Discovery Charter School in Parkside says it is fighting for its life.
In anticipation of having its charter renewed and opening a new building, the academically successful elementary school added 73 students beyond the 620 maximum in its current charter.
In November, the charter began billing the state for the extra students. The state deducted the amount from the School District of Philadelphia's allocation and sent it to Discovery.
Now the district has told Discovery that its charter will not be renewed unless the school repays the district $406,391 it received from the state. The School Reform Commission is tentatively scheduled to vote on Discovery's charter Wednesday night.
Discovery officials say they are shocked. They contend the school was allowed to add students by state law and said the quarrel over funding and enrollment could jeopardize the financing for the new building, set to be dedicated next month.
"We were devastated," said Jacquelyn Kelley, Discovery's chief executive. "There was no reason for us to believe we had anything but a clear, good renewal coming up, as we have had in the past. . . .
"The renewal and the money dispute have no relation. This quarrel over money should not touch a successful school."
Discovery has met the state's academic benchmarks in eight of its 10 years and maintains it has met the district's criteria for obtaining a new charter.
"Our best hope is that the SRC ignores this recommendation [for nonrenewal] from the district and renews us," said Sean P. Stevens, chairman of Discovery's board.
The charter will hold a "Save Our School" rally outside the district's headquarters on North Broad Street before the SRC meeting.
District spokesman Fernando Gallard said the district recommended nonrenewal because Discovery violated the terms of its current charter.
"The charter school signed its charter in September 2008 and agreed to limit the number of seats they would have at the school and agreed not to request payment above that number from the district or the state," he said.
"After that, they went forward, added more seats, and then went to the state and asked for payment," Gallard said. "We are saying: 'You signed the charter and agreed to those terms, and therefore, you are not complying with the charter.' "
It's all part of the latest skirmish in the district's continuing battle to control charter school expansions in the face of a 2008 Pennsylvania law that prohibits districts from capping charter school enrollment unless the school agrees to a limit.
The dispute with Discovery centers on when the current charter took effect.
The state law on enrollment became effective July 1, 2008. Discovery's prior board chairman signed the charter Sept. 30, 2008.
Stevens said Discovery's position is that the current charter took effect when the SRC approved it in April 2008 and there were no negotiations after that. He said signing the document that fall "was a formality."
The district has lost a couple of cases in Commonwealth Court over the cap. A year ago, the court found the district's attempt to unilaterally limit the number of students at one city charter in 2008-09 and 2009-10 was invalid, and the state Education Department had correctly withheld funds from the district to pay for the additional charter students.
The district, which is trying to bridge a funding gap of more than $300 million for the fiscal year that begins July 1, announced last month that it would not consider any charter expansions for 2013-14.
Twenty-one of the district's 84 charters requested expansions in the next academic year that would have added a total of 15,000 seats. The district said the growth would increase its charter costs by $500 million over the next five years.
Discovery had asked to add 135 students in the fall and an overall total of 400 over five years.
The SRC had approved charter school expansions when it tackled renewals last year. Kelley said that when Discovery submitted its renewal application in November, the school expected the new seats would be part of the renewal process.
She said no one had expected the district's deciding not to consider any expansions in 2013-14.
Last month, the school held its lottery to select new students. One hundred of the 1,719 applicants won spots for September.
Discovery officials said they fear that if the charter is not renewed and with 755 students, it could cause the school to default on the nearly $14 million bond issue that is financing its new facility at 4700 Parkside Ave.