Staff urges charter schools panel to reject new online school proposal

K12, the company behind Georgia Cyber Academy, is petitioning to start another online school, Destinations Career Academy, but a staff recommendation to the State Charter Schools Commission opposes it.

K12, the company behind Georgia Cyber Academy, is petitioning to start another online school, Destinations Career Academy, but a staff recommendation to the State Charter Schools Commission opposes it.

A proposal for an online public school with as many as 8,000 Georgia students faces an uphill battle for approval after an official review cited concerns about weak oversight.

The staff of the State Charter Schools Commission is recommending the denial of Destinations Career Academy, which, if ultimately approved, would become the second largest public school in the state.

The petition is backed by K12 Inc., a publicly traded corporation with scores of online schools around the country. One of them, Georgia Cyber Academy, is this state's largest public school. It is at risk of closure due to its history of poor academic performance. The company and the school's board are embroiled in a contractual dispute following recent board decisions aimed at turning the school around. The board has reduced K12's role in — and revenue from — the school.

>> RELATED: Georgia’s largest public school struggles to survive

The petition for Destinations says the school would be unique in Georgia by providing a “comprehensive career-focused curriculum” starting in kindergarten. Older students could get hands-on work experience and industry certifications.

It is a relatively new business concept for K12, which operates Destinations academies in at least a dozen states, with plans to open more. The State Charter Schools Commission meets July 31, when the commissioners, a group of political appointees, will vote on the petition. They could overrule the staff recommendation, which expressed concern about the school’s ability to “meet the standards of a high-quality charter school.”

If approved, Destinations would open in 2020 with 1,600 students, growing to 8,000 by the fifth year. Officials calculate the public payments would reach $50 million annually at that point.

It would be the latest experiment in an educational format that has failed to impress even charter school supporters. Virtual charter schools have turned in poor performances nationwide.

“People are realizing these schools are failing most of the students they serve, and they are costing taxpayers a fortune,” said Greg Richmond, president and CEO of the National Association of Charter School Authorizers, a group for agencies — like the State Charter Schools Commission and local school boards — that grant charters and provide taxpayer dollars. K12 has been a dominant force in the online education industry, he said. “Maybe with this new twist — the career academies — it will get better.”

>> RELATED: K12 education company settles case with Calif.

Advocates for the new school say it would provide an alternative for children who aren’t academically inclined.

Ashley Vandevender is among members of the proposed school’s board who said they joined up after hearing about K12 through a friend. At a state petition hearing in June, she said she was impressed by the company’s innovations and by the career-oriented mission of this latest proposal. She is a lawyer, but said her brothers and father didn’t get college degrees. They would have benefited from a school like Destinations.

“I’ve seen my family members struggle with the bumps and bruises of being in a world and in an economy that favors academic-focused education and not career-focused education,” she said.

The petition notes a gap between the number of available jobs and the number of people trained to fill them. It says there are few training options in rural areas, where students could more easily attend a virtual school.

The petition comes as Georgia Cyber Academy prepares for a grilling over the renewal of its charter, which expires next year. That decision will hinge on the latest round of state standardized test scores due later this year. A K12 spokesman wouldn’t discuss the dispute between K12 and the school’s board, but the company provided a document that said it and the school were in arbitration, limiting what each party could say.

The state and federal governments sent about $90 million in public funds to Georgia Cyber Academy this past year. It has been among the largest in K12’s portfolio.

In a recent filing with the Securities and Exchange Commission, the company reported revenue of $222.6 million for its managed public schools business in the first quarter of this year. As of March, there were 75 schools operating in most states, but four had been denied new charters and would likely close, the company reported. Meanwhile, some contracts had been modified.

This is what company CEO Nathaniel Davis would call the “ebb and flow” of the core business, which is maturing rather than growing. In a recent earnings call, he told analysts about a pivot to a new, growing market: career readiness.

"Over the next three to four years, we plan to roll out DCA programs in all of the states in which we operate," he said, according to a transcript of the call.

Online schools are complicated endeavors that require technical infrastructure and financial backing. The Georgia Charter Schools Association says K12 played a crucial role in establishing Georgia Cyber Academy.

“Without K12, I am unsure that the school would have been able to start, let alone operate,” said Tony Roberts, president and CEO of the association.

In Monday’s denial recommendation, the State Charter Schools Commission staff expressed reservations about implementing a “project-based” curriculum in an online environment. It also said the Destinations board appeared to lack the expertise to run the school and failed to demonstrate independence from K12.

A K12 spokesman said the company “remains committed” to the board, but the commission chairman appeared to share the staff’s lack of confidence.

After the hearing in June when the proposed board pitched the school, there was a discussion about the presentation. “I can see a lack of capacity to oversee,” said a charter school expert who’d been invited to help with the review.

Tom Lewis, the commission chairman, jumped in: “It was glaring,” he said. The board members kept deferring to the K12 executives seated in the audience behind them to answer questions, he noted. “It was too much of this looking back for an answer that was unnerving to me.”

Danielle Henderson, a member of the board, said Tuesday that she and her colleagues had prepared for their roles. She said they developed a strong relationship with K12 yet maintained independence.

When told about Lewis’ observation during that discussion about the petition hearing (Henderson and her fellow board members had already left the room by then), she said she could understand the impression he got, “but I feel like all of us did a lot of research and were very knowledgeable about what we were trying to accomplish.” She said she believes the school’s online approach to career preparation would be beneficial for Georgia.