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Webinar Recap: Getting Into Your Forever Home Starts Yesterday

Grow Schools

October 25, 2022

Webinar Recap Forever Home Starts Yesterday

In this information-packed webinar, experts Mike Mizzoni of BoardOnTrack and Jon Dahlberg of Charter School Capital discussed one of the most important aspects of charter school planning: facilities decisions. The good news is that, with clear and focused planning, school leaders and boards can ensure they make timely and impactful decisions for their school’s facilities future. 

Mike Mizzoni highlighted the role of the school’s board in facilities decisions. Having worked with hundreds of charter school boards across the country, he has found that the most effective teams come together early and collaboratively to think through strategic decisions for schools. Mike emphasized:

  1. A focus on the mission of the school, which ties in directly to the facility—that the building must support both the school’s mission and its plans for growth.  
  2. Annual board meetings to discuss the next 3-5 years as it relates to the facility and what the school needs.  

Jon Dahlberg has helped charter schools find their forever homes for over a decade and asked the tongue-in-cheek (but compelling) question: “Is construction management in your charter school mission? If not, don’t be afraid to reach out for help and advice.” As a first step, Jon suggested charter schools think about their “space plan”: 

  • How many classrooms do you need? 
  • How many bathrooms?  
  • What about hallways, office space?  
  • What spaces are needed to address your mission? 

“That plan informs your budget,” Jon said; and it’s important to write it down.  

 Of particular focus for the speakers was a discussion of the timeline and finance options required to build, move to an existing building, add improvements to buildings, or even stay in a lease. These timelines caused Mike to put it this way: “Next year is today.” Both speakers emphasized that a timely facilities journey involves a balance of needs, wants, and dreams, and it all ties back to the school’s mission. 

 What’s clear is that it requires significant planning when it comes to finding the right building and selecting a sustainable financing model. These decisions also require foresight, ensuring that the process starts early enough to be successful.  

If you missed the webinar and would like to watch this compelling conversation, you can find the free on-demand version here, or read the full transcript below. If you have questions pertaining to your school, feel free to reach out to BoardOnTrack and Charter School Capital directly—both would love to hear about your dreams for the future of your school! 


– Morning or afternoon, wherever you are in the world. My name is Isabella Marenco, and I’m a marketing operations coordinator for our team at Charter School Capital. Today I’m joined by my colleague Jon Dahlberg and our team’s partner, Mike Mizzoni. We’re gonna get started on our webinar Getting Into Forever Home Starts Yesterday: How school leaders and board members plan for the future of their facilities. I’ll let Jon and Mike introduce themselves in a minute. We’d encourage you to ask questions using the QA window at the bottom and then we’ll do our best to get to those questions throughout the presentation. We’re also recording this webinar now, so you’ll receive those recordings later this afternoon in an email. All righty, well, now I’ll turn it over to Jon and Mike. Thank you.

– Awesome. Thanks, Isa. Hey, Jon. How are you?

– I’m great, Mike. Thank you.

– [Mike] Awesome.

– Hope you’re well too.

– Yeah, I’m excited for this topic. So, as we said when we kicked off, this topic is called Getting Into Your Forever Home Starts Yesterday, kind of a cheeky little title here because we really wanna hammer on a message today. What Jon and I are gonna be conveying to all of you is whether you’re a board member, a school leader, a staff member, a partner, that one of the challenges that every charter school deals with is making sure that its facilities matches its mission and helps to satisfy what we’re all here to accomplish. And I think a lot of times in my experience, Jon, and I know just from putting together this presentation you’ve seen it too, sometimes people just get behind the ball on this topic. So we wanna bring it front and center. It’s a good time of year for people to be thinking about this. And hopefully at the end of this presentation, you’ll takeaway some conversations that you can have with your team on this topic. So what we’re gonna cover today is we’re gonna start off with introductions from Jon and me. I’m gonna kick off with some framing thoughts. For those of you who aren’t familiar with BoardOnTrack, we like to zoom out really far and help to contextualize why this is important for board members. You’ve all taken time out of your busy schedules to learn and develop in this area and so we wanna acknowledge how this fits in to the broader puzzle. What I’m gonna talk about is the board’s role in facilities. In this presentation, we’re gonna cover both the staff side, the management side ’cause it’s all one team. But importantly here, from our perspective at BoardOnTrack, one of the areas that hasn’t had as much attention is really how the board fits in in this world of shared governance. So I’m gonna talk about that. I’m gonna turn it over to Jon, who’s gonna go through some of the real in-depth parts of how you should be thinking about this journey, what some of those milestones should look like. And we’re both going to pause throughout, and at the end, to answer any community questions that you all have. Again, we put together the best presentation we could, but we wanna make sure that we’re answering the questions that are top of your mind. So if you have anything, feel free to chat it in. We’ve got Isa here to help filter those through, and we’re gonna get to as many as we can. So with that, before I turn it over to you, Jon, let me just say hello and do a quick introduction. My name is Mike Mizzoni. I am the chief governance officer here at BoardOnTrack. If you’re not familiar with us, we are a national organization that partners with hundreds of charter school boards and their staff to focus on good governance. And so that’s what I’m here to focus on today. I’m an attorney by trade. I’ve served on school boards as well. And I know that this is a topic that I get questions about all the time, so I’m excited, Jon, to be here with you. Why don’t you take it away?

– Well, thanks, Mike. I’m excited to be here with you. And folks, welcome. Thank you for taking the time today. I’m excited. Mike and I come at the problem and the opportunity from different angles. I joined Charter School Capital 11 years ago. And for those that aren’t familiar with Charter School Capital, we’re a specialty finance company that really our mission is to help charter schools get where they’re going. And we have a wide array of people, tools, money, techniques. We just really wanna help schools succeed. And our vision is that every student who wants a seat at a charter school can have it. So Mike talked about zooming out and talking about board, and I’m gonna come in at the end and talk about what you as a board and you as a team can do to make the vision that is set at the board level turn it into reality, you know, on the ground. So that’s how we’re gonna hopefully seeing this all together and looking forward to it. So, you know, personally, I’m excited to be here. I take a lot of energy from doing this. This is a fun part of my job, to share the experiences that I have. Hopefully they’re valuable. But really I wanna say thank you for making the time. We know that this is a volunteer opportunity, volunteer role for you. You and your teams are stressed. Aside from COVID, you’re doing it, you know, on bootstraps and it’s hard. You have this pressure of nurturing the lives and future of kids while managing public money and interest, and that’s pressure-filled. So I just wanna thank you for what you do. It’s hard work. It’s great work. There’s a quote that I’ll share, which is totally inspiring to our team, is there’s a leader that we work with in California and he says, “We have to treat every one of our students like they’re gonna change the world. We don’t know which one is gonna cure cancer.” So I personally am for the kids. I have a business mind and I’ve spent a lot of time in facilities helping you all figure that out. But I really love that I get to do something right and good for kids, and I applaud you for being here today.

– Awesome. And I echo everything, Jon, that you just said. Very well put. And I’ve been saying over the last couple years that I served for four and a half years as a school board member and, you know, every time you’re on a board or serving in a position, the grass always looks greener. But I have to say, it’s been a really tough couple years with everything that’s going on. And so all the more power to you for taking the time out. So I’m gonna start off, again, with some framing thoughts to zoom all the way out. Because the target of this is really for everybody who’s involved in this effort with a focus and a bend towards the governing boards, right, and how they fit in to the broader puzzle here. So one of the things that I like to start off with almost every presentation I give to charter school boards and leaders is just realigning on what exactly a charter school board is here to do. And one thing that we’re gonna come back to throughout this entire presentation, both Jon and me, is that the journey is going to look different based on so many circumstances. But the impact that one charter school board has on this process may look totally different than another board. But it’s important that you are involved. And so when I give presentations, typically live and in-person, we’ve got lots of folks around, I ask them, you know, “What exactly is your charter school board here to do? What is it that your board is?” We often get something that boils back down to this idea that, you know, the charter school board is, it’s a group of volunteer, people who are here to lead this organization. And that’s true, but we really want people to be thinking of their board more as a highly effective team that’s been strategically assembled to bring the skills, expertise, time, and temperament to govern a multimillion-dollar public enterprise. And usually when I give this presentation, I see some people nod their heads slowly as it washes over them that this is more than just a part-time, you know, hobby. You’re on the board of directors of a multimillion-dollar business. And specifically, being a charter school board brings a lot of other challenges that traditional district boards just don’t experience. And the main one is the facilities, in this idea that you are on the board of directors of a multimillion-dollar organization that’s responsible for finding, maintaining, and having its own facilities. So oftentimes boards ask us, “Well, you know, isn’t this something that my CEO should be doing?” And what we really wanna be reminding people is that this work is what we call shared governance. And there’s really two sides of the same coin: there’s the board on one side and there’s the staff, the CEOs, their management team on the other side. And collectively, we call that the governance team. But ultimately, the board itself is the group that owns the charter, right? The way that these charter schools are allowed to exist is that your authorizer, or some arm of the government, the community, we’ve all coalesced and said, “You know what, we are going to give this charter school board the autonomy to make some decisions about itself,” right, “to develop its own school program, to hire its own staffing, to control its finances.” Specifically, comes facilities, right? On one end, it can be a challenge in that you’re not granted, you know, when I served on my district board, it came with the school building, and it was the entire municipality’s job to keep that up and running. Here, ultimately, at the heart of this charter contract that is owned by the board, we are saying that in exchange for this autonomy to be able to have these decisions up here, we’re going to prove back to you all of these results, right? We’re gonna talk about operational performance, student outcomes, financial sustainability. But ultimately, this all ties back to succeeding in our charter, and not just meeting our charter promises, but, as Jon said a moment ago, we wanna change the world, right, and so we wanna meet and exceed those charter promises. And oftentimes one of the ways that we do that is by keeping a focus on things like our facilities. So just a reminder, we’re gonna pause throughout to answer any questions that we have. I’m just gonna talk a little bit more about the context of boards. But, Isa, I just wanted to check with you to see if there are any questions or comments that we should address as of now.

– Nope, none so far. But the QA window is at the bottom if you do have any questions.

– All right, so just a reminder, Jon and I are both pretty light on our feet so feel free to chat those in. All right, so what I’m gonna do really relatively quickly is go through how this fits in the facilities question, how this fits in to the broader roles and responsibilities of a charter school board. Because, again, this is one of the questions that we get asked a lot is, you know, “We know our board is doing a really great job, but when we ask compared to what, it tends to not be as in-depth.” And so what I wanna do is refresh on some of the list, it’s not an exhaustive list, of just some of the things that ultimately the board needs to focus on. So number one, it’s the board’s responsibility, tied back to this charter, to maintain a focus on the mission in all of the decisions that we make. That’s particularly relevant to this presentation because the facilities can have a major impact on your mission, and we wanna talk about making sure that the facilities meet the mission that we’re here to try and accomplish. We’re talking about selecting, supporting, and evaluating our CEO, or our executive director, our lead staff person. We’re talking about maintaining a high bar for academic excellence, right? So continuing to lift the bar for our staff. We’re talking about ensuring effective organizational planning. So that means looking beyond just this current academic year, but making sure that we’re in a position to succeed in the next three to five years. Again, in the back of your head, marked down facilities. How are we effectively planning for facilities? The job obviously includes advocating and enhancing the public standing, making sure that the resources are managed effectively, right? Jon mentioned the finances, making sure that we’re actually spending each dollar in accordance with our public mission. We’re gonna make sure that we’re holding the organization accountable, that we’re abiding by all legal and ethical guidelines, all those regulations. We’ve gotta make sure that we’ve got the right people on the board. And so as I’m gonna get into in just a moment, how do we make sure that the people on our board are actually able to pitch in and add value into these facilities conversations? We’re talking about professional development. So doing things like this, attending a session with BoardOnTrack or Charter School Capital so that you can actually develop and professionally develop in this area of good board governance. Talking about succession planning for your CEO, right? Making sure emergency, long-term succession planning. And then most importantly, for this presentation, it is the board’s ultimate responsibility to ensure adequate resources and facilities. So to make sure that not just this year, but in the next three to five years that we’ve got the facilities in place to make sure that we’re able to succeed. And again, that’s something that’s a little bit unique to public charter school boards. Finally here, just to help contextualize this stuff, there’s a role for both sides of the board and the staff. And so what we really wanna highlight here is that this is a spectrum. And so one of the questions I get asked all the time is, “Who’s actually responsible for doing the facilities work?” We might know that we need a new building, we might know that our lease is coming up, but who is actually the ones responsible for, you know, for running air traffic control, signing contracts, picking service providers, all of that work? So what I’d just like to do is to point out that this governance and management issue it’s overlapping and shared responsibilities. So the governance team is all about supporting and being a strategic partner to your senior staff. And your senior staff is all about executing on that vision that the board set up. So, Jon, I’m curious from your perspective, you know, one of the questions that I get all the time is, “Is there a black and white answer,” you know, “Is there a roadmap that says the board needs to do X, Y, or Z and the staff is gonna do, you know, one, two, and three?” And in my mind, it’s just not something that can be separated out like that. So what we’re gonna talk about through the rest of this presentation is how each team can figure out what my role might be versus our CEO’s, but I’m curious your thoughts on that.

– Yeah, thanks, Mike. I’m like you. No school is identical and no board is identical to another. And there’s an art and a science to understanding who’s on the board, what capabilities they have, and what capacities they have, and being real honest with your blind spots. And the same with your staff. Think of it this way, it’s a zero-sum game. If your senior staff is spending an hour or two a week on a facility committee interviewing architects and interviewing, you know, contractors, that’s an hour or two a week that they’re not spending doing professional development, leading the students producing educational outcomes. So, Mike, I say that in a way that I don’t have that job, I’m not on a board, but the balance of how do you get the right resources to the right place at the right time that’s a dance that each board has to do given the life cycle and age and stage of their board and the capabilities and capacities of their team and their committees. So it isn’t a black and white answer. And I will encourage you all, and we’ll speak to it later, there’s a whole network of people in the ecosystem that are good at this. This is what Charter School Capital does. Mike can help you set strategy and be a great governance board. There are groups out there that can assist you. Don’t be afraid to ask for that advice. Because if it’s not in your mission to be a land baron and to go build buildings, you might wanna outsource that. I mean, that’s my tongue in cheek answer to that. Check your mission. Is construction management and development, you know, inside your charter mission? I usually doubt it.

– I haven’t read one like that. And I think, Jon, you just brought up a really good point, which that we didn’t say at the beginning, which is this whole presentation, right, I alluded to the fact that it’s a unique challenge to charter school boards in that they, you know, if you launch a new school tomorrow, you’re gonna have to find a building. You probably are gonna have a short-term solution and then a longer term solution. But this presentation really presupposes that you have that first place, that you’re an existing charter school entity that’s looking for the next home, right? And so to Jon’s point, the reason why we do a Venn diagram here is because it’s not black and white. All of these things that you see on either side of this Venn diagram are at the heart of the partnership. So things like on the left-hand side, oversight, policies, resource allocation, right, making sure we have the budget to create, you know, a new building, all of these things in blue are things that might ultimately be the board’s vote or, you know, ultimately the buck stops with them. But it all happens with the advice and counsel of the staff. Just like everything on the right-hand side happens, you know, ultimately, might be the senior staff member or the CEO who actually goes out and deploys the resources, right, has the corporate credit card, but all of these things happen with the advice and counsel of the board. And so what you wanna know is that it’s ultimately the ball. We just want this presentation to remind you not to drop the ball, that the facilities conversation is important and you wanna get out in front of it so that you can sort out some of these things, the who’s gonna do what, the capacity problems, all of that stuff. And so that brings me to this point. In some form or another, right, if you’re a massive school with hundreds of staff and you’re educating thousands of students across many, many facilities, then your role might look different than if you’re a school that’s been opened for three years, maybe you’re in the basement of another facility and you’re looking to expand. Ultimately, the board has a legal responsibility to make sure that all of these points are addressed. To, first, make sure that your facilities that you are currently in allow you to meet and, importantly, to exceed the needs of your mission and vision. An example that I give is a school that I worked with in Wisconsin that was a high-tech, advanced manufacturing STEM high school. So as you can imagine, in order for them to meet their charter promises but then actually to exceed it, they need an entire laboratory filled with equipment. And so they really had to do things a little bit differently to make that work. The board’s gonna partner with the staff, as we talked about, to identify and strategize both about the short-term and, more importantly for this presentation, the long-term facilities needs. As that work is brought forward, ultimately it’s going to be the board’s job to approve those facilities priorities. So if we agree that we need to build a new building in the next five years or acquire a new building, ultimately the board’s gonna have to, you know, discuss that and approve that. And then they’re going to engage with stakeholders throughout the process to ensure that there’s financial alignment, that they can be successful, it’s a viable program, but then also that it’s going to continue to meet our programmatic needs. Are we continuing to add grade levels? Are we adding different academic programming, all of that kind of stuff. So, Jon, before we were talking a little bit about how every path is different, and I can’t really hammer home that. It looks different in all aspects of this work. So there is the process differences, right? How involved am I as a board and a facilities committee versus on another board and how have they handled it? Then the actual ultimate solution is gonna look different. And Jon’s really gonna dig into, you know, whether we wanna lease or buy or build a new building. And we really can’t stress enough that there is no roadmap for us to give you. And so the only thing that we can suggest to you is that you get out ahead of it as far as possible, and that’s where the title comes, that your forever home starts yesterday, that it’s never too early for you as a team to be addressing this question about facilities and whether or not it’s gonna meet your organizational priorities. So the step one, and there’s just a couple steps here and then I’m gonna turn it over to Jon to help take it from here, but the first thing that we wanna recommend is that your organization needs to get aligned on our organizational priorities, specifically we wanna have at least an annual discussion on our facilities and how they meet our needs of our organization. How are they meeting the needs today? What are the immediate needs? Are there maintenance, deferred maintenance issues that we need to deal with? But then also three to five years down the line, is this the home that we’re gonna have forever or do we need to make a change? What you wanna then do is agree on an annual basis. What are our endpoints? And Jon’s gonna dig into this more. But are we good to stay? Do we need to be thinking about moving? Do we need to be thinking about building? And if you’re asking yourself how this happens in real life, typically what we expect is a board has either an annual board retreat or an annual strategic planning session, sometime close to when the school year ends and over the summer before the new year begins. Boards have this conversation where the school leader typically facilitates, no pun intended, the conversation and says, “Here’s what I think are the most important things. Our lease is up in three years, and we’ve got a lot of maintenance that we need to think about doing on this building, what do we wanna do from here?” Jon, is that typically how you see the conversation first come up? Is it typically that a school leader, you know, is, you know, the captain of the ship finds these things, or how do they typically, in your experience, do these conversations bubble up to the board level?

– Mike, I think it does. There are visionaries that might say, “Hey, we need to do this for our school,” but usually there’s energy. If a change needs to be made, the first point of energy is usually from the people who are on the ground dealing with the students, understanding what they’d like to do and what they can’t do. So, again, it’s energy coming from two places. Hopefully the board has a strategy, but you’re gonna hear about it. If something’s not right with your building or your leadership wants more from a building, they’re not shy about it, you’ll hear from them.

– Yeah, that’s good to hear. And, you know, I was just reading the questions as well that were coming in. One of the things that I think is important on this when we talk about having this annual discussion is that it’s one of those things that, you know, your board members are always told to focus on, you know, the ball, right, the ball that’s in front of them. But there are all of these other things that if nobody’s shining on a spotlight on it, they’re not gonna get much attention. So there’s gonna be the obvious things, right? If there’s a safety issue, if there’s a major glaring environmental, climate issue in your school, you know, the board will know about that. But if it’s something sneaky, like, you know, maybe you’ve got a lease and you just, you know, assumed it ran in perpetuity, but it’s coming up soon. Jon and I just talked about and planning this. I have a board that I work with really closely that had somewhat of a nightmare scenario where they didn’t talk about it as much as they should’ve, the end of the lease snuck up on them, they thought they had an informal agreement with their lessor that they’d be able to continue to stay in that place, they weren’t, and they were left scrambling. And, you know, they only had the summer months to get into a new facility. And as Jon’s gonna show you in a moment, that’s pretty unrealistic to think that you’re gonna move from one facility to the next in a couple weeks over the summer. All right, so let’s assume now that for a lot of the board’s period you may not have many major facilities issues that are front and center. So like everything at BoardOnTrack, we really recommend that you should structure your board for success, right? That your form should follow its function. And what I mean by that is we have a lot of boards that come to work with us and I say, “Great, you’re a brand new board,” you know, “What do you have? What is the makeup of your board?” And they might have five board members and they have six committees. And the committees might be on paper-only and they don’t actually get any work done. So what we don’t like is for people to just, you know, create committees because somebody said they opt to. We want you to create a committee or a task force because it has a specific mission to follow. So in this case, let’s say, for example, that facilities are now on our radar. We know that in the next three to five years we’re gonna have to make this facilities change. Now is the time where we wanna form this committee or a task force that’s going to own facilities. Once we form that task force, now is the time where we’re going to actually recruit board members and assign them to that committee or task force who bring facilities expertise. Maybe they’re commercial realtor, maybe they’re a project manager in construction, whatever it might be you’re now bringing those people on for this particular purpose. Maybe this is when your board grows from five to seven members because you bring in two experts like Jon to your team. It’s not always realistic to think that you’re gonna find, you know, two Jon Dahlbergs to be on your board and bring that expertise. The idea is that you wanna find somebody and just be intentional about it, right, so that you’re picking people starting this task force and giving it a particular charge to address this immediate facilities need. Most boards that we work with do not have a standing facilities committee or task force, because it invites work that doesn’t actually necessarily need to be done by the full board. All right, last thing that I’m gonna say before I turn it over to Jon to really then help us expand upon this and flesh it out, is now that we have the task force, right, once the full board has identified a priority of facilities, you notice I haven’t been using the term goal yet, once the board and the CEO and the staff all agree that facilities are a priority that need to now end up on our work plate, we got that committee, we’re gonna rely on the committee to take the lead with the staff to actually translate this priority into a SMART goal. So a SMART goal, as you all know, I’m not gonna go through it, but it takes that idea of a very simple, broad statement of a priority and it fleshes it out into a project plan. And it actually says, “How are we going to achieve these goals,” and we bring that back up to the full board for approval. So the committee might work and do all the stuff that we’re gonna talk about with Jon in a moment, and then bring back to the board a proposal that we do, you know, X, Y, or Z, and there’s some detail and meet behind that. So, Jon, I’m excited. I’m really, really excited, I know at least from our members, the questions that you’re about to answer are the questions that we get asked all of the time. I wanna give a quick plug here, though, that if you are a board that’s wrestling with the board side of this stuff, if I brought up anything that’s making you wonder whether you’re doing things the right way or, you know, differently for your board, please, please, please feel free to reach out to us. Like Charter School Capital, we are a really mission-driven organization that puts out tons of free content just to help you all not have to reinvent the wheel. So what we can offer is a coaching session with our team, we’ve got lots of resources on our website. So if you have any questions that we don’t address on this webinar, just know that these other resources are available for you and we’d love to help answer these questions for you. Jon, you ready to take-

– [Jon] Yes.

– Anything you wanted to add to this piece?

– No, that’s great. There’s a question in the chat that I’m gonna get to here in a second in context. So yeah. Looks like some of these transitions, Mike, are glitching a little bit. Let’s go ahead a bunch of times. Awesome, thank you. Again, Mike talked about the setting the goal or setting the vision, sorry, not goal, setting the vision, then a goal. If your goal involves going somewhere, we wanna define for you what that journey might look like and be somewhat broad and flexible in its approach. So we’re gonna talk about these seven things, and I’ll get to them, you know, as we go. But here’s our agenda. First and foremost, go ahead and let your heart dream in context with your mission, and what you wanna do, and then temper that with your needs, right? You’ve got needs, you’ve got to manage space, you’ve got needs, you have to create a space, and you have to create a budget. So let’s dive in and take a look at what that looks like, right, from a requirement standpoint. When you’re figuring out how much space you need, you’ve got to pay attention, as Mike has said, you gotta go back to your mission. If you’re a STEM school, you should have something related to science. If you’re an art school, you might wanna have a stage. It doesn’t have to be perfect and it doesn’t have to be grandiose, but your building should be connected to your charter and your mission. We’ve talked about it for growth. Your building today doesn’t have to be your forever home for 40 years. It could be, it might be, but understanding where you are today and where you’re going in one year, two year, 3 year, 20 years and planning your growth is important when you make a facility decision. Your local consideration is just making sure that your building meets the code and also, from a requirement perspective, you’ve got to deliver a complete education for every single one of your students, regardless of what they need. So you’re gonna need space in your building to deliver specials and breakout rooms and things like that. You’ll need transition spaces, you’ll need gang bathrooms. There’s all these factors that us or one of your partners can work through to figure out how much space you need and what it looks like. And the term that you’re looking for there is a space plan. You really need to write down, “I need X classrooms. I need this many bathrooms. I need this many specials. I need this many offices,” and then you can start to build a budget from that.

– Jon, real quick, does that typically look like that space plan? Does it typically divide it into, when you talk about wants and needs, do you divide them, I’m sure, between wants and needs? And then is this something that, like, a Charter School Capital or another group would actually support us? And, you know, how do we think of those things that might not come straight to our mind, like the hallways and some of these other things? Is that something that, like, you guys would do or do we hire somebody else, an architect, to think through those things?

– It’s all of the above. We can help you. I think what a board should start with, Mike, is, “I want X number of classrooms with X number of students in it,” right? The academic mission. “I need an office for my leader. I need a breakout room for my staff. I need this, I need that. I need, you know, a specials room. I need an art room,” whatever you wanna do. If you make that list, Charter School Capital or a range of professionals, an architect, is a good resource. We can take a look at that, or they can take a look, and we can put a number of square footage next to it and then we tag on the normal and prevailing size of bathrooms and hallways, you know, things like that. We can help you with that. The heavy-lift is the board and the staff saying, “Our school needs X, Y, and Z,” and then we can add to the margin.

– And for the most part, you know, I assume that, just like anybody who lives in a house, that, you know, for all of these people, they’ve been living in this school presumably for several years so, you know, more likely than not, there are the things that are frustrating, right? That we don’t have an assembly room that we can fit the whole school, and there’s some particular pain points that they wanna to draft. Okay, great.

– Yep, great. So when you talk about planning, what that looks like, and there’s many ways to come to a plan. But when you and your business officer, or your business manager, your back office provider, when you come to strategy, you should be looking very high-level at how much revenue you have and then you should be allocating somewhere between 10 and 20% of that revenue on an annual basis to support your facility. And that is regardless if you’re getting a bond, if you have a bank loan, if you’re leasing. There’s a range of success that that 10%, if you’re spending less than 10% in your facility, you might not have a school that is attractive and offers the features and amenities that produces educational outcomes. If you have a building that costs you 20% of your operating revenue, you might not have enough money to put in to staff and classrooms to get those same educational outcomes. So there’s a band of confidence. And in the middle, we’ve showed you 15%. And what that does on this chart, you can take a look quickly, and you can say, “Okay, if I have $4 million in annual school revenue,” if you go up that chart and you scroll over to the left, you can see that, you know, “I can probably afford about an $8 million building,” a total project cost, right, give or take how we finance it. If you have $4 million in revenue, you can’t be thinking about a 16, 18, $14 million building. So you have to take all your needs and your wants and your dreams, and you have to frame them in a viable fiscal reality that is sustainable for your outcomes. And that is between 10 and 20% on an annual basis.

– I love this slide, Jon, because it’s a quick rule of thumb that boards can apply to themselves, right, without knowing more, just sort of like, I think you brought this up to me last time, that we were talking about this slide, but just like with our own personal lives that there’s some general rules of thumb with budgeting that just help you to know like, “Okay, at least I’m not wildly off in one direction or another,” as long as you can keep some of these parameters in mind.

– Yep. And, again, Mike, I’ll say, you can be wildly off in outlying circumstances if you’re gonna run a Montessori model. If you’re gonna run a Montessori model in a territory that is low to average funding, where real estate costs are high, you’re gonna be above it. But to you point, it’s a watch out, it’s, “Are we doing something intentional,” and that is really helpful for schools to have that.

– [Mike] Great.

– Mike has spent a lot of time talking about planning for success, and I’ll double down on it, right? Understanding timelines, preparing, planning, communicating. Mike, if you wanna go to the next slide, we’ll try to speed the folks along. The vision of a board that is written down and manifests itself in a plan that people can anchor to. That is a powerful tool. That is a best practice in our opinion. If you write it down, it doesn’t have to be perfect, it doesn’t have to look like a consultant did it. But if it’s a tangible document that you can come back to, and say, “How are we doing against our plan,” really powerful. We’ve talked about this. We’ve talked about the team. It is the board setting strategy and vision, but you have to have your team engaged and on board. There’s best practices out there from other schools. Go talk to your fellow board members and your fellow schools. They’ll share. Again, we’re coming back to your mission. Whenever you’re making a plan, make sure it’s ground in your mission and the delivery of the education to the students. And you’re gonna come back to us and talk about time and time again, it’s taking a long time to do things out there in the world today. So as Mike talked about earlier, we’ve broken the concept of your endpoint into three places. You can stay. We’re gonna talk about a lease. Chances are some of you either are in or started in a lease. Then you have a chance. Do you wanna move? Or do you wanna build? And those are really the simplest ways to think about. And we’ve broken down some illustrations and some thoughts around each of those three alternatives. So Mike has talked about each path being different. This is where I would challenge you all to be visionaries, right? Think about, whatever path you pick, put intention to it so it’s durable and it will outlast this year’s, you know, cohorts of fifth graders, right, that’ll outlast your tenure on the board. Think of being a visionary. And do the best you can to think about today, but also a future and a legacy.

– [Mike] I think this might be…

– [Jon] I think you went up instead of-

– [Mike] I think we’ve got a duplicate. Yeah, all right, cool.

– Oh, there we go. There we go. Leasing. I talked about a lease, right? I would say, the headline of this slide is a lease is actually a great option depending on where you are, and what you’re doing, and what you need. So many of you may have started in a lease, it was short-term, it was flexible. Leases have different accounting treatment. If you find a lease that works long-term for you, the potential balance sheet implications in how your accounting is treated could matter. And a lease is sometimes more flexible than a bond and potential debt solutions. So I’m gonna pause right now, and, Cecil, appreciate the question. The question in the chat, if people haven’t read it, is, “How do I finance major improvements on the building, like HVAC or roofs or things like that?” And that is a question that is all about the owner and the funding source of your building. If you’re in a leased building, your lease is probably gonna define who is responsible for an HVAC system or the roof. If you’re in a bond or you own the building with some traditional bank debt, that responsibility is yours. And the question that wasn’t asked in the chat was, “How do you pay for that?” Well, you pay for that by getting into a discussion with the owner who may or may not be a funding source around what’s required. So if you’re in a lease and you’re responsible for making the HVAC system work, that you are on your own in the open market in order to make that happen. There’s funding sources, Charter School Capital can help you. Mike, I’m sure, has a network of people who might be able to help you fund that as well. But it really comes down to what’s in your lease or your contract as to who is responsible for paying for that. And if it’s you, then it’s up to you and the board to source the solution and the funding. And there, again, we can help you, other people can help you. Mike, I will tell you, again, you know, you were insistent that this annual lease review with your team, I love it. I think it’s a best practice. And I would just say, don’t be afraid to look at your building, don’t be afraid to stay in your lease when you understand the control and duration that affords you in a cost. We’re working with a school in San Diego, they’re gonna stay in their lease. They have 2 10-year options and there’s no way that they can do a better deal, you know, in the bond market or anywhere else. So don’t be afraid of a lease. That’s my advice there.

– [Mike] Jon, if I… Sorry.

– [Jon] Go ahead.

– If I just add two things, you know, back to Cecil’s question about how do you fund it. You know, that’s the import of having these conversations on an annual basis, regardless of whether you’re planning to move or do some major renovation. There are always security enhancements, climate enhancements, minor technology enhancements that you can do throughout the year. And it’s important to work that into the board’s broader work. So from BoardOnTrack’s perspective, we would say is ultimately, “You may need to borrow money,” and there are sources for that. This also ties back to the board role in fundraising and its overall financial model, and whether or not it’s sustainable. So there’s some questions, but again the key is to get out ahead of it. And then one last note, Jon, and if you have anything to speak to this, you’re more of an expert than I would, but I just wanted to point out that when we talk about leases there are, I think, two major types of leases or categories that they, I’m not sure if they have formal names, but there tends to be lessees who have no relationship with the lessor or the building owner. But then oftentimes we have charter schools where they actually own the building through a foundation or a friends of board that then they do have a lease back through that organization. And I think, primarily, we’re talking about leases from an owner who’s unaffiliated with the organization, is that right?

– Yeah, I mean, that’s the place where the contract is gonna tell you whose responsibility is. If you’re leasing through a friends of organization, it’s usually inside the school’s house.

– [Mike] Sure, awesome.

– Yep. So we talked about this. This is a really pretty slide. I hope this invokes a little tiny bit of fear in somebody. Because what this is saying, and Mike, you know, has famously quoted when we showed him this slide that, “It’s gonna take you a year or more to decide where you wanna build and build it.” And that, folks, is pre-COVID. This top slide is, let’s say you need to build your forever home. This slide is probably out of date in a COVID environment. So please, please start early and understand that it’s gonna take a lot of work and a lot of time to decide what you wanna build, where you wanna build it, find it, and build it. It takes a little bit less time to actually move to a building that exists because you don’t have to build it. But it’s still gonna take considerable time to find it, potentially renovate it. You might wanna make improvements to it. It might need improvements to meet your school mission. And then finally, the other option is if you choose to stay, if you’re in a lease and you wanna stay there, get in front of that transaction so that you can understand what you need and want and you can understand what’s in the market. Engage with a commercial real estate broker. You’re gonna pay for that service, but they’re gonna help you understand what the market is and help represent you during the negotiations if that’s not a skill you have on your board. So as Mike famously says, “Next year is today.”

– [Mike] Love it.

– Let’s go forward here. We’re gonna talk about options for your money. So on the next slide, if there’s an assumption that you are going to another, Mike, if you wanna advance for me. I’ll just talk about it here. When you decide that you either wanna move or you wanna build something, you have options in terms of how you want to finance that, how you wanna raise, raise is the wrong word, how you want to source the money in order to fund that building. So if we look on the top, across the columns, you’ve got cash, you’ve got bank, you’ve got bonds, you’ve got long-term lease, and then there’s relatively a new product that’s, you know, a no-cost bond alternative, those are the traditional and unique ways of paying for your building. On the row axes, the criteria that we council boards and committees to consider when they’re making a decision are, “How much money do you need to close to get into the facility? What’s your annual cost once you get there? How much does it cost on an annual basis? How hard is it to get underwriting? What security and what control do you have to give up in order to finance a building?” And then the last couple is, “Does it fit your growth options? Can you expand it? Are you locked in?” And then the catch-all is at the bottom. So this is a hypothetical. This assumes, you know, “Hey, you need $7 million.” Well, let’s walk through that quick. If you have $7 million in your fund balance, unrestricted fund balance, you can buy a building anytime you want. There’s no annual cost, there’s no underwriting, you own it free and clear. That’s not realistic. On the other end, on the lease category, you need very little money to get into a lease. You could have a developer or an investor who owned a building lease you a space. You might need to put some money into it, but you have very little money up front. And as you work through those criteria, right, the underwriting for a lease, and, you guys, each one of you will have a copy of this and you can sort through it on your own, but in a lease there’s fewer underwriting hurdles. There is usually no security interest. And, Mike, to your point, most groups who are leasing buildings, they’re intended to be scalable, they’re designed to be more flexible. So if you want more space, you can grow into it. That’s not always true when you get into bonds and loans as a criteria. Those are usually harder to get into. They can cost you less. Like, for instance, a loan might cost you less per year to maintain, but you’re gonna need a big chunk of cash in order to get that going. And sometimes schools don’t have 20, 30% to put down on a property. So the point on this slide is there are some common criteria. This is what a bond underwriter is gonna look for. This is what a local lender is gonna look for. This is what we at Charter School Capital are gonna look for. This is pretty common. And the intersection of each of these points is going to help inform your decision as to what you wanna do. And, Mike, the last piece I’ll tell you, it’s highlighted in green ’cause it is unique. There’s a new structure out there. We’d be happy to talk more about it. It is a hybrid of a bond and a lease. It allows the school to have no money down, it’s tailored, there’s a path for the school to actually own it, and it’s scalable. There are options. Please takeaway that you have options. And then I’m gonna talk out of the other side of my mouth and I’m gonna say the funding markets are crazy right now and nobody really knows what’s going on out there. But, structurally, there are funding options for schools that they need to evaluate.

– And I love it ’cause it gives you a spectrum, right? And so for board members, just like there’s a spectrum of decisions to make in the school, not just the color, but the types of features and functions that are in the school. There’s this whole impact of which option you use to fund it, right? They can have major impact on your growth ability years down the line. So these are all the kind of trading the chip work that people have to do in making these decisions. I like it.

– Right, great. Yeah, we can go forward, Mike. I’m sensitive to time. I wanna keep folks on task. If we go to the next slide, Mike. When you’re making a decision, understand that a lease versus a purchase this really comes down to control versus ownership. And in a lease, you have long-term control; in a purchase, you have ownership, the “getting to an ownership place”, and I use that in quotes because you really don’t own it until you pay off 35 years of bonds. But you have to understand that there’s a time element involved with getting a bond versus getting a lease. If you are drawn towards getting a bond, you then become a real estate, your board then becomes in the real estate game. And there are local market considerations. There are broader market fluctuations in the real estate and funding market like we talked about. And the other one too that I’ll highlight for you, if you’re gonna move, and if you’re gonna build, please be careful that the building is zoned for you to actually be there, either by right or by zoning, whatever it happens to be, just don’t get your heart set on a building that can’t be a school. And again, that was a pretty heady section. And when we talk about this, please be excited, please be working with your team and be invigorated that all these decisions are designed to produce something new that’s going to benefit your students, your staff, and your community. So it’s a head and a heart exercise simultaneously. And then when we talk about designing your forever home, this applies to making changes in your lease. In your lease building, this applies to making changes if you’re renovating something or if you’re actually gonna build something from the ground up. Again, there’s a common theme. You are the stewards and visionaries of your charter and your mission, go back to it. Make sure that your building reflects what you’re trying to accomplish. Include a broad range of people. Here’s some examples. You know, students, teachers. We had a school in Ohio that included their lunch staff and they made, I think we calculated like under $10,000 worth of changes in their lunch prep area, and they bought goodwill and smiles from their staff forever. So, you know, a broad team, making sure that you are including them. We talked about this before. There’s an ecosystem and a network of people out there who want to help support you, architects, contractors. Talk to them. And then I think, you know, into the subsoil and the weeds, get an architect and a contractor who’ve done this before. Because the same way you’re setting a strategy, the strategy that your architect and your contractor go after when they start talking about making changes with renovation code or rehab code or building new, all of those are very different and they can save you time and money when you’re making changes to a building if you’re doing it strategically, so. And then, you know, once you’ve dreamed it and you’ve funded it and you’ve decided it and you’ve designed it, it’s gonna be a reality. And, you know, there are people who should be on your team, you know, a project manager. This goes back to Mike’s point about getting the right person in the right role at the right time. If you’re leading the strategy and your team and your CEO is running the school, you might not have somebody who is going to be badgering contractors and architects and builders to build your building or renovate your building the way you agreed to do it. That person’s critical. Mike, we can go ahead. Communication, right? Please, again, continue to communicate. Use your social media, use your board meetings, use your staff, use your kids. Let them know what’s going on, and communicate early and often so that there’s excitement about it. And then the other piece of it, too, that is when you’re building or making major changes, you actually are gonna want the owner’s representative in your mix as well. There are gonna be tension to keep your project on track and on time so that you’re getting what you want. Those are people who you want in the system to create the balance of what’s going on. And lastly, Mike’s talked about it, moving is not easy. Find somebody that can help you with a move plan. It really is suboptimal and not a best practice to do it on the last day of winter break before the school starts on January third. It can be done, but it’s disruptive. So plan the move with the same intentionality and the same foresight that you’ve done everything else. And you’re gonna have a better entrance into your endpoint. There we go. You’re in. Mike, I felt like I rushed that a bit, but I’m sensitive to keeping our team on track.

– No, I mean, at least for me, like I said before, this is a topic that we get asked so much about that I knew I was gonna learn a lot. And I’ve been taking actually some notes. Just even hearing you do it live, I think that was really great. If you’re open to it, just while I stole the microphone from you, Jon, I’ll do another call for Q&A. So while we’re on, we’ve got at least five minutes left where we can answer any questions. And then I think I can speak on behalf of Jon that my hope is that this might spur some questions in your mind after today. And so if there are any other questions that come up before or after we break, please feel free to reach out to either or both of us and we will address as many of those as we can.

– Yeah, I would ditto that, Mike. Thank you. And like I said, I’m available. Our team is available. You had a shameless plug for resources. Charter School Capital will meet you in the middle. We have a bunch of other free resources on our website. And we try to make it pretty easy if you wanna have a personal conversation about something specific, let us know. We would welcome this. We can’t solve many problems in an hour. Maybe we gave Cecil something to think about, but this really requires a conversation that builds over time and we’d be happy to start that with anybody offline.

– Yeah, if I repeat one thing, it would just be that. If nothing else, start with your team. Propose to them, you know, “Hey, we haven’t had,” if it’s not a conversation you’ve had in the past, bring up the facilities question, ask your staff if they haven’t already to, you know, put together a quick presentation that highlights things that are working well, areas of concern for the future. And then I think it kicks off at the beginning of this presentation with some good next steps after that.

– [Jon] Exactly.

– You know, Jon, I think one other thought that, I’m not sure that I had thought of before this, is the impact. And you mentioned that the impact of the environment and the economy right now when it comes to some of this work. And so if it was important two years ago to get out and ahead of this work, you can imagine how important it is now. I’ve had a staircase that I’ve needed to have replaced for months and months and months, and it’s just been delayed. So I imagine that impacts all of this work as well.

– Yeah, it does, Mike. I’ll make the point here, there’s two things. One is the costs are not going to retreat. The construction experts are telling us that there’s no step function down. So it is completely appropriate for schools to look at if they need to grow. Staging is a great option, right? If we wanna build a high school, can we build 9th and 10th grade first, and then add 11th and 12th grade after that? So staging is an option. Staging is an option. Costs are not coming down. And the other piece that is disruptive right now is materials. Materials and human capital is just not stable. So it’s a challenge to figure out how you wanna make improvements. But making improvements today intentionally is going to cost you less than ignoring the problem and then deciding to do it down the road.

– Well said. Well, Jon, Isa, are there any questions that have come in that we might be missing?

– Nope, no questions in the chat. I think we’re good to wrap up. Yeah.

– Awesome. Well, from my perspective, this was a really great presentation. Actually I think we might have gotten-

– Oh, one more question.

– [Mike] One more question.

– Yeah, “Do you have any examples of converting alternative sites, such as shopping malls into a school?”

– Yeah, I’m trying to get to the place where it’s, oh, anonymous attendee. Yes. Well, I’ll speak for us. Yes, we do have experience doing that. And if you’d like to call me offline or email me offline, I’d be happy to talk about that. And, Mike, I’m assuming you’ve seen that with one or more of your schools, right?

– Yeah, slightly different answer. I was gonna say, yes, we have seen many examples. Unlike Jon, we haven’t actually been the ones facilitating that conversation. So if you are in that kind of a space, you know, we’d love to put you in touch with, you know, we’ve seen everything, shopping malls, renovated churches, basements of churches, old office buildings, old residential houses have all been turned into this kind of thing. So if you’re looking for a case study and, you know, how it’s been done, feel free to reach out to, I think, either of us. But yeah, Jon, it sounds like you could probably, I think you’ve probably been more involved in that conversation before.

– Yes. And again, this goes back to zoning, right? Make sure that your old building is actually zoned to be a school. We looked at a school property that was an old, it was an old grocery store. But sadly, 20 feet above it on the same property was a filling station. And you can imagine what gravity does to the toxic waste of a filling station. So it just wasn’t a great site. It was gonna fail. The idea of putting a school on top of, you know, old fuel from, you know, whenever that leached out of the tanks. So repurposing an old site got tons of value in terms of time and money saved. You just have to make sure it works in the municipality and, you know, with the four walls that you’re trying to work with.

– Definitely an affordable model, right, you know, if that’s what works out. You know, creative use. We were just in Buffalo, New York this last week where a school found a particular parcel of land that, to your point, Jon, you know, met the legal and regulatory requirements but it came at a heavy discount because of its prior use. And so, you know, I appreciate the question for the creativity that we’ve seen out there in the charter sector.

– Yeah. And, Mike, I’m gonna answer Janice’s question in part and offer support offline. Janice, be happy to talk to you about that. My advice to you is, I can’t tell you what the budget is other than the 10 to 20% range of spending your revenue, but I would look, if you’re a brand new charter, looking at some type of short-term lease that allows you to get open and allows you to attract students, deliver education and get an audit. Once you do that a couple times, then your scalability and your options start to open up very quickly. So your number one task is to get open and educating. And offline, I can help you with a budget depending on where you are and what you need and things like that. But I’d be happy to work with you, Janice.

– Yeah, and I assume that Janice’s question is about a budget for this building. If it’s a step back from that and it’s a broader budget, Jon, I know Charter School Capital it’s wheelhouse for them as well, if it’s that sort of broader thing and you’re just putting it together, my answer would be don’t start from scratch. And, you know, same thing, we could help talk you through it and then put you in touch with some folks if it’s that kind of a broader.

– Yeah, Mike, for the benefit of the group, I should read the question. That’s bad administrator on me. Janice’s question was, “Do you have a budget sample for new charters that recommend we look into?”

– And she did clarify that it is budget for facility operations, so it’s fine.

– Okay, great. Okay, good. Now, I scroll up. Thanks, Janice. One of us or both of us would be glad to help you with that.

– All righty, and that’s the last question that we have. You will be receiving this recording and the presentation slides after this session. So later in the afternoon you’ll be getting an email. Yeah, so have a good day. And if you wanna follow-up with Mike and Jon, their contact info is on the screen. You’ll also be receiving that in the email as well. Thank you.

– [Mike] Thank you, Jon. Appreciate it.

– Thank you all for participating. Have a great day.

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