Eligibility for Facilities Under Prop. 39

In order to be eligible for facilities under Prop. 39, charter schools must provide "reasonable projections" of their average daily attendance (ADA) of at least 80 in-district students. In-district students are those students who could attend a district school if they had not chosen to enroll in the charter school.

Districts may deny a school's request if the school projects fewer than 80 in-district ADA. A charter school may request facilities from each district from which they project ADA of at least 80 students, even if the district is not the charter authorizer. . It is important to note that the projections must be of ADA, not enrollment.

Districts are not required to provide facilities for students who attend the charter school from outside the district. However, charter schools are not prohibited from serving out-of-district students in another district's facilities. Because of the threshold of 80 ADA, charter schools that accept students from several districts could have a difficult time meeting the prerequisite number from a single district, or may find that they cannot satisfy their entire school population under Prop. 39.

We advise charter schools to review this issue early when you are deciding whether or not to pursue district facilities under Prop.39.

Costs For Use Of District Facilities

School districts are allowed to charge charter school for use of district facilities under Prop. 39. Prop. 39 provides two alternatives for the district to charge charter schools annually for the use of facilities: a pro rata share charge or an increased oversight fee. Although many school districts have historically charged both the pro rata share and the increased oversight fee, the amended regulations clarify that only one charge is authorized.

Pro Rata Share Charge

One option is for districts to charge a "pro rata share" of the district's facilities costs. The charge must apply equally to all charter schools using district facilities. The pro rate share may not exceed:

1. a per-square-foot amount equal to the district's facilities costs which are paid with unrestricted general fund revenues, divided by the total space of the district; multiplied by,
2. the amount of space allocated to the charter school.

Example calculation:

School district X has a total of 6,000,000 sq. ft. of facilities for which they pay $7 million from their unrestricted general funds. The pro rata share would be $7 million divided by 6 million, or $1.17 per sq. ft.

Charter school Y is given 10,000 sq. ft. The charter school's annual payment to the district would be $1.17 times 10,000 sq. ft., or $11,700 per year.

In practice, calculating the pro rata share is rarely this straight forward. Although simple in theory, calculating the "pro rata share" is complex and unclear. The two most important variables, total district space and unrestricted general funds used for facilities can prove difficult to quantify. Many districts simply do not have an accurate estimate of their square footage or their facilities costs; others attempt to add to their costs expenses that the regulations specifically exclude, or that the charter school pays for itself. We strongly advise charter schools to meet with their districts, ask for supporting documentation, and to review the details carefully. If you are not confident in your ability to work through these details, there are paid consultants and Association staff to assist you.

Beginning in the 2009-10 school year, charter schools using district facilities under Prop. 39 and paying the pro rata share charge must report the per-square-foot charge to the CDE. Charter schools must include this charge in their annual funding method report to the CDE, who will then post the charges on its publicly accessible Web site. We hope that the publication of this information will lead to more predictable, transparent and fair charges statewide.

Increased Oversight Fee

The second option is for a district to charge a charter school the district's actual costs of oversight up to three percent of the charter school's revenue (defined as the general purpose entitlement and categorical block grant), rather than up to one percent of revenue as allowed elsewhere in the Charter Schools Act. Although the law specifies that the district is entitled to actual oversight costs, we note that districts who opt for this charge routinely charge exactly three percent of revenue, rather than determining the actual costs of oversight and only charging up to three percent of those costs. Many districts simply assume that its oversight costs exceed three percent of a school's state revenue and charge that maximum amount. As with the pro rata share calculation, we strongly advise charter schools to meet with their districts, ask for supporting documentation, and to review the oversight costs carefully.

Other Costs

Regardless of how the district opts to charge for using the facilities, the distribution of other costs is separate. For example, the charter school is responsible for the ongoing operations and maintenance of the facility, furnishings and equipment it uses. The school district is responsible for items and projects funded through the deferred maintenance programs and the replacement of equipment and furnishings.

Reimbursement for Over-Allocated Space

Charter schools that over-project ADA may be required to pay a penalty for the over-allocated space. If the difference between the projected and actual in-district classroom ADA is greater than or equal to 25 ADA or 10 percent of projected in-district classroom ADA, whichever is greater, then the penalty may apply. The penalty is assessed on a per-ADA basis, so the larger a charter school's over-projection, the larger the penalty.

Paying for Prop 39 fees

Charter schools often ask whether SB 740 funds may be used to pay Prop 39 fees (for example fees to co-locate). The answer is No. SB 740 specifically excludes rent for district-owned facilities, even if those facilities were acquired through a means other than a Prop 39 request.

"Charter schools occupying existing school district or county office of education facilities, and charter schools receiving reasonably equivalent facilities from their chartering authority pursuant to Education Code (EC) Section 47614 (Proposition 39) are not eligible for funding under this program."

Making a Request For Facilities Under Prop. 39

The regulations implementing Prop. 39 set forth specific requirements for making a facilities request to a district. In short, a charter school's Prop. 39 request must include

A. A projection of in-district and total ADA and in-district and total classroom ADA, based on ADA claimed in the prior fiscal year, if any, adjusted for expected changes in enrollment in the forthcoming fiscal year, and broken down by grade level and by the school in the district that the student would otherwise attend

B. A description of the methodology for the projections

C. If relevant (i.e., when a charter school is not yet open or to the extent an operating charter school projects a substantial increase in in-district ADA), documentation of the number of in-district students meaningfully interested in attending the charter school that is sufficient for the district to determine the reasonableness of the projection, but that need not be verifiable for precise accuracy

D. The charter school's operational calendar

E. Information regarding the specific district school site and/or general geographic area in which the school wishes to locate

F. Information on the school's educational program, if any, that is relevant to facilities (science labs, for example)

Recommendations

The Association has worked with the law firm Middleton, Young & Minney to prepare a facilities request form and instructions for completing the request We suggest you review the form and instructions carefully when preparing your request.

We also recommend that each charter school notify the district of its intent to request a facility under Proposition 39 and request any district forms, instructions or other information that the district may require for a Prop. 39 request. We are aware of several districts throughout the state that have developed their own form or that require charter schools to use a form developed by the CDE. (Scroll down to Facility Administration and Support.)

Signatures

As long as the form shows the students' names, addresses, grade level during the year for which the charter school is requesting facilities, and a signature indicating the families' meaningful interest, then it can be used for both a charter petition and Prop 39. It is also a best practice for the form to include a place to list the students' neighborhood schools. This will make it easier for the charter school to migrate that information onto its Prop 39 request which requires such information.

Relevant Deadlines Under Prop. 39

In addition to meeting the eligibility requirements, there are a variety of dates which must be met for a charter school to preserve its right to district facilities.

Legal Challenges

Given the complexities of Prop. 39 and the implementing regulations, it is inevitable that disputes arise between school districts and charter schools regarding their obligations and rights to facilities. Below we briefly describe some of these previous and ongoing legal battles, many of which have set precedent statewide or in their regions.

The first legal challenge to Prop. 39 resulted from tiny Aurora High School's request for facilities from the Sequoia Union High School District in 2003. The court ruled the law was unambiguous with regard to district obligations to provide facilities to its resident students. Furthermore, charter schools were not required to provide enrollment projections with mathematical exactitude since the regulations provided a financial disincentive for over estimates.

In 2004, a state appellate court in Environmental Charter High School v. Centinela Valley Union High School District interpreted the Prop. 39 implementing regulations to require all charter schools (whether new or ongoing) to "make a showing of its enrollment projections with relevant documents." We note that the amended regulations are intended to limit the reach of this case, clarifying that no documentation is required for currently operating charter schools without a "substantial increase" in in-district ADA.

The following year, the Ridgecrest Charter School v. Sierra Sands School District case affirmed a school district's duty to give the same degree of consideration to the needs of charter school students as it does to the students in district-run schools. The court struck down the district's attempt to place the Ridgecrest charter school's 223 students on five district sites separated by 65 miles. The court stated that districts, "must at least begin with the assumption that all charter school students will be assigned to a single site." The court recognized that accommodating the charter school's request will "cause some, if not considerable, disruption and dislocation among the District's students, staff and programs."

In the last few years, several schools and the Association pursued legal actions against school districts for lack of compliance with Prop. 39. In San Diego Unified, the Association, KIPP Adelante, and Fanno Academy challenged the district's failure to provide facilities to start-up schools for the 2005-06 school year. In October 2006, the judge decided not to rule on the merits of the case, instead deciding the issue was moot. To avoid a similar result, charter schools are advised to act quickly to enforce a district's compliance with Prop 39. Fortunately, the San Diego case had the immediate and sustained result of providing more district facilities to start-up charter schools than in years past.

In 2007, the Association, along with Green Dot Public Schools, PUC Schools, and charter school parents, filed two lawsuits against Los Angeles Unified School District, challenging the District's stance on Prop. 39. The court immediately ordered the cases to the charters' dispute resolution process, despite the Association's argument that that process did not apply to the district's compliance with Prop. 39. After an initial mediation session, the district and the Association (on behalf of its plaintiff partners) engaged in lengthy negotiations in an attempt to settle the legal actions. The settlement is structured to achieve over time many goals which cannot be achieved through Prop. 39, such as an LAUSD commitment to:

1. engage in long-term facilities planning with the charter schools, and
2. adopt a standard form Prop. 39-compliant facilities use agreement.

It also requires rescission of LAUSD's illegal Prop. 39 policy and full compliance with the Prop. 39 law and regulations.

But after two years since execution of the Settlement Agreement, the district has refused to comply with Prop. 39 and various other obligations under the Settlement Agreement, and the Association was forced to bring another action. On May 24, 2010, the Association filed a lawsuit against LAUSD based on LAUSD's failures to comply with Proposition 39 and the Settlement Agreement. For the 2010-11 school year, 81 charter schools in LAUSD requested Prop 39 facilities and LAUSD issued only 45 letters purporting to be final offers. The Association believes that none of the purported offers is compliant with Prop. 39.

Learn more about the Association's lawsuit against LAUSD

New West Charter Middle School ("New West") has also filed suit against LAUSD three times for violating Prop. 39. In 2008, after the district "rescinded" its 2008-09 facility offer to New West, the school filed a lawsuit and obtained a favorable judgment. Notably, as a charter school authorized by the State Board of Education, New West was not constrained by the district's mandatory dispute resolution process. The court rejected the district's "parade of unprovable horribles", which the district claimed justified its failure to provide space to New West--such as the district's size, its need to relieve overcrowding, its efforts to comply with class-size reduction, the challenges meeting the charter school's geographic demands, among other things--and ordered the district to provide a facility to New West. When the district refused to do so, the court ordered the district to pay New West damages. The case was appealed, and in August 2010, the appellate court affirmed the trial court's measure of damages for LAUSD's failure to provide New West CMS a facility. In the meantime, however, LAUSD refused to offer "reasonably equivalent" facilities to New West two more times, for the 2009-10 and 2010-11 school years, and New West was forced to file two more lawsuits.

Other schools, such as the Rocklin Academy, Bullis Charter School, Odyssey Charter School Discovery Charter School, and Everest Public High School, have negotiated favorable facilities outcomes by pursuing dispute resolution and/or potential legal action challenging the district's lack of compliance.

Alternatives To Prop. 39 Facilities

It is imperative that charter schools are in compliance with Prop. 39 requirements to ensure a seat at the table for district negotiations. In some instances it is in both a charter school's and school district's interest to find an alternative to providing or using a district facility. By having a seat at the table, you may be able to negotiate creative alternatives, such as:

Rental Subsidies

Do some leg work and locate cost-effective rental alternatives--districts might be willing to compromise on fair rental subsidies in lieu of district facilities. East Palo Alto High School and Aurora High School negotiated rent subsidies from the Sequoia Union High School District (unfurnished buildings) in exchange for shared facility options in district schools.

PI Transportation and Busing

In both Program Improvement and overcrowded areas, you may suggest the district pay for busing for students to neighborhood charter schools and subsidize school facility costs with the transportation cost savings. If districts are mandated to bus pupils to alternate schools or have overcrowded classrooms, this could represent an opportunity to local charter schools while serving district interests.

Surplus Property

Many districts have property which sits vacant, is used for storage purposes, is listed as surplus or is partially available for non-school use. Charter schools could suggest placing portables on vacant property or renovating non-classroom space (warehouses or administrative offices). Additionally, charter schools are entitled to ask for written notices from the district about potential action to designate property as "surplus" or to lease or sell such surplus property.

Shared Facilities

Particularly in declining enrollment districts, school property is often underutilized and sharing space with a district school or another charter school could be a possibility. Reviewing all the district school sites, talking with school principals and staff, and working collaboratively with local schools could result in options. Even in overcrowded districts, sharing space could be an option when the district has large-acreage school sites. One charter school entered into an agreement with a district to lease a portion of open space at an elementary school for the placement of portable classrooms.

Bond Funds

Charter schools can work with districts to be included on district bond measures. Downtown College Prep, for example, received a percentage of its district's bond monies based on its student population. Some districts have unspent funds from previous bond measures. Negotiate with districts for a share of those funds.