It’s hard to believe the Charter Schools Development Center’s “Leadership Update” Conference is next week! Held in San Diego,CA November 16-17, the event is designed to provide California’s charter school movement with the skills and knowledge needed to thrive during the school year ahead. This year’s event will undoubtedly promote thought-provoking content on the latest charter issues. Ryan Eldridge Charter School Capital
I am genuinely looking forward to meeting with charter leaders and members of the charter community again at this years conference. If you have the time, I’d encourage you to stop by our table and say hello. As Charter School Capital’s California funding specialist, I love speaking with charter school leaders on funding and facility needs – but also any educational or how-to content we can provide.
Charter School Capital has been providing financial solutions for working capital and facilities financing to the charter community in California for over a decade. In fact, we have now provided over $1.6B in financing to over 600 charter schools serving over 650,000 students nationally. Since our entire business is 100% focused on charters, we truly have the experience and the focus to solve some of the unique financial challenges charter schools face. Running a charter school comes with some unique business challenges and we seek to understand the whole picture of a school’s operations and look for a way to solve those challenges collectively with the school. Here are a couple examples:
Many times new and expanding charters will face cash flow crunches in the early stages of the year. New schools do not receive their first principal apportionment payment sometimes until the first week of October and, unless they have a start up grant or some philanthropy, they may not have the cash on hand to open the doors for the start of the school year. Expanding charters with increasing enrollments, either by adding grades or straight organic growth will have the challenge of cash flow crunches in P1 until the state catches up with payments in P2. In. In both situations Charter School Capital has helped many charters throughout California over the years receive the necessary funds in time to open the doors or balance the cash flow issues during these times.
Another area that Charter School Capital has been helping charters in California is with unique facilities financing solutions. Proposition 39 space is an ongoing challenge for many charters in California. The uncertainty of available, equitable space continues to be a point of contention for charters and their authorizing districts. Reapplying year after year for district provided space can be time consuming and create a lot of uncertainty for potential parents and students enrolling in the schools. The space often does not provide enough parking, access to labs, libraries, and outside space. While colocating on the same campus with district schools poses a bevvy of other issues. At Charter School Capital we provide the opportunity for charters to acquire properties that will allow for expansion in a permanent facility knowing they have full control of the property. And they don’t have to become real estate experts over night or become landlords. They can focus on teaching kids while Charter School Capital provides a long term lease with no out-of-pocket expenses, while also collecting SB740 money. If the school ultimately wants to use bond financing long term that is an option too. Either way, the schools can make this dream a reality today without having multiple renewals or deep reserves.
I hope you will stop by the table to introduce yourself. I look forward to the chance to meet with you and hear about the wonderful things that you organization is doing for California students. I want to know your story and learn more about how we may be of service.
If you’d like to set up time in advance to discuss your school’s vision and funding or facility needs, email us at growcharters@charterschoolcapital.com and we’ll get something on the books. Safe travels and I look forward to seeing you there!
JOIN OUR WEBINAR ON THURSDAY, SEPTEMBER 7TH
California charter leaders face a variety of challenges in operating schools including planning and maintaining school budgets, navigating staggered funding timelines and managing complex cash-flow systems. As part of our commitment to support California charter schools, we’ll be hosting a webinar specifically highlighting best practices around these challenges.
Join us Thursday, September 7th at 9:00 a.m. PDT / 12:00 p.m. EDT for a unique webinar on charter school budget planning best practices for California charter schools. You will learn key takeaways including funding streams, budget specifics for California and budget planning steps for your school’s stage of growth. Speakers will include Spencer Styles, President and CEO of Charter Impact, Bonnie Bensen, CFO at Fortune School of Education, and Stuart Ellis, President and CEO of Charter School Capital.
We’ll share valuable information to help charter leaders understand the challenges and best practices across various charter school growth stages. Our panelists have a wealth of experience and knowledge to share with attendees. In addition, Stuart will walk through our Growth Estimator tool and highlight key information relevant for your school.
Additionally, for those interested in expansion or replication after the webinar, our team will be available to walk through the Growth Estimator one-on-one. You won’t want to miss this great webinar. Register now.
On August 21st, the legislature will reconvene from summer recess and make one final push to put legislation on the Governor’s desk. Once they’re back they will have until September 15th to act on all remaining legislation before they adjourn for Interim Recess. After adjournment, the Governor will have until October 15th to sign or veto all legislation, with legislation that he signs becoming law on January 1, 2018 unless the measure has an urgency clause in it. The legislature will then reconvene on January 3, 2018 to begin the second year of the 2017-18 legislative session.
When the legislature does return there will be two bills left that could impact California’s charter schools. The measures are AB 318 by Assemblywoman Anna Caballero and AB 1217 by Assemblyman Raul Bocanegra; they will both be heard in the Senate Appropriations Committee before heading to the Senate Floor for a vote if they pass out of committee.
AB 318 would require all independent study programs in the state to implement a policy that has a teacher interact with each student bi-weekly either in person or by a visual aid. This measure has strong opposition from the California Consortium for Independent Study and charter school groups. It originated from a student tragedy in Monterey County and it is sponsored by the Monterey County Office of Education. Though the bill has stiff opposition it has steadily moved through the legislature. If it passes the Senate Appropriations Committee it will head to the Senate Floor and then back to the Assembly Floor for a concurrence vote on the amendments that were taken in the Senate.
AB 1217 would create a statewide STEM school based in Los Angeles, however the measure would provide charter school funding through the charter school statute and would provide a facility for the school through the SB 740 charter school facility grant program. 1217 is a typical “gut and amend” meaning that it was created and first appeared in print in its current form on July 19th. The legislation did not exist in print until then and there were no hearings on the measure before it was amended. Though the measure does not directly impact charter schools it is alarming that they are utilizing the charter school statutes to create the school though it is not considered a charter school. This should raise questions about how the charter school statutes may be utilized in the future. Similar to AB 318, if this measure passes the Senate Appropriations Committee it will head to the Senate Floor and then back to the Assembly for final action.
To view these measures go to legislature.ca.gov hit the bill information link on the top left of the page and put in the bill number.
The California Legislature has passed the budget and education trailer bill on to the Governor Brown fulfilling their constitutional mandate to pass it by June 15th. Similar to the past several years, the education community will see robust funding and one-time dollars that can be spent to augment their programs. Now that the measures are on his desk, the Governor will have 30 days to sign or veto them.
The budget was passing along without much fanfare until SB 96 was presented in the State Assembly. Though it is a trailer bill, the measure contains provisions that could make the ongoing recall of Senator Josh Newman of Orange County harder to complete by changing the statutes that govern the state’s recall process. After voting for the transportation tax Senator Newman was targeted by his opponents who began the recall process in his district. SB 96 would alter the process while the recall is ongoing. Though it is has nothing to do with educational policy it makes for great Capitol intrigue.
Much of the funding and policy changes for California’s educational process are contained in the education trailer bill. Below are some of the major highlights:
Provides $1.362 billion for continued implementation of the Local Control Funding Formula to LEAs and charter schools.
Provides $876.6 million in discretionary one-time dollars to LEAs on a per ADA basis.
Increases the maximum charter school grant under the Charter School Facilities Grant Program (SB 740) from $750 per ADA our up to 75 percent of a school’s annual rent and lease costs to $1,117 per ADA or up to 75 percent of its annual rent and lease costs. The bill also applies a cost-of-living adjustments for future years.
Replaces the authority for the Superintendent of Public Instruction to assign the CCEE to assist a charter school, with authority for the CCEE to assist the school after consulting with the Superintendent.
Provides $25 million in one-time dollars to the CTC to fund a second cohort of the California Classified School Employee Teacher Credentialing Program.
Provides $10 million in one-time dollars to allocate to school districts impacted by refugees.
Extends the District of Choice program, with some limitations, through 2022-2023.
Extends the date that LEAs can encumber funds received under Proposition 39 for clean energy projects by one year, until June 30, 2019.
Provides $7 million in ongoing dollars to county offices of education to fund their work on LCAPs.
Updates the standard reimbursement rate and the regional market rate to increase funding for child care providers.
The California Legislature’s Budget Conference Committee has wrapped up and produced a budget for both houses to vote on. The vote should occur next week with both houses passing the budget bill and the trailer bills along to the Governor for his signature by June 15th. The trailer bills contain the policy language to implement the budget’s projects and priorities.
There are still a few outstanding issues that the legislature will have to resolve around the use of tobacco tax revenues and the expansion of Medi-Cal. Additionally, not all of the budget trailer bill language is in print yet. Once he receives the budget the Governor will have 30 days to sign or veto the budget. He can also ‘blue pencil’ additional spending that the legislature has added to the budget.
Here are some education highlights from the budget:
The Proposition 98 guarantee is projected to be $74.5 billion.
LCFF implementation will be funded at $1.36 billion.
There will be one-time discretionary dollars of almost $877 million, which should be released at $187 per ADA starting in the 2017-18 budget year.
The District of Choice program will be extended for five years with some reforms preposed, those reforms are not in print yet.
County Offices of Education will receive $7 million to support their work with LCAP review and support.
The COLA for the LCFF base grant remains at 1.56%.
There is $50 million for the After School Education and Safety Program.
The early education compromise would restore the increase in slots and ratio funding that was agreed upon in last year’s budget and provide $25 million to increase eligibility for parents and children. The compromise also creates a working group to study facility changes for child care centers and LEAs who provide care.
$44 million one-time for additional special education costs.
$15 million to restore the CTE Pathways program.
Applications to the California School Facility Grant Program (SB740) are now being accepted starting May 18th. As part of our efforts to serve as a reliable resource for charter school leaders, we wanted to ensure charter schools in California are aware of this grant opportunity. Applications for 2017-18 are open now and close at 5:00 p.m. on June 1st, 2017.
The California School Facility Grant program (SB740) was created to provide annual assistance with facilities rent and lease expenditures to qualifying charter schools. Eligible charter schools typically receive $750 per unit of classroom-based average daily attendance, or up to 75% of their annual facilities rent and lease costs for the school. New funding rounds occur annually, and schools can turn in online applications to the California School Finance Authority (CSFA). The CSFA uses prior year data on pupil eligibility for Free or Reduced-Price Meals (FRPM) program to determine the charter school’s eligibility. At least 55% of the student enrollment must be in the FRPM program, or located in an elementary school attendance area where at least 55% of students enrolled are FRPM eligible in order to qualify.
For more information on the grant program, an FAQ with a full list of eligibility requirements is available here.
The Governor has released his May Revision, which is an update to the budget that he introduced in January. This new “budget” takes into account tax receipts and revenue projections that the administration has assumed. With revenues up slightly, the revision has several major changes. Below are some of the highlights:
Dollars to fund the minimum wage increase to $11 in 2018
Expansion of health care coverage to undocumented children
Providing dental benefits to adults covered by Medi‐Cal
The first cost‐of‐living adjustment for Supplemental Security Income/State Supplementary Payment (SSI/SSP) recipients since 2005
California’s first‐ever Earned Income Tax Credit to help the poorest working families
For education specifically, the May Revision will increase funding for the Local Control Funding Formula by $661 million. That is added to the $770 million included in the January budget proposal to bring the additional funds going to the Local Control Funding Formula this year to almost $1.4 billion. This money will go out on an ADA basis and be very flexible in terms of what it can be used for. The Governor has also reinstated the three year “deal” with the early education community that he suspended in his January budget. This means that early education will see an increase of $500 million to fund an increase in the standard reimbursement rate and the regional market rate, as well as funding for an additional 2,959 slots for full day preschool.
The legislature is beginning hearings on the Governor’s May Revision. Budget subcommittees in both houses of the legislature will hear and vote on the measures and advance them to the full Budget Committees so that the final budget can be approved by June 15th.
To see the full text of the Governor’s May Revision go to the state’s budget page on their website.
This week saw a lot of action on charter school legislation as Friday, April 28 represented the last day for California legislative policy committees to hear and act on bills that are keyed fiscal. Being keyed fiscal means that they will have to be heard in the respective appropriation committees over the next several weeks. Below are some of the key highlights from those bills. AB 950 by Assemblywoman Rubio greatly expands the power of county boards of education and the State Board of Education to authorize charter schools. Some charter leaders and County Boards of Education view this measure as a big step forward as it eases some of the tensions that exist between an authorizer and its charter school by allowing other means for authorization. It passed the Assembly Education Committee by a 4-1 vote with 2 abstentions. It will next be heard in the Assembly Appropriations Committee. SB 806 by Senator Glazer would have applied conflict of interest policies and self dealing policies to charter schools including the Political Reform Act and Public Records Act. It would have also created a ‘fire-wall’ between charter schools and the for-profits that they work with while banning for profit companies from operating charter schools. The measure divided the charter school community as the Charter School Association sponsored the bill and other charter school organizations opposed the measure along with the Association of Clerks and Election Officials and numerous union and trade organizations. The bill failed by a 2-1 vote with 4 abstentions in the Senate Judiciary Committee. SB 808 by Senator Mendoza would have removed a charter school’s ability to appeal a denial or revocation at the County Board of Education or the State Board of Education. It would have only allowed school districts to approve a charter school and if they did not approve that charter petition the charter would essentially be dead. Senator Mendoza presented the bill in the Senate Education Committee for testimony only with no vote. There was a contentious debate on both sides but the bill should not move out of committee. AB 1661 by Assemblywoman Caballero is sponsored by the Department of Education and is their attempt to move the state from the API to a new measurement. The bill is still a work in progress and the Department should be amending it as it moves forward but I want to make sure it is on your radar screen because it will affect charter schools. The measure passed the Assembly Education Committee 4-2 with 1 abstention. It will next be heard in the Assembly Appropriations Committee. AB 1224 by Assemblywoman Weber would have created a pilot program in the state for charter school authorization. The program would have allowed three county offices of education to authorize up to five new charter schools in their county or the neighboring counties. It would have also authorized existing CMOs to consolidate up to 10 existing schools, located anywhere in the State, under a county office of education and exempted these CMOs from existing resource center requirements. Assemblywoman Weber did not take the bill up in the Assembly Education Committee because she did not have the votes so it is effectively dead for the year. AB 1360 by Assemblyman Bonta would establish expulsion and suspension procedures for charter schools, limit the type of preferences they can use for admission and state that parental involvement cannot be a requirement to attend a charter school. The measure passed the Assembly Education Committee 5-2 and will next be heard in the Assembly Appropriations Committee.
To view any of these measures or their committee analysis please go to www.legislature.ca.gov and hit the bill information tab on the top left and place in the bill number.
This year’s California Charter Schools Conference was packed full of great keynotes, sessions and networking opportunities and we think it was one of the best conferences from CCSA! We enjoyed meeting other charter leaders in person at our booth and at our breakout and poster sessions on facilities funding, growth strategy, growth capital, student enrollment marketing, and social media marketing.
The learnings we gained from attending sessions and connecting with partners and clients at the many events were invaluable. It was a privilege to be a Diamond Sponsor and we’d like to thank the California Charter Schools Association for putting on a great conference. If you couldn’t attend this year, definitely put it on your calendar for next year…in San Diego!
Whether you attended the conference or not, we invite you to access our conference session presentations and Facebook Live recordings by visiting our website. Also, sign-up for our newsletter and ongoing outreach to continue building your charter school knowledge. Please reach out if you have questions. And, keep an eye out for our upcoming webinars.
Hope to see you at next year’s conference!
The Charter School Capital team sends congratulations to Olive Grove Charter School’s expansion in San Luis Obispo, California. Open since the beginning of the 2016/17 school year, this learning center joins Olive Grove’s five other Southern California locations. Olive Grove Charter Schools have roughly 300 students enrolled including a mixture of home-schooled and independent study students. The mission of Olive Grove Charter School is to plan, monitor, and assist in the education of students K-12 in a home or blended school learning environment enabling them to speak, read, write, use technology, and calculate effectively to become self-motivated, competent, and life-long learners. The Olive Grove Charter Schools will provide students with the necessary resources to achieve success and meet state standards in core academic subjects appropriate to their level. Additionally, students will become career/college ready upon completion of the program. This will be achieved in a collaborative effort with parents as primary deliverers of the educational program, certificated teachers and the community.
Charter School Capital is excited to work with Olive Grove to meet their expansion goals by utilizing our working capital that aids in charter school financing.
“I have been working with Laura Mudge and her team at Olive Grove for almost a year to make this happen,” explained Donna Kopman, Client Relationship Manager at Charter School Capital. “We are so happy to see all their hard work come to fruition and see the positive outcomes from our charter school financing tools.”
You can read more about Olive Grove Charter Schools’ expansion in a recent article from The Tribune and images below of Olive Grove students.
