Potential for Charter School Facilities Funding

Currently, most of California's charter schools have no readily available source of funding to provide them with facilities. This has proven to be one of the largest obstacles to starting a charter school. Various recent laws and programs are available to provide facilities funding and support to qualifying schools. The major sources of charter school facilities funding are noted below:

Proposition 39
This proposition, adopted by voters in November 2000, requires school districts to provide charter schools with reasonably equivalent facilities to those provided to students in the area where the charter school students reside. This measure took effect on November 8, 2003, generally requiring all California school districts to provide facilities to charter schools that meet the requirements of the regulations. The deadline to apply for facilities for a given school year under Proposition 39 is October 1 of the previous fiscal year for an existing charter school and prior to December 31 of the previous fiscal year for a new charter school. Schools that are currently using facilities received under Prop 39 generally must reapply each year to use Prop 39 facilities. Facilities requests must provide detailed information regarding various attendance and student information as specified in the regulations that implement Proposition 39. Recent court decisions also provide some guidance on what information is necessary. To avoid misunderstandings and ensure compliance with applicable laws, CSDC recommends that charter schools establish a dialogue with school districts early if facilities are going to be requested under Prop 39. The district may have a particular form that must be used to request facilities under Prop 39. Most districts, however, have no such form and CSDC provides a sample facilities request letter. If you are a subscriber and would like to view the letter, please contact us at 916-278-6069 or CSDC@chartercenter.org.

Prop 39 Eligibility Requirements
To qualify for Prop 39 facilities a charter school must be "operating in the school district," which is defined as either (1) currently providing education to in-district students or (2) having identified 80 students who are meaningfully interested in enrolling in the charter school for the following year.

There are also certain eligibility requirements unique to new charter schools :*

1. Charter petition must be submitted by November 14, 2007
2. Must submit facilities request by December 31, 2007
3. Must be able to demonstrate meaningful interest from 80 in-district ADA at the time the facilities request is submitted to the school district
4. Charter petition must be approved before March 1, 2007

*a new/proposed charter school is defined as one that did not receive funds pursuant to a general purpose entitlement (Ed. Code section 47633) for the fiscal year preceding the year for which facilities are requested

The implementing regulations provide details on the process and timeline for requesting facilities. According to the regulations, the facilities request must include:

a) reasonable projections of in-district and total ADA and in-district and total classroom ADA broken down by grade level and by the school in the school district that the student would otherwise attend;

b) a description of the methodology for the projections;

c) documentation of the number of in-district students meaningfully interested in attending the charter school, if relevant (this will likely be relevant for a new or proposed school);

d) the charter school's instructional calendar;

e) information regarding the general geographic area in which the charter school wishes to operate; and

f) information on the charter school's educational program that is relevant to assignment of facilities.

Other Notable Aspects of the Prop 39 Facilities Program

• School districts are required to provide facilities that are "reasonably equivalent" to other district facilities - considerations include school site size, the condition of interior and exterior surfaces, condition of mechanical, plumbing, electrical and fire alarm systems, availability and condition of technology infrastructure, suitability of the facility as a learning environment, and the manner in which the facility is furnished and equipped.
• The facilities provided by the school district must include all the furnishings and equipment necessary to conduct classroom-based instruction.
• Facilities must be made available to the charter school for the charter school's entire school year regardless of the school district's instructional year or class schedule.
• The school district must make reasonable efforts to provide facilities near to the charter school's desired location.
• The facilities provided by the school district to the charter school remain the property of the school district.
• The school district may charge the charter school a pro rata share of its facilities costs, including on-going costs for operations and maintenance.
• If the charter school generates less than its projected ADA, it may be responsible to reimburse the district for the facilities over-allotment.

For a much more detailed explanation of Proposition 39 and the implementing regulations, Information Services Subscribers may contact CSDC for back copies of the Fall 2002, Winter 2002, and March 2001 issues of Charter Currents.

Though Prop 39 requires that districts provide rent-free facilities, they are permitted to charge specified maintenance fees. SDC has received numerous inquires regarding how to calculate an appropriate fee for charter schools occupying district facilities pursuant to Proposition 39 and related regulatory law. The answer may be a lot more complex than meets the eye. We've posted preliminary guidance on this matter and welcome any feedback you might have. Click here to read the article.

Legal Battles Under Proposition 39
After the passage of the regulations, Sequoia Union High School District sued one of the four charter schools within its boundaries, Aurora Charter High School, disputing its need to provide facilities to Aurora under the terms of Proposition 39 and the new regulations. The district claimed that it was not obligated to provide facilities because the charter was granted by a nearby elementary district rather than a high school district and the district alleged that the charter school's enrollment documents were insufficient to establish that the school would have 80 in-district students. Aurora Charter School prevailed in the litigation before San Mateo County Superior Court Judge Quentin Kopp. Although this decision does not set precedent for the entire state because it is not an appellate decision, it does provide some indication of how other courts may interpret and enforce other districts' obligations to provide facilities to charter schools. For a more in-depth analysis of the court's decision and how it may impact other charter school facility disputes, click here. In addition, several other charter schools have begun legal challenges to school districts' refusal to provide facilities under Prop 39. Several subsequent court cases have also shed light on Proposition 39 and proposals are pending to revise the regulations that implement the measure. CSDC is closely monitoring these matters and is actively participating in many of them by serving as expert witnesses in litigation and as members of regulatory redrafting working groups. Stay posted to our web site and watch future issues of Charter Currents for updates on the progress of these legal challenges as they proceed.

SB740
Senate Bill 740, passed by the Legislature and signed by the Governor last year, allowed cuts to non-classroom-based charter school budgets and provided facilities funding to charter schools that are located in attendance areas of elementary schools in which at least 70 percent of the students enrolled qualify for free or reduced-price meals (presumably pursuant to federal meal subsidy guidelines). Schools that are located in district- or county-owned facilities or that receive facilities pursuant to the requirements of Proposition 39 are not eligible for SB740 funding. For those schools fortunate enough to qualify, the school may receive up to $750 per unit of average daily attendance ( ADA) to reimburse up to 75 percent of the school's facilities rent and lease costs. The Legislature appropriated $10 million to fund these facilities costs, but it is unclear at this time whether this amount will be enough to accommodate all of the facilities funding requests by eligible schools. If it is not enough, it appears that the California Department of Education will enable all eligible schools to split the funding on a pro rata basis to the extent that they have actual expenses that are eligible for reimbursement. For a more detailed description, download the Fall 2002 and Winter 2002 issues of Charter Currents from the News page of our website.

Federal Per-Pupil Facilities Aid
California received a $50 million grant from the federal government to support a recently-established per-pupil facilities aid program. This program provides grants of up to three years in length to charter schools to reimburse lease and facilities acquisition costs. This competitive grant program is targeted on schools that are nonprofit corportions serving high proportions of economically-disadvantaged (qualify for free/reduced price meals) students and that are located in overcrowded districts. For further information, see the Summer 2005 issue of Charter Currents (p.5).

State Bond Funding
Charter Schools have never historically been able to receive any proceeds from state bonds directly. In a handful of cases, districts have shared state bond funds with charter schools in their district, but this is not legally required. EdVoice, a school reform lobbying group, was successful in persuading the Legislature to set aside a portion of two state bond measures for support of charter schools. Charter schools using state bond funds to comply with myriad regulatory hurdles and with the Field Act, must provide a 50 percent match to the bond funds, and comply with complex labor laws. The first two rounds of funding, providing $400 million, have all been preliminarily apportioned through a competitive process. Proposition 1D, a state school facilities bond measure which passed in the November election, set aside $500 million in charter school funds. For more information about how to apply for this, visit the Office of Public School Construction’s website at http://www.opsc.dgs.ca.gov/Default.htm and download the upcoming Proposition 1D workshop in your area.

Donations
A few charter schools, such as the Accelerated Charter School in Los Angeles, have managed to get facilities donated to them for use as school sites. Although this is not a common way to get facilities, it may warrant some exploration. Donations of funds that are subsequently used to buy or lease facilities are also quite common. Most charter schools maintain active fundraising efforts to offset facilities and other costs that are unique to their program.

Using Other Charter School Funding
Most charter schools spend some portion of their operating budget on facilities leases or purchases. School districts typically receive most of their facilities funding from proceeds of state and local school bonds, but charter schools do not currently have a right to access these funds. Facilities costs are often one of the largest expenses for a tart-up charter school. Escondido Charter High School in Escondido, California recently self-financed some of its facilities and may provide a good model for schools that are unable to get facilities funding through other means.

Facilities Planning and Development Ideas
A helpful facilities planning and development resource, "Out of the Box: An Idea Book on Facilities Financing," is available on the Charter Friends National Network website at www.charterfriends.org/outofbox.html.

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