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ACCS Meeting Notes for April 6, 2011

Advisory Commission on Charter Schools - ACCS Meeting Notes for April 6, 2011.

Advisory Commission on Charter Schools
An Advisory Body to the State Board of Education

FINAL NOTES

California Department of Education
1430 N Street, Room 1101
Sacramento, CA 95814-5901

Wednesday, April 6, 2011

 

COMMISSION MEMBERS

Lupita Cortez Alcala*
Dr. Vicki Barber
Brian Bauer
Dr. Paul Cartas
Gary Davis
Mark Kushner
Corri Ravare (Absent)
Curtis Washington

*Lupita Cortez Alcala filled in for Beth Hunkapiller, who is the State Superintendent of Public Instruction’s designee. Beth Hunkapiller joined the meeting at 1:35 PM, following the lunch break, at which point Ms. Alcala left the meeting.

State Board of Education Representatives Present:

Yvonne Chan

Patricia de Cos

Principal Staff to the Advisory Commission

Bonnie Galloway, Consultant, CDE Charter Schools Division

Jay Harris, Consultant, CDE Charter Schools Division

Celina Torres, Consultant, CDE Charter Schools Division

Dmitriy Voloshin, Consultant, CDE Charter Schools Division

Stephen Work, Consultant, CDE Charter Schools Division

Carolyn Zachry, Consultant, CDE Charter Schools Division

Call to Order

Chair Bauer called the meeting to order at 10:13 a.m.

Approval of Meeting Notes

ACTION: A motion was brought forward to approve the meeting notes from the February 2, 2011 ACCS meeting. The motion was approved by a vote of 7 in favor and none opposed.

Review/Reordering of the Meeting Agenda

Chair Bauer announced a reordering of the agenda. He called presentations to be held in the following order: Item 2, Item 1, Item 3, Item 4 and Item 5.

AGENDA ITEMS

ITEM 2: Report on Special Education Fiscal Issues Workshop-Continue Discussion From the February 2, 2011, ACCS Meeting.

Dr. Vicki Barber presented on this item. She continued the presentation from the February 2, 2011 ACCS meeting.

Each District (and charter school) is required to belong to a Special Education Local Plan Area (SELPA) to provide education services to individuals with disabilities. Special education is a requirement of State and federal law. Districts may be a single SELPA, or participate in a multi-district SELPA.

Prior to 2010-11, El Dorado County Office of Education (EDCOE) served as the administrative unit of the only Charter SELPA operating in California. The Los Angeles County Office of Education (LACOE) was approved for a SELPA in 2010-11.

As of 2010-11, 106 charters participated in the EDCOE SELPA, with approximately 8.5% of students residing in the jurisdiction of EDCOE receiving special education services. The Statewide percent of students served is approximately 11%; the Charter SELPA is therefore approaching the statewide average.

Dr. Barber noted that children are not eligible for special education if their needs can be met through other means. She explained that charters can be nimble in how they meet the needs of their students.

The governance of the Charter SELPA, which is part of the Local Plan, is broken up into four different components: the CEO Council, which sets the direction of the SELPA and distributes funds according to an Allocation Plan; the Executive Committee, which is selected by the CEO council and makes recommendations to the CEO Council; the Steering Committee, which makes programmatic recommendations to the CEO council, as well as identifying training and service needs; and other hierarchies that includes the Community Advisory Committee, and SELPA members.

The purpose of the Charter SELPA is to provide options to State Board of Education (SBE) approved charters, Statewide Benefit charters, or charters demonstrating capacity to be a Local Education Agency (LEA), especially for those charters not able to develop a workable relationship with their authorizer.

Admission to the Charter SELPA are prioritized for SBE approved charters, and existing charters, where existing charters are only given priority when access and quality are the primary factors for enrollment (fiscal issues cannot be the primary rationale). Also, priority consideration will be given for current members that are expanding.

As enrollment in the Charter SELPA has increased, compliance results demonstrate a decrease in the number of overdue evaluations and annual IEPs.

When comparing the Charter SELPA to existing SELPAs, analysis shows that there is less funding for Charter SELPA, taking into consideration both local and federal funds.

EDCOE is currently working with 106 charters, and are reviewing applications. New applicants are asked to attend a workshop in October. Dr. Barber commented that the process to become part of an out-of-area SELPA is like a marriage; charters need to understand how the relationship works, and the potential for success.

Dr. Barber closed her presentation by stating that new charters should first try to work out any issues they may be encountering with their authorizer. Whenever the EDCOE SELPA receives an inquiry, they provide a response to the charter and their authorizer.

Chair Bauer called for questions.

Mr. Mark Kushner requested a copy of the presentation. Dr. Barber indicated that the presentation would be available on her website. Ms. Lupita Cortez Alcala indicated that the department would provide a link to Dr. Barber’s website.

ITEM 1: California Department of Education Update – To Include, but not be Limited to, an Update on the March 2011 State Board of Education Meeting.

Ms. Alcala presented on this item. She summarized charter-relevant issues that were discussed at the March State Board of Education (SBE) meeting. This included renewal of the School of Arts and Enterprises (SAE) charter petition. The SBE recognized that while the SAE needed to improve academically, the SAE had both a high retention and graduation rate, and expressed appreciation for the school’s heartfelt presentation.

In addition, there were a number of waiver requests to permit a 27.5:1 pupil–teacher ratio for several nonclassroom-based charters. The Board also furthered its efforts to clarify the definition of a Statewide Benefit charter, and moved forward on amending regulations pertaining to Statewide Benefit.

Ms. Alcala stated that the Board unanimously approved nonclassroom-based funding determinations presented at its March meeting. In a discussion surrounding modifications to specific funding determinations, SBE members requested that academic achievement data be included in future funding determination items.

Chair Bauer requested an update from Yvonne Chan.

Ms. Chan stated that the SBE would like clarification on the responsibilities of the ACCS. She requested that the ACCS work to define their responsibilities, and expressed a concern that the ACCS should act as a filter so that the SBE would not be encumbered with an excessive amount of charter-related items. She also requested that the ACCS define an explicit formula for determining the number of years allotted for funding determinations.

Chair Bauer indicated that SB-740 (nonclassroom-based funding determinations) would be coming up for review at today’s meeting. He asked that Ms. Alcala clarify who would be participating in the Statewide Benefit work group’s second meeting.

Ms. Alcala said that she did not have a list of participating members handy, but that participants included representatives from the Association of California School Administrators (ACSA), the California State Parent Teacher Association (Cal State PTA), the California Charter Schools Association (CCSA), and the Charter Schools Development Center (CSDC).

Mark Kushner commented that only he and Beth Hunkapiller were on the first ACCS panel, and that none of the current SBE members had served on the commission. He explained that the ACCS preceded SB-740, and was created specifically to address charter issues. He welcomed a discussion with the SBE on the function of the ACCS, but explained that SB-740 responsibilities existed outside of statute.

Chair Bauer called for commissioner questions.

Dr. Vicki Barber asked Ms. Chan to share the SBE’s perspective, specifically noting that statute does not consider academic achievement as a criteria in funding determinations.

Patricia de Cos stated that there is a provision in Ed Code that requires a funding determination of 5 years at 100% funding if the school has an Academic Performance Index (API) rank of 6 or higher, but that statute does not provide guidance if the school has an API rank of less than 6. Because of this lack of guidance, the SBE asked California Department of Education (CDE) staff to include academic performance information in the Board item.

Ms. Alcala added that the State Superintendent’s staff was concerned that 4 or 5 year funding determinations were given to very low-performing schools.

Chair Bauer asked for clarification on the 18-20 funding determinations in Ms. Alcala’s report. He noted that the SBE modified the determinations for Westwood and one other charter school. Ms. Alcala responded that both funding determinations were lowered from 4 years to 2 years. Chair Bauer indicated that the Commission may want to revisit these schools as case studies in putting forward a recommendation to the SBE.

Chair Bauer called on department staff to present the next item.

ITEM 3: Consideration of Bases for Determination of Funding Rates as Required for Nonclassroom-based Charter Schools, Including, but not Limited to, Academic Performance of Nonclassroom-based Charter Schools.

Jay Harris presented on this item. He explained several parameters and time frames that were established in statute and regulation. He specifically noted that California Code of Regulations Title 5 (CCR 5) recommends a 2 year funding determination for new charters, and that funding determinations must be a minimum of 2 years and a maximum of 5 years. In addition, in order for a 100% funding determination of 5 years to be offered, statute requires that the charter school meet three requirements: 40% of its total revenue must be spent on certificated personnel; 80% of total revenue must be spent on instructional and related costs; and the class size cannot exceed a pupil–teacher ratio of 25:1.

Chair Bauer recognized that there was a request before the Commission from the SBE that academic performance be considered in funding determinations. He noted that there was possible overlap between items 3 and 4 on today’s agenda.

Dr. Barber asked for a perspective on the current state of Mitigating Circumstances from either CDE staff or the SBE representatives.

Mr. Harris explained that regulations permit Mitigating Circumstances on an individual basis, and that department staff consider these requests based on materials submitted by the charter school. Factors that influence the approval of Mitigating Circumstances include the school’s ability to hold reserves, and deferrals, which have an adverse affect on cash flow. Ms. Alcala noted that these factors were primarily of a fiscal nature, and did not take into consideration academic performance. Mr. Harris confirmed this.

Chair Bauer asked for clarification on criteria used to make a determination of 70% or 85%.

Mr. Harris explained that for a 100% funding determination to be made, the school must meet the three requirements in statute that pertain to pupil–teacher ratio, and percent of revenue spent. For an 85% funding determination, the charter school must meet the 40% for personnel costs requirement, but may have 70-80% of their total revenue spent on instructional costs. A 70% determination would be made if the charter school failed to meet both the 40% and 80% targets. He clarified that for any percentage amount, the charter school must maintain a pupil–teacher ratio of 25:1. Ms. Alcala added that the charter may obtain a waiver to break the 25:1 ratio requirement.

Ms. Chan asked if facility costs can contribute to the 80% instructional costs target. Mr. Harris indicated that facility costs can only contribute to the 80% target under specific circumstances. Mr. Kushner explained that there is an assumption that facility costs are not as prominent for nonclassroom-based charters.

Chair Bauer called for public comment, and reminded the audience that there is a 2 minute speaking limit.

Jeff Rice (A+ Personalized Learning) addressed the Commission and explained that there are two distinct issues at hand: academic performance requirements in funding determinations, and Mitigating Circumstances. He expressed that audience members would like to address one or the other item, or both in some instances. He requested that the Commission take public comment on both issues separately.

Chair Bauer agreed with Mr. Rice. He announced that the Commission will take public comment first on academic performance, and then on Mitigating Circumstances.

Mr. Rice proceeded to comment that SB-740 was solely intended to address fiscal accountability issues, such as profiteering and spending in nonclassroom-based charters prior to 2002. It was never intended to be an academic performance measure. He explained that the criteria of API rank 6 for a 5 year determination was added later, and was intended to be an incentive and not a limitation. He stated that academic performance is already measured and considered during charter renewal proceedings. Mr. Rice added that nonclassroom-based charters serve an at-risk and underserved student population, so that initial STAR testing scores appear to be low, but demonstrate significant growth after the first two years; therefore, API scores are misleading. He also noted that the model of comparison for API is flawed, because it compares K-12 nonclassroom-based charters to K-8 public schools, which have a higher average API ranking than schools that serve secondary grades.

Lisa Corr (Middleton, Young, and Minney) commented that SB-740 was intended to fix a specific problem with state funding, and was based on the assumption that nonclassroom-based charters were less expensive to operate than brick-and-mortar schools. As a result, regulations focus on instructional costs. She explained that the law already provides for the handling of low-performance charters by revocation. She noted a disparity between funding for charters and funding for public schools, and explained that charters are penalized for low performance while public schools are given additional resources. She cited Title 1 funding as an example.

Eric Premack (Charter Schools Development Center) agreed with the previous comments. He added that funding determinations are not supposed to function as an academic review process. He suggested that the ACCS remind the SBE that SB-740 is a funding determination process in name, spirit, and law, and that this is not an academic review process. He recalled that the CDE modified the funding determination form to collect API data a few years ago, and he suggested that the department revert back to the original form.

Diane Grotjohn, who explained that she works with nonclassroom-based charters, primarily in Southern California, commented that the purpose of SB-740 is to make a funding determination and to be fiscally responsible. If considering API, then the Commission and the Board must have the strong belief that funding influences API. She expressed that she is at a loss to prove that test scores are directly related to funding.

Carol Anderson (Somis Academy) commented that, per No Child Left Behind (NCLB), 80% of the nation’s schools are considered to be failing. NCLB relies on unsophisticated “bubble tests” to grade students and schools. She expressed support for the State’s efforts to measure problem solving and 21st-century skills. She urged the Commission to consider that nonclassroom-based programs engage students, and also to consider the impact of national standards in penalizing nonclassroom-based schools.

Peter Birdsall (K12 and California Virtual Academy) commented that there are huge problems with decile rankings. Rankings divide schools into elementary, middle, and high schools. He explained that all 9 CAVA and K12 schools are categorized as elementary schools, even though they serve mostly 7-12 grade level students. Because elementary schools have a higher average API ranking than secondary schools, there is a statistically significant negative correlation to comparing these mostly secondary nonclassroom-based schools to elementary schools.

Skip Hansen (Learn 4 Life) noted that one of the SBE’s goals was to prevent the Board from dealing with the minutia on charter issues. However, the Board is now requesting to review API, and usurp a formula-based process, ultimately opening themselves up to an enormous amount of detail that they had previously expressed a desire to avoid. Mr. Hansen suggested that the motivation in examining API was more political than practical.

Colin Miller (California Charter Schools Association) expressed that this whole issue is a huge distraction, and that this was creating more and more problems for schools. He commented that both State and federal policy provides additional resources to underperforming schools, while taking funds away from charter schools. He explained that there are already systems in place that measure performance data. He noted that, per regulation 11963.3, the forms shall not include academic information. He suggested that if the SBE was interested in pursuing this, they should go through the appropriate process of amending the administrative process.

Superintendent Dave Tome explained that his district serves two charters. Most students that come into these charters are 10th and 11th graders that are behind in credits. Despite this, CAHSEE pass rates, graduation rates, and college attendance rates are higher than the county average. However, the school is in API rank 2. He expressed that he is wary this is an anti-charter move.

Janelle Pennat (CORE Butte Charter) agreed that all schools, including classroom-based and nonclassroom-based schools, should be able to demonstrate academic improvement. However, placing this additional measurement on nonclassroom-based charters would be discriminatory.

Jodi Grought commented that these are funding determinations, and they should not take into consideration API. She explained that there are already processes to hold schools accountable for their API. She added that it doesn’t make sense to include API ranking in the funding determination process.

Mary Biksby said she would like to clarify the definition of a “low performing school”. She explained that her school has a 6-year WASC accreditation, has always been renewed for the full 5 year charter term, and that the school is pursuing both State and national awards. Despite all this, the school is an ASAM school, and was recommended for reduced funding. She requested that the ACCS urge the SBE to reconsider a 4-year determination for her school.

There were no other public comments. Chair Bauer opened the floor for commissioner questions.

Mr. Kushner shared the SBE’s concern for academic performance, and indicated that while it may be a narrow measure, it is at least a measure. He commented that he found some of the points brought up during the public comment to be disturbing. In particular, that there was a statistical fallacy in comparing K-12 nonclassroom-based schools to elementary schools. He also cited an e-mail correspondence in which he requested information from ACSA about whether or not they supported using academic performance to influence funding for all schools, and not just nonclassroom-based schools. According to e-mail correspondence, ACSA indicated that they did not support this. Mr. Kushner added that that statute was intended to address inappropriate spending, and he did not see the basis to “bootstrap” academic performance onto funding determinations.

Gary Davis expressed that charters that are not performing well should be shut down. He added that this issue is a slippery slope because there are already mechanisms in place to deal with low-performing charters. He expressed concern for unintended consequences for the field; for example, charters could be deterred from taking at-risk students if it would affect their funding. Ultimately, this could have repercussions on students.

Chair Bauer asked for clarification on the SBE discussion at the March meeting pertaining to Westwood. He asked if the funding was reduced, or the number of years. Ms. Alcala clarified that the department recommendation was for 4 years, but the SBE approved for 100% at 2 years. Chair Bauer requested confirmation that it was the number of years reduced, and not the percentage of funding.

Ms. Chan explained that the SBE wanted clarification on the formula used to determine a 2, 3, 4 or 5 year recommendation. She also noted some instances where the school applied for 2 years, but the recommendation was for 4 years. She also wanted clarification on ASAM schools.

Ms. Alcala explained that in those cases where the recommendation was for a greater number of years, it was due to the charter school not understanding that they could apply for more years. She also expressed a concern that, when there was a stark drop in API scores, the school should be present to answer any questions from the Board, and they had not been present.

Dr. Barber cautioned against just using one measure to gauge a school’s academic performance. She expressed a concern that, even though the number of years would be reduced as opposed to the overall funding percentage, this could also be a cost factor if the school needs to expend administrative recourses to secure a subsequent funding determination. Dr. Barber suggests that the Commission should express to the SBE that they agree on the importance of academic accountability, but that there are already processes set up to examine this, and that they will work together with department staff to clarify the formula to make 2, 3, 4, and 5 year determinations.

Ms. Alcala responded that whatever their recommendation is, they should consult legal opinion as appropriate to ensure that any action is made within the confines of statute.

Curtis Washington expressed a concern that building academic performance data into funding determinations could cause a disincentive for charters to serve at-risk students. As an analogy, he offered teacher evaluation: he would not advocate the use of a single number to judge teacher effectiveness because a teacher needs time to improve at their profession, in the same way a school needs time to improve their program. Based on the current system, students are learning that it’s not about developing an authentic interest in learning, but rather it is about cheating to reach a specific number. He advised caution against using a “quick fix”. He suggested reviewing these schools as living, breathing organisms, and that schools which serve at-risk students cannot fairly be compared to schools that serve privileged students.

Dr. Paul Cartas agreed with what had been said about academic performance. He also suggested that they look at growth, and not just API. He explained that growth can be measured, and is statistically reliable. He also commented that the criteria should be clear so that schools with deficiencies can address those deficiencies.

Chair Bauer expressed a concern that without specific language on 3 or 4 year determinations, if the CDE and ACCS would not establish specific language, the SBE would be likely to establish regulations and marginalize their roles in the process. He suggested that the Commission draft clear language on the basis for 3 and 4 year determinations, and that they eliminate any confusion around this subject.

Mr. Kushner commented that while the Commission wants to provide guidance, they should be careful not to establish underground regulations. He disagreed with Dr. Cartas that API growth could be used as a statistically reliable measure. He thanked Ms. Chan for attending the Commission meeting to improve relations with the SBE. He suggested that a motion be put forward.

Dr. Barber commented that there is tremendous consensus from the Commission on the points enumerated below.

The Commission supports measuring academic achievement, but feels that academic achievement should be appropriately addressed during appeals or renewals. Consideration of academic performance during the SB-740 funding determination process raises a number of concerns regarding:

In addition, when reducing the duration of a funding determination based on academic performance, the reduction can impose addition costs on the charter school, which must expend administrative resources to obtain funding determinations. The process can also drain resources from CDE and SBE staff, which must process and review funding determinations.

Finally, the Commission agrees with the SBE on the need to address and clarify the criteria for funding determinations of two, three, four, and five years in duration.

Chair Bauer asked Ms. de Cos and Ms. Chan if such a level of communication would be useful to the SBE.

Ms. Chan asked how the Commission would address the schools being considered for funding determinations in today’s meeting, and noted that 29 schools were being considered.

Chair Bauer asked if there were any additional questions about the motion brought forward. Hearing none, he called for a vote.

Dr. Barber noted that the SBE had modified a funding determination for an ASAM charter school.

Mr. Kushner suggested that the Commission emphasize to the Board that the ACCS had previously recommended a 4 year funding determination, and commented that it was not clear, based on the SBE record, if the Board moved forward unaware that the charter was an ASAM school.

Dr. Barber suggested that they include information pertaining to ASAM schools in their recommendation to the Board.

Lunch Break

Chair Bauer called for a lunch break at 12:40 PM.

The meeting resumed at 1:35 PM.

Beth Hunkapiller joined the meeting. Ms. Alcala left the meeting.

Chair Bauer called on public comment related to Mitigating Circumstances, and reiterated the limitation of 2 minutes per comment.

Mr. Rice (A+ Personalized Learning) expressed the need for greater flexibility in Mitigating Circumstances. He noted that the lengthy time frame to revise these regulations was initiated back in 2009. He cited the LAO, which stated that the State crisis will exist through 2015-2016, and perhaps longer. He urged the Commission to recognize that when SB-740 was created, there was fiscal stability within the State, and that schools could easily predict their funding level and plan in advance. In contrast, a number of unpredictable factors are affecting schools right now, such as budget cuts and deferrals.

Chris Mahwrin (CORE Camptonville Academy) commented that, because of deferrals, his school is scheduled to receive over $600,000 after the fiscal year ends. Because of SB-740, the school will have spending requirements that must be met by June, and will need to spend an additional $100,000 to meet these requirements. He explained that the school will need to borrow money in order to meet the 40%/80% funding determination targets. He noted that the process consumes administrative resources, resulting in less cash to negotiate the next round of budget cuts. He urged that the regulations permit facility costs to contribute to the instructional spending requirement of funding determinations.

Mr. Miller (CCSA) noted that, during the February ACCS meeting, the Commission had requested a workgroup to focus on these issues. He expressed that the CCSA would be happy to participate in this workgroup.

Mr. Premack (CSDC) expressed the need to explain to the SBE that the entire SB-740 process has “melted down”, and explains that the current model of nonclassroom-based charters have eclipsed the process altogether. He urged for the SBE to re-open this issue and fix the process.

Cameron Curry (Classical Academies) commented that his schools must borrow millions of dollars to assist with cash flow due directly to the regulations in place. He shared a concern that this whole process is killing schools in the field.

Mr. Hansen (Learn 4 Life) commented that the dropout rate is a serious problem. However, whether or not charters can accept at-risk students has become a financial issue. He expressed a concern that charters who have to borrow money to compensate for deferrals are essentially paying a fee for access to their own funds. He also expressed a concern that a 2 year funding determination affects a charter school’s ability to obtain facilities, especially when the funding determination does not match up with the charter term. He urged the Commission to consider that there is a major difference between a 2 and 4 year funding determination.

Mr. Birdsall (K12 and California Virtual Academies) expressed that the current regulations are broken, especially in the context of the current fiscal environment. He explained that a number of charters will need Mitigating Circumstances for 2011-2012, which should not be delayed because of revision to regulations.

Chair Bauer opened the floor to commissioner questions.

Mr. Kushner reported on the workgroup committee that was mentioned. He noted that in a previous Commission meeting, Dr. Cartas had proposed to establish a committee to examine potential revisions to regulations. The goal of the committee was to fulfill the original objective to ensure that money in nonclassroom-based charters was spent on instruction, and to prevent excess profiteering, while considering the evolution of nonclassroom-based charters and the applicability of the original regulations.

Mr. Kushner noted concerns over how current regulations do not allow schools to be prudent by building reserves in anticipation of future financial hardships. He also noted ambiguity over the definition of nonclassroom-based, and over the spending targets in funding determinations. He explained that, in the past, nonclassroom-based charters did not use facilities. Nowadays, nonclassroom-based charters utilize drop-in centers or resource centers, which cannot be counted towards their instructional cost target. The committee felt that 100% of facilities costs should be counted towards the instructional cost target.

Mr. Kushner explained that the committee was looking for the commission’s guidance and support in drafting concrete language in each of these areas, and for involvement from the CDE through whatever appropriate means. He asked the SBE to start the rule making process to revise nonclassroom-based regulations.

Dr. Barber commended the committee. She suggested that the Commission define both short-term and long-term concerns that need to be addressed. She explained that the upcoming 11-12 year would be the worst so far, and that the issues at hand would last longer than one year. She reiterated the need to start the regulatory process, and to move forward. She agreed with Mr. Kushner on the CDE’s involvement in this process, and suggested that the SBE office also participate. She commented on the inequity of funding between public and charter schools, using Tier 3 funding as an example of where charters are not given the same funding opportunities as public schools.

Chair Bauer requested guidance from the SBE representatives about if or how they would like to participate in this process.

Ms. de Cos offered to participate.

Mr. Kushner said he wanted to authorize the committee to continue working, and to revisit the issue at a subsequent Commission meeting.

Ms. Hunkapiller noted concerns with establishing a quorum.

Dr. Barber suggested a recommendation from the Commission to protect short-term flexibility by utilizing whatever was reasonable for the 11-12 school year. She also suggested that the Commission request the SBE initiate the rule making process to revise regulations, and provide for new factors of flexibility.

Mr. Kushner requested clarification on what would be needed to start the rule making process.

Ms. de Cos recognized that the impetus to initiate the rule making process is that current circumstances do not fit into the original regulations.

Ms. Chan expressed that it would take a long time to revise regulations. She indicated that her impression was that flexibility is carried out through the waiver process. She asked if there was the option of using the waiver process to streamline flexibility.

Mr. Kushner indicated that such a process would generate hundreds of waivers, and noted that each school has 10-15 mitigating factors. He expressed that the Commission is aware of the lengthy revision process, but indicated that the current regulations are so unjust that they demand the need for revisions. He indicated that waivers could be used as a short-term solution.

Ms. de Cos suggested that the waivers could be processed in batches, but explains that this is merely a suggestion. She explained that the waiver process is only temporary, and that the Board is wary of approving waivers.

Chair Bauer explained that the Commission is just looking to extend the time frame of the working committee, and to expand its scope. He also wanted to gather input from the SBE office.

Mr. Birdsall identified himself as a member of the committee, and clarified that many issues could be included under the umbrella of mitigating circumstances, but that pupil-teacher ration must be handled through the waiver process.

Ms. Hunkapiller commented that academic performance especially comes under scrutiny when the school has been in operation for several years and maintains a score in the 400 range. She added that academic performance is uppermost in the minds of the Board members, and in the minds of department staff, and that it would be impossible to apply waivers to this entire process. She noted specifically that the workgroup committee was not an agendized workgroup, but operated by virtue of a pair of Commission members who exercised their right as public citizens to address an issue of concern in the community.

Mr. Kushner clarified that the committee scrupulously followed Bagley-Keene, and they were careful not to contact Commission members outside of an appropriate public hearing.

ITEM 4: Consideration of Requests for Determination of Funding Rates as Required for Nonclassroom-based Charter Schools.

Chair Bauer noted that there is regulatory basis for both 2 and 5 year funding determinations, but there are some questions about the criteria for both 3 and 4 year funding determinations. He explained that the Commission may grapple with schools recommended for 3 or 4 years.

Mr. Harris presented on this item. He directed the commission’s attention to Attachment 1, which listed schools recommended for a 2 year funding determination for years 2010-2011 and 2011-2012. He explained that these schools are recommended for 2 years because they are all within their first year of operation, and have met the statutory requirements for a 2 year determination.

Chair Bauer called for questions from the commission.

Dr. Cartas requested clarification on whether the schools would be considered individually, or as a group. Chair Bauer indicated that the Commission would consider the schools as a group, and pull individual schools if needed.

Chair Bauer noted that some schools in this list requested a determination of 5 years. He asked if there would be a reason for these schools to request 5 years when the recommendation is for 2 years. Mr. Harris explained that it was mainly due to an idiosyncrasy with the filing process, and that schools which applied for a 5 year determination were not aware of the regulation that limits the determination to 2 years. He cited CCR 5 11963.6.

Chair Bauer called for a response from the schools under consideration. Hearing none, he called for a motion.

Chair Bauer directed the commissioners to page 2 of Attachment 1, for a listing of schools recommended for 5 years at 100% funding.

Mr. Harris identified the schools, and indicated that each school meets the statutory requirement for a 5 year funding determination of 100%, beginning in the 11-12 fiscal year.

Chair Bauer requested clarification on the statute that requires API rank 6 for a 5 year determination. Would the ranking be statewide, similar schools, or either one? Mr. Harris clarified that statute does not make a distinction, and that either criteria could be met. Chair Bauer noted that one of the schools had a statewide API rank of 3, and a similar schools rank of 6.

Chair Bauer called for commissioner comments. Hearing none, he called for a motion.

Chair Bauer directed the Commission to review the next two groups of schools, up for a determination of 3 years.

Mr. Harries identified the schools listed and recommended for a 3 year determination of 100% funding. He explained that all schools met the statutory requirements for their recommendation, and that the groups were divided because the recommendation for the first group was for fiscal years 10-11 through 12-13, and the second ground was for fiscal years 11-12 through 13-14.

Chair Bauer called for commissioner comments.

Dr. Cartas requested clarification on why the recommendation was for 3 years instead of 4 or 5. Mr. Harris clarified that these schools did not meet the statutory requirement for a recommendation of 5 years, and explained that a recommendation of 4 years is generally reserved for schools that have established a successful record of operation; these schools in particular opened in 2009.

Dr. Cartas noted that there is no limitation barring a 5 year determination. He explained that statute stated a 5 year recommendation “shall’ be offered to schools with an API rank 6 or higher, but that “shall’ does not exclude schools that do not meet this criteria. He requested clarification on the basis for a 3 or 4 year funding determination.

Mr. Harris indicated that past practice governed the issuance of 3 and 4 year funding determinations.

Ms. Hunkapiller explained that 3-year determinations were recommended for schools that had only been operated for one or two years, and a 4-year determination was recommended for schools operating three years or more with no audit findings.

Chair Bauer noted that, of the 4-year recommended schools, one of them was an ASAM school, and the others had been authorized in 2004 or earlier.

Mr. Curtis Washington commented that, due to a lack of track record for these newer schools, there was a feeling that the schools should receive a shorter funding determination.

Chair Bauer clarified that this is the first Commission meeting in which they were provided academic performance data, at the behest of the SBE, so this could not have been a past practice.

Dr. Cartas noted an inconsistency in the funding determination form for Creekside Cooperative (1102), and it was not clear if the recommendation was for 85% or 100% funding. Mr. Harris explained that the school met the threshold for an 85% funding determination, but that the recommendation was increased to 100%.

Dr. Cartas questioned if the spending threshold for Anchor Academy (1245), as indicated in the funding determination form, had been met. Mr. Harris clarified that Anchor Academy is a new school, and under regulations, a 100% funding rate can be recommended.

Dr. Cartas identified Stockton Alternative High School (1084), and identified an inconsistency in the reported salary costs. Mr. Harris explained that the school spent over $100,000 on salaries, above their available revenue; in this case, the school compensated the expense using past-year reserves.

Dr. Cartas identified San Diego Neighborhood Homeschools (1077), and noted an expense in excess of 100% of reported revenue on instructional services. Mr. Harris explained that the school used past-year reserves to offset costs, and thereby exceeded their reported revenue.

Dr. Cartas recommended that additional information be provided in the item whenever an exception was granted to the school, or whenever the school received Mitigating Circumstances.

Mr. Washington agreed with Dr. Cartas, and requested that an additional list be provided in the item, that provided information on any relevant Mitigating Circumstances, or instances where the school spent reserves to cover costs.

Mr. Kushner requested clarification on the recommendation, and noted that CDE staff is already very busy. Mr. Washington responded and said that he wanted a comment sheet to provide explanations whenever there was something unusual about a funding determination.

Chair Bauer called for a motion.

Dr. Cartas requested that the Commission consider the following recommendations separately: Creekside Cooperative (1102), San Diego Neighborhood Homeschools (1077), and Stockton Alternative High School (1084).

Ms. Chan requested that the Commission be absolutely clear when a 3 or 4 year recommendation is made. She commented that the criteria as discussed thus far were still very unclear.

Dr. Barber clarified that a 4-year determination would be recommended for a school that has been in operation for longer than 3 years with no audit exceptions; a 3-year determination would be recommended for a school that has been in operation for less than 3 years. In both cases, the spending thresholds and 25:1 pupil-teacher ratio, as provided in regulation, would still need to be met. Dr. Barber added that the purpose of the workgroup committee is to augment these criteria, and reiterated that the Commission is merely advisory to the SBE. Dr. Barber expressed a concern that these schools are expecting a 3 or 4 year recommendation, and that she would want to give schools the opportunity to prepare for a reduction in recommended years if this were to occur.

Ms. Chan emphasized that it was important that department staff and the Commission are clear on how the 3 and 4 year recommendations are made, so as not to replay the events of the last SBE meeting.

Chair Bauer repeated the criteria for a 3 and 4 year recommendation, as described by Dr. Barber. Mr. Harris confirmed.

He also moved to approve the following schools for a recommended funding determination of 100% over 3 fiscal years, from 11-12 to 13-14: CORE Placer Charter (1064), Dunlap Leadership Academy (1074), Kaplan Academy California Central California (1111), Kaplan Academy California North Central California (1129), Kaplan Academy California San Diego (1065), Kaplan Academy California San Francisco Bay (1112), Mercury On-line Academy Southern California (1104), New Day Academy (1123), Pivot Online Charter North Bay (1139), Alta Vista Public Charter (1147), Crescent View South Charter (1138), Diego Hills Charter School (1088).

He also moved that the following schools be considered separately: Creekside Cooperative Charter (1102), San Diego Neighborhood Homeschools (1077), Stockton Alternative High School (1084).

Mr. Davis seconded the motion.

Dr. Cartas identified Stockton Alternative High School (1084) and San Diego Neighborhood Homeschools (1077), and explained that these schools used reserve funds to pay for their costs, thereby altering the formula.

Dr. Barber requested that department staff clarifies when the school is recommended for a funding determination of more years than was requested by the school. Mr. Kushner responded that the CDE should not penalize a school for being unaware of Ed Code.

Ms. Chan requested clarification on Dunlap Leadership Academy (1074), which showed a starting date of 2008 and an initial determination of 2 years (08-09, 09-10). If the current funding determination was for 11-12 through 13-14, then where was the determination for fiscal year 2010-2011? Chair Bauer indicates that the data presented is inconsistent, and that the school was, in fact, authorized in 2009.

Chair Bauer called for a motion.

Dr. Cartas identified Creekside Cooperative Charter (1102). He explained that the school did not meet the required spending threshold for instructional costs (the school was at 77.1%, and needed 80%). He requested clarification on any flexibility offered to the school. Mr. Harris explains that the school was permitted to include facilities costs in their spending calculation, which pushed them above the 80% threshold.

Chair Bauer directed the Commission to review those schools recommended for a 4 year determination. Mr. Harris ran through the list of schools.

Chair Bauer called for public comment. There was no response.

Dr. Barber requested that the Commission consider the funding determination for Charter Community Schools (0005) separately, as the school falls within the jurisdiction of the El Dorado County Office of Education.

Dr. Cartas requested clarification on why the recommendation is for 4 years. Chair Bauer explained that each school met statutory requirements, and has been operating for a significant amount of time without audit exceptions.

Dr. Cartas noted specific language in regulation pertaining to a recommendation of 5 years that will be offered to schools with an API rank of 6 or higher. He indicated that the term “shall” would not exclude schools with a rank lower than 6. Chair Bauer indicated that the workgroup committee would consider this issue. Dr. Cartas responded by expressing that he would like to remain consistent with past practice.

This motion changed the recommended number of years from 4 fiscal years to 5 fiscal years. Chair Bauer clarified that this is consistent with past practice.

Dr. Barber recused herself from consideration pertaining to Charter Community Schools (0005) because this school falls under the jurisdiction of the El Dorado County Office of Education.

This motion changed the recommended number of years from 4 fiscal years to 5 fiscal years.

Chair Bauer indicated that the Commission would need at least 5 votes to approve the motion.

Dr. Barber explained that she would also need to abstain from consideration of the funding determination for Charter Alternative Program (0360), as this school also falls within the jurisdiction of the El Dorado County Office of Education.

To clarify, the motion did not change the department recommendation.

ITEM 5: Consideration of Requests from Nonclassroom-based Charter Schools for "Reasonable Basis"/Mitigating Circumstance Changes in Funding Determinations Based on the California Code of Regulations, Title 5, Section 11963.4(e).

Mr. Harris presented on this item. The CDE recommended 100% funding determination for 5 fiscal years for both Coastal Academy Charter School (0516) and Shasta Secondary Home School (0256). Both schools met the 40% target for personnel costs, and the 25:1 pupil-teacher ratio, but they did not meet the 80% threshold for instructional costs. Both schools were in the 70-80% range. Factors considered as mitigating circumstances included: deferrals, which affected cash flow, and the inability to allocate American Recovery and Reinvestment Act funds towards expenditure costs. Mr. Harris added that both schools had API ranks higher than 6, and therefore qualified for a 5 year funding determination.

Chair Bauer called for commissioner questions.

Dr. Barber asked for clarification that both schools were being considered for 5 year funding determinations because they both had API ranks higher than 6. Mr. Harris confirmed.

Ms. Hunkapiller clarified that mitigating circumstances are a one-time shot, and are not part of the pre-approved funding determination form.

Mr. Washington requested clarification that Coastal Academy reported $500,000 in facilities costs, but they were still unable to meet the 80% target. Mr. Harris clarified that facilities costs were not included in calculating the total instructional costs of the school. Mr. Harris added that, even factoring in the facilities costs, the school would still be unable to meet the 80% target.

Chair Bauer called for public comment.

Jim Konantz (K12 Inc.) expressed the dire need for direction on mitigating circumstances. He explained that associates in the field were struggling to meet budget deadlines without guidance. He indicated that county offices have made severe budget cuts, and that while charters were forced to cut teachers, they could not change their class sizes. He requested that guidance be released that explicitly directs interested charters on how to apply for mitigating circumstances.

Mr. Premack (CSDC) explained that charter schools don’t have the authority to request waivers. He added that he did not believe that waivers were a viable long-term solution. In regards to the number of years provided in funding determinations, he explained that the law does not provide much guidance. He stated that, from his perspective, if the department was unable to cite some basis in law for approving a recommendation of less than the requested amount, the approval of such a reduction was tantamount to underground regulations.

Mr. Rice (A+ Personalized Learning) attested to the quality of both schools under consideration for mitigating circumstances. He expressed that both schools should have their requests approved based on their excellent track records.

Mr. Miller (CCSA) agreed with Mr. Konantz’ comments about the urgency for clarity, especially in anticipation of imminent budget woes. He expressed that everyone is concerned with the department’s workload, and the workload imposed on schools. He explained that whenever the department can reasonably recommend a 5 year determination, they should do so as a means to decrease workload.

Chair Bauer called for a motion.

 

Chair Bauer called for clarification on the date of the next SBE meeting. Ms. de Cos indicated that the SBE is considering a meeting to be held June 8, 2011.

Chair Bauer adjourned the meeting at 3:39 PM.

Questions: Charter Schools Division | Charters@cde.ca.gov | 916-322-6029 
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