Eastern Michigan University statement regarding non-renewal of Ann Arbor Learning Community charter

Overview

Eastern Michigan University serves as Ann Arbor Learning Community’s (AALC) contractual charter school authorizer and has served in this capacity since the school launched 24 years ago. As such, EMU has a contract with the AALC, most recently renewed in 2020, that expires this year. At the time of that renewal, EMU in our role as authorizer shared areas of concern with AALC.  Unfortunately, those issues of enrollment decline and financial sustainability have continued.  EMU also has encountered issues with AALC’s compliance with contractual provisions and data reporting that led to the University’s determination, last November, not to renew its charter contract with AALC.  

The role of charter school authorizers

It’s important to understand the role and responsibilities of a charter school authorizer.  

Michigan law, MCL 380.502(4), provides:  “An authorizing body shall oversee, or shall contract with an intermediate school district, community college, or state public university to oversee, each public school academy operating under a contract issued by the authorizing body. The authorizing body is responsible for overseeing compliance by the board of directors with the contract and all applicable law.”

Authorizers are responsible for approving groups who can open new schools, setting clear expectations for enrollment, approving its mission and general direction, overseeing school academic and financial performance, and taking action if a school is not meeting expectations.  Each charter school, once authorized, operates under the direction of an appointed board.  The school’s board is solely responsible for selecting operational leadership, day-to-day oversight, selecting and compensating any management partners in alignment with the charter contract.

The events and factors that led to the decision not to renew the school’s charter beyond the 2021-2022 academic year are briefly outlined below:

EMU warns AALC about AALC’s enrollment and financial challenges in 2020 

In the summer of 2020, AALC’s charter contract with EMU was set to expire. Typically, an authorizer such as EMU will renew a charter contract for five years but, in this case, EMU noted several concerns with AALC in deciding to renew AALC’s contract for only a two-year period. At that time, EMU made clear to AALC that to be considered for another charter contract renewal, AALC needed to improve upon (a) its enrollment (as almost all funding for public schools is based upon the school’s student enrollment), and (b) its financial condition, which had remained in a precarious position (due to low enrollment) for several years. Since the 2020 renewal, EMU has also raised concerns with AALC regarding decisions related to facilities and data accuracy and reporting.  

AALC’s building challenges

AALC has also had issues related to its school building for several years. From July 2018 to spring 2021, AALC was housed in a building located on Textile Road in Ann Arbor.  In 2020, the school’s leadership began to have significant concerns about that building, so much so that AALC took the unusual step of vacating the property in Spring 2021 before the original lease term was set to expire. It did so without having another building in place to house the school. 

AALC leadership found a temporary building to host summer school in 2021. However, AALC failed to present the proper certificate of occupancy to EMU, even after numerous requests. With no certificate of occupancy by mid-July 2021, EMU required that the school vacate that premises.

AALC found another building to begin the Fall 2021 school year, but that building also did not have a certificate of occupancy.  Without a certificate, AALC was forced to educate its students virtually for the first two and a half months of the 2021-2022 school year.  At the same time, AALC’s proposed building required hundreds of thousands of dollars in improvements to be transformed into the school building AALC wanted.

AALC ends its educational service provider contract, leading to further enrollment losses

While dealing with these challenges, AALC also decided to end its contract with its education service provider, Global Education Excellence (GEE). The school and GEE had a number of disagreements between them, which are now the subject of a lawsuit. As a result of GEE’s departure, AALC lost almost its entire high school enrollment. As noted above, the school’s overall enrollment suffered significantly, going from 273 students in the 2020-2021 school year to less than 40 with a staffing ratio of nearly one staff member for every two students.  That level is simply not financially viable for a school that relies on public funding to operate.

EMU elects not to renew AALC’s charter

EMU informed AALC on Nov. 8, 2021, that it would not renew its charter when it expired in June 2022 (see letter dated Nov. 8, 2021). EMU outlined in writing the reasons for not renewing AALC’s charter, including AALC’s rapid decline in enrollment, serious financial problems, and failure to comply with its charter agreement.

EMU’s decision to not renew its charter contract with AALC does not mean the school must automatically close - it only serves as notice EMU will no longer serve as AALC's contractual authorizer after the end of the 2021-2022 school year. The school has until that time to find another authorizer, decide to close or take other action.

Given EMU’s decision not to renew AALC’s charter, EMU could not justify using a significant amount of public funds to turn a privately-owned commercial building into a temporary public school building.  Accordingly, in that same Nov. 8th letter, EMU also informed AALC that the University disapproved of AALC’s proposed lease. 

Despite EMU’s letter, AALC signed a lease with its chosen building.  

Michigan Dept. of Education’s (MDE) concerns about AALC

During this time, the Michigan Department of Education had separately communicated to EMU that it was concerned about some of the enrollment numbers AALC had been reporting to the State. 

EMU appoints a conservator for AALC

As questions about enrollment and finances continued to mount, EMU appointed a Conservator for the school in December 2021 pursuant to the charter contract.  The Conservator's role is to assume the duties of the AALC Board and oversee the operations of the school.

Soon after the Conservator was appointed, it became apparent that EMU’s concerns about AALC’s finances were well-founded.  After reviewing AALC’s financial information, AALC’s Conservator informed EMU that in January 2022, AALC had less than $100,000 in its bank account but approximately $110,000 in monthly expenses.  Fortunately, at this time, the Conservator, with EMU’s help and cooperation, has successfully stabilized expenses and obtained sufficient additional funding from the MDE to keep AALC’s doors open for its students.  EMU understands there are additional federal Covid-related grant funds (which are commonly referred to as “ESSER” funds) that AALC may be eligible for and receive which may help keep AALC open for the remainder of the 2021-2022 school year.

Next steps

At no time has Eastern advocated -- nor would we ever advocate -- for a school to be closed during the school year. Such a result is exceedingly disruptive for the students, parents, and entire school community. Since the Conservator's appointment, EMU has sent letters and had numerous conversations with AALC, Axios (AALC’s current staffing company), and the State of Michigan, fiercely advocating that the school remain open to finish out the school year. We will continue to advocate that the school remain open as long as possible this school year and work with the State and the school to the best of our ability to achieve that result.

March 15, 2022

Written by:
Official Statements

Media Contact:
Melissa Thrasher
mthrashe@emich.edu
734-487-4401