The Oregon Department of Education will recommend denial of the Cannon Beach Academy’s request that the state sponsors the charter school.

A team of charter school specialists with the education department has completed a two-month review of the academy’s proposal to begin a charter school in the Seaside School District.

After finding several weaknesses with the proposal, the team has let the academy and the school district know that, at the next meeting of the state Board of Education Oct. 24, discussion will center on why the board should turn down the charter proposal.

However, the academy’s developers — led by board President Phil Simmons — and the school district will have time to make their case, and the board could decide to sponsor the academy.

Simmons could not be reached by press time. Jim Litherland and Sam Steidel, members of the academy’s building committee, said it was too early to comment.

The recommendation is the latest setback for the academy, which was twice turned down by the Seaside School District earlier this year, first in February and then in June.

After the second denial, the charter school developers decided to appeal to the State Board of Education. If the board chooses to accept the charter proposal, it will become the official sponsor of the Cannon Beach Academy, which means the academy will negotiate a charter contract with the state. Without the state’s sponsorship, the charter school wouldn’t be able to receive more than $600,000 in operating funds from the Seaside School District.

The department of education’s review — led by Kate Pattison, a charter school specialist — focuses on many of the same problems that the compelled the school district to deny the academy’s proposal.

The charter school’s budget, financial plans and heavy reliance on fundraising during its first three to five years seem especially unsound, according to the review.

The proposed budget relies on fundraising for $193,000 during Year No. 0, $325,500 during Year No. 1, $222,500 during Year No. 2 and $85,000 during Year No. 3, according to the staff review.

Though the academy’s developers say they have raised more than $400,000 in local pledges for the charter school and identified several federal grants the school qualifies for, neither the pledges nor the grants have been secured as funding sources. They are considered “soft funds.”

“A pledge is not generally a legally binding commitment,” the review states. “Without the grants and donations the school will not be sustainable.”

The developers hope to “achieve their fundraising pledges at 100 percent and receive the grants that they apply for. What occurs if they do not?” the review asks.

Moreover, the proposal said the charter school is looking into several loans, but it is unclear what kind of loans these are, where they will come from or how the school plans to pay them back with interest.

“It is not financially sound to rely on (the Cannon Beach Academy’s) suggested use of borrowed funds,” the review adds.

The budgetary details regarding the city-owned RV Park, where the school hopes to place three portable classrooms, are also “not fully discussed,” the review says.

“The costs associated with leasing the RV park are unknown, and there are a number of ancillary spaces (restrooms, health room, playground space, parking, etc.) needed to operate a school, and these are not identified or budgeted in the proposal,” it notes.

Teachers’ salaries, pegged by the academy at $34,000, are also problematic.

“This is very, very low and, surprisingly, not a salary that would ... attract very young teachers. The median income of Cannon Beach is $47,000,” the review continues. “The salaries for teachers are far under the median mark for this city. This is a huge concern for the long-term stability of this charter school.”

The Seaside School District has maintained since it first denied the charter proposal that the creation of the charter school would have an adverse impact on the overall quality of education throughout the district’s schools.

This concern arose because, if the state approves the charter proposal and becomes the academy’s sponsor, 90 percent of the school district’s funding that would have gone toward educating a student at a district elementary school will follow the students enrolled at the Cannon Beach Academy. An additional 5 percent would pay for the state’s administrative costs.

With more than 100 children signed up, the school district stands to lose more than $629,600, or $6,296 per child, plus about $35,000 in administrative costs, according to figures provided by Doug Dougherty, the school district superintendent.

Pattison and her team, however, concluded that no such adverse impact would happen, vindicating Simmons’ longstanding claim that such fears were based on specious reasoning.

“The district argues that the ‘loss’ of revenue from (the district schools) to the charter (school) will likely cause a reduction in both classroom and support staff. That is likely true,” the review states. “However, also having a lower enrollment would correspond naturally to a reduction (in) staff.”

Pattison will give her recommendation at the Oct. 24 state board meeting — also called the “first reading” — after delivering a 10-minute presentation on the academy and its history.

The school district will have a chance to present its own arguments against the charter school. Then the academy’s supporters will have time to rebut both the district and Pattison’s arguments.

This will be followed by a public comment period, with the length determined ahead of time. The state board will discuss the proposal and ask questions of the parties involved.

Although the state board will not reach a decision on Oct. 24, a second reading in December will likely be when the board hands down its final decision.

If the board follows Pattison’s recommendation and rejects the proposal, the academy can pursue a judicial review of the board’s decision. If the academy chooses not to go that route, though, the charter school developers must begin again at the school district level if they want to move forward with the Cannon Beach Academy.

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