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Design-Lab charter modified; founder leaves leadership post

Delaware Public Media

Cristina Alvarez could hardly be blamed for feeling rather like a mother who has given birth, only to be told that she’s not fit to raise her newborn child.

Last August, the Delaware Design-Lab High School, a charter school that Alvarez cofounded, was one of 10 schools nationwide to win a $10 million, five-year grant from the XQ Super School Project to design a prototypical high school of the future.

Soon after the grant was announced, Kendall Massett, executive director of the Delaware Charter Schools Network, an advocacy organization, said “it’s not like anything else we have in our state. The award validates that we brought an innovative model to Delaware.”

Last week, however, Delaware Secretary of Education Susan Bunting approved a requested modification to Design-Lab’s charter, a modification that essentially severs Alvarez’s connection to the school she helped create and possibly to the prize she helped the school win.

On Feb. 3, Alvarez resigned as Design Lab’s CEO and head of school. Paul Miller, chairman of the school’s board of directors, and Rebecca Collins, the board’s vice chair, say Alvarez’s resignation was “voluntary.” “We got it out of the blue. It was surprising, disappointing, shocking, whatever,” Miller says.

Alvarez says she resigned “under duress.”

According to Miller and Collins, the “minor modification” to Design-Lab’s charter, its contract with the state, essentially clarifies the school’s management structure so that it accurately reflects how the school is now operating. The modification eliminates references to Design-Lab Schools LLC, a legal entity created by Alvarez that provided academic, organizational and management services to the school.

The Department of Education’s Charter School Accountability Committee, which reviews requests for charter modifications, recommended to Bunting that she approve the changes.

Massett, who assisted Alvarez in her efforts to secure a charter for Design-Lab four years ago and who is familiar with the modification request, described the situation as “normal growing pains, what happens when moving from founders to operational (status).” The skills involved in creating an innovative school are different from the ones needed to operate that school successfully, she says.

“When you make changes, people get hurt,” Massett says. “The board said, ‘We’re sorry. This is not personal. It’s about the school. We have to move ahead.’”

At the root of the change is a contractual dispute whose details neither Alvarez nor the board members are willing to discuss in detail publicly. It began last fall, shortly after the XQ grant was announced, when board members realized there were differences in wording between the charter, issued by the state in 2013, and a contract between the board and Design-Lab Schools LLC that was signed on Aug. 25, 2015, just days before the school opened its doors to students for the first time.

The board and Alvarez had several options. One would have been to revise the contract between the board and the LLC so its language would be in sync with the charter. Another was to modify the charter, and that was the approach taken. Alvarez and the board worked together on a charter modification proposal, but differences developed between Alvarez and the board. Ultimately, the board filed a charter modification request on January 31 that removed or revised portions of a previous draft that Alvarez had helped prepare. Three days later, Alvarez resigned.

Since then, the relationship between Alvarez (and cofounder Martin Rayala as well) and the board of directors has been curious.

Alvarez, Miller says, “is an integral part of the school, but she is no longer the head, no longer the CEO. But by no means do we want to prevent her from being helpful to the school.” And, Miller adds, Rayala, unlike Alvarez, has not resigned his position.

Miller and Collins said that did not know how often Alvarez or Rayala had been at the school, located in the Faith City church complex near Christiana Mall, since February. Minutes of board meetings posted on the school’s website show that both attended monthly board meetings in February and March. According to a revised version of the minor modification request, submitted to the Department of Education on April 21 (the January 31 version is no longer on the department’s website), “the LLC currently is providing very minimal Services to the School.”

The April 21 filing also asked that the changes to the charter be made retroactive to Feb. 3, the day Alvarez resigned.

Alvarez, in a statement delivered at a June 5 public hearing on the minor modification request, said the school had attempted “to ban Dr. Alvarez and Dr. Rayala from even entering” the building, a claim that Miller and Collins deny.

Alvarez, in a telephone interview, said Miller and Collins “are engineering all the changes at the school.”

And, during the June 5 hearing, Alvarez said the minor modification request contained several “inaccuracies made by the Board” and claimed that “there is no factual or legal basis” for the board to have terminated its contract with Design-Lab Schools LLC.

But the Department of Education’s file on the request includes references that offer hints of what has transpired.

A footnote in the request states that a contract between the school and the LLC provides that the LLC would provide specified services to the school “in exchange for a fixed percentage of the School’s total annual revenue.” The footnote continues: “The Board does not believe that the Contract accurately reflects the historic relationship between the parties, or was effective, and submits that the Contract was never implemented according to its terms.” 

The footnote appears below a table that details 11 payments of $27,077, five made on Feb. 25, 2016 and six on Aug. 4, 2016, and one of $196,779.96 on Oct. 4, 2016 made to the LLC. According to the request, those payments were improperly coded as “CMO Fees,” referring a designation as a “charter management organization.”

According to Collins, Design-Lab’s charter makes no reference to a “charter management organization” and that is the reason the board believes the contract did not accurately reflect its relationship with the LLC. And, she adds, for that reason, the board determined that the LLC was a vendor, not a CMO, and that the payments to the LLC should have been coded instead as “Payment on Vendor Invoice.”

The payments made to the LLC, regardless of how they were coded, were for “services rendered,” and were not based in any way on the school’s revenues, Collins says.

Although questions were raised about how the payments were recorded on the school’s books, “there have been no financial improprieties, no problems with state funding at all,” Massett says.

While Bunting’s ruling on the minor modification request may resolve questions surrounding the school’s leadership, one door that could give Alvarez and Rayala continued access to the school remains slightly ajar.

In early July, the board issued a Request for Proposal (RFP), seeking assistance with professional services relating to design thinking, a project-based learning curriculum and professional development. The services requested in the RFP are among the responsibilities Alvarez’s LLC had been carrying out at the school since its opening.

The deadline for responding to the RFP is Friday. Miller and Collins say they have invited Alvarez to submit a proposal. Alvarez said last week that she will not do so.

Following Alvarez’s resignation, the board appointed Joseph Mock, whom Alvarez had hired in 2015 as special education coordinator and vice principal, to succeed her as principal and head of school. Prior to joining Design-Lab, Mock had spent nine years as a teacher in public schools in Easton, Pennsylvania, and a year as a charter school administrator.

To an outside visitor to the school, “I’m not sure the difference [between the leadership of Alvarez and Mock] would be obvious. I believe the transition was seamless to both staff and parents,” Collins says.

As of now, she adds, “we are operating in full compliance with our charter.”

However, despite the positive publicity the school received when the XQ grant was announced, Design-Lab still has not reached the enrollment levels required for full compliance for the upcoming school year.

Design-Lab closed in June with 276 students enrolled in grades 9 through 11. Its first class will graduate next year, and authorized enrollment, under terms of its charter, would be 475 students in grades 9 through 12. To remain in compliance, charter schools must reach 80 percent of authorized enrollment, or 380 students.

As of July 7, the school had 342 students enrolled, “so we need 38 more,” Miller says.

While the minor modification issue may have been resolved, the tension between Alvarez and the board’s leaders persists. Both sides are careful about discussing differing interpretations of the 2015 contract, a hint that some form of legal battle may still be on the horizon. And there’s still the matter of the $10 million XQ grant, a complex issue on its own.

As Collins admits, “it’s complicated.”

Larry Nagengast, a contributor to Delaware First Media since 2011, has been writing and editing news stories in Delaware for more than five decades.
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