Shifting of money could be illegal

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Shifting of money could be illegal

Lakewood Christian school using public funds to support religious program

By Lou Kilzer, Rocky Mountain News, November 28, 2006

A private Christian school in Lakewood is shifting tens of thousands of dollars of public funds to support its religious program - a possible violation of state law.

Christian Fellowship charges the public $160,000 a year to rent two small classrooms to Hope Online Learning Academy Co-op. The rent for the space - containing a total of 1,008 to 1,400 square feet - is four to six times the rate of a pricey 17th Street office suite.

In fact, the rent alone for the two classrooms is nearly twice as much as the $85,000 a year of annual mortgage payments that Christian Fellowship pays for its 21,987-square- foot religious campus, according to a trust deed.

Other annual charges billed to taxpayers for the 1,000-plus square feet of Hope classrooms are:

• $24,785 for maintenance.
• $28,000 for gas and electric.
• $22,000 for insurance.
• $110,000 for administrative expenses.
• $45,000 for a secretary.

These figures come from a budget that the Rocky Mountain News obtained through a Colorado Open Records Act request.

The U.S. Supreme Court has ruled that public funds for private religious schooling is acceptable under certain rules. But "this is not well-defined," said Bill Moloney, Colorado education commissioner.

The state Constitution specifically prohibits use of public money for sectarian purposes. What exactly that means "is a very sticky question," Moloney said. The issue must be resolved on "a case-by-case basis," he said.

The public money is paid to the Christian Fellowship School to educate 160 students who attend a purportedly secular program offered by Hope Online Academy.

But the dividing lines at Christian Fellowship between the secular program and the religious one appear blurred. Not only does income from rent and other charges flow into the Christian program, but the Hope students do as well.

The 160 kids work online for 1 1/2 to two hours a day, said Christian Fellowship administrator Truman Abbott. The rest of their time is spent in the religious school.

And attendance in the religious school is a requirement for Hope students, he said.

Abbott said he is doing nothing wrong and is closely following the rules spelled out by Hope.

"I'm following the guidelines that they've given us," he said. "And I have followed them sometimes to my dislike."

Abbott defended the school's accounting in spending state funds.

Asked about the maintenance tab, he said, "I spend in maintenance a lot of things."

And in explaining the $28,000 for gas and utilities, he said: "Those two rooms have to be air-conditioned." He said the two rooms actually cost more than $28,000 a year for utilities.

The national average for utility costs per square foot is $1.31 per year, according to the magazine American School and University. That would mean that on average, utilities for 1,008- to 1,400-square- foot classrooms would be $1,320 to $1,834.

And $22,000 for the insurance payments? "Do you know what it costs to buy insurance? I suggest you go check and see."

Abbott refused to open his books to show how much of the state monies flow into Christian Fellowship.

But Abbott did say that without the Hope money, "I don't know if I could totally afford this building, but I wouldn't need a building this size if I didn't have the Hope program. Let's say - worst-case scenario - something would happen to where you guys (media examining the program) killed the Hope program, then I would probably search for another facility."

Speaking of the $160,000 rent being charged for the two classrooms, Byron Koste, director of the University of Colorado Real Estate Center, said: "I've never heard of such a thing. The numbers don't make sense. I don't know who is looking over their shoulder."

Heather O'Mara, Hope's executive director, said she didn't find Christian Fellowship's charges for rent and overhead to be necessarily unreasonable.

"I have not analyzed the specifics of each budget," she said, adding that the real value of the program will be known when standardized tests are compared year to year.
An apparent windfall

By any measure, the state money appears to be a windfall for the Christian Fellowship.

The school earns $350 of state funds monthly for each Hope Academy student plus $100 a month from their parents for the religious part of their schooling.

That means the school brings in a total of $450 a month for each Hope Academy student.

By contrast, each Christian Fellowship student pays just $100 a month.

Until it signed up with Hope, Christian Fellowship School had 271 students, according to a state report. Now there are about 100 Christian Fellowship regular students, Abbott said, and 160 students attend the Hope program.

Following the Hope Online Academy model, Christian Fellowship employs mentors to assist students in the classroom.

The four mentors who work for Hope Academy in the Christian Fellowship program make roughly $20,500 each, according to a financial report that Christian Fellowship filed when it sought participation in the Hope program.

Hope mentors do not need a college degree but must have the equivalent of two years of higher education.

Abbott said that to serve all 160 students, the kids attend their 90- minute sessions in eight shifts throughout the day. The kids also can use the computers for an additional 30 minutes, he added.

Christian Fellowship is not alone among faith-based schools affiliated with Hope in receiving state funds to pay overhead expenses. But in Christian Fellowship's case, the amount going to building and facilities overhead is nearly six times the amount paid in salaries and benefits for the people instructing the Hope kids.

Of a budget of about $572,000, $490,000 goes to overhead, while $82,000 pays the salaries and benefits of instructors.

Of the 50 faith-based schools or centers that get state funds to run Hope centers, six submit overhead expenses more than double the amount paid to instructors.

But many such schools are closer to a 50-50 ratio between overhead costs and mentors' salaries, and some actually appear to put in dollars beyond what the state funds, according to budgets submitted to Hope Online Learning Academy.

A recent study of public schools in California said that teacher salaries and benefits run slightly ahead of all other costs for education.

Although the 160 kids in the program share four mentors, the ratio improves when they shift to the rest of their day in the religious school.

Abbott said he has the equivalent of 15 to 16 full-time teachers - not mentors - in the religious school.
A family institution

Christian Fellowship is very much a family institution. Abbott holds the top spot, followed by his wife, Loretta, who is principal, and his daughter, Jenny Smith, who is academic dean.

All of them attended Tulsa-based Oral Roberts University.

Abbott says he has worked in Christian schools since 1985 and with Christian Fellowship since 1990. It has moved around but typically as a tenant, not as a landlord.

It started in a warehouse and, just before its recent move, rented space at the First Assembly of God Church, 7350 W. Eastman Place, in Lakewood.

That changed last year with the advent of Hope.

On Aug. 1, Christian Fellowship bought the campus of the former Discovery Learning Charter School and moved in.

Although the warranty deed says that Christian Fellowship bought the building for $2.5 million, Abbott said that the official record doesn't disclose all the details.

"We're in the process of acquiring it," he said. "There are some things that need to occur for us to purchase this building. It's almost like rent-to- purchase."

The various deeds on the property do not indicate that Christian Fellowship paid a down payment on the building.

The seller, who is charging 3.4 percent interest, is related to several religious companies, according to a database search of the seller's address.

Christian Fellowship is paying back interest only, according to a deed of trust. Abbott said he isn't in the Christian school business for the money.

Of his family's involvement in Christian Fellowship and Hope, he said, "I can tell you that all of us would like to be paid what public teachers are paid. And we don't make much. We're not making any money."

He said the purpose of Hope is to serve disadvantaged kids.

"For all the hard stuff that we have to deal with, it's when we see those little kids' faces light up when they get the concept . . . that's what makes all the heartaches worthwhile," he said.

He complained about press scrutiny of the Hope program, saying, "My frustration is that the focus hasn't been on the educational aspects of the kids."

But he quickly added: "I completely agree that we need to maintain and make sure we're following the law regarding the public funds."

Two schools under one roof

Christian Fellowship School houses and supervises a learning center called the Hope Online Learning Academy in two rooms in its building. Christian Fellowship is a private religious school. Hope Online offers secular subjects and is paid for by the state.

Christian

Hope Online

Number of students
100
160

Cost to student

$100/mo

$350/mo

Who pays?

Parents

Colorado taxpayers

Square footage

22,000

1,008-1,400*

Staff

15 teachers

Four mentors

Salaries

NA

$20,500 per mentor

*Estimates vary on size

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