Reading School District v. I-Lead Charter School

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Reading School District, :
Petitioner :
:
v. :
:
I-Lead Charter School, : No. 78 C.D. 2018
Respondent : Argued: November 15, 2018
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ANNE E. COVEY, Judge (P.)
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION BY
JUDGE COVEY FILED: March 14, 2019
Reading School District (District) petitions this Court for review of the
Pennsylvania State Charter School Appeal Board’s (CAB) December 20, 2017 order
granting I-Lead Charter School’s (I-Lead) appeal from the District’s decision
revoking I-Lead’s charter, and directing the District to sign the charter. The District
presents the following issues for this Court’s review: (1) whether CAB arbitrarily and
capriciously disregarded record evidence; (2) whether CAB’s decision is erroneous
because it is contrary to law, is not supported by substantial evidence, and disregards
I-Lead’s failure to comply with the academic performance requirements in the State
Board of Education’s Regulations and academic goals set forth in I-Lead’s charter
application; (3) whether CAB committed an error of law by concluding that it cannot
decide if I-Lead violated the Sunshine Act;1 (4) whether CAB erred when it
concluded that I-Lead did not violate the Public Official and Employee Ethics Act2
(Ethics Act); and (5) whether CAB’s decision regarding I-Lead’s compliance with
1
65 Pa.C.S. §§ 701-716.
2
65 Pa.C.S. §§ 1101-1113.
highly-qualified teacher3 requirements (HQT) was erroneous. After review, we
vacate and remand.
I. BACKGROUND
The District operates Reading Senior High School (RSHS), which serves
approximately 3,500 students in grades 10 through 12. I-Lead, Inc. is a Pennsylvania
nonprofit corporation.4 I-Lead is a charter school that was established in the District
in 2010 and which operates pursuant to the Charter School Law (CSL).5 I-Lead is the
only charter school within the District’s boundaries. I-Lead’s mission is as follows:
[I-Lead] empowers youth age 17 and up who have dropped
out of school and appear on the off-roll list to be self-
sufficient members of the 21st Century economy as
effective leaders, creative entrepreneurs, and engaged
citizens. At [I-Lead], leadership, citizenship, academics,
and work experience are integrated, and responsibility for
learning and leading is shared among the youth, the staff,
families, and the community.
Reproduced Record (R.R.) at 319a. I-Lead’s target students include individuals 17 to
21 who are not attending school, students who are enrolled but truant, enrolled
students at risk of dropping out, and individuals experiencing hardships and
challenges such as, inter alia, court adjudications, addiction, homelessness, abuse and
pregnancy. See R.R. at 707a.
3
“In Pennsylvania, a highly[-]qualified teacher . . . is one who: (i) holds a [Pennsylvania
Department of Education]-issued teaching certificate in a core content area; and (ii) demonstrates
subject matter competency within that core content area[].” CAB Op. at 11, Finding of Fact No. 38.
4
See Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C.S. § 501(c)(3). I-Lead,
Inc.’s Executive Director, President and CEO David Castro testified that I-Lead, Inc.’s “mission is
to improve quality of life in challenged communities through leadership[,] development and
education.” Reproduced Record at 678a. I-Lead, Inc. was the charter school applicant and has
provided financial support for I-Lead.
5
Act of March 10, 1949, P.L. 30, as amended, added by Section 1 of the Act of June 19,
1997, P.L. 225, 24 P.S. §§ 17-1701-A - 17-1751-A.
2
On October 27, 2010, the District approved Resolution Gen-55 which
granted I-Lead’s charter application (Charter Application)6 for a 3-year term, but
directed I-Lead to provide classes for students in grades 9 through 12. I-Lead and the
District executed a charter agreement (Charter Agreement) which imposed specific
responsibilities upon I-Lead, including: complying with the CSL, complying with
secondary education curriculum requirements, and “observ[ing] the provisions of the
[Charter Application.]” R.R. at 331a. The Charter Agreement further mandated that
“[I-Lead] will provide education for grades 9 through 12 but will give preference in
enrollment to [dropout] students consistent with its [Charter A]pplication.” R.R. at
331a.
In October 2013, the District renewed I-Lead’s charter for a 5-year term
(July 1, 2014 through June 30, 2019). Although a new charter agreement was not
proposed following the October 2013 renewal vote, approximately 10 months later,
by August 8, 2014 letter, the District proposed a new charter agreement.
On June 5, 2015, the District’s counsel Allison S. Petersen (Petersen)
sent a letter to I-Lead’s counsel, Robert W. O’Donnell (O’Donnell), threatening to
“move forward with [charter] revocation proceedings” based on numerous concerns
with I-Lead’s operation. R.R. at 305a. Petersen described I-Lead’s students’
academic performance as “deficient and not in accordance with the intent of the
[CSL].” R.R. at 304a. Petersen also expressed concern with I-Lead’s failure to take
“steps to ensure that all of [I-Lead’s] teaching staff are highly qualified as required
under federal law.” Id. Based on I-Lead’s bylaws, board meeting minutes and other
documents, Petersen further accused that I-Lead was “not operating in accordance
with the [CSL], the Sunshine Act, the Ethics Act or [I-Lead’s] own bylaws.” R.R. at
6
The Charter Application is referenced in numerous documents in the Reproduced Record
as the “Revised Charter Application” because I-Lead, Inc. had previously submitted a Charter
Application which was denied. However, we exclusively refer to it as the “Charter Application”
herein.
3
305a. Petersen voiced concerns with I-Lead, Inc.’s involvement in I-Lead’s
management, and the sharing of common board members between the two entities.
Petersen also expressed that I-Lead’s board members’ statements of financial interest
were incomplete and some members had failed to file them at all.
Based thereon, Petersen explained that the District was preparing a
resolution to present at its June 25, 2015 meeting to revoke I-Lead’s charter.
Notwithstanding, Petersen proposed:
To avoid the time and expense of revocation proceedings,
the [] District is willing to make one more attempt to reach
a resolution on [the implementation of accountability]
standards. If [I-Lead] agrees to [certain enumerated]
accountability terms and conditions as part of a renewal
charter acceptable to the [] District, the term of which
would be from the 2014-[20]15 school year through the
2018-2019 school year (‘Renewal Term’), the [] District
would agree to forego revocation at this time and
continue to monitor the performance and operations of
[I-Lead] during the Renewal Term.
R.R. at 305a-306a (emphasis added). On June 15, 2015, O’Donnell responded, in
relevant part:
Please be advised that there is no management contract or
other financial agreement between [I-Lead and I-Lead,
Inc.7] The role of I[-]Lead[,] Inc. has purely been that of a
7
In its brief to this Court , I-Lead represents:
I-L[ead,] Inc. is the sponsoring organization of [I-Lead] in that it was
the applicant for the charter school and has philanthropically
supported [I-Lead] since its inception. I-L[ead,] Inc. is neither a
management company nor a vendor to [I-Lead], and has not
performed any work for any other charter school in the state. I-
L[ead,] Inc. staff members have donated time and money to support
[I-Lead].
[The District] approved the [Charter Application] which placed I-
L[ead,] Inc. in a supportive role. The [Charter] Application provided
that I-L[ead,] Inc.’s Board of Directors would form the Board of
Trustees for [I-Lead].
4
donor. I[-]Lead[,] Inc. has funded [I-Lead] in a variety of
ways and has never realized any gain nor was any gain
intended. For example, the lease which your client already
has provides that there is effectively no rent charged by I[-
]Lead[,] Inc. The only payment is for operating expenses.
The only ‘money changing hands’ that you refer to is the
advancement of funds by I[-]Lead[,] Inc. to [I-Lead] to
meet cash flow needs. These funds are lent without
interest. There is simply no basis for the sinister
implications in your letter.
As far as academic performance is concerned, as you are
well aware, the priority for enrollment at [I-Lead] is
drop[]out status. These students start from well behind the
conventional enrollee and to impose unrealistic
performance standards creates inevitable conflict later on.
Your letter unequivocally threatens revocation proceedings
which my client believes unnecessarily creates more
conflict and expense and undermines their [sic] efforts to
serve their [sic] students. Therefore, [I-Lead] is prepared,
albeit under duress, to sign the charter agreement as
proposed in your letter.
R.R. at 263a (underline emphasis added).
On September 21, 2015, I-Lead submitted a request to amend its charter
(Amendment Request) to “clarify the terms of its charter[.]”8 R.R. at 238a. On
September 23, 2015, (just two days after I-Lead submitted its Amendment Request,
only three months after the District proposed to “forego revocation” and I-Lead
accepted the District’s proposed terms, and just two years after the District renewed I-
I-Lead Br. at 18.
8
I-Lead sought in the Amendment Request,
among other things . . . : (1) to replace the academic goals within the
existing [C]harter [Agreement] with new ones; (2) to clarify the
independence of I-Lead, Inc. . . . from I-Lead; and (3) to specify that
I-Lead shall comply with the Sunshine Act . . . and [HQT]
requirements, and offer compliance training regarding the Sunshine
Act and the Ethics Act.
CAB Op. at 1.
5
Lead’s charter), the District’s Board of School Directors (District’s Board) approved
a resolution initiating revocation proceedings against I-Lead. R.R. at 306a. The
resolution referenced as grounds for revocation the same concerns raised in
Petersen’s June 5, 2015 letter. Specifically, the District’s Board specified in Charge 1
that I-Lead “[f]ail[ed] to meet the requirements for student performance set forth in
[Chapter 5 of State Board of Education’s Regulations,] 22 P[a.] Code Ch. 5 (relating
to curriculum) or subsequent regulations promulgated to replace 22 P[a.] Code Ch. 5,
or fail[ed] to meet any performance standards set forth in the written charter.” R.R. at
311a. The District’s Board averred in Charge 2 that I-Lead “[v]iolat[ed] [] provisions
of the [CSL] and/or any provisions of law which the charter school has not been
exempted, including federal laws and regulations governing children with
disabilities.” R.R. at 312a. The District’s Board alleged in Charge 3 that I-Lead
“[f]ail[ed] to meet generally[-]accepted standards of fiscal management or audit
requirements.” R.R. at 313a.
The District’s Board appointed a hearing examiner who held hearings on
both the Amendment Request and the revocation proceedings on January 21 and 22,
2016 and February 2, 5, 8 and 9, 2016. During a 30-day public comment period
which followed the hearings, 987 written communications were submitted
supporting I-Lead.9
On May 18, 2016, the District granted in part and denied in part the
Amendment Request. On May 25, 2016, the District’s Board voted to revoke I-
Lead’s charter based on Charges 1 and 2. On June 23, 2016, I-Lead filed with CAB a
petition appealing the charter revocation.10 On September 16, 2016, pursuant to
9
See CAB Op. at 6. These included letters from a State Representative, a State Senator, a
County Commissioner, members of the Reading City Council, and parents of I-Lead’s students.
10
On June 16, 2016, I-Lead filed with CAB a petition appealing from the partial denial of
the Amendment Request. I-Lead later withdrew that petition and, thus, the District’s Amendment
Request decision is not before this Court.
6
Section 1729-A(d) of the CSL,11 I-Lead filed a motion to supplement the record (I-
Lead Motion) with the following documents: (1) minutes and attachments from I-
Lead’s Board of Trustees’ 2016 public meetings; (2) August and September 2016
letters of support from public officials; (3) 2016 statements of financial interest filed
by I-Lead board members and administrators; and (4) I-Lead Board of Trustees’
meeting minutes from January and March 2014. I-Lead also requested a hearing at
which former I-Lead Board chair and Executive Director, President and CEO of I-
Lead, Inc. David Castro (Castro) would testify regarding the independent committee
that negotiated the lease for I-Lead’s building and the discussions held at public
meetings pertaining to those lease transactions. On November 21, 2016, the District
filed a motion to supplement the record nunc pro tunc (District Motion) with I-Lead’s
and the District’s 2015-2016 Specific Performance Profile (SPP)12 scores released by
the Pennsylvania Department of Education (PDE) on October 27, 2016.
11
Section 1729-A(d) of the CSL provides, in relevant part: “[CAB] shall review the record
and shall have the discretion to supplement the record if the supplemental information was
previously unavailable.” 24 P.S. § 17-1729-A(d).
12
Prior to the 2012-2013 school year, “[t]he Pennsylvania Department of Education (PDE)
set . . . Adequate Yearly Progress (AYP) standards under the No Child Left Behind Act[,]” 20
U.S.C. §§ 6301–7941, based on the Pennsylvania System of School Assessment (PSSA). New
Hope Acad. Charter Sch. v. Sch. Dist. of the City of York, 89 A.3d 731, 733-34 (Pa. Cmwlth. 2014).
“Even if a school [did] not satisfy those AYP proficiency thresholds, AYP [could] also be achieved
through other safe harbor and growth methods based on reductions in the percentage of non-
proficient students and improvements in scores toward proficiency.” Id. at 734.
In the 2012-2013 school year, [the] PDE created a new metric for
measuring academic achievement, the SPP and Federal Designation
system, which was approved by the [United States Department of
Education] and replaced AYP in Pennsylvania. The SPP is a system
that incorporates various data points including raw test scores on the
PSSA and Keystone Exams (as applicable), [Pennsylvania Value-
Added Assessment System (]PVAAS[)] scores as well as a host of
other measurable factors such as graduation rates and Advanced
Placement Test scoring. The system generates a SPP Building Level
score on a 1-100 scale with certain scoring intervals being tiered into
classifications. However, the information that is analyzed to create
7
On January 3, 2017, CAB’s hearing examiner denied I-Lead’s Motion
because its documents were not relevant and/or were not previously unavailable, and
granted the District’s Motion because the SPP data was relevant and previously
unavailable. Subsequently, I-Lead submitted, and the hearing examiner granted, a
motion to supplement the record with Citadel Intermediate High School’s (Citadel)13
2016 SPP scores released by the PDE on October 27, 2016.
On June 13, 2017, CAB granted I-Lead’s appeal from the District’s
charter revocation. CAB explained its rationale for supplementing the evidence as
follows:
The 2015-2016 SPP [scores] of I-L[ead] and the [District],
which were released by PDE on October 27, 2016, were
previously unavailable and are directly relevant to the
issue of I-L[ead]’s academic performance. CAB has
considered SPP data in its revocation and nonrenewal cases
since the SPP system took effect in Pennsylvania.
CAB Op. at 24 (citations omitted; emphasis added).14
the Building Level score such as the academic achievement data of
students in Reading and Math is also reported.
Imani Educ. Circle Charter Sch. v. Sch. Dist. of Phila., (Dkt. No. CAB 2014-08, filed May 11,
2016), at 33-34 (footnote omitted).
13
Citadel is located in the District and serves students in grades 8 and 9.
14
“We construe the term ‘previously unavailable’ according to its plain meaning. 1 Pa.C.S.
§ 1903. ‘Previously’ pertains to timing. In this context, it should be construed to mean the
timeframe beginning when the revocation notice was issued, and ending when the record closed.”
Pocono Mountain Charter Sch., Inc. v. Pocono Mountain Sch. Dist., 88 A.3d 275, 291 (Pa. Cmwlth.
2014). Further,
CAB holds ‘[i]nformation that was previously unavailable cannot
include information that could have been obtained and submitted for
inclusion into the record prior to the school board’s vote, but was
not.’ See In re: Renaissance Acad. of Pittsburgh, Alternative of Hope
Edison Charter Sch., [(]Dkt. No. CAB 2001-2[, filed October 16,
2001)] at 4-5; C.R., Item No. 56, at 5.
In context, ‘unavailable’ means not accessible, unknown, or not
discernible with due diligence.
8
On the merits, CAB held that I-Lead’s students had demonstrated
significant improvement and accordingly, I-Lead had satisfied the CSL’s
performance requirements. CAB also ruled that I-Lead’s failure to meet HQT
requirements was not alone sufficient to deny I-Lead’s charter. In addition, CAB
noted that I-Lead acknowledged its Sunshine Act violations and the record showed
improvement with its compliance, but concluded that CAB did “not [] have
jurisdiction over open meeting challenges for local agencies.” CAB Op. at 29. Thus,
CAB “[could not] consider these alleged Sunshine [Act] violations in determining
whether or not I-L[ead]’s charter should be revoked.” Id. at 30. CAB further
determined that I-Lead’s alleged Ethics Act violations did not warrant charter
revocation because although there was commingling between I-Lead and I-Lead, Inc.,
there was no evidence that anyone was enriched by it.15 CAB explained that although
it does not have jurisdiction to hear Ethics Act violations, it “can take into
consideration [lack of compliance] in determining governance issues,” and rejected
the District’s argument that I-Lead’s Board members’ failure to file financial
disclosure statements should be attributed to I-Lead. Id. at 34. The District timely
appealed to this Court.16
Id.
15
CAB characterized the relationship between I-Lead and I-Lead, Inc. as follows: “(1)
philanthropy, including zero percent interest loans, contributions, and a below-market lease for real
estate; and (2) provisions that the Board of Directors for I-L[ead], Inc. will be the Board of Trustees
for I-Lead.” CAB Op. at 33.
16
“Our review of [CAB’s] decision is limited to determining whether constitutional rights
were violated, whether errors of law were committed or whether the decision is not supported by
substantial evidence.” New Hope Acad., 89 A.3d at 736.
9
II. DISCUSSION
Initially,
[t]he core purpose of the [CSL] is to improve students’
education. The General Assembly expressly set forth its
intention in enacting the [CSL] to ‘[i]mprove pupil
learning,’ ‘[i]ncrease learning opportunities for all pupils,’
and ‘[h]old the schools established under [the CSL]
accountable for meeting measurable academic standards
and provide the school with a method to establish
accountability systems.’ [Section 1702-A (1), (2), (6) of the
CSL,] 24 P.S. § 17-1702-A(1), (2), (6)[.]
New Hope Acad. Charter Sch. v. Sch. Dist. of the City of York, 89 A.3d 731, 739 (Pa.
Cmwlth. 2014) (citations omitted).
Section 1729-A(a) of the CSL permits a local board of school directors
to revoke a charter or deny renewal based on any of the following:
(1) One or more material violations of any of the
conditions, standards or procedures contained in the written
charter . . . .
(2) Failure to meet the requirements for student
performance set forth in [Chapter 5 of the State Board of
Education’s Regulations,] 22 Pa. Code Ch. 5 (relating to
curriculum) or subsequent regulations promulgated to
replace [Chapter 5 of the State Board of Education’s
Regulations] or failure to meet any performance standard
set forth in the written charter signed pursuant to [S]ection
1716-A [of the CSL].
(3) Failure to meet generally[-]accepted standards of fiscal
management or audit requirements.
(4) Violation of provisions of [the CSL].
(5) Violation of any provision of law from which the charter
school has not been exempted, including [f]ederal laws and
regulations governing children with disabilities.
(6) The charter school has been convicted of fraud.
24 P.S. § 17-1729-A(a).
10
Section 1729-A(d) of the CSL provides for CAB’s review of a school
board’s charter revocation or nonrenewal decision.17 See 24 P.S. § 17-1729-A(d). In
West Chester Area School District v. Collegium Charter School, 812 A.2d 1172 (Pa.
2002), the Pennsylvania Supreme Court held that CAB applies a de novo standard of
review from a school board’s denial of a charter school application, stating, “such
review requires [] CAB to give ‘appropriate consideration’ to the findings of the
[d]istrict [b]oard, while making an independent determination as to the merits . . . .”
Id. at 1180. The Court explicitly rejected the argument that “de novo review would
result in [] CAB giving no consideration to the [d]istrict [b]oard’s findings, a result
inconsistent with the statutory discretion granted to local school boards.”18 Id. at
1179. Thus, CAB “exercise[s] the authority to arrive at an independent judgment
on the matter in dispute.” Id. at 1178 n.9 (emphasis added) (quoting Codorus Stone
& Supply Co., Inc., v. Kingston, 711 A.2d 563, 566 (Pa. Cmwlth. 1998)).
Section 1729-A(d) of the CSL governs CAB’s exercise of its
independent judgment:
17
The statutory criteria for charter nonrenewal and revocation are the same. See 24 P.S. §
17-1729-A(a); Discovery Charter Sch. v. Sch. Dist. of Phila., 166 A.3d 304 (Pa. 2017).
18
In contrasting CAB’s standard of review with the appellate standard of review, the Court
explained: “The plain language of the CSL directs [] CAB to specifically articulate its reasons for
‘agreeing or disagreeing’ with the [d]istrict [b]oard’s findings. Simply stated, substantial evidence
review does not involve agreement or disagreement with findings.” W. Chester, 812 A.2d at 1179-
80. This Court has also recognized:
Because a school district has a financial interest in the outcome of a
charter grant or denial, ‘the minimum requirements of due process
require that the charter school applicant have a neutral fact finder in
[CAB].’ [W. Chester, 812 A.2d at 1181]. [CAB] ‘must apply a de
novo standard of review when entertaining appeals from a [d]istrict
[b]oard’s denial of a charter school application.’ Id. at 1180.
Sch. Dist. of Pittsburgh v. Provident Charter Sch. for Children with Dyslexia, 134 A.3d 128, 139
n.24 (Pa. Cmwlth. 2016).
11
[CAB] may consider the charter school plan, annual reports,
student performance and employe and community support
for the charter school in addition to the record. [CAB] shall
give due consideration to the findings of the local board of
directors and specifically articulate its reasons for agreeing
or disagreeing with those findings in its written decision[.]
24 P.S. § 17-1729-A(d).
Based on the above foundation, this Court addresses the District’s
arguments.
A. Disregard of Evidence
The District first contends that CAB arbitrarily ignored record evidence
demonstrating that revocation was proper based on student performance. It contends
that, despite having found that the 2015-2016 SPP scores were “directly relevant to
the issue of I-L[ead]’s academic performance[,]” CAB erroneously failed to consider
that evidence because “[t]he most recent data available to the [District] at the time of
the adoption of the Revocation Adjudication in May of 2016 was for the 2014-[20]15
School Year[.]” CAB Op. at 24, 26.
In an appeal to CAB from a school district’s decision denying renewal or
revoking a charter, Section 1729-A(d) of the CSL grants CAB discretion to
supplement the record if the supplemental information was “previously
unavailable.” 24 P.S. § 17-1729-A(d) (emphasis added). Based on its clear
language, Section 1729-A(d) of the CSL specifically contemplates that, on appeal,
CAB may consider information that did not inform a school district’s decision.19
This statement is consistent with CAB’s de novo review function, “making an
19
Notably, prior CAB decisions have relied upon student performance data occurring after a
school district resolved to revoke a charter. See, e.g., Imani Educ. Circle Charter Sch.; Cmty. Acad.
of Phila. Charter Sch. v. Sch. Dist. of Phila., Sch. Reform Comm’n, (Dkt. No. CAB 2013-12, filed
September 8, 2014).
12
independent determination as to the merits . . . .” W. Chester, 812 A.2d at 1180.20 In
its opinion, CAB explained:
The most recent data available to the School District at the
time of the adoption of the Revocation Adjudication in May
of 2016 was for the 2014-[20]15 School Year, when I-
L[ead] had an SPP score of 40.0, an increase of nearly 20%
over the 2013-[20]14 School Year. []CAB rejects the over-
simplified comparisons between the student performance on
Keystone Exams at I-L[ead] and RSHS as reported in SPP
documentation given I-L[ead]’s focus and mission to
educate at-risk students. Further, the record here supports a
conclusion that I-L[ead] has made substantial improvements
in academic performance.
CAB Op. at 26. Nowhere in CAB’s opinion does CAB discuss and substantively
consider I-Lead’s student performance for the 2015-2016 school year, and the
significant drop in student performance in all academic areas during that period, as
referenced, infra.21 CAB referenced and discussed student performance for all
20
See, e.g., Leatherwood, Inc. v. Dep’t of Envtl. Prot., 819 A.2d 604 (Pa. Cmwlth. 2003).
21
The Dissent claims:
[N]othing in CAB’s decision suggests to me that it disregarded any
particular test score or data set in making that decision. Instead, CAB
noted that it had considered all of the evidence before it, including
the supplemental evidence claimed to have been disregarded by the
Majority, and was satisfied that, ‘given I-L[ead]’s focus and mission
to educate at-risk students,’ I-Lead had made ‘improvement in student
performance in the last several school years.’ (CAB Op. at 26, 34;
Conclusion of Law ¶ 14.) That CAB did not directly cite the statistics
from the 2015-2016 School Year in its opinion does not mean CAB
disregarded that evidence. Rather, CAB’s decision reflects, and the
record supports, that ‘I-L[ead]’s students have shown improvement.’
(CAB Op. at 28.)
Dissenting Op. at 3-4. However, in Findings of Fact Nos. 30 through 33, CAB describes SPP
scores for each school year up to and including the 2014-2015 school year. CAB does not address
the SPP score for the 2015-2016 school year. Instead, the very next Finding of Fact states that
“[t]he most recent data available to the [District] at the time of the adoption of the Revocation
Adjudication in May of 2016 was that for the 2014-[20]15 School Year, I-L[ead] had an SPP score
of 40.0 [from the prior year’s SPP score of 33.5], an increase of nearly 20% over the 2013-[20]14
School Year.” CAB Op. at 10, Finding of Fact No. 34. CAB’s omission of I-Lead’s 2015-2016
13
academic years other than the 2015-2016 school year and made conclusions directly
contrary to the 2015-2016 data without reconciling or even acknowledging the
conflict.
“[O]ur case law defines a capricious disregard of the evidence to exist
‘when there is a willful and deliberate disregard of competent testimony and
relevant evidence which one of ordinary intelligence could not possibly have
avoided in reaching a result.’” Pocono Manor Inv’rs, LP v. Pa. Gaming Control Bd.,
927 A.2d 209, 216 (Pa. 2007) (emphasis added) (quoting Arena v. Packaging Sys.
Corp., 507 A.2d 18, 20 (Pa. 1986)). CAB specifically supplemented the record with
the 2015-2016 SPP data, finding that information “directly relevant to the issue of
I-L[ead]’s academic performance.” CAB Op. at 24 (emphasis added). Despite
having found the information relevant, previously unavailable, and properly
admitted,22 CAB erred when it “deliberate[ly] disregard[ed] . . . relevant evidence” by
failing to consider the 2015-2016 SPP data in deciding whether to revoke I-Lead’s
charter. Pocono Manor, 927 A.2d at 216.
B. CAB’s Application of Proper Standards
School Year SPP avoids an inconvenient discussion of the 2015-2016 SPP score decrease from 40
to 32.5, a drop which exceeded the prior year’s increase.
CAB’s failure to consider student performance for the 2015-2016 school year is further
evidenced by its conclusion that “[n]o students have been enrolled in I-L[ead] over a five-year
timeframe and therefore it is not possible to make an accurate judgment about the ability of I-
L[ead] to retain students in school.” CAB Op. at 27 (emphasis added). I-Lead enrolled students
over a five-year period between 2011 and 2016: I-Lead’s first year operating was 2011-2012; its
second year was 2012-2013; its third year was 2013-2014; its fourth year was 2014-2015; and its
fifth year was 2015-2016. Thus, it is clear that CAB did not consider the 2015-2016 school year
student performance. CAB’s general statement in the Conclusion to its Opinion that “review[ed]
the record below, as well as the supplemental information admitted to the record,” does not
convince this Court that it considered and weighed the supplemental information as it pertains to
student performance. CAB Op. at 34.
22
Notably, I-Lead does not argue in its brief to this Court that CAB erred when it found the
2015-2016 SPP data relevant, and supplemented the record with that evidence.
14
The District next argues that CAB failed to apply the law in New Hope
Academy to evaluate whether there existed valid grounds to revoke I-Lead’s charter
based on I-Lead’s full history of SPP scores and proficiency data, dropout and
graduation rates, and its compliance history with respect to the goals described in its
Charter Application.
1. Academic Performance Standards
The District contends that New Hope Academy mandates charter
revocation where, as here, I-Lead’s proficiency rates were significantly below those
of the District’s other schools, and where there was no pattern of significant
improvement. It maintains that such lack of improvement would have been evident
had CAB properly considered SPP scores and academic proficiency percentages for
the 2015-2016 school year.
In New Hope Academy, this Court explained that “Section 1729-A(a)(2)
of the [CSL] permits a school district to deny renewal of a charter school’s charter
for failure to meet student academic performance standards. 24 P.S. § 17-1729-
A(a)(2)[.]” New Hope Acad., 89 A.3d at 736 (emphasis added). Further,
[Chapter 423] sets forth the [Pennsylvania System of School
Assessment (]PSSA[)24] as the measure of student and
23
Chapter 5 of Title 22 of the Pennsylvania Code, to which Section
1729-A(a)(2) [of the CSL] refers, has been repealed and replaced by
[Chapter 4 of the State Board of Education’s Regulations (Chapter
4),] 22 Pa. Code Chapter 4. 29 Pa. B. 399 (1999) [(relating to
Academic Standards and Assessment)]. The regulations referenced in
Section 1729-A(a)(2) [of the CSL] are therefore those set forth in
[Chapter 4].
New Hope Acad., 89 A.3d at 737.
24
On its website, PDE explains:
The annual [PSSA] is a standards-based, criterion-referenced
assessment which provides students, parents, educators and citizens
with an understanding of student and school performance related to
the attainment of proficiency of the academic standards. These
15
school performance and sets standards of performance to be
measured by the PSSA, including proficiency.
New Hope Acad., 89 A.3d at 737.
Section 4.51(b) of Chapter 4 provides that “[t]he [s]tate assessment
system must include PSSA assessments and Keystone[25] Exams.” 22 Pa. Code §
4.51(b).
Proficiency as measured by PSSA test scores is therefore a
Chapter 4 student performance requirement. A consistently
standards in English Language Arts, Mathematics, and Science and
Technology identify what a student should know and be able to do at
varying grade levels. School districts possess the freedom to design
curriculum and instruction to ensure that students meet or exceed the
standards’ expectations.
Every Pennsylvania student in grades 3 through 8 is assessed in
English Language Arts and Math. Every Pennsylvania student in
grades 4 and 8 is assessed in [S]cience.
https://www.education.pa.gov/K-12/Assessment%20and%20Accountability/PSSA/Pages/default.aspx (last
visited 3/6/19). Prior to the 2012-2013 school year, 11th grade students were also required to take
PSSA tests. The Keystone Exam (further described, infra), replaced the 11th grade PSSA tests.
25
According to PDE’s website:
The Keystone Exams are end-of-course assessments designed to
assess proficiency in the subject areas of Algebra I, Algebra II,
Geometry, Literature, English Composition, Biology, Chemistry, U.S.
History, World History, and Civics and Government. Beginning in
the 2012-2013 school year, Keystone Exams in the following subjects
were developed by the [PDE] and made available for use by school
districts . . . and charter schools, including cyber charter schools:
Algebra I
Literature
Biology
The Keystone Exams are one component of Pennsylvania’s statewide
high school graduation requirements. Keystone Exams will help
school districts guide students toward meeting state standards.
https://www.education.pa.gov/K-12/Assessment%20and%20Accountability/Pages/Keystone-Exams.aspx
(last visited 3/6/19). The Keystone Exams replaced the 11th grade PSSA tests.
16
low percentage of students scoring proficient or better
on the PSSA constitutes a failure to satisfy Chapter 4
student performance requirements and is a valid ground
for nonrenewal of a school’s charter under Section 1729-
A(a)(2) of the [CSL] where the charter school’s
proficiency rates are lower than those of its school
district’s schools as a whole and no clear pattern of
significant improvement in its PSSA results is shown.
New Hope Acad., 89 A.3d at 737 (citations and footnote omitted; emphasis added).
During the 2011-2012 school year, RSHS was in its sixth year of
“corrective status” for AYP. SPP scores and Keystone Exam proficiency percentages
for RSHS students during the subsequent school years were as follows:
RSHS 2012-2013 2013-2014 2014-2015 2015-2016
SPP Score 54.5 60.2 65.2 72.8
Literature Proficiency 53.04% 64.22% 63.08% 60.40%
Algebra Proficiency 44.01% 50.20% 58.36% 50.71%
Biology Proficiency 16.08% 18.80% 25.68% 42.80%
See R.R. at 48a, 219a.
In contrast, during the 2011-2012 school year, I-Lead did not make
AYP, and its status was “Warning.” I-Lead’s students’ SPP scores and Keystone
Exam proficiency percentages during those same years were significantly lower than
RSHS’s as charted:
I-Lead 2012-2013 2013-2014 2014-2015 2015-2016
SPP Score 35.1 33.5 40.0 32.5
Literature Proficiency 25.81% 28.13% 32.79% 9.52%
Algebra Proficiency 9.68% 9.38% 18.92% 7.69%
Biology Proficiency 6.25% 9.09% 10.45% 0%
See R.R. at 43a, 217a.
17
I-Lead’s proficiency rates for the relevant school years were clearly
significantly lower than RSHS’s rates. In its opinion, while acknowledging I-Lead’s
lower scores, CAB nevertheless focused on what it found to be a pattern of
improvement. CAB recognized I-Lead’s students’ increasing Literature and Biology
Proficiencies each school year from the 2012-2013 school year through the 2014-
2015 school year, and a significant increase in Algebra Proficiency between the
2013-2014 school year and the 2014-2015 school year. CAB also relied on a 6½
point increase in I-Lead’s 2014-2015 school year SPP score.
However, since the SPP score and academic proficiency percentages for
the 2015-2016 school year revealed a marked departure from prior school years,
CAB’s failure to consider I-Lead’s SPP score and proficiencies that year rendered its
evaluation incomplete. During the 2015-2016 school year, I-Lead’s SPP score
dropped from 40.0 to 32.5. Literature Proficiency dropped from 32.79% to 9.52%.
Algebra Proficiency dropped from 18.92% to 7.69%. Finally, Biology Proficiency
dropped from 10.45% to 0%.26
26
The District also contends that CAB failed to consider that RSHS’s dropout rate was
substantially lower than I-Lead’s, and RSHS’s cohort graduation rate (students graduating in 4
years) was substantially higher than I-Lead’s as illustrated:
Dropout
2012-2013 2013-2014 2014-2015 2015-2016
Rates
RSHS 13% 7.61% 7.9% 7.46%
I-Lead 86% 38.96% 23.19% 10.08%
Graduation
2012-2013 2013-2014 2014-2015 2015-2016
Rates
RSHS 61.09% 66.64% 71.35% 64.37%
I-Lead 18.33% 27.10% 27.44% 41.49%
18
This Court agrees that consideration of I-Lead’s 2015-2016 SPP data
and proficiency rates could alter CAB’s conclusions regarding whether SPP and
proficiency histories demonstrate a “clear pattern of significant improvement[.]”
New Hope Acad., 89 A.3d at 737. However, it is noteworthy that while this Court
declared in New Hope Academy that “a failure to satisfy Chapter 4 student
performance requirements [] is a valid ground for nonrenewal of a school’s
charter[,]” the New Hope Academy Court did not hold that such a failure requires27 a
school district or CAB to not renew a charter or revoke a charter during the charter’s
term. Id. at 737 (emphasis added); see also Sch. Dist. of the City of York v. Lincoln
Charter Sch., 889 A.2d 1286 (Pa. Cmwlth. 2006).28
Thus, in conducting its de novo review in the instant matter, CAB was
free to consider numerous factors and to exercise its independent discretion in
reaching its decision. CAB analyzed I-Lead’s academic performance and
distinguished critical factors as follows:
I-L[ead] is unique in that it actively recruits students who
are ‘at-risk’ for dropping out of school or failing, and
enrolls students who are pregnant, have been adjudicated by
the courts, are truant, and/or have significant issues that
impede their ability to function in a traditional school
setting.
....
See R.R. at 41a, 43a, 46a, 48a, 224a-225a. I-Lead consistently and substantially reduced its
dropout rates over the relevant school years (from 86% in the 2012-2013 school year to 10.08% in
the 2015-2016 school year). Further, I-Lead’s graduation rate steadily increased from 18.33% in
the 2013-2014 school year to 41.49% in the 2015-2016 school year.
27
Section 1729-A(a) of the CSL permits, but does not require, a school district to revoke
or not renew a charter based on the reasons set forth therein.
28
The Dissent argues that “the Majority’s analysis suggests that a direct comparison with
[RSHS] is required to determine whether I-Lead’s students have achieved the requisite level of
academic performance that would allow I-Lead to retain its Charter.” Dissenting Op. at 4. The
Majority suggests no such thing. The Majority simply cites the law as explained in New Hope
Academy, and focuses on CAB’s failure to consider the 2015-2016 student performance data.
19
The significant factor in deciding if I-L[ead]’s charter
should be revoked is whether I-L[ead] has shown that it can
increase academic performance in those students that it has
undertaken to educate - students who are ‘at-risk’ for
dropping out of school or failing. In fact, I-L[ead]
originally applied to provide a charter school to grades 11
and 12. When the [District] granted the charter, it added
grades 9 and 10. This changed the need to provide
comprehensive high school services that [I-Lead] was not
previously prepared to provide. I-L[ead] has improved its
attendance rates and has significantly increased its
enrollment from 205 to 520.
....
The CSL encourages the establishment of schools to serve a
variety of purposes. It was enacted to create a system of
independent, mission-driven public schools that operate
outside of the school district structure. 24 P.S. § 17-1702-
A. Our prior interpretation requiring proficient or above
proficient achievement on state standardized tests is not
wholly applicable to a case in which the [c]harter [s]chool
educates students who are dropouts, at significant risk of
dropping out, who have been out of the school system, or
who have other significant issues that impede traditional
learning such as early pregnancy, a history of crime or
delinquency, and social-emotional issues. While academic
progress is absolutely expected, it is inappropriate to expect
exactly the same achievement on standardized tests when
the pool of students and the mission of the charter school is
so different from the public school. The comparison
between I-L[ead], which serves students in grades nine
through twelve, is simply not a perfect comparison with the
RSHS which serves students in grades ten through twelve.
We do not agree with the [District] that a different grade
configuration is ‘irrelevant when making that comparison.’
Similarly, based upon a review of the evidence, CAB does
not agree with the [District] that I-L[ead] has made
‘insignificant progress’ given its pool of students.
The strong support from community members including a
State Representative, a State Senator, a County
Commissioner, members of the Reading City Council, and,
most especially, parents of students at I-L[ead] is also
noteworthy. Taken as a whole, I-L[ead] provides a service
20
to a significant pool of students in this community and
should be given more time to improve its academic
performance, especially considering that I-L[ead’s] . . .
revocation proceedings [were instituted] only two years into
its five-year renewal.
The facts in this record support the conclusion that I-
L[ead]’s students have shown improvement, and CAB
believes it should be given additional time because of the
at-risk population the charter school serves. Because the
legislative mandate of the CSL is to increase learning
opportunities for all students and to improve pupil
performance of all students, I-L[ead] has this statutory
obligation to do so. CAB strongly urges I-L[ead] to
continue on the path of improvement.
CAB Op. at 26-28 (citation omitted).29
29
The District contends that the record evidence does not support CAB’s conclusion that I-
Lead targets and educates at-risk students, unique from those at RSHS. Although the record is
lacking in specific data on the composition of I-Lead’s student body, there is substantial record
evidence upon which CAB could have relied in reaching its conclusion. First, the Charter
Agreement itself recognizes that “[I-Lead] will provide education for grades 9 through 12[,] but
will give preference in enrollment to [dropout] students consistent with its application.” R.R.
at 331a (emphasis added). Further, when asked “[w]hat would you estimate the percentage of
students who were not dropouts at I-L[ead,]” Dr. Tamara Smith, I-Lead’s former principal and then-
acting chief academic officer, responded: “[I]t’s hard to give an exact number. Maybe I might
estimate a third – a third, or a little higher.” R.R. at 824a. In addition, Castro testified:
[L]ooking at the data[,] . . . there was a significant problem with
students exiting the District when they turned 17.
And we believed at the time that there were a . . . significant number
of students that had earned significant credits in the 9th and 10th
grade, but they were then dropping out, and that we would be able to
serve them in the 11th and 12th grade, and this fit very well with our
mission to try to help low income learners to go to college.
R.R. at 680a. Castro expounded:
[W]e knew we were focusing on a population that is very low[-
]performing academically. We knew that we were trying to reach out
to students that were disconnected from [s]chool and that, perhaps,
had been out of [s]chool for a[ ]while, and we expected them to be
presenting with severe academic deficits.
R.R. at 685a. When asked if I-Lead enrolled such students, Castro stated: “Yes, we certainly did.
We got – and even more challenges than could have imagined when we were in the application
21
The District argues that CAB’s analysis is erroneous because it “applied
an exception to Chapter 4 standards that the CSL does not condone.” District Br. at
38. Specifically, the District contends that CAB erred by disregarding established
academic standards because of I-Lead’s focus on at-risk students: “Never before has
CAB ever taken the position that different standards should apply to such schools, or
that these schools should be given a pass on the standards imposed on everyone else.”
District Br. at 40.
phase. . . . I mean the students present not only with severe academic deficits, but with
extraordinary social problems[.]” R.R. at 685a.
In response to his representation that I-Lead primarily focused on dropouts, Castro was
asked how I-Lead defined that term. He explained:
Well, I would say we define it in several layers. The first layer would
be someone that’s . . . not in school, who’s still at an age where they
[sic] can be in school. So that would be somebody who’s 17 and
above and who is not in school even though they’re [sic] entitled to go
to [s]chool until they’re [sic] 21 years old.
So then it would be people that . . . have had a substantial history of
truancy. . . – they may be theoretically on the books somewhere, but
they’re actually not attending school. . . .
And then the third level would be students who are at risk of dropping
out, which would be people who have been in school but are not
accumulating credits or are experiencing extremely poor academic
performance . . . .
And then I would add a final tranche to that which is students that are
suffering with social issues that are likely to impede their academic
engagement[.]
R.R. at 707a. When asked if he “would agree . . . that not every child enrolled by [I-Lead] falls into
one of those four categories[,]” Castro replied:
I actually don’t agree with that. I think . . . I would turn it around. I
would say that there may be a small minority of students to which
those categories do not apply, but I think that it is, in all likelihood,
less than five percent of our population, and that the rest of the
population would be very appropriately described by those
categories that I just mentioned, fall into at least one, if not
multiple of them.
R.R. at 707a (emphasis added).
22
Contrary to the District’s characterization, CAB did not “appl[y] an
exception to Chapter 4 standards[,]” but, instead, in conducting its de novo review,
simply exercised the independent judgment and discretion that the CSL authorizes.
District Br. at 38. The record is clear that the CSL did not explicitly mandate that I-
Lead’s charter be revoked, and CAB considered I-Lead’s academic performance,
weighed the CSL’s purpose, and evaluated I-Lead’s mission, student and community
benefits and strong community support. Based thereon, with the exception of its
failing to consider the 2015-2016 academic performance data, we hold that CAB
properly exercised its discretion.
2. Charter Goals
The District further argues that CAB failed to consider that I-Lead did
not attain the academic goals specified in its Charter Application. Citing to
Graystone Academy Charter School v. Coatesville Area School District, 99 A.3d 125(Pa. Cmwlth. 2014), the District asserts that “[a] charter school’s failure to achieve its
own stated academic goals is also justification for revocation.” District Br. at 36.
Notably, Section 1729-A(a)(1) of the CSL permits charter revocation or nonrenewal
based on “[o]ne or more material violations of any of the conditions, standards or
procedures contained in the written charter . . . .” 24 P.S. § 17-1729-A(a)(1)
(emphasis added).
The Charter Application set forth I-Lead’s specific academic goals:
Academic Goal #1
[Literacy and Mathematics]
Objectives and Performance Indicators:
 By the end of the school’s fifth year of operation,
75% of exiting 12th grade learners will score as
Proficient or Advanced on representative, internally
23
administered sections of the reading comprehension
and writing components of the PSSA or will have
increased their literacy skills by at least four
functioning levels as measured by the Test of Adult
Basic Education (TABE).
 By the end of the school’s fifth year of operation,
75% of exiting 12th grade learners will score as
Proficient or Advanced on representative, internally
administered sections of the mathematical reasoning
and computation components of the PSSA or will
have increased their mathematics skills by at least
four functioning levels as measured by the TABE.
 By the end of the fifth year of the school’s operation,
90% of exiting 12th grade learners will have
successfully demonstrated reading, writing, and
mathematical reasoning and computation skills by
completing all relevant aspects of their classroom and
experiential learning activities.
R.R. at 322a-323a. The Charter Application further represents:
Academic Goal #2
[Science, Technology, and Social Studies]
Objectives and Performance Indicators:
 By the end of the school’s fifth year of operation,
75% of exiting 12th grade learners will score as
Proficient or Advanced on the science and social
studies components of the PSSA.
 By the end of the school’s fifth year of operation,
85% of exiting 12th grade learners will demonstrate
competence in the areas of word processing,
spreadsheets, databases, multimedia and
presentations, telecommunication, Internet systems
and fundamentals, and critical thinking about social
and ethical issues in technology, as measured by
success on the TechLiteracy Assessment tool and
performance-based assessment rubrics as part of the
learner’s experiential learning activities.
24
R.R. at 323a-324a. The Charter Application also proposed academic goals pertaining
to leadership skills, cultural and community-related issues, and school-to-career and
21st Century employment competencies.
In addition, the Charter Application included the following non-
academic goals:
Non-Academic Goal #1
[I-Lead] learners will attend regularly and punctually all
classroom and experiential learning activities.
Objectives and Performance Indicators:
 The average daily attendance rate will be at least 85%
in the first year of the school’s operation, will
improve to 90% by the third year, and to 95% by the
fifth year, according to daily records kept by teachers
(called ‘learning facilitators’ at [I-Lead]), mentors,
tutors, and/or employers.
 The average daily tardiness rate will be no greater
than 10% in the first year of the school’s operation,
will be no greater than 7% in the third year, and no
greater than 5% in the fifth year, according to daily
records kept by learning facilitators, mentors, tutors,
and/or employers.
R.R. at 326a. Other non-academic goals included mediation use, non-violent conflict
resolution skills, and parental engagement.
I-Lead’s failure to achieve its Charter Application standards is a factor
that could impact CAB’s revocation decision.30 Accordingly, in reaching its decision,
30
I-Lead contends that CAB was justified in not considering its performance goals since
CAB found that the charter was “not properly granted because the [District] itself unilaterally
changed the design and structure of the [c]harter [s]chool by requiring it to serve grades 9 and 10[.]”
I-Lead Br. at 35. The Dissent similarly notes that the District “added 9th and 10th grades to the
school, grades for which I-Lead had not been prepared to offer.” Dissenting Op. at 2. Further, I-
Lead argues, even if the Charter Application goals applied, they “required students to ‘develop
competency’ in academic areas, did not require a specific statistical level of achievement, and did
not apply until after the school’s fifth year of operation.” Id. Notwithstanding, I-Lead
25
CAB should have considered whether I-Lead achieved its goals and, if not, weighed
the effect of such failure. CAB is not required to uphold the District’s charter
revocation based on a charter school’s failure to achieve such goals. In Truebright
Science Academy Charter School v. Philadelphia School District, 115 A.3d 919 (Pa.
Cmwlth. 2015), this Court held that a charter school’s “failure to meet a performance
goal set forth in its charter is a valid ground for nonrenewal[,]” but the Court did not
require charter nonrenewal. Id. at 921.
C. Violation of Other Laws
The District further argues that since I-Lead violated other applicable
laws, CAB erred when it granted I-Lead’s appeal and ordered the District to sign I-
Lead’s charter. Section 1729-A(a)(5) of the CSL permits a school district to revoke
or nonrenew a charter for “[v]iolation of any provision of law from which the charter
school has not been exempted[.]” 24 P.S. § 17-1729-A(a)(5). The District asserts
that “[c]ompetent evidence established multiple, material violations of the Sunshine
Act, the Ethics Act and the [HQT] requirements over the course of multiple school
years[.]” District Br. at 47.
1. Ethics Act
The District asserts that the lease between I-Lead, Inc. and I-Lead
contains conflicts of interest prohibited by the Ethics Act which, along with I-Lead’s
subsequently voluntarily signed the Charter Application that expressly required it to “observe
the provisions of the [Charter Application] . . . .” R.R. at 331a. Further, while it is true that I-
Lead’s specific academic goals were to be measured after five years of operation, and the District
initiated revocation proceedings at the start of I-Lead’s fifth operating year, the record was
supplemented at CAB’s de novo proceeding with data for five full years of operation. Thus, it was
appropriate for CAB to consider whether I-Lead had achieved the goals stated in the Charter
Application for the five-year period including the 2015-2016 school year.
26
officials’ and employees’ failure to file financial disclosure statements, merited I-
Lead’s charter revocation.
This Court has acknowledged CAB’s authority to determine Ethics Act
violations for purposes of rendering a decision on a charter nonrenewal under the
CSL. In New Hope Academy, this Court held that “[CAB’s] determinations that [the
charter school] violated . . . the Ethics Act . . . in it[s] contracts with its founder[’s] . .
. businesses are likewise supported by substantial evidence and legally valid.” Id. at
740.
a. Conflict of Interest
CAB explained:
At issue is the lease between I-L[ead] and I-L[ead], Inc.,
and the actions of I-L[ead]’s Board of Trustees.[31] The
September 23, 2015 Resolution contains two ‘charges’ for
which evidence of the I-L[ead] Board [of Trustees’] actions
and involvement in lease transactions would be relevant: (1)
I-L[ead] failed to ensure that its operations are independent
from that of its management company and/or vendor, I-
L[ead], Inc. (the two entities have common board members
and/or administrators and do not have a written contract that
delineates each entity’s responsibilities to the other or
payment terms); and (2) I-L[ead] violated the [CSL], the
Sunshine Act and its own Bylaws in that decisions relegated
to the Board of Trustees are being made by others outside
the public realm, ‘including decisions about budgeting,
contracts and leases . . . .’ It is the overlap of board
members and administrators involved with both I-L[ead]
and I-L[ead], Inc. which is the underlying problem. []
Castro, a board member who served as President of the
Charter Board for some period of time, was one of those
individuals.
I-L[ead] claims that the lease for 401 Penn Street cannot
form the basis of an Ethics Act violation because no benefit
31
The Charter Application “provided that I-L[ead], Inc. Board of Directors would serve as I-
L[ead]’s Board of Trustees (Charter Board).” CAB Op. at 12, ¶46.
27
accrued to I-L[ead], Inc. as result of that lease. I-L[ead],
Inc. is receiving rent from I-L[ead] as a result of the lease,
but the evidence shows that the rental arrangement entails I-
L[ead], Inc. donating back to I-L[ead] any balance
remaining after payment of operating costs.
CAB Op. at 31-32 (citations omitted). However, CAB concluded:
It appears that members of the I-L[ead]’s Board [of
Trustees] engaged in activities which, on their face, may
have constituted a conflict of interest had there been a
‘private pecuniary benefit.’ 65 Pa.C.S. § 1103(a). A
‘conflict of interest’ is defined by the Ethics Act as ‘[u]se
by a public official or public employee of the authority of
his office or employment or any confidential information
received through his holding public office or employment
for the private pecuniary benefit of himself, a member of
his immediate family or a business with which he or a
member of his immediate family is associated . . . .’ 65
Pa.C.S. § 1102 (emphasis added). Contracts or transactions
entered into with businesses associated with public officials
must be awarded through an open and public process which
is dictated by [Section 1103(f) of the Ethics Act,] 65
Pa.C.S. § 1103(f). Such a process includes prior public
notice and subsequent public disclosure of all proposals
considered and contracts awarded. 65 Pa.C.S. § 1102. It is
the State Ethics Commission which has the authority to
remedy noncompliance with the Ethics Act. 65 Pa.C.S. §
1107 (15).
There is no evidence that anyone or any entity was actually
enriched by this commingling of relationships between I-
L[ead] and I-L[ead], Inc. I-L[ead], Inc. is a not-for-profit
operation. It does not provide management services or any
other comprehensive services. There is no evidence in this
record that I-L[ead] or I-L[ead], Inc. has done business with
any other charter school in the Commonwealth. The
totality of the relationship between I-L[ead], Inc. and I-
L[ead] can be summed up in two categories: (1)
philanthropy, including zero percent interest loans,
contributions, and a below-market lease for real estate; and
(2) provisions that the Board of Directors for I-L[ead], Inc.
will be the Board of Trustees for I-L[ead]. The [District]
did approve an application that specifically placed I-L[ead],
Inc. in a supportive role. While the commingling of these
28
entities may appear troubling on its face, the evidence of
this commingling is not sufficient to constitute a
statutory reason for revocation.
CAB Op. at 32-33 (emphasis added; footnote omitted).
The District argues that “CAB’s creation of the standard of ‘actual
enrichment’ disregarded the actual standard of ‘private pecuniary benefit’ set forth in
[Section 1102 of the Ethics Act,] 65 Pa.C.S. § 1102.” District Br. at 56. It further
contends that “because CAB made up a standard that does not exist, it overlooked the
evidence of commingling and of the receipt of a private pecuniary benefit in violation
of the Ethics Act, and determined that there were insufficient grounds to justify
charter revocation.” Id.
This Court has explained:
Section 1729-A(a)(5) of the [CSL] does not provide that a
charter must be revoked or cannot be renewed if it is
established that a charter school is in violation of the
law. It only provides that ‘the local board of school
directors may choose to revoke or not to renew the charter’
if it finds that a charter school is in ‘[v]iolation of any
provision of law from which the charter school has not been
exempted[.] . . .’ [T]he [s]chool [d]istrict decided to
exercise its discretion and revoke the charter, but that
decision is not binding on [CAB].
Lincoln Charter, 889 A.2d at 1288 (emphasis added).
Contrary to the District’s characterization, CAB did not “ma[k]e up a
standard[,]” when opting not to impose sanctions for the alleged Ethics Act
violations. District Br. at 56. Rather, its opinion demonstrates that CAB considered
the facts, weighed whether the conduct warranted charter revocation under the CSL,
and exercised its discretion. District Br. at 56. Accordingly, CAB properly acted
within its authority.32
32
As Lincoln Charter makes clear, CAB was not required to revoke the charter even if it
found that I-Lead had violated the Ethics Act.
29
b. Financial Disclosure Forms
Further, this Court finds no merit to the District’s argument that I-Lead’s
officials’ and employees’ failure to file financial disclosure statements justifies
charter revocation. In Lincoln Charter, this Court explained:
[J]ust because a . . . [b]oard member of a charter school did
not file an Ethics Act statement does not mean that the
charter school is in violation of the Ethics Act; only the
individual board member is in violation because filing is an
individual responsibility, not the corporate responsibility of
the charter school. Charter schools are required to organize
as non-profit corporations. Section 1703-A of the [CSL],
24 P.S. § 17-1703-A. Just like any corporation, the failure
of any . . . [b]oard member not to carry out his or her
individual responsibility cannot be imputed to the
corporation itself. While the [s]chool [d]istrict or [CAB]
can take the failure to file Ethics Act statements into
consideration in determining governance issues, that
violation cannot be imputed to the charter school so that
it can be considered in violation of any law, making its
charter subject to non[]renewal or revocation under
Section 1729-A(a)(5) of the [CSL].
Lincoln Charter, 889 A.2d at 1288 n.7 (emphasis added). Accordingly, CAB did not
err by declining to impute to I-Lead, I-Lead’s officials’ and employees’ failure to file
financial disclosure statements.
2. Sunshine Act
The District next asserts that CAB erred when it refused to consider I-
Lead’s alleged Sunshine Act violations as a basis for charter revocation.
Section 1716-A(c) of the CSL, 24 P.S. § 17-1716-A(c), mandates that a
charter school’s board of trustees must comply with the Sunshine Act. In support of
its argument that I-Lead repeatedly failed to comply with the Sunshine Act, the
District referenced I-Lead’s nonpublic decisions such as its adoption of its annual
30
budget, expenditures to lease school facilities, employees’ hiring and employment
termination, decisions to borrow large sums of money and the repayment of such
loans. In response, CAB stated: “The courts of common pleas, not CAB, have
jurisdiction over open meeting challenges for local agencies. The remedy is a legal
challenge within thirty days of an alleged violation of the Sunshine Act[.] There is no
evidence on this record that the [District] made such a legal challenge.” CAB Op. at
29-30 (citations omitted).
Notwithstanding, CAB acknowledged:
I-L[ead]’s Board [of Trustees] held only three to four
meetings a year, and the [District] introduced copies of
every meeting minute supplied by I-L[ead]. The [I-Lead]
Board [m]inutes admitted into the record show some
attempted compliance with the [CSL]. Six sets of minutes
from the 2013-[20]14 school year and half of the 2014-
[20]15 school year do show that: (1) each meeting was
advertised in accordance with the notice requirements of the
Sunshine [Act]; (2) the Board [of Trustees] discussed and
approved financial reports, and the school’s financial
position on the record at each meeting; (3) the Board [of
Trustees] created an Executive Committee of the school to
handle day-to-day operations and matters arising between
meetings of the Board [of Trustees]; (4) the Board [of
Trustees] approved restructuring, employee resignations,
and staffing requests from the Executive Committee; and
(5) the Board [of Trustees] voted on important matters such
as amending the by-laws to establish an independent
committee for facility negotiations and electing Dr. Natalini
as Board [of Trustees] chair.
I-L[ead] admits to minutes-recording errors in the past
and contends that it has worked to correct Sunshine
[Act] violations by receiving training on how properly to
[sic] record public meeting minutes, and has posted
those minutes to its website following each meeting of
the Board [of Trustees] since the hearings below. The
record shows improvement in this area.
31
CAB Op. at 30 (emphasis added; citations omitted). Thus, CAB did consider these
issues and found that I-Lead was working in good faith to resolve those issues.33
Accordingly, the District’s argument is meritless.
3. Highly-Qualified Teachers
Finally, the District contends that I-Lead’s failure to adhere to HQT
requirements was further justification for I-Lead’s charter revocation, and that CAB
failed to give sufficient weight to the issue. The District first maintains that CAB’s
factual findings are inconsistent with respect to the percentage of I-Lead’s HQTs.
Regardless of any inconsistencies in its factual findings, CAB’s opinion
makes clear that it acknowledged that “I-Lead did not always meet the HQT
requirements.” CAB Op. at 28. CAB further explained:
Even the [District] concedes that these violations alone
would not be significant enough to warrant revocation of
the charter. The employment of HQTs is not a significant,
fundamental, or material reason to revoke a charter. . . .
These HQT violations should be considered, but only if
they constitute a part of a wider pattern of significant
violations of law by I-L[ead] will they constitute sufficient
evidence to revoke I-L[ead]’s charter. Therefore, this
evidence will be considered along with the evidence of
other alleged violations.
CAB Op. at 29 (citations omitted; emphasis added). Thus, CAB properly considered
I-Lead’s lack of compliance with HQT requirements. It weighed that evidence as a
factor when it exercised its independent judgment and discretion, as permitted by the
CSL.34 Accordingly, this Court discerns no error.
33
Notably, the District denied I-Lead’s proposed amendment providing for “compliance
training regarding the Sunshine Act and the Ethics Act.” CAB Op. at 1.
34
See Lincoln Charter.
32
III. CONCLUSION
Based on the foregoing, this Court vacates CAB’s order and remands
this matter to CAB to consider the matter anew with the inclusion of the following
additional information: I-Lead’s 2015-2016 academic performance data (including
SPP score and Keystone Exam proficiency percentages), its dropout and graduation
rates and its compliance with its Charter Application’s academic goals. Based
thereon, CAB is to render a new decision on the merits.
For all of the above reasons, CAB’s order is vacated, and the matter is
remanded to CAB for proceedings consistent with this opinion.35
___________________________
ANNE E. COVEY, Judge
35
The Dissent complains that “[d]espite this [Court’s observation that the CSL does not
require revocation or non[]renewal for failure to meet academic performance standards] and [this
Court’s] recognition that ‘CAB was free to consider numerous factors and to exercise its
independent discretion in reaching its decision,’ the Majority would still remand this matter for
CAB to issue a new decision.” Dissenting Op. at 4-5. This Court recognizes CAB’s independent
discretion, but it must exercise that discretion properly, by considering all relevant evidence. It
did not do so here.
Further, contrary to the Dissent’s assertion that a remand is not necessary because this
“Court should defer to CAB’s expertise[,]” this Court does not question CAB’s expertise.
Dissenting Op. at 5. CAB is free to use its expertise when reviewing charter school revocation
decisions. However, CAB may not capriciously disregard evidence when doing so.
33
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Reading School District, :
Petitioner :
:
v. :
:
I-Lead Charter School, : No. 78 C.D. 2018
Respondent :
ORDER
AND NOW, this 14th day of March, 2019, the Pennsylvania State
Charter School Appeal Board’s (CAB) December 20, 2017 order is vacated, and the
matter is remanded to CAB for proceedings consistent with this opinion.
Jurisdiction is relinquished.
___________________________
ANNE E. COVEY, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Reading School District, :
Petitioner :
:
v. : No. 78 C.D. 2018
: Argued: November 15, 2018
I-Lead Charter School, :
Respondent :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ANNE E. COVEY, Judge (P.)
HONORABLE CHRISTINE FIZZANO CANNON, Judge
DISSENTING OPINION BY
JUDGE COHN JUBELIRER FILED: March 14, 2019
Because I would conclude the Pennsylvania State Charter School Appeal
Board (CAB) did not err or abuse its discretion in holding that the revocation of I-
Lead Charter School’s (I-Lead) Charter was not warranted based on its holistic
consideration of the evidence before it, the alleged violations of, among other
statutes, the Sunshine Act,1 the unique nature and needs of I-Lead’s mission and
student population, and the considerable community support for I-Lead, I would
affirm CAB’s Order. Therefore, I must, respectfully, disagree with the Majority’s
decision to vacate and remand this matter for a new decision.
The purposes of the Charter School Law2 (CSL) include “[i]mprov[ing]
pupil[s’] learning,” “[i]ncreas[ing] learning opportunities for all pupils,” and
1
65 Pa. C.S. §§ 701-716.
2
Act of March 10, 1949, P.L. 30, as amended, added by Section 1 of the Act of June 19,
1997, P.L. 225, 24 P.S. §§ 17-1701-A—17-1751-A.
“[p]rovid[ing] parents and pupils with expanded choices in the types of
educational opportunities . . . available.” Section 1702-A(1), (2), (5) of the CSL,
24 P.S. § 17-1702-A(1), (2), (5) (emphasis added); New Hope Acad. Charter Sch. v.
Sch. Dist. of the City of York, 89 A.3d 731, 739 (Pa. Cmwlth. 2014). Taking these
legislative mandates to heart, I-Lead established its school in 2010 “with a mission
to provide former students who had dropped out of school and other at-risk
students,” such as those who were truant, pregnant, had been adjudicated delinquent
by the courts, or had other issues that impacted their ability to function in traditional
school settings, “with an educational option to finish high school.” (CAB Opinion
(Op.) at 1; Finding of Fact (FOF) ¶ 2.) It applied to provide education for only 11th
and 12th grades, but when the Reading School District (District) granted the Charter,
it added 9th and 10th grades to the school, grades for which I-Lead had not been
prepared to offer. (CAB Op. at 26.) Because “[n]inth grade is a significant year in
which students drop-out or get off-track,” the addition of these grades did not change
the focus of I-Lead’s mission. (FOF ¶ 36.) I-Lead proceeded with its mission to
provide an educational option to at-risk students, beginning with 205 students in the
2011-12 school year, a number that has increased to 520 by 2015. (CAB Op. at 26;
FOF ¶¶ 4, 22.) With these legislative purposes and I-Lead’s mission in mind, CAB
considered the District’s decision to revoke I-Lead’s Charter five years after it began
operating and a mere two years after the District renewed that Charter.
In its decision, CAB acknowledged, as we all must, the importance of a charter
school’s ability to meet academic performance requirements, stating that “academic
progress is absolutely expected.” (CAB Op. at 27.) But, CAB also recognized that
a direct comparison of charter schools and traditional schools as a means of
measuring academic performance and improvement may not be appropriate in all
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cases. Without considering, among other factors, the differences in the grade levels
served and the unique characteristics and needs of the enrolled student populations,
such direct comparisons may become “over-simplified.” (Id. at 26-27.) In reflecting
on such comparisons, CAB reasoned that “it is inappropriate to expect exactly the
same achievement on standardized tests when the pool of students and the mission
of the charter school [are] so different from the public school.” (Id. at 27.) Thus,
CAB took a holistic approach to resolving the question before it, considering, in
addition to the academic performance of I-Lead’s students over the years, the
particular at-risk student population served by I-Lead, the need for this type of
educational option, and the community support for its continued operation. I agree
that this approach can be, in some circumstances, an appropriate way of ascertaining
whether the revocation of a charter is warranted.
The Majority holds that CAB “deliberate[ly] disregard[ed] . . . relevant
evidence by failing to consider the 2015-2016 [School Performance Profiles (SPP)]
data in deciding whether to revoke I-Lead’s charter,” which reflected a decrease in
proficiency scores. Reading Sch. Dist. v. I-Lead Charter Sch., __ A.3d __, __ (Pa.
Cmwlth., No. 78 C.D. 2018, filed March 14, 2019), slip op. at 14 (internal quotation
omitted). However, nothing in CAB’s decision suggests to me that it disregarded
any particular test score or data set in making that decision. Instead, CAB noted that
it had considered all of the evidence before it, including the supplemental evidence
claimed to have been disregarded by the Majority, and was satisfied that, “given I-
L[ead]’s focus and mission to educate at-risk students,” I-Lead had made
“improvement in student performance in the last several school years.” (CAB Op.
at 26, 34; Conclusion of Law ¶ 14.) That CAB did not directly cite the statistics
from the 2015-2016 School Year in its opinion does not mean CAB disregarded that
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evidence. Rather, CAB’s decision reflects, and the record supports, that “I-L[ead]’s
students have shown improvement.” (CAB Op. at 28.) Citing the legislative
mandate to increase learning opportunities for all students, the student improvement
shown, the improved dropout rates, and the strong community support for I-Lead,
CAB, in its expertise, concluded that I-Lead “should be given additional time” “to
improve its academic performance, especially considering that [the District]
instituted revocation proceedings only two years into [I-Lead’s] five-year renewal.”
(Id.)
Moreover, the Majority’s analysis suggests that a direct comparison with
Reading Senior High School (RSHS) is required to determine whether I-Lead’s
students have achieved the requisite level of academic performance that would allow
I-Lead to retain its Charter. Reading Sch. Dist., __ A.3d at __, slip op. at 17-18 and
n.26 (comparing the test scores, dropout rates, and graduation rates of I-Lead to
RSHS and stating “I-Lead’s proficiency rates for the relevant school years were
clearly significantly lower than RSHS’s rates”). However, as CAB observed in its
decision, RSHS does not serve 9th graders, the population that is often most at risk
for dropping out of school or getting off track. (FOF ¶¶ 23, 36; CAB Op. at 26-27.)
I agree with CAB that a direct comparison of I-Lead and RSHS is not reasonable
given their different student populations and missions.
As observed by the Majority, Section 1729-A(a)(2) of the CSL, 24 P.S. § 17-
1729-A(a)(2), permits, but does not require, the revocation or non-renewal of a
charter based on the failure to meet student academic performance standards.
Reading Sch. Dist., __ A.3d at __, slip op. at 15, 19. Despite this observation and
its recognition that “CAB was free to consider numerous factors and to exercise its
independent discretion in reaching its decision,” the Majority would still remand this
RCJ-4
matter for CAB to issue a new decision. Id. at __, slip op. at 19-23. In doing so, the
Majority is not saying that CAB must come to a different result, but that it must
mention the 2015-2016 School Year scores in its decision. Thus, CAB could still
find, as it already has, that revocation of I-Lead’s Charter was not warranted given
a holistic review of the evidence. Under these circumstances, I believe a remand is
unnecessary and that the Court should defer to CAB’s expertise and affirm.
Further, I note the practical implications of a remand for CAB to issue a new
decision addressing issues that I would conclude have been adequately and correctly
resolved in the present decision. CAB’s remand decision will likely be followed by
another appeal, resulting in the diversion of additional funds that could be otherwise
used for the education of both the District’s and I-Lead’s students. And, continued
proceedings challenging I-Lead’s operation will continue to cast a shadow on I-
Lead’s ability to provide additional educational opportunities to the at-risk students
it has chosen to educate. These practical implications deserve consideration in
determining whether a remand is warranted in this matter.
Finally, I note my agreement with the Majority that the District’s argument
that CAB erred in refusing to consider I-Lead’s alleged Sunshine Act violations is
without merit. Reading Sch. Dist., __ A.3d at __, slip op. at 30-32. However, I do
so primarily because I agree with CAB that it lacks jurisdiction to consider whether
a violation of the Sunshine Act has occurred in the first instance, as such
determinations fall within the jurisdiction of the local court of common pleas. (CAB
Op. at 29-30); see Section 715 of the Sunshine Act, 65 Pa. C.S. § 715 (stating courts
of common pleas have original jurisdiction over Sunshine Act challenges);
Graystone Acad. Charter Sch. v. Coatesville Area Sch. Dist., 99 A.3d 125, 142 (Pa.
Cmwlth. 2014); Pocono Mountain Charter Sch., Inc. v. Pocono Mountain Sch. Dist.,
RCJ-5
88 A.3d 275, 286 (Pa. Cmwlth. 2014). However, I also agree with the Majority’s
observation that, notwithstanding CAB’s statement, given I-Lead’s admitted issues,
“CAB did consider these issues and found that I-Lead was working in good faith to
resolve” them. Reading Sch. Dist., __ A.3d at __, slip op. at 32.
Accordingly, I would not vacate and remand for a new decision but would
affirm CAB’s Order.
_____________________________________
RENÉE COHN JUBELIRER, Judge
RCJ-6