn't sign it."

Lott says she has concluded that Renaissance viewed the Arlington campus as a cash cow since the state paid Renaissance Charter School for the 40 or so Arlington students and none of the money was invested in the branch campus. Now that TEA has discovered that the Arlington campus operated outside the school's boundaries and therefore illegally, it is taking back every cent it gave Renaissance to educate those students. Justice, according to Lott.

"The only reason Don Jones kept us was so he could collect funds from the state," she believes.

Lott says the Arlington school hopes to operate next year under a new charter holder. "I have to commend these young people," she says. "They have strong characters, and they want to come back in September."

Lott, a community activist in Arlington since the mid-1980s, broke her public silence about the plight of her students at the Board of Education meeting in May, an instinctive reaction to the claim by Jones that he knew nothing of the wretched conditions. After the meeting, Lott returned to silence. A call from the Observer caught her off-guard, she said.

"I want people to understand that charter schools are a positive alternative solution to education," she says. "I think the concept is excellent. My only concern is that persons who are allowed to run charter schools should be scrutinized very, very closely. That's why I kept so quiet about this for so long. I didn't want to damage the reputation of charter schools in general. I guess it comes to the point now where it's good we are talking about it. Maybe the State Board of Education can take some kind of measures to make sure something like this doesn't happen again."

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