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Next steps for Keystone after voting against Sugar Valley

Following a vote by the Keystone Central School Board Wednesday to not renew the charter for Sugar Valley Rural Charter School, a three-step process is triggered to deal with the issue, according to Tracie Kennedy, CEO for the school.

Noting that the school was not surprised by the vote, Kennedy said the next step entails the district sending an official letter to the school concerning the denial. Taped hearings will then be conducted.

The school board will view the tapes to decide if everything has been presented and holds another vote.

If that vote is again no, Kennedy noted, Sugar Valley can appeal to the Charter Appeal Board.

According to the appeal board’s website, the charter school files an appeal with CAB stating their reason for disagreeing with the school board’s denial.

The CAB provides written notice of receiving the appeal, then assigns a docket number and a hearing officer.

The school board has to provide a certified record to the CAB within 10 days.

The hearing officer then holds a pre-hearing conference with both counsels to determine if more evidence is needed and to set a date for presentation of the case to CAB. Following the hearing, CAB issues its decision within 60 days.

If CAB grants the appeal, the school board has 10 days to grant the renewal. If they do not vote to approve in that time, the application is considered automatically renewed.

Kennedy stressed that the school is not closed. The school’s charter, which runs for a five-year period is good until June 2020.

In denying the renewal, the Keystone Central board had cited Sugar Valley’s poor performance in standardized testing over a period of time.

An independent consultant hired by Keystone Central also alleged there were red flags with the charter school’s budget.

Craig Allen, president of the Jersey Shore Area School Board, attended the board meeting at Keystone Central, because Jersey Shore has a fair amount of students attending the charger.

He expressed concern about Sugar Valley’s fund balance.

Prefacing his comments with the fact that he was speaking for himself and not officially on behalf of the Jersey Shore board, Allen said that traditional school districts are only allowed to keep a fund balance of eight percent, or maybe 12 percent for small schools, but that Sugar Valley seemed to be exempt from that.

“In my opinion, the limitation for fund balances of charter schools should be the same as those for traditional public schools,” Allen said.

Allen commented on the financial observations contained in the consultant’s report.

“Traditional public schools are limited to a general fund balance of 5 to 8 percent. The fund balance for SVRCS significantly exceeds those amounts. In particular, the 2019 year-end unassigned fund balance for SVRCS was 50.5 percent (about $4,722,651),” Allen noted.

“In this case, the maximum unassigned fund balance for SVRCS would be $748,143 and the difference of $3,974,508 should be returned to the home school district of SVRCS students on a pro-rated basis,” he said. “Note that the overall fund balance for SVRCS was identified as 70.6 percent or $6,372,651. In general terms, the fund balance is the equivalent of a savings account for school districts and the SVRCS fund balance has increased by $3,890,671” between budget years 2014/15 and 2018/19, he added.

Allen added he feels there are changes that need to be made in the charter school laws to deal with the situation.

The charter school was established in 1999. The current enrollment is 492 students, primarily from the Keystone Central School District as well as the Jersey Shore Area and Penns Valley school districts.

Kennedy said they also draw a few students from other area districts.

“We’re a blended school. We’re a family,” she said.

Kennedy added this is not the first time Keystone Central has denied the application to renew the school’s charter. Both in 2010 and 2015, the board voted against renewing the charter. Kennedy said the district board had let the process run out in 2010 and the charter was automatically renewed. In 2015, the charter was initially denied by a 7-2 vote, but received approval the next year by a 5-4 vote.

Charter schools are considered by law to be public schools in Pennsylvania and receive funding for students from a student’s resident district.

“We do not receive 100 percent of a student’s tuition cost,” Kennedy said. “It can run from 20 to 80 percent. Each district is different.”

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