CWCNY Letter to Board

7/30/2019 CWCNY Letter to Board

1/7

WAGPOPS! and Parents from PS221 Toussaint LOuverture

Williamsburg and Greenpoint Parents: Our Public Schools!

Over 700 members and growing!

SENT VIA ELECTRONIC MAIL

May 28, 2013

Board of Trustees

Citizen of the World New York

P.O. Box 25885

Brooklyn, NY 11202-5885

Dear Board Members:

We represent parents from Greenpoint, Williamsburg, Bed Stuy, Bushwick, and Crown Heights. Most of us are

public school parents of children from PreK to high school, but we also represent parents of children in charterschools, like Beginning with Children and Northside Believe, two homegrown Williamsburg charter schools started

by local community leaders.

We come to you with concerns about the Citizens of the World National organization, the governance structure in

place, the financial health of this organization, and the capacity of Citizens of the World Charter Schools to create

and sustain the schools promised to parents in New York.

All of us, including the CWCNY Trustees, share a common belief in the benefits of de-segregated communities and

classrooms that meet the many needs of all of our children. We have faith that you joined the CWCNY Board with the

absolute best of intentions that CWC Williamsburg and CWC Crown Heights would live up to the mission that was

sold by CWC National to parents in Los Angeles and Brooklyn as well as yourselves.

FINANCIAL ISSUES

We have deep concerns over the financial state of the CWC schools. In light of recent events in LA and certain

financial dealings imposed by the National Network, we engaged in a close study of the budgets submitted last year

in the SUNY proposal for the NY schools as well as the governance documents posted on the CWC website since

the school was approved last summer. Several red flags were raised, and we hope youll agree that the budgets

should be revisited and evaluated for their soundness.

Licensing Fee

First of all, the fact that a new, previously unmentioned Licensing Agreement presented by CWC National inSeptember 2012 -- after SUNY approved the proposed schools -- is alarming. They did not include this licensing fee in

the 5-year projections submitted in their proposal to SUNY, and the Agreement stands to pull $3,359,434 in revenue

from the NY schools up to National in California. This licensing fee is unprecedented among charter school

operators.

CWC failed to disclose to the public their intention to charge a licensing fee. The CWC proposal to SUNY mentioned

a possible licensing agreement only once: Additionally, CWCS anticipates engaging in a licensing agreement with

1


2/7

local schools for the use of the Citizens of the World name. (SUNY proposal, 11-5)

The first time the public heard of the 3% charge for a licensing fee was in the SUNY recommendation to the Regents,

where a licensing fee was described as for the use of intellectual property. Yet there is no intellectual property, no

proprietary model or curriculum to CWC National to protect. The only thing CWC National owns the rights to is the

name itself, and as a newly formed and not-yet established entity, use of their name hardly justifies this hefty 3% fee.

What concerns us is that this fee of 3% of per pupil funding going to National is in exchange for nothing but a name.

National has not promised or defined any services or support to justify that fee.

In fact, buried within the Licensing Agreement, National claims that they will provide certain services and support to

the NY schools, but the schools will be charged separately for it--above and beyond the 3% fee. Have the scope, fee

structure and work agreement been defined for this? What work needs to be done above and beyond salaried

positions and managerial contracts? How will it impact the schools operating budget? Who decides what work will

be performed and when? Whos driving this work? Are there limits imposed for the amount of work they can provide

and bill the schools for? If not, has National offered any assurances that you will be able to control, plan and protect

your budget?

Besides the 3% constant fee for use of their trademarked name, and the random, unforeseeable charges for undefined

services that National intends to provide in the future, we see an additional revenue stream for National that is

buried in the licensing agreement under REIMBURSEMENT FEES.

Again, in an unprecedented move, National is asking your schools to foot the bill for the labor and expenses that

they incurred over the last year and a half to open these schools in NY. Kriste Dragon, Krupa Desai and Hilary

Johnson all hold c-level positions and six-figure salaries at National. They even listed themselves as Founding

Members of these NY schools. But now that the schools are set to open and they have appointed you as Trustees

with fiduciary responsibility over the schools, why are they compromising your budgets to be reimbursed for

expenses incurred to apply for and open two school that ultimately benefits them more than anyone else?

Have these prior expenses been defined or documented anywhere? Was an agreement drafted up front to define and

limit the scope of charges? Were these terms spelled out with you from the beginning so that you could have control

over the budgets for which you are ultimately responsible? What is the fee structure?

Most importantly, why is National inserting workagreement language into a licensing agreement? Defining terms of

a working relationship, scope of work, and services provided belongs in a contract, not a licensing agreement. A

contract has defined terms and an end in sight, but the licensing agreement marries CWCNY to National without

bidding for other contractors. We are deeply concerned that the Licensing Agreement gives CWCNY no authority to

protest charges that National can make at any time.

Because we have not seen any budgets for the schools that factor in the Licensing Agreement, weve provided a

breakdown of the fees based on the projected per pupil revenue that CWC used in their budgets submitted to SUNY.

(EXHIBIT A)

Considering that such a significant amount of capital is being funneled to National with no goods or services

delivered in return, it's easy to view the Licensing Agreement as a pure profit grab on the part of National, exploiting

their sole membership position on the CWCNY Board in an effort to cover their own inflated salaries. The licensing

fee appears designed to fund Nationals expansion into other states rather than our own CWCNY school

communities. It is for a trademarked name only -- one that is not well established and increasingly losing its prestige.

2


3/7

This fee offers nothing to the schools, as none of CWCs curriculum, process or pedagogy is proprietary or ownable.

PATTERN OF NON-TRANSPARENCY AND PROVIDING MISLEADING INFORMATION

In addition to concealing the fees and purpose of the Licensing Agreement from SUNY and the public, CWC National

misrepresented themselves by stating that a "partnership" and Licensing Agreement had already been established

between CWC National and CWCLA.

No existing licensing agreement in LA

We discovered that CWCLA Board has yet to sign the Licensing Agreement. Parents in CWCLA schools are upset

about their Licensing Agreemnent - and it should be noted that their fee is lower than what National is charging NY

at only 1% of per pupil spending and doesnt have as big an impact on the CWCLA school budgets. Why are the

CWCNY schools being charged so much more than CWCLA simply for the right to use the name, particularly as New

Yorks per pupil spending is already significantly higher than Californias? (EXHIBIT B)

Also, CWCLA schools are not being charged additional fees for past and future services. CWC National might claim

that they need to provide significantly higher fees to CWCNY schools because they are starting them up, yet those

charges are not being applied to CWC Silverlake (opened Fall 2012) or CWC Mar Vista (opening Fall 2013).

CWC National did not incorporate until one yearafterthe first CWC school opened in Hollywood. The CWC schools

were operating without Nationals services and using the name Citizens of the World gratis. The parents in Los

Angeles have written to letters the CWCLA Board asking them to reconsider both the licensing fee and the

governing structure that has led to the licensing fee being pushed through against the best interests of their school.

Weve included the letters CWCLA parents have written for your perusal (EXHIBIT C & D)

As of this date, CWCLA has not paid anything to National and the services National has provided have been

minimal a study of operations and audits of internal controls. Principals may not be empowered to discuss the

usefulness of National as National can fire Principals at any time for any cause.

The CWC Hollywood parents letter points to the discomfort parents are feeling with the absolute control of CWC

National and the simmering amongst parents and teachers by a newly imposed governance structure that robs all

power from the schools. This parent warns that unless power is shared between National, Regional, and schools, the

problems will deepen with expansion. (EXHIBIT E)

Considering that CWCLA has still not signed their Licensing Agreement, and there are no services that National

provides that the schools themselves are not providing, we must seriously question the purpose of CWC Nationals

role with CWCNY in CWCNY schools?

Neglect of children

We want to make you aware that there is legal action pending against CWCLA, and by all appearances CWC

National has done a disappearing act. Minutes from recent CWCLA Board meetings describe negligence on the part

of the schools that put their children in serious peril. One parent describes the lack of care that led to her sons five

day coma: The harsh reality of the situation is that if I was not in the front office my son would have died in the

classroom. Another parent described finding her daughter passed out in a pool of her own vomit. In a desperate

plea for assistance from the CWCLA Board, she acknowledged that this could be a PR nightmare for this school,

and did not desire her school to be punished for the policies and communication measures not in place to prevent

3


4/7

further risks. Another parent wrote to LAUSD regarding the lack of services provided to ELL students. Where is

CWC National when these crises occur or when parents have genuine concerns regarding childrens education and

safety? (EXHIBITS F & G)

Fiscal instability

Financial statements from ExEd, CWCLAs management organization, were posted after CWCNY was approved by

SUNY. These documents reveal that the LA schools are not financially healthy.

The CWCLA schools ask for fundraising from parents to fulfill Nationals early promises of small class sizes and

enrichment. And the ask is astronomical -- $1300 per student at Hollywood and $2500 per student at Silverlake (which

is under-enrolled). At Hollywood, the stated overall fundraising goal for the school last year was $245k. Considering

that in District 14 alone over 85% of our children are FRPL and that North Brooklyn has the highest child poverty

rates in New York City, we need to ask ourselves what will happen if we have to rely on money raised by parents just

to operate these schools? What will be sacrificed if we cant meet these impossible goals?

Mingling of funds

In a recent letter, Executive Director Amy Held tried to assuage CWCLA parents and prospects who had been

hearing negative information by telling them that the cash-flow challenges are stemming from the state holding

back money. In the same letter, Held reassures parents that all funds raised at a school remain with that school.

What many of those parents do not know, and what we need you to know, is that in the past few months, CWCLA

created what they refer to as the PWB account, an account combines all the schools revenues into one account.

The budgets combine both of the schools expenses into one, giving the impression that the schools cost the same to

run, when this is not the case.

Parents at Hollywood who know about the revenue/expenses being combined are understandably upset, since CWC

Silverlake has significantly less parent resources and enrollment funds than CWC Hollywood. CWC Hollywoodparents have raised over $200K this school year, which was transferred out of the Hollywood account and into the

PWB account on January 13, 2013 . Soon thereafter, $80K was transferred from the PWB account to CWC Silverlake.

No one knows the status of the remaining $120K, as CWC National has not accounted for it. Parents are learning this

now and justifiably outraged to discover that their fundraising is not going directly to their own school.

Atypical, problematic governance

The CWC sole membership governing structure is highly unusual between two independent non-profits, and we

are concerned that it eradicates any power or decision-making authority that you have. CWC National pitched this

structure, with themselves as the sole member of our regional NY board, as though it were a successful and

financially sustainable model already in place in California. Nothing could be farther from the truth.

You can see from the letters written by parents and a close perusal of the CWCLA minutes, this is a hotly contested

issue. Through sole membership, CWC National is given extraordinary power over the CWCNY Board without

CWCNY receiving benefits from the sole membership governance structure. SUNY expressed concerns about sole

membership in their recommendations to the Regents, yet we see no safeguards in place to ensure the independent

functioning of the CWCNY Board. It appears that, in spite of CWC National pulling the strings on important policy

and budgetary issues, only CWCNY will be on the hook and legally responsible when a problem arises.

4


5/7

For example, this demand for the Licensing Agreement, which was drafted immediately after their approval from

SUNY last summer, did not originate from CWCNY, but from CWC National. We understand that as the Trustees of

both schools here in NY, you have some tough questions to face. How will it benefit your schools by signing a

licensing agreement that takes such a significant chunk out of the school budgets with so little return? As you know,

in its nascent stages, a school very often has budget challenges that more established schools do not. Are you

prepared to take on such a huge risk without the power to control its destiny?

Leaders who create a culture of opacity

The Minutes from the Board Meetings that occurred when Hollywoods board was merged into Nationals CWCLA

Regional Board have been unavailable for parents in spite of repeated requests. Members of the original CWC Board

that created CWC National are now c-level staff members at CWC National. This merger not only took away the

Board and thus any control at the school level, which was a tenet of their original charter, it transformed the Regional

board to include CWC Nationals current sole membership authority.

Additionally, the most recent CWC National 990 has not been released. Conflict of Interest Statements from Trustees

are unavailable. Recent ExEd financial statements with narrative descriptions are unavailable. And funds in the

amount of $850,000 held by CWC National, yet promised to the schools, are not accounted for. Fully executed

documents with amendments are also missing.

CWCNY furthers this pattern of opacity against Open Meetings Law by not posting the minutes from the previous

meeting or waiting until the late afternoon the day before the meeting to post the agenda for the most recent Board

meeting that we attended. Recent Board Materials discussed at CWCNY Board meetings have been posted and then

disappeared, and several important documents, like an executed copy of the Licensing Agreement between CWCNY

and CWC National have never been posted.

We know that the CWCNY website gets updated regularly. Last week, the website was updated to reflect that there

are still 1st grade openings at the NY schools and the new Executive Directors bio was added a few days ago. As

respected professionals, we trust that transparency for your Board is a top priority. The CWCNY Boards role is notonly to ensure academically successful schools, but to act as a public body, with transparency and a responsibility

to the public. But if you are forced to work under the murky dealings of CWC National, how can you maintain ethical

governance procedures? Are you willing to endure the scrutiny and tenacity of parents, the media, and elected

officials who are extremely skeptical of the legitimacy of CWC National? Especially when National is not offering

grants or other charitable goods to help your schools succeed?

We are aware of the ongoing absences of two CWCNY Trustees, Aretha Miller and Maryanne Kiley. We question

not only whether these Trustees are active, but whether they should still be considered CWCNY Trustees at all. We

believe that CWC National is aware that these Trustees have resigned, but have kept this information from the

CWCNY Board. Your bylaws state that you must have five Trustees to be considered a corporation, and we stand

by our allegation that you do not have five Trustees.

This lack of transparency concerns us deeply and points to a culture that inhibits transparency and limits the

engagement of both Regional Board members and parents to participate democratically in their schools, so that CWC

National can have free reign and absolute control over the NY schools.

Adding to our concerns regarding the lack of transparency in the operations of CWC National is the non-disclosure

agreements that CWC National and CWCLA school employees have been pressured to sign. Are you aware that

employees are asked to sign these NDAs when they are hired, and are required sign additional NDAs upon

5


6/7

termination in order to receive a severance package? This has made it very difficult, if not impossible for oversight

organizations like SUNY and New York State Regents to do their due diligence. Notably, none of these NDAs have

been mentioned in the proposals for any CWC school, so the charter school authorizers are not aware that they are

being deprived of information or that there is an organizational culture that favors secrecy over transparency.

We have learned from reliable sources that former employees are not even allowed to mention that they signed

NDAs, but must read from a script regarding CWC and their employment at CWC. When there is no proprietary

information to protect, and they are a publicly funded entity, why would CWC require NDAs of their employees?

What have they got to hide?

Enrollment

Looking back at CWCs proposals to SUNY, we noticed that the budgets were built on the assumption that

per-pupil enrollment is expected at full capacity each year (SUNY proposal 24(a)-2). According to recent CWCNY

Board Materials, the application numbers simply dont support full capacity at either of your schools. The amount of

applications received for first grade will decrease revenue by a few hundred thousand dollars.

If CWCNY schools arent bringing in the anticipated revenue, what promises made to parents will go unfulfilled? The

top heavy salaries going to an Executive Director and a Principal, a Community Development Director, an Operations

Manager, and a Business Manager are essential to the functioning and mission of the schools - those cant be cut.

Has National worked with you to come up with a contingency plan to address reduced revenue? What will the impact

be on the promises National made to parents for small class sizes, an art teacher, a music teacher, and a PE teacher?

Further, we were surprised to find that the budget only plans for a 1/2 time SPED coordinator and a single Learning

Specialist/ELL coordinator for a predicted 18 SPED children in each school and housed in Williamsburg where

neighboring elementary schools serve between 15-28% ELLs.

There is no planned school nurse in the CWCNY budgets, in spite of the hazards children at CWCLA have faced as a

result of having no on site nurse, and minimal janitorial services provided, an ongoing problem described by parentswith children at CWCLA schools who volunteer their time each week to clean their schools themselves.

We also note that there were no management fees factored into the budget, yet CWCNY signed an agreement with

CSBM (Charter School Business Management) to handle management services. Have the budgets been recalculated

to reflect these anticipated needs?

We urge you to consider your options

We fear that the licensing agreement, unforeseen future and retroactive fees, and the unethical practices of the

National board have the potential to cripple the schools in their nascent years. As Im sure you would agree, getting

not one but TWO schools up and running takes a tremendous amount of hard work, tenacity and funding. We hope

you will think about whether all of your hard work and your professional reputation are worth putting on the line for a

small group of people who are putting their own success above yours.

Our NYC and NY State elected officials are calling for investigations into the activities weve noted and other

activities we are discovering about CWC National. The one thing that has been repeated by everyone that we have

spoken to is that never have they seen a brand new charter school organization raise so many red flags.

While you make your decisions as Trustees about how to proceed, who the Board is responsible to, and what the

6


7/7

Board is responsible for, you should know that not a single parent who was in the core group who originally

advocated to bring these schools to District 14 is enrolling their children in CWC this fall. We think that speaks

volumes.

To be clear - our issue is not with the individual existing schools in LA or with CWCNY as a Board. We are working

closely with parents who have children at the existing CWCLA schools and we share the same serious questions

about CWC National not telling parents and Regional Board members the full story.

We see CWC National as an organization frequently at cross purposes with the individual schools that they are

claiming to support. Their agenda - spelled out clearly in the Licensing Agreement - preferences expansion into other

cities over servicing the students and families that you, as Trustees, have committed to.

Respectfully,

WAGPOPS!

Williamsburg and Greenpoint Parents: Our Public Schools!

Over 700 members and growing!

PS221 Toussaint LOuverture Parents

Enc: EXHIBITS A through G

cc: Carl McCall, Chairman, SUNY Board of Trustees

Regent Kathleen Cashin, New York State Education Department

Sally Bachofer, New York State Education Department

Susan Barker Miller, Executive Director, SUNY Charter School Institute

James Merriman, NYC Charter School Center

Marc Sternberg, Division of Portfolio Planning, NYC Department of Education

Chancellor Dennis Walcott, NYC Department of EducationBrooklyn Borough President Marty Markowitz

New York State Senator Martin Dilan

New York State Assemblyman Joseph Lentol

New York City Councilmember Letitia James

New York City Councilmember Stephen Levin

New York City Councilmember Diana Reyna

New York City Public Advocate Bill deBlasio

New York City Comptroller John Liu

7

Documents

CWCNY Letter to Board