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An outgoing Utah lawmaker is crying foul about the creation of a new charter school in Herriman.
South Jordan Republican Rep. Rich Cunningham said Friday that Athlos Academy of Utah has violated the spirit, if not the letter, of Utah's Procurement Code by selecting a space for its campus without a competitive bid process.
"We've allowed an out-of-state company to come in and do a charter school," he said. "We're going to have to go back and change the law if they're going to play the games like that."
Utah's Procurement Code requires schools and other public entities to accept bids for outside services like construction in an effort to reduce taxpayer cost through competition.
But Athlos Academy of Utah did not build and does not own its facility, according to Andy Lavin, chairman of the charter school's governing board.
Instead, Lavin said, the Herriman school was built by Athlos Academies, an Idaho-based education company, which then leased the space to Athlos Academy of Utah for $112,083 a month.
"The code specifically states, as I recall, that it does not apply to leased facilities," Lavin said.
Several Utah charter schools are housed within pre-existing commercial space. But Athlos Academy's location has all the trappings of a traditional schoolhouse, and Cunningham said the state's Procurement Code was not intended to let a private company build its own public school, reimbursed with taxpayer dollars.
Lavin said the disagreement stems from the similarity of the school's name to the corporate organization that provides services to the school.
"It has been the source of some confusion," Lavin said. "Athlos Academy of Utah is our organization, and we have a contract with Athlos Academies, who owns the building."
Confusion over charter schools and the companies that run them is not unique to Athlos Academy. In 2015, a campaign-finance complaint was filed against South Jordan Republican Sen. Lincoln Fillmore over a $1,000 donation from American Preparatory Schools, the private company that manages Utah's network of American Preparatory Academy charter schools. But because the money came from the company and not the public schools it runs, the donation did not violate state law.
A recent analysis by The Salt Lake Tribune also found that Utah charter schools spend millions of dollars outsourcing administrative operations to private companies that are not subject to public disclosure laws. Charter schools receive taxpayer funding on a per-student basis, but operate independently of Utah's 41 school districts.
Cunningham said Athlos' lease arrangement is one example of the loopholes used by charter management companies, allowing private interests to operate public schools outside the intentions of state law. "They're just taking so much more money away from the classroom," he said. "It's become a big moneymaker."
Lavin dismissed the accusation that procurement law had been gamed or circumvented.
He said the school has three contracts with Athlos Academies: the lease for the building, a licensing agreement to use Athlos' logo and identifying materials, and a $700 per-student management-services agreement that will climb to $900 over the next five years.
"The claim that we're leasing from ourself is just completely unfounded," he said.
Cunningham said he relayed his concerns to the office of state Auditor John Dougall, and a response shared with The Tribune said the auditor's office would look into the issue after completion of current priorities.
"Any attempt to circumvent Utah law, or belief that they can, should be grounds for serious concern and immediate investigation by Utah authorities," Cunningham said.
Representatives of the Utah Board of Education, Utah Department of Administrative Services and Utah Division of Purchasing and General Services were unable to provide clarification on the Procurement Code's lease exception.