The Corvallis School Board approved the application for Muddy Creek Charter School on Tuesday night, but neither the board nor the charter school's supporters seemed particularly happy about it.

By a vote of 4-3, the board agreed to let Muddy Creek operate a kindergarten-through-fifth-grade program for three years beginning in September 2008, subject to annual contract reviews.

The approval came with nine conditions, including:

• an enrollment cap of 65 students;

• the securing of a building to house the new school;

• proof of financial stability; and

• the creation of a separate nonprofit corporation to operate the new school.

Numerous details of a final charter agreement remain to be worked out, including the level of funding the district will pass on to the new school.

The proposal was put forward in response to the June 2006 closure of Inavale School by a group called Inavale Community Partners, whose goal is to create a new rural campus in the southwestern part of the Corvallis School District.

The board rejected the group's initial proposal Jan. 17, then tentatively OK'd a revised application May 7. The matter was discussed further at last week's meeting, but the final wording of the charter resolution, prepared by district staff members, was not presented to the board until just before Monday's special meeting - an abbreviated session scheduled for 30 minutes on the docket before a scheduled meeting of the Budget Committee.

Several board members said they should have had more time to review the language of the resolution before voting.

"I'm somewhat frustrated with this process," Nell O'Malley said.

Much of the discussion focused on the question of funding levels.

The resolution drafted by district staff called for funding Muddy Creek Charter School at 80 percent of the per-student rate the district receives from the state. District business manager Kathy Rodeman advised the board that the district gives each school about 72 percent of that rate - called the average daily membership, or ADM - for operations while the rest goes to building maintenance, transportation, administrative costs and other districtwide expenses.

Some board members argued 80 percent of ADM wasn't enough to get a startup school off the ground, while others countered that anything more would drain resources from other schools in the district.

"I'm looking at a Muddy Creek Charter School as part of the district," said Blake Rodman. "We get something for the money the district contributes to the school - it's not just a loss."

Anne Schuster noted that the Philomath School District funds the Kings Valley Charter School at nearly 100 percent of ADM and said fixing a funding level at 80 percent now could torpedo the new school before it could get up to speed.

"The charter folks don't know how much money they're going to actually need," Schuster said. "I think we need some flexibility there."

Chairwoman Kari Rieck disagreed, saying the board had an obligation to set fiscal policy rather than leave it for staff to negotiate with the charter school proponents. She also raised the issue of fairness.

"I don't believe the students of Muddy Creek Charter School should be treated any different than any other students at any of our other schools," Rieck said.

And Helen Higgins worried that a higher level of funding might raise expectations for future charter applications.

"If we set a precedent of 90 or 100 percent … we're going to be expected to do that if another school comes to us," Higgins said.

Following a motion by Blake, the board voted 4-3 to delete the reference to the 80 percent funding level, then approved the amended charter resolution by the same margin.

Members of Inavale Community Partners expressed both satisfaction with the outcome and dismay over some of the details.

"We're happy. We just know it's going to be a lot of work," said Anita Grunder, one of seven Muddy Creek supporters who caucused after the meeting to discuss the decision. "We don't understand it, is what it boils down to."

Group members were surprised by several of the conditions in the formal resolution, which they had not seen until just before the meeting started.

Their biggest concerns revolved around the enrollment cap, which could limit the new school's ability to finance its operations, and the requirement to form a new nonprofit to run the school, which will take several thousand dollars in filing fees and legal expenses.

And while there was relief that the 80 percent funding rate was voted out of the resolution, there was also concern that a higher level of support has not been nailed down.

"If they had voted 80 percent, we could not have done it," said John Dilles. "We're hoping this is just a tough negotiating stance, but we don't know."

On the plus side, the conditional approval means the charter school backers qualify for an additional $25,000 in state grant funding to help fund their operations while they negotiate the final terms of the charter agreement.

If the charter ultimately is approved, the new school would qualify for another $100,000 (plus $500 for each enrolled student) to pay for startup costs such as buying textbooks, desks and computer equipment.

Bennett Hall is the business editor for the Gazette-Times. He can be reached at 758-9529 or bennett.hall@lee.net.