Officials of the Shelby School in Tonto Village say they've been unfairly branded a cult.
As a result, they are threatened to sue the state because their application for a charter-school was denied by the state Board of Education.
Steven Rensch, a board member of the school and a local attorney, said he believes the state denied the school's charter based on a report from a private investigation firm linking the school to alleged cult activity.
"The report is totally unsubstantiated," Rensch said. "It contains accusations but no charges."
The document was compiled by Investigative Resources Services, L.L.C. during a routine criminal and financial background check of the school's board members ordered by the state Board of Education.
The report said Gila County School Superintendent, Armida Bittner told the investigators that a number of local residents have expressed major concerns about the church groups that lives in Tonto Village. Bittner confirmed that statement Tuesday.
The document described the group as "more of a commune," and qouted detective Tom Stratton of the Gila County Sheriff's Department as saying is "is very similar to the Oklahoma and Waco deals."
When contacted by The Payson Roundup Tuesday, Stratton refused to comment on the matter.
The school, 16 miles east of Payson, is operated by the Church of Immortal Consciousness, but is operated without religious bias, Rensch said. It is run by 12 to 14 fulltimes and six to eight part-time teachers who instruct 45 students from kindergarten to high school.
Lisa Graham state superintendent of public instruction and a member of both state boards that review charter schools, said in the Sunday edition of The Arizona Republic that isn't concerned about the school's church connections.
"If the Church of Immortal Consciousness wants to run an academic program without any religious instruction or affiliation, it is perfectly legal for them to do that," she said. "I have a bigger concern about their financial problems."
The board cited unfavorable credit reports and tax liens involving some of the school's officials as the basis for its rejection of the school's charter request.
"I know that it's the report that has the (state) board upset, but we haven't been able to address that yet," Rensch said. "We are not a cult. This is simply a very large extended family. Most of these people are related by marriage or blood…Most of these people toop up residence in Tonto Village because people want to be with the ones they love."
Rensch, said there are about 150 members of the Church of Immortal Consciousness in the Tonto Village area.
Rensch plans to appeal the state board's decision, during a review hearing next week. If the board refuses to approve the school's charter, he said he will take the state to court.
"We want then to reinstate the charter beginning in 1995-96 and running for five years," he said, 'or pay us the money that would have come with the school's charter." Rensch estimates the school's charter is worth $175,000 to $180,000 a year.