Florida’s new funding plan could help relieve some charter school tensions

Editor’s Note: This blog post was originally published On March 8, 2018 here by RedefinED and was written by Travis Pillow. We think it’s vital to keep tabs on the pulse of all things related to charter schools, including informational and legislative resources, and how to support charter school growth. We hope you find this—and any other article we curate—both interesting and valuable.

The budget deal reached between Florida’s House and Senate could ease some tensions between charter schools and districts fighting over last year’s education law. It would also boost overall charter school capital funding.HB 7069 required school districts to provide charter schools an equal per-pupil share of property tax revenue for capital funding.That funding, about $91.2 million, went out to charter schools last month — but not without drama in a few districts. And it’s at the center of two lawsuits challenging the law.Things would change under legislative proposals already passed by both chambers, combined with next year’s state budget.
Late Wednesday night, Sen. Rob Bradley, R-Fleming Island and Carlos Trujillo, R-Miami, agreed to their plan for school construction spending. It includes $145.3 million for charter school capital outlay. The House proposed $120.3 million in its initial spending plan, and added an extra $25 million this morning.*
The state would distribute that money to eligible charters to pay for school buildings and other long-term expenses. Right now, about 544 of the state’s nearly 650 charters qualify.
Next year’s statewide total would be more than the $141.2 million charters received this school year. And all of the funding would come from the state. School districts would no longer have to share their local property tax revenue with charters — at least initially.
Under this year’s HB 7055, which has already passed, next year’s state funding level would become a new benchmark for charter school capital outlay. That benchmark would rise each year, to adjust for inflation and enrollment growth. If state funding ever fell below the benchmark, then districts would have to share property tax revenue with charter schools to make up the difference.
And charter school funding would be more equal. Charter schools in districts like Polk, Pasco and Lake Counties don’t receive much local funding under last year’s law. That’s because HB 7069 lets districts set aside funding they need to cover their debt obligations before HB 7069’s revenue-sharing provisions kick in.
In addition, the budget plan would give districts $50 million in state funding to help with their capital expenses.
Local media reports suggest this new funding arrangement may have come about, in part, due to behind-the-scenes advocacy by Miami-Dade County Public Schools, which didn’t join other districts challenging the new law in court.
Whether it can ease the political tensions or legal battles last year’s law provoked remains to be seen.

Florida Legislative and Constitutional Revision Commission Update

This article was co-written by Kevin Burgess, Client Service Representative at Charter School Capital and Larry Williams, DPL, Owner/Managing Partner, Larry Williams Consulting LLC

This year’s legislative session is shaping up to be just as lively as last’s year’s for charter schools in Florida. The Education Committee in the Florida House of Representatives introduced HB 7055 an extensive education bill that deals with many topics including some that should be of interest to charter schools.
The highlights for charter schools of HB 7055 are:
School Leader Preparation Programs:

The bill allows charter schools and charter management organizations to submit applications to establish Level I and Level II leader preparation programs or program renewals.

Deferral of Opening:

The bill allows a charter school to defer opening for up to 3 years, rather than two.

Surplus Facilities:

The bill requires that tangible personal property that has been properly classified as surplus, marked for disposal, or otherwise unused by a district school board must be provided for a charter school’s use on the same basis as it is made available to other public schools in the district. A charter school receiving such property may not sell or dispose of the property without written permission of the school district.

High Performing Charter Schools:

The bill revises the criteria determining a high-quality charter school by also allowing a school that receives two consecutive grades of “A” to be determined a high-performing charter school. It allows a high-performing charter school to replicate up to two new schools that substantially replicate one of its high-performing schools. For those schools qualifying under the two consecutive grades of “A” provision, the bill revises the financial eligibility requirements to require only 2 years of financial audits that received an unqualified opinion and no state of financial emergency.
The bill clarifies that the increase in student enrollment may occur as long as it does not exceed the capacity of the facility at the time of enrollment, rather than the original capacity of the facility, allowing a charter school that has expanded its original facility or has access to additional facilities, to increase enrollment without being limited to the original facility capacity.
The bill also provides that facility capacity for purposes of grade level expansion must include any improvements to an existing facility or any new facility in which a majority of the students of the high performing charter school will enroll.

Charter School Contracts:

The bill revises the initial term of a charter to 5 years. The bill allows a planning period of 1 year in addition to the 5-year charter.
The bill specifies that, in the event of a termination or nonrenewal, the sponsor must have clear and convincing evidence that one of the disqualifying factors occurred. The bill also specifies that a violation of law must be material in order to constitute a disqualifying factor.
The bill revises the hearing procedures once a charter school receives its notice of termination or nonrenewal by removing the option for the school district to conduct a direct hearing. The hearing must be conducted by an administrative law judge within 90 days after receipt of the request for a hearing, and the administrative law judge must issue the final order. The administrative law judge must also award the prevailing party reasonable attorney fees and costs incurred during the administrative proceeding and any appeals.
The charter school governing board may, within 30 calendar days after receiving the judge’s final order, appeal the decision pursuant to s. 120.68, F.S.
The bill also revises the ability of charter schools to modify their charter due to consolidation and provides that a charter school with a school grade of “C” or higher that closes as part of a consolidation must be reported by the school district as a consolidation.
Services provided to a Charter School by a School District: If a dispute regarding a contract to provide goods and services cannot be resolved through mediation, an appeal may be made to an administrative law judge appointed by the Division of Administrative Hearings, rather than the Charter School Appeals Commission. The administrative law judge has final order authority to rule on the dispute and shall award the prevailing party reasonable attorney fees and costs incurred during the mediation process, administrative proceeding, and any appeals, to be paid by the non-prevailing party.

Background Screening:

If a charter school has their employees undergo background screening through the school district in which the charter school is located, the bill requires the district to provide the background screening results of its governing board members and instructional and non-instructional personnel to the charter school within 14 days after submission of the fingerprints. If the district fails to do so, the fees for the screening must be reimbursed.

Charter School Capital Outlay:

The bill specifies that charter school capital outlay funds consist of state funds when such funds are provided. However, if in any given fiscal year the amount of state funds for charter school capital outlay is not equal to or is less than the average charter school capital outlay funds per unweighted full-time equivalent student for the 2018-2019 fiscal year, multiplied by the estimated number of charter school students for the applicable fiscal year, and adjusted by changes in the Consumer Price Index from the previous year, charter school capital outlay funding shall also consist of revenue resulting from the discretionary 1.5 millage authorized in s. 1011.71(2), F.S.
The bill modifies the calculation for distributing discretionary millage revenue to eligible charter schools by clarifying that the debt service obligation that can be reduced from the distribution is the debt service obligation incurred by March 1, 2017, which has not subsequently been retired.
The bill requires each school district, annually by October 1, to certify to the DOE the amount of debt service and the participation requirement can be reduced from the total discretionary millage revenue. The Auditor General must verify compliance during scheduled operation audits of school districts.
The bill further provides that if aggregate lease-purchase agreement payments, including lease purchase agreements entered into before June 30, 2009, exceed three-fourths of the discretionary millage proceeds, the district may not withhold the administrative fees authorized in law 113 from any charter school operating in the school district.
As of the first full week of February 2018 discussions in the Florida House of Representatives are centered on Capital Outlay. The latest proposal eliminates the school districts’ obligation to share local property tax revenue with charter schools — at least in the first year.
Florida House of Representatives HB 7055, would set a benchmark for charter school capital outlay. That benchmark would be the amount of state capital funding in next year’s state budget — $120 million. The benchmark would increase each year, based on two factors – inflation and the growth of charter school enrollment. This would hold charter school capital funding constant in future years, on a per-student basis, at whatever the level lawmakers set in the 2018-19 budget. Should state charter school capital funding ever decrease below that set amount, then school districts would have to make up the difference with local property tax monies.

What does this mean, and what’s next?
Under HB 7055, the Districts’ could have the obligation to share local property tax funds with charter schools in the future, but for the time being this latest proposal might just help to solve the rift between the school districts and the legislature as seen in the multiple lawsuits over last year’s HB 7069.
The full House passed H.B. 7055 on February 8^th and it will now be sent to the Senate for consideration. Since HB 7055 was introduced as a committee bill rather than a member bill, it does not require a companion bill in the Senate to be considered. Additionally, the House has language in its version of the budget that makes passing of the budget contingent on passing HB 7055 or similar legislation, ensuring that HB 7055 will be included in budget negotiations when the House and Senate begin budget conference committee meetings later this month to iron out a final budget.
Meanwhile, in the Florida Senate, the Education Committee has introduced SB 1434. This bill provides that a charter school is not eligible to receive capital outlay funds if the chair of the charter school governing board and the chief administrative officer of the charter school do not annually certify under oath that the funds will be used solely and exclusively for constructing, renovating, or improving charter school facilities that are owned by: (1) A school district, a political subdivision of the state, a municipality, a Florida College System institution or a state university; or, (2) An organization that is qualified as an exempt organization under the Internal Revenue Code whose articles of incorporation specify that, upon the organizations dissolution, the subject property will be transferred to a school district, a political subdivision of the state, a municipality, a Florida College System institution, or a state university. The revised eligibility requirements may result in a change in the number of charter schools that receive capital outlay funds.
As for the Florida Constitution Revision Commission (CRC), there are two proposals proposed by Commissioner Erika Donalds that have cleared the CRC Education Committee and are now on their way to the full commission for consideration. Currently the Florida state constitution gives 67 county-wide school districts almost exclusive authority to operate all free public schools within their geographic boundary. Proposal #45 contains specific language that firmly establishes the Florida Legislature’s authority in setting policy relating to free public education. This provision could very well pave the way for legislators to establish an alternative state charter school authorizer. The second proposal # 71 contains language that give the Florida Legislature broad latitude in authorizing the establishment of public schools within the state. Both of these proposals increases the constitutional authority of the Legislature with regards to state-wide public education, including public schools, in whatever manner the Legislature may desire.
While the proposed legislation and constitutional revisions may undergo further change before the legislative session ends in March and the constitutional revisions are brought to the voters in Florida, this gives you an idea of what is happening in Tallahassee now…

UPDATE fromLarry Williams, DPL, Owner/Managing Partner, Larry Williams Consulting LLC: February 24, 2018

While House Speaker Corcoran wanted this bill to be included with the appropriation bills that will ultimately go to budget conference, the Senate President Negron for the moment has ruled that out and has opted to send it through the Senate committee process the same as any other bill sent from the House to the Senate with no Senate bill companion. The Senate referred the bill to the Education Committee and Appropriations Committee, and was heard this past week in the Education Committee.
Senator Pasadomo is running the bill in the Senate and offered a strike-all amendment removing some major portions of the House version of the bill, but keeping some major issues intact such as the Hope Scholarship and the language addressing education unions. There were a number of amendments offered during the committee meeting, and several were adopted including one that removed the union language. There is much more to this story, but suffice it to say the Senate version of this bill is now significantly different from the House version and there will be a great deal of work to bring the two in-line to pass both chambers.
Budget negotiations always hinge on resolving policy issues between the two chambers, and this session is no different. Leadership in both the House and Senate will have to come to agreement on this and a few other issues before serious budget talks can begin.

If you want to learn more about Charter School Capital’s funding options or schedule time with a client services representative get started here:

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The 2017 Florida Charter School Conference is a wrap, and having had some time to reflect on this year’s flurry of activities, I can safely say this one was perhaps the best yet!
A clear topic trend at the conference seemed to be centered on facilities needs for charter schools. By my count, there were at least four different breakout sessions discussing different challenges and best practices around facilities.
One of those sessions was even hosted by Charter School Capital, titled “I Need a New Facility for My School, Now What.” Aptly named, panelists Thom Jackson, President and CEO of EdisonLearning Inc., Mike Morley, President and CEO of American Charter Development, and Stuart Ellis, President and CEO of Charter School Capital, walked through funding options, challenges and best practices for schools finding themselves in need of a new or updated facility. If you missed the session, you can find the slides and recording here.
I had the pleasure of meeting onsite with leaders from charter management organizations, education management organizations, independent charter schools, and others. While the funding needs and visions for these organizations differ, they are all rooted in and motivating passion for the charter school movement, and were inspiring to speak with.
I even found some time to attend sessions outside the Charter School Capital content, and particularly enjoyed the “Legal Update for Florida Charter Schools” presentation provided by Daniel Woodring, of Woodring Law Firm. His session covered lawsuits over Florida House Bill 7069, information on what happens to persistently failing schools, legal issues for charter schools in Florida with respect to public records, among others.
All in all, this year’s conference was a hit. I am sincerely looking forward to the return of the Florida Charter School Conference next year in Orlando, Florida at the Caribe Royale Resort and Convention Center. Mark your calendars now for October 16 – 18, 2018 and I hope to see you there!

Our team is looking forward to this year’s Florida Charter School Conference in Daytona Beach, FL. We’ll be presenting an info-packed session, “I Need a Better Facility for My School: Now What?” and streaming it live on Facebook for anyone who isn’t at this year’s event. Additionally, our team will be located at booth #400 to answer questions about working capital and facilities financing support, and passing out our free Facilities How-To Packet.

Charter School Capital sponsored a breakfast meeting this week in Florida with more than 50 charter school principals and assistant principals from the Orange County Public School District in attendance. This gathering was co-sponsored by Kia Scott, Executive Director, and Gina Doyle, Senior Administrator of the School Choice Services of the Orange County Public Schools.

We presented information focused on charter school resources, particularly growth capital and charter facilities funding. Keeping with an education focus, attendees were then asked to take an open book “pop quiz” based on some of our handouts.
This was our team’s second breakfast meeting for the Orange County School District, and we hope to continue working with charter leaders to provide additional sessions focused on growth capital and charter facilities funding. If you are interested in having our team meet with your group, please contact GrowCharters@charterschoolcapital.com.

Charter School Capital’s facilities arm, American Education Properties (AEP), has acquired two Florida charter school facilities for $30.5 million from ESJ Capital Partners and MG3 Developer Group.
The charter schools operating in the two facilities are Renaissance Charter School at University in Tamarac, Fla. and Kid’s Community College Southeast Riverview in Riverview, Fla. The Renaissance property was acquired for $22,296,330, and the Kid’s Community College property was acquired for $8,208,100. As part of the acquisition, the company has assumed the existing 20-year leases on both properties, which expire in 2032 and 2033, respectively. The two properties encompass a total of 134,000 square feet on 11.81 acres.
This acquisition marks AEP’s second transaction with ESJ Capital Partners and MG3 Developer Group. In late November, 2016, AEP/Charter School Capital acquired five charter school facilities from the sellers.
“It is such an honor to positively impact the future of the nearly 2,000 students that attend these two impressive Florida charter schools,” said Stuart Ellis, president and CEO of Charter School Capital. “We enjoyed working once again with ESJ and MG3 to arrive at terms that will give the charter school operators the peace of mind that comes in knowing their facilities are securely theirs to operate for years to come.”
Renaissance Charter School at University operates as part of Broward County Public Schools. Located about 10 miles northwest of the Fort Lauderdale business district, the charter school opened in 2012 and will serve 1,426 students in the 2017-18 school year. Managed by Charter Schools USA, one of the oldest and largest charter management organizations (CMO) in the country, the K-8 charter school operates in one 105,002 square foot building on 8.91 acres. The building was originally constructed in 1982 and renovated in 2015.
Kid’s Community College Southeast Riverview operates under the Hillsborough County School District. Located about 15 miles southeast of the Tampa business district, the charter school opened in 2003 and is slated to serve 397 students in the 2017-18 school year. The K-8 charter school operates on a 2.9-acre parcel in a single two-story building built in 2013 that is comprised of 28,998 square feet. It is independently operated by Kid’s Community College, a CMO that manages a total of eight charter schools serving Pre-K through high school.
Today, more than 1 million students are currently on charter school waiting lists. The National Alliance for Public Charters schools continues to highlight the lack of facilities options and funds for charter facilities available as a major issue charter leaders face. To meet this demand, charter schools require facilities that address the unique growth needs of each school and community and require access to capital to expand. Charter School Capital focuses solely on charter school needs, providing funds for charter facilities that are customizable. Charter leaders retain control of their buildings and are afforded the flexibility to make the modifications necessary to expand their enrollment and academic programs.
To date, Charter School Capital has invested $1.5 billion to 550+ charter schools supporting 650,000 students across the country. Currently we have more than 40 charter school properties under management.
For more information on how Charter School Capital can help you assess your charter school’s facilities needs or provide funds for charter facilities, contact GrowCharters@CharterSchoolCapital.org. Also check out more facilities information on our website.

Charter School Capital is excited to announce that its facilities arm, American Education Properties (AEP), has acquired five Florida charter school facilities, securing long-term occupancy and opportunity for the schools’ expansion via charter school facilities financing.
“It is immensely gratifying to positively impact the future of 4,065 students in a single transaction,” said Stuart Ellis, president and CEO of Charter School Capital. “After months of due diligence, we were delighted to arrive at terms that provide five charter schools in Florida with the peace of mind that comes in knowing their facilities are securely theirs to operate with a partner willing to fund growth and expansion for years to come.”
Gabriel Amiel and Arnaud Sitbon, principals of ESJ Capital Partners, stated, “A transaction of this magnitude represents ESJ’s largest charter school sale to date, and confirms our early belief in Florida’s charter school growth. We are pleased to work with the Charter School Capital team to collectively commit to the long term path of charter school education.”
The charter schools, operated by four different charter management organizations (CMOs) encompass a total of 295,992 square feet over 38 acres in Broward, Indian River and Hillsborough Counties. Charter schools operating in the facilities include Renaissance Charter School at Plantation, Imagine Charter and Middle School at Broward, Imagine School at South Vero, Championship Academy of Distinction–Davie Campus, and Kid’s Community College Riverview South.
Today, more than 1 million students find themselves on waiting lists for their local charter schools. The National Alliance for Public Charter Schools continues to highlight the lack of facilities options available to charter schools as a major issue charter leaders face. To meet this demand, charter schools require facilities that address the unique growth needs of each school and community and require access to capital to expand. Charter School Capital focuses solely on charter school needs, providing customizable facilities financing options to charter schools. Charter leaders retain control of their buildings and are afforded the flexibility to make the modifications necessary to expand their enrollment and academic programs.
Looking for more information about facilities expansion? Get in touch with our team at GrowCharters@charterschoolcapital.com.

Across the country, today’s charter schools need better access to charter school funding for working capital and facilities financing at all stages of growth. Having reliable sources of charter school funding when needed allows schools to hire teachers, purchase textbooks, upgrade classroom technology, and expand the school’s facilities footprint so charter leaders can focus on what’s most important – educating students.
Working exclusively with charter schools, Charter School Capital understands the daily pressures charter leaders face. Our team works with school leaders to develop the best strategies matched to the school’s unique financial needs. By providing funding for charter schools, we’re empowering you. We give you access to the working capital and facilities financing options you need to stay focused on education, so every student has the opportunity to become someone incredible
Let us help you in planning for your school’s future.
Our team is excited to learn more about your charter school needs. Set up a one-on-one with our client services team to find out how we can help your school. Call 877-272-1001 or email GrowCharters@charterschoolcapital.com.
Want more information on growth capital and facilities financing? We offer information on growth strategies, facilities financing options, student enrollment marketing, and more.

Welcome to Charter School Capital’s weekly round-up where we feature charter school news about operations, policy, funding for charter schools, charter school facilities financing, and other trends.
It’s officially the first week of fall, and with school back in full-swing we’ve compiled a few updates including one from California and Florida. Tell us your thoughts and leave a comment.

Tell Your Students: CA State Board of Education is Looking for a Student Member

The California State Board of Education (SBE) is looking fora public high school senior to serve as a Student Board Member. Does your charter school have a student who might be a candidate?
From the application page: “Any student who is a California resident and enrolled in a public high school, will be a senior in good standing in the 2015–16 school year, and will be available to attend a statewide student leader conference November 11-14, 2014 in Sacramento, is eligible to apply.”
For more information, including the 2015–16 Student SBE Member application, please visit the SBE Student Member Application Web page, or contact the SBE by email at sbe@cde.ca.gov or by telephone at 916-319-0691.
Applications must be received by the SBE by 5:00 p.m., Monday, October 20, 2014

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Join Charter School Capital for a Webinar on Charter School Facilities Financing

We’re excited to be partnering with Procopio to lead a discussion on various charter school faciltiies options.
Presented by our president and CEO, Stuart Ellis, and Chip Eady, a lawyer with Procopio who specializes in education facilities and land development, this webinar will cover various financing options and best practices for facilities planning.

If you’d like to register, we recommend doing so as soon as possible, as we only have a few seats left, and registration closes on Monday, September 29th.

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Florida Board of Education Adopting New Charter School Contract

When the Florida Board of Education meets in Tampa at the end of September, they will be moving forward with adopting a standard charter school contract.
According to an article in the Tampa Bay Times, “The recommended new rule makes clear that the standard contract would serve as the basis for an initial draft contract. Both charter applicants and districts would be allowed to modify the document, but would have to indicate clearly how they changed it and why.”
If Florida adopts the standard contract, it would go into effect in November 2014.

In June of this year, we announced a $500 million facilities fund, and the formation of American Education Properties (AEP), a collaboration between Charter School Capital, the nation’s leading provider of working and growth capital to charter schools, and American Infrastructure MLP Funds (AIM), a leading private investment firm specializing in real property, infrastructure and natural resources businesses.
We’re excited to announce that just months later, the first $75 million in charter school facilities funding has been distributed to 11 schools across six states as part of the $500 million in innovative charter school financing to meet schools’ demand for facilities.
The distribution of the first $75 million marks one of the largest charter school facilities financing deals to date. This investment supports facilities at nine schools in Arizona, Colorado, Florida, and Washington, D.C., which educate roughly 4,550 Imagine Schools students, as well as students at two charter schools run by independent operators in Arizona and California.
With growing enrollment and nearly one million students on charter school waiting lists nationwide, charter school leaders need to find facilities that meet their needs, both now and in the future. AEP launched in June of this year, addresses this increasing challenge.
AEP enables school leaders to determine their long-term facility needs and retain control of their buildings, so they can focus on their mission of educating our children. With facilities financing in place, charter schools can expand their enrollment and academic offerings with confidence, knowing they can access and maintain the facilities to sustain their ongoing programs and growth.
“We are supporting one of the top needs charter schools face – facilities,” explained Stuart Ellis, President & CEO of Charter School Capital. “Charter School Capital has committed more growth capital to support the movement and now we are able to ensure that charters have the best facilities to meet their educational goals. With $500 million to invest over three years, we are dedicated to providing charter schools access to the capital they need to thrive.”
“We are pleased to have an organization that focuses on charter schools supporting our efforts and mission,” said James McFadden, Vice President and Treasurer of Imagine Schools. “Having a landlord who partners with us and others in the charter school movement to support the growth of schools makes our collaboration more meaningful.”
Imagine Schools is one of the nation’s largest and most highly regarded charter school networks. Their unique, full-service model currently administers a single, multi-state “school district” with 67 schools across 11 states and the District of Columbia. With total enrollment at approximately 36,000 students, the network is larger than each public school district in Tacoma, Boise and Cincinnati. The model has been successful. Imagine was one of only three school districts in the nation to be named a “2013 National District of Character” by the Character Education Partnership for promoting positive character development in a school environment.
Charter schools often have difficulty accessing funding and affordable credit. Recently, Standard & Poor’s (S&P) downgraded the value of charter school transactions, and Fitch Ratings downgraded the value of charter bonds. With its committed pool of capital, AEP enables schools to get the funding they need when they need it, without strings or fluctuating interest rates. Charter School Capital facilitates all origination and sourcing, underwriting, asset administration and property management for the fund.
“At a time when many are turning away from the needs of charter schools, we look forward to putting more dollars to work for charters of all sizes that will enable school leaders to focus on what they do best – educating students – while alleviating concerns about their schools’ facilities,” said Ellis.
To find out how we can help you with your charter school’s facility needs, give us a call at 877-272-1001 or email us at GrowCharters@charterschoolcapital.com.