Charter schools pay off for CEO’s family

Nonprofit says it’s subject to strict oversight

The Dayton Daily News questioned the management company that oversees operations at several area charter schools about the compensation of its top executives and the number of family members they employed. The company, EdVantages, responded with a written statement. An excerpt:

“Charter schools are public schools. They are subject to even more oversight than the districts, with more levels of oversight, closure laws for academic failure, closure for fiscal instability, closure for health and safety violations, non-renewal or closure for any good cause.

“Their audits and their academic standards are the same as the districts. Their parents vote with their feet, leaving at will. Their enrollment is measured monthly and their state payments fluctuate monthly. There is no payment for ‘phantom enrollment’ such as in the districts, who are paid based on a one-time October count. The time, money, risk and dedication of private citizens and companies to operate community schools is the essence of the charter school movement, and has improved public education throughout Ohio and the United States.

“The heightened standards of these schools have improved substantially the education in the Dayton area. And the use of private educational management organizations has increased the efficiency and performance of public schools in the urban areas of Ohio.”

A Dayton Daily News investigation found that a company managing several taxpayer-funded charter schools in the area is a lucrative family business whose husband-and-wife management team makes more than $400,000 a year.

The nonprofit, EdVantages, manages seven charter schools in Ohio, including schools in Trotwood, Middletown and Springfield. By law, these are public schools, but CEO Myrrha Pammer-Satow’s compensation is far higher than the pay of any local public schools superintendent with many more students.

Her salary is in addition to the income from another for-profit management company, Performance Academies LLC, that oversees other schools in Ohio and Michigan.

“That’s tough to defend,” said Terry Ryan, Ohio program director for the Dayton-based charter school think tank Thomas B. Fordham Institute, when presented with the newspaper’s findings.

EdVantages officials say classroom results are their top priority and that their schools generally perform better than the districts in which they are located, and at a lower per-pupil cost.

“We’re really proud of our track record at EdVantages,” Pammer-Satow said.

In addition to Pammer-Stow and her husband, who is the Chief Operating Officer, the schools employ a number of family members, including the CEO’s sister, son, daughter and daughter-in-law. The daughter works as the nonprofit’s human resources director, responsible for all hiring and firing.

The structure of the management companies reduces the ability of the public to guard against nepotism in hiring practices.

“I have a problem with that, when one family is running things,” said Paul Woodard, whose son and daughter previously attended the Trotwood Preparatory and Fitness Academy.

Woodard is part of a self-described “Parent Action Committee” of former teachers and parents of former and current Trotwood Prep students. He said he was shocked at how much the top administrators were making, saying the school was too cheap to let his kids bring their textbooks home.

“What are you doing for these kids? They don’t have a dictionary. They don’t have computers,” he said.

EdVantages says it gets results

EdVantages officials say results trump these concerns. Their schools regularly perform better than the districts in which they are located, and have had dozens of audits in recent years without a single misspending issue noted.

And they do so for less money, on average. Trotwood Prep officials said they received $9,586 per student in 2011 while Dayton Public Schools received $14,733 per student.

“Dayton Public has schools right next to (Trotwood Prep) that are in school improvement status year 11. They receive millions of dollars each year to fail students,” EdVantages said in a statement.

The Trotwood Preparatory and Fitness Academy and Springfield Preparatory and Fitness Academy both scored better in the most recent state rankings than the public school districts in which they reside. Springfield Prep was one of the best-performing charters in the region. In Middletown, the public school district fared better than the Middletown Preparatory and Fitness Academy.

“Generally speaking, the performance results of these schools that have contracted with EdVantages and Performance Academies is exceptionally good. They get results in the schools that they contract with,” said Frank Stoy, director of operations for the Ohio Council of Community Schools, which sponsors their schools across the state.

Not all customers leave happy, though. The Parent Action Committee meets regularly at the Trotwood library to discuss ways to make the school better. Their complaints include the quality of materials and the administration not responding to their concerns of things such as bullying.

“Do you know how many kids are coming through that school, and if they’re not being educated they’re going to be a product of the street,” said Leslie Lawson, whose son used to attend the school.

EdVantages’ seven schools in Ohio have a combined enrollment of 1,926. The first school founded by the nonprofit, Trotwood Prep, is its largest in Ohio with 329 students. The three schools in Florida have a total of 860 students.

This puts their total enrollment in both states at a few dozen more than the Trotwood-Madison School District, where Superintendent Rexann Wagner received a total compensation of $149,925 last year, according to a Daily News analysis published in July 2011. The largest local school district, Dayton City Schools, pays its superintendent a total $199,500.

Because EdVantages is tax-exempt, it must report to the IRS how much it pays its top employees. Tax records obtained by the Daily News show CEO Pammer-Satow received a base pay of $168,466 in 2010, along with a $60,000 bonus and other compensation valued at $25,573. Her husband, COO Clinton Satow, received a base pay of $126,000, bonus of $45,000 and $14,000 in other compensation.

EdVantages said Pammer-Satow’s pay is based on the compensation for similarly sized nonprofit entities and is not comparable to public school superintendents because, by law, each charter school is an individual school district. This means she and her husband are preparing reports and audits as if overseeing seven small school districts.

“(Her) salary is spread across multiple schools in multiple states and costs the school far less than if they hired a consultant to perform the requisite duties the state requires,” the company statement said.

EdVantages not unique

Ryan of the Fordham Institute said one clear difference between these charters and traditional public schools is “at a minimum they are politically tone deaf to the realities of perception out in the community.”

“At some point you should ask yourselves, ‘Should some of the money (paid to management companies) be going to the benefit of the kids or the benefit of the teachers?’ And I believe these are questions people should ask,” Ryan said. “These are all schools that are public schools and they need to be accountable to the public. And one form of accountability is transparency.”

The Fordham Institute and Dayton City Schools sponsor the Dayton Early College Academy schools, one of which is the second-highest performing charter school in the region.

DECA President Judy Hennessey’s salary is $96,000, according to an employment contract provided by the school to the Daily News through Ohio public records laws.

EdVantages is not unique, though. Richard Allen founder Jeanette Harris was compensated $226,685 in 2010, according to nonprofit tax filings, putting her pay above any local superintendent. Her daughter, Superintendent Michelle Thomas, was compensated $127,702.

Richard Allen Schools, with locations in Dayton and Hamilton, was called to task earlier this year by the state auditor’s office for problems including contracts involving companies owned by school board members and building rent paid to a church owned by the school president’s husband.

Thomas told the Daily News that Harris no longer works for the school or management company and all potential conflicts of interest identified in state audits have been addressed. Other findings are being contested, she said.

The audit was referred to the Ohio Ethics Commission, though Thomas said it conducted no investigation.

Thomas added that the same problems are found and fixed in tradional public schools with little fanfare.

“Charter schools are trying to make it, they’re trying to make a difference for students and I wish people would come out and see what we’re doing,” she said. “I think (we should) focus more on the education kids are getting, which should be the main focus, instead of trying to bring bad attention to schools that are complying with the law and are really making a difference in these students’ lives.”

Richard Allen schools perform notably better than the district in Dayton and slightly worse in Hamilton.

A dozen nepotism probes

The Ohio Ethics Commission estimates that it has about a dozen open investigations of allegations of nepotism at charter schools.

The ethics commission has issued advisories that say charter schools are public schools, and that they are subject to ethics laws. But there are major differences in how they operate that can make it more likely they hire family members.

“Charter schools are set up differently than your traditional model of taxpayer-elected school board members who appoint a superintendent,” said Ethics Commission Director Paul Nick.

The Daily News requested personnel files for all of the individuals identified in the newspaper’s investigation who are related to Pammer-Satow and working for her schools, but only received files for Cassandra Engber, the CEO’s sister who works as a speech pathologist for Trotwood Prep, and daughter-in-law Joan Pammer, who is a principal for a school in Columbus.

All of EdVantages’ funding comes from taxpayers, according to IRS records. At each school, money flows from the state to the school, which hands 98 percent of it to EdVantages. The management company uses that money to handle virtually all of the school’s expenses. At Trotwood Prep, $3 million was paid to EdVantages in 2011.

Engber’s personnel files show she was hired as a speech language pathologist in 2002 from the Bellbrook School District. Her employment agreements signed in July list her salary at $46,813.

Her employment contract was signed by Robert Shively, co-founder of EdVantages with Pammer-Satow. Shively was Trotwood Prep’s original tennis coach and is now one of only two board members listed on tax records. His compensation in 2010 was $134,310. The other board member has no listed compensation.

Engber’s most recent employee evaluation was signed by supervisors to whom she is not apparently related.

Joan Pammer — Pammer-Satow’s daughter-in-law — was hired in 2005 as a second-grade teacher and promoted to principal of one of the Columbus schools in July at a salary of $60,000 a year.

Her most recent employment contract was signed by EdVantages treasurer Toby Pinkerton; her teacher evaluations were signed by Pammer-Satow.

“The schools follow all of the Ohio ethics and conflicts rules applicable to them,” said EdVantages.

This system illustrates both the strength and danger of charter schools, according to charter advocates. The schools have increased accountability — poor-performing schools are eventually shut down, unlike traditional schools — but they also have increased autonomy.

“(Ohio) policy wants to a create space for innovation and create spaces that are really different,” said Ryan of the Fordham Institute. “Do people abuse the space for innovation? Yes. And if it happens enough it has political ramifications, and that’s what you’re picking up on.”

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