|PDF (599 KB)|
3 National Alliance for Public Charter Schools, "About Charter Schools," http://www.publiccharters.org (accessed July 9, 2008).
5 National Alliance for Public Charter Schools, "About Charter Schools," http://www.publiccharters.org (accessed July 9, 2008).
6 Affordable access to appropriate facilities was identified as a common challenge for charter schools by members of the advisory group convened for the study on which this guide is based, as well as by many of those interviewed for the study (see table A1, "Respondents Interviewed for This Guide," in appendix A, Research Methodology).
7 For more information, see the "State Charter School Facilities Incentive Grants Program" page on the U.S. Department of Education's Web site, http://www.ed.gov/programs/charterfacilities/index.html (accessed June 25, 2008).
8 For more information about the program, see the "Credit Enhancement for Charter School Facilities" page on the U.S. Department of Education's Web site, http://www.ed.gov/programs/charterfacilities/index.html (accessed Nov. 17, 2008).
9 For full descriptions of these programs, see Elise Balboni et al., 2007 Charter School Facility Finance Landscape (New York: The Education Facilities Financing Center of Local Initiatives Support Corporation, 2007).
14 According to LISC's 2007 Charter School Facility Finance Landscape publication, 30 of the 41 jurisdictions with charter legislation do not offer supplemental per-pupil aid for facilities-related expenses (Balboni et al., 2007).
15 See the Center for Education Reform's table, "State-by-state Funding Comparisons,": available at http://www.edreform.com/charter_schools/funding/chart.htm (accessed Nov. 17, 2008).
16 Massachusetts has two types of charter schools. Almost 90 percent are "Commonwealth" charters, and all of them receive state facilities funding. The others are "Horace Mann" charter schools. Commonwealth schools are entirely independent, while the charter applications of Horace Mann schools require approval by the local teachers union and the school committee of the district in which they plan to locate. Funding for Horace Mann schools is determined through the local budget process of the district, which also provides these schools with facilities.
17 For information about the differing costs of construction alone (not including land, for example) for primary, middle, and high schools, see the "McGraw-Hill Construction Monthly, Historical, and Forecast Data" provided by the National Clearinghouse for Educational Facilities. Costs for additions, alterations, and new buildings are provided by grade range (i.e., primary, middle, high school) and by project cost per square foot. The data, updated monthly, are available at http://www.edfacilities.org/ds/index.cfm (accessed July 9, 2008).
19 The legislature first enacted lease aid at a lower maximum amount, then gradually increased the maximum to $1,500 per student; but, as part of an overall deficit reduction effort in the state, the legislature subsequently reduced the maximum to $1,200 per student, although grandfathering in older schools at the prior rate.
20 According to an Arizona State Senate Issue Brief (Aug. 29, 2007, p. 3), basic state aid is computed differently for district schools than it is for charter schools. In addition to the "base support level," district schools receive separate funding components intended to support the costs of textbooks, transportation, and soft capital (such as computers, lab equipment, and furniture) that are not used in the charter school funding formula. The issue brief is available at http://www.arizonaea.org/pdfs/politics/briefings/State_Aid_8.29.07.pdf (accessed Aug. 19, 2008).
21 See District of Columbia School Reform Act of 1995, Title 38, Educational Institutions => Subtitle IV. Public Education Charter Schools => Chapter 18. District of Columbia School Reform => Subchapter II. Public Charter Schools. Sec. 38-1802.04 Duties, Powers, and Other Requirements, of Public Charter Schools.
22 A balance sheet is a financial statement that summarizes the value of an entity's assets and debts. Charter school balance sheets give investors (or potential investors) a sense of what a given school owns and owes at a specific point in time.
23 According to a presentation made by the Arizona Charter Schools Association to the Arizona Senate K-12 Education Committee in February 2008, construction costs rose by 12.85 percent in 2006 and 12.20 percent in 2007. See Arizona Charter Schools Association presentation (Feb. 20, 2008), "Discussion of Charter School Funding Needs," Arizona Senate K-12 Education Committee, slide 6.
27 For example, the highest rating given by Standard & Poor's and Fitch is AAA and the lowest is C. The higher ratings these agencies give (i.e., AAA, AA, BBB) are considered high- or medium-quality investment grade, whereas lower ratings (i.e., BB, B, CCC, CC, C) are considered lower-quality and noninvestment grade.
29 See the full text of Colorado Senate bill 98082, available at http://www.state.co.us/gov_dir/leg_dir/sess1998/sbills98/sb082.htm (accessed June 26, 2008).
30 Chapter 53, Texas Education Code, which authorizes higher education authorities to issue bonds for institutions of higher education, was enacted in 1971. The authority to issue bonds for charter schools was added in 1995, with the addition of Sec. 53.48. The authorization or direction for Texas Public Finance Authority (TPFA), a state agency, to create a nonprofit corporation to issue bonds for charters was enacted in 2001, with the addition of Sec. 53.351. The TPFA Charter School Finance Corporation was incorporated in 2003, and issued its first bonds on behalf of a charter school in 2004.
31 See Sec. 53.351 of the Texas Education Code and note that bond issuance is restricted to open-enrollment charter schools. Open-enrollment charter schools must comply with Chapter 12 of the Texas Education Code.
32 The Home Rule Act, Title VI, authorizes the U.S. Congress to exercise constitutional authority as legislature for the District. See Sec. 601 (D.C. Code 1-206), available online at http://www.abfa.com/ogc/tit6.htm (accessed June 26, 2008).
40 For more information about QZABs, visit http://www.ed.gov/programs/qualifiedzone/index.html (accessed June 26, 2008).
46 Thornton Matheson, "Qualified Zone Academy Bond Issuance and Investment: Evidence from 2004 Form 8860 Data," SOI Bulletin, 26, 4 (Spring 2007), http://www.irs.gov/pub/irssoi/07ebspringbulthorn.pdf (accessed Aug. 7, 2008).
49 Proposition 47 was a $13.1 billion general education facilities measure passed in 2002. Subsequent action by the state legislature slated $100 million for the Charter School Facilities Program (CSFP). Similarly, $300 million for CSFP was carved out of a total general obligation bond issuance of $12.3 billion for Proposition 55 in 2004, and $500 million was set aside for CSFP out of a total of $10.4 billion for Proposition 1D in 2006.
50 Among the agencies are the California School Finance Authority (CSFA), the Office of Public School Construction (OPSC), the State Allocation Board (SAB), the Division of the State Architect, the Department of Toxic Substances Control, the Division of Occupational Safety and Health (Cal/ OSHA), and the California Department of Education. A typical school district applying for funds from the parallel School Facilities Program for conventional public school facilities would be required to have these approvals in place prior to applying for these state funds.
52 A total of 34 projects have been awarded in propositions 47 and 55 funds to date. As of June 2008, five of these have received their full awards, and another 21 have sufficient time to "convert to a final apportionment" (i.e., secure the approvals necessary to receive their full awards). Eight other projects chose to rescind their awards for reasons not specified by the Office of Public School Construction staff. Funds awarded to these projects have been returned to the program for use on other CSFP projects.
53 As additional projects convert, they will be apportioned based on the grant amount for the year in which the conversion application is funded. The 2008 grant amounts are as follows (these amounts include a 6 percent grant increase approved at the May 28, 2008, State Allocation Board monthly meeting): $8,839 for elementary students, $9,348 for middle school students, and $11,893 for high school students.
54 The city of Indianapolis also has made it possible for charter schools to take advantage of its moral obligation pledge. The mayor there was successful in obtaining state legislative authorization for the Indianapolis City Bond Bank to finance charter schools.
56 One advisor, Elise Balboni, who is the vice president of education programs at the Local Initiatives Support Corporation (LISC), expresses the opinion that use of an intercept mechanism is not necessarily in the best interest of borrowers or lenders. She points out that intercepting a charter school's regular source of revenue has the potential to escalate challenges for charter schools that, in turn, could lead to default on a loan. Because, in using an intercept mechanism, a school has no access to the revenue dedicated to loan repayment, it could be faced with cash flow problems that prevent it from making other payments essential to its operation (e.g., teacher salaries, electric bills). In this scenario, a school could be forced to shut down and lenders would need to foreclose on any outstanding debt. While a school that has not opted to use this mechanism might still default on a loan, Balboni notes that in such circumstances, a lender and borrower could still confer on how to restructure the loan—opening up the possibility of the school continuing to operate and the lender still receiving payments, albeit at a later date.
57 See the following Colorado Department of the Treasury Web page entitled, "Charter School Intercept and Moral Obligation Program," for more information: http://www.colorado.gov/cs/Satellite/Treasury/TR/1190277266181 (accessed June 8, 2008).
60 The information in this paragraph about Texas' debt-service reserve fund derives from an interview with Kim Edwards, who, at the time of the interview, was executive director of the Texas Public Finance Authority.
61 See House Bill 6 of the 76th Legislature, which, among other charter school reforms, authorized the State Comptroller to establish a fund for credit enhancement of bonds issued by the TPFA Charter School Finance Corporation.
62 Barbara Page et al., The Charter School Facility Finance Landscape: A National Mapping Survey of Private Nonprofit Providers and Public Initiatives (New York: The Education Facilities Financing Center of Local Initiatives Support Corporation, 2005).
66 See Sec. 47614(b) of the California Education Code. (Also note that another major component of Proposition 39 lowered the percentage of the local electorate required to approve local school bonds in California from 66 to 55 percent.)
70 Note that Assembly Bill 544, which preceded and was replaced by Proposition 39, required districts to allow charter schools to use facilities not being utilized by the districts for instructional or administrative purposes, provided that charter schools assumed responsibility for maintaining these facilities.
71 The following court cases have followed adoption of Proposition 39: Sequoia Union High School District v. Aurora Charter High School (2003); Allianza Charter School v. Pajaro Valley Unified School District (2004); Renaissance Academy v. Los Angeles Unified School District (2005); Environmental Charter High School v. Centinela Valley Union High School District (2004); Bullis Charter School v. Los Altos School District (2005); Ridgecrest Charter School v. Sierra Sands Unified School District (2005); California Charter Schools Association et al. v. San Diego Unified School District (2006); and California Charter Schools Association, Green Dot, PUC et al. v. LAUSD (2008).
73 Charter advocates in Minnesota also have been discussing legislation to prohibit districts from having policies that deny charter schools access to surplus district facilities. The Minneapolis School District, for example, has such a policy despite having numerous excess classrooms and having local charter schools begging for access to the district's surplus space. As of July 2008, that policy was under review by the district and negotiations were underway with several charter schools seeking to use excess district space.
76 Paul Minney statement during question-and-answer period following session entitled, "How can my charter school get school district facilities through Prop. 39?" (Sacramento: California Charter Schools Association Annual Conference, March 5, 2008).