April 2023 ACCS - Item 2 Public Comment 5

Item 02, Attachment 24, Charter #1520

April 14, 2023

Re: April 2023 ACCS Agenda Item 02, Attachment 24: Request for Reconsideration of Funding Determination for Taylion High Desert Academy/Adelanto

Dear Director Farland and Members of the Advisory Commission on Charter Schools:

This letter is submitted on behalf of Taylion High Desert Academy/Adelanto (“Taylion”), seeking reconsideration of its funding determination. At the outset, we wish to express our sincere appreciation for CDE staff’s evaluation and consideration of Taylion’s Determination of Funding Request (the “Request”). Taylion endeavored to provide detailed information and analysis supporting the mitigating circumstances for its Request. Taylion was pleased to have had the opportunity to respond to CDE staff’s request for additional information about the facts and circumstances conveyed in the Request. Taylion provided thorough responses and was under the impression that all questions or concerns from CDE had been adequately addressed. Although we appreciate the CDE’s concurrence that the information provided supports the Request, we disagree with the designation of 70% funding, and request reconsideration for 100%, even if for a two-year determination.

Taylion is pleased that CDE agrees that the information provided supports mitigating circumstances. The ACCS has authority to find a “reasonable basis” (i.e., “mitigating circumstances”) by which to make another recommendation, in order to allow an NCB charter school to receive a higher percentage of funding than it qualifies for based on its expenditures. (5 CCR Section 11963.4(e).) Specifically, regulations section 11963.4(e) allows the ACCS to consider “documented data regarding individual circumstances of the charter school”. Taylion provided that information which was accepted by CDE staff. But the recommendation is nonetheless only 70% funding.

Taylion understands that while considering a request for mitigating circumstances, the CDE may also review the school’s reserves. In that regard, we are concerned that CDE staff may have concluded that Taylion was being overly conservative—or “imprudently prudent”— with regard to cash reserves in the school’s assessment of economic uncertainty, and therefore used that as a justification to recommended only 70% funding. We disagree.

There is no generalized cap on reserves. We note that FCMAT advises that charter schools should maintain at least 5% budgetary reserves. Further, “FCMAT recommends that charter schools adopt a minimum cash reserve of 5% of the total of all budgeted expenditures and develop a five-year plan to increase that reserve from 5% to at least 10% of total budgeted expenditures.” (See FCMAT Charter School Accounting and Best Practices Manual, 2022-23.) Even regulations section 11963.4(b) contemplates that the ACCS can allow reserves “in excess” of 5% if such reserves are “satisfactorily explained”. And CDE staff found that the reserves for Taylion in excess of 5% were in fact satisfactorily explained. CDE staff found that “[i]n consideration of the school’s large enrollment growth from one year to the next, the school believed it was fiscally prudent to ensure ample reserves were maintained to allow for that growth as well as to pay all current and incoming staff. The CDE finds the school’s explanation of its excess reserves to be satisfactory.” But despite that finding, CDE staff nonetheless limited funding to 70%.

In addition to the findings articulated by CDE staff specific to Taylion, it is important to reflect upon the context of the past three years of education funding generally, and NCB schools in particular, when considering the notion of economic uncertainty. Little about this pandemic period could have been predicted with certainty. In 2020, all schools were pegged to funding based on a fixed February 2020 enrollment date in the state’s response to 100% distance learning. For many NCB schools, this caused an economic calamity when students swarmed to their already-in-place programs, but no ADA-based funding for those increases followed. In that context alone, it is prudent and reasonable for a school like Taylion to maintain reserves much greater than 5%. Taylion should not be funded less because of its prudence in that regard.

In light of the foregoing, Taylion respectfully requests reconsideration for 100% funding. At a minimum, we request an opportunity to meet with CDE staff to explore options.

Sincerely,

LAW OFFICES OF YOUNG,
MINNEY & CORR, LLP

/s/
John Lemmo
ATTORNEY AT LAW

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