Realm Charter School is out of hot water for now, as a consolidated charter will allow both the middle school and high school (pictured) to continue operating. Photo: Nancy Rubin

REALM Charter Schools will consolidate its two schools under one charter in a last-ditch attempt to improve a precarious financial situation at the middle school.

The Berkeley School Board voted 4-1 to approve the “material revision” at a special meeting Tuesday afternoon. REALM leadership proposed restructuring the charter in February after the board issued the middle school a notice of violation, a precursor to the possible revocation of that school’s charter. Tuesday’s vote takes revocation off the table, allowing both the middle school and high school to remain open for at least another year.

REALM believes that by combining the two charters — and thus combining finances — the middle school will benefit from the much stronger financial performance of the high school.

District staff recommended that the board support the consolidation of the charter, but expressed reservations at the meeting. Pauline Follansbee, interim assistant superintendent of business services, said combining the charters could not only fail to improve the middle school’s situation, but could possibly backfire and bring down both schools.

“If you take two schools separately, and combine them together, materially there are no differences in terms of the overall revenues and expenses,” Follansbee said. “It will be just as expensive for REALM to operate one school as it would be to operate two separate schools…There’s a potential for the middle school to then destroy the high school, which will in turn destroy the whole program.”

Although REALM Middle School’s finances have improved this past year, it is still projected to end the school year with a $1.2 million deficit. Its ability to continue climbing out of that debt hinges on an increase in enrollment at the schools, as state funding is based on average daily attendance.

Despite decreases in enrollment each of the past few years, REALM executive director Victor Diaz said he’s made the changes necessary to count on more students in the coming years. REALM has not only shifted how it projects enrollment and makes staffing decisions, but has also ramped up public recruitment efforts and set up school-bus service from Richmond to Berkeley.

The middle school is also on track to move from the small space it currently rents from BUSD at the West Campus, to a new facility at the Pacific School of Religion on Holy Hill, which REALM expects will attract new families.

By 2020-21, REALM, whose charters were first granted in 2011 and renewed in 2015, expects its current 517 students to grow to 680.

The middle school has typically had the most trouble recruiting for sixth grade, as many of REALM’s students come from West Contra Costa Unified, where many elementary schools are K-6. REALM is still projecting 50 new sixth-graders over the next three years, and smaller increases at many other levels.

“With proper recruiting, I do think they could possibly meet that number projection,” BUSD Superintendent Donald Evans said at the meeting.

Josh Daniels, board president, said that when he looked at how much each class, or “cohort,” is expected to grow each year, and compared that to the growth in previous years, he became “concerned that the projections are overly optimistic.”

“I think the instructional program that [REALM] runs is quite impressive,” Daniels said. “The last thing I’d want is to have them combine into one school and have the high school threatened.”

Board members have often praised REALM’s academic program, which is focused on hands-on, “project-based” learning.

REALM’s finances have improved over the past year in part because the schools laid off several teachers and ended certain fiscal practices. The move to the Pacific School of Religion, which REALM is excited about due to its proximity to UC Berkeley, will also make the charter school eligible for a new facilities grant from the state. It received the grant in the past for its building on Eighth Street, which the high school occupies.

Board member Judy Appel said she was appreciative of REALM’s efforts to improve, but was concerned BUSD could be held liable for the new multi-year lease at the Pacific School of Religion should REALM’s finances not shape up enough. Follansbee said district lawyers believe BUSD would not have that responsibility.

At the end of the hour-long meeting, board member Karen Hemphill made a motion to approve the consolidation of the charters, noting that the school has drawn up a plan to improve the finances.

“Mr. Diaz knows I have been a supporter of his curriculum and instruction, but from the very beginning, when you first submitted your proposal, I had deep concerns over some of the financial projections of the school,” Hemphill said. “It’s now been quite a few years and I still have those objections. However, I don’t think it is my — I don’t feel the need to shut down a program that’s making a difference with our black and brown students, when there’s the opportunity for it to maintain itself financially. I hope it comes to pass and I hope the community at REALM is monitoring the business side very carefully.”

Board members Beatriz Leyva-Cutler, Ty Alper and Appel joined Hemphill in supporting the material revision, with only Daniels voting against it.

“Just for the record, I hope I’m wrong in voting no,” he said. “I wish REALM, on behalf of the district, luck with its combined school. I hope you’re willing and able to make tough decisions so you’re not back here in a year.”

As he was leaving the meeting, Diaz said he was “at a loss for words.”

“We haven’t had a victory in here in awhile. We have to get to recruiting and get the message out there that we’re here to stay,” he said.

Natalie Orenstein reports on housing and homelessness for The Oaklandside. Natalie was a Berkeleyside staff reporter from early 2017 to May 2020. She had previously contributed to the site since 2012,...