Four charter-school groups will receive $152.4 million in Phoenix Industrial Development Authority bonds to expand and build new campuses following approvals by the Phoenix City Council.
The council voted unanimously in favor of the private, non-profit bonds being issued to the charter schools in separate meetings last week and Wednesday. But the meetings were contentious. Dozens of people spoke at both sessions. The majority were charter-school supporters, including parents and school employees who pleaded with the council to approve the bonds. But some residents also turned out to question why Phoenix was getting involved with charter-school funding.
Phoenix resident Imogene Bennett said some of the bond money could wind up in the pockets of private-management companies that administer charter schools. Resident Leonard Clark pointed out that most school districts don’t apply for IDA bonds and questioned whether it is fair for charters to use them.
Dan Nienhauser, executive director of BASIS Schools Inc., countered by saying charter schools need IDA bond money because they lack the power to ask voters for bonds backed by property taxes.
Nienhauser also told the council that BASIS is listed as a top academic performer — BASIS Scottsdale and BASIS Tucson North ranked No. 2 and No. 5, respectively, in the nation in the most recent U.S. News and World Report Best High School ratings. Schools operated by the other charter groups also have earned “A” letter grades from the Arizona Department of Education.
The $95 million bond issue will help BASIS save $500,000 when it uses the money to refinance debt, he said.
“Every child in Arizona deserves access to world-caliber education,” said BASIS teacher Charity Taylor Antal.
Two weeks ago, the Phoenix City Council unanimously approved $95 million in Phoenix Industrial Development Authority bonds for BASIS. The charter group is expected to use the money to expand a campus in Goodyear, build a school in Tucson and refinance construction debt.
This week, the council unanimously approved $57.4 million in IDA bonds for expansions at three more charter companies: Freedom Academy, Legacy Traditional School and Villa Montessori. The IDA is a private non-profit organization that helps finance projects for schools, housing programs, health-care programs and other nonprofit groups. Part of the IDA’s mission is to support organizations that will generate new jobs in Phoenix. The IDA’s board is appointed by the Phoenix mayor and council, but no tax dollars are used to back the bonds it issues. Private investors purchase the bonds and are on the hook if schools default on bonds.
The meetings might have been more heated, but city and IDA officials met with representatives from school districts and advocacy organizations before the BASIS meeting.
Phoenix Elementary School District board president Ruth Ann Marston said after meeting with city officials that she now supports the IDA bond program.
Tracey Benson, associate executive director of the Arizona School Boards Association, said that after several Phoenix districts voiced concerns to her, she also met with Phoenix and IDA representatives. She said in an e-mail interview that districts were worried that the bonds would “buildcorporate assets — those held by privately operated charter schools — versus community assets — our local district public schools that add value to our cities and neighborhoods.”
Benson said the school board association plans to work with the city and the IDA to find ways for school districts to make use of the bond program.
“With the vast number of Arizona students attending local district schools, there is the need to leverage such opportunities for the good of a greater number of students,” she said.
John Salgado, Phoenix IDA executive director, said the education representatives he and city officials met with had a number of misconceptions about the bonds.
“I think some of the folks thought we were giving away grants,” he said after the council meeting. “We are not giving away grants. These are loans that involve no taxpayer money.” Historically, IDA bonds have not been controversial.
Rob Dibacco, chief operating officer of the Arizona Charter Schools Association, said this is the first time that he has seen opposition to IDA bonds issued to charter schools.
He said he believes the opposition is rooted in politics.
“There was a heated battle over education funding in the state budget this year,” he said. “It pitted charter schools against district schools.”
