A bitter split between the scandal-plagued United Neighborhood Organization and the charter school chain it founded could leave parents scrambling to find a new school for thousands of children come fall, the head of UNO is warning.
In a letter Wednesday to Chicago Board of Education Chairman David Vitale, UNO CEO Rick Cerda said the separately incorporated UNO Charter School Network owes his group nearly $3 million in management fees.
“This has put our non-profit under severe financial pressure,” Cerda wrote.
He told Vitale UNO “will be forced” to sell four buildings that are home to six schools unless the charter network pays what it owes his community group and also agrees to an unspecified “transition agreement.”
He said conflicts between UNO and the charter chain “raise a question as to whether the UCSN schools will continue to operate as they do today.”
“UCSN parents need to know if their children will be attending their same school in the fall or if they need to scramble to find a new place for their children,” Cerda said in the letter, which he also forwarded to the charter network’s teachers and staff.
The UNO Charter School Network has 16 schools — all in Chicago, all chartered by the Board of Ed and largely government-funded — that serve about 8,000 students, largely from Latino families on the Southwest Side and Northwest Side.
The charter board members say they’re ready to take over management of the schools when their contract with UNO runs out at the end of the school year and called Cerda’s letter “misleading and laced with factual inaccuracies.”
They say they stopped paying UNO because the community group hasn’t shown them what it’s doing with the money and because of a new “investigation of possible criminal misconduct at UNO,” according to records obtained by the Chicago Sun-Times.
Founded as a community organization, UNO began operating charter schools in 1998, taking advantage of increased public funding for privately operated charter schools. The UNO schools get tens of millions of dollars a year from the Chicago Public Schools.
Under a longstanding management deal, the charter network pays 10 percent of its budget to the UNO community group to run its schools.
For years, both organizations were led by longtime UNO leader Juan Rangel, a shrewd political operator who was co-chairman of Mayor Rahm Emanuel’s first campaign for mayor in 2011. The groups shared offices and most of their board members.
But they appointed separate boards and Rangel was forced out after a 2013 Sun-Times investigation that revealed UNO paid millions from a $98 million state school-construction grant to companies owned by two brothers of Rangel’s top aide. House Speaker Michael Madigan, D-Chicago, engineered the grant.
Last year, the charter board notified UNO’s new leadership it wouldn’t extend the management agreement — worth more than $6 million a year — beyond this school year.
Starting last fall, the charter network cut the payments it made to UNO, citing a refusal to provide “proper detail or justification” for the fees UNO got, records show.
On March 27, Richard Rodriguez, who heads the charter schools’ board, told Cerda the network was halting the payments entirely, citing accusations of “improper cash payments or bribes from an UNO vendor” to an UNO official. Rodriguez wrote that he understood the allegations were being investigated by the Cook County state’s attorney’s office, demanded details and said the issue “raised serious concerns about UNO’s ability to provide proper financial management.”
Replying three days later, Cerda acknowledged informing law enforcement of the allegations but also said “it would be inappropriate for UNO to say more at this time, for fear of compromising or interfering in any way with that investigation.”
Cerda, State’s Attorney Anita Alvarez and CPS officials all declined to comment Wednesday.
The charter board still plans to take over “all management services previously provided by UNO” on June 26, Rodriguez said.
But that could be complicated by the fact UNO holds title to campuses built with the 2009 state grant, which was suspended last year by then-Gov. Pat Quinn.