Laws & Guidance ELEMENTARY & SECONDARY EDUCATION
Summary of the District of Columbia Charter School Facility Law

The District of Columbia has several laws that help charter schools obtain school facilities. These laws use different approaches in assisting charter schools with this need, including per-pupil facilities aid, credit enhancement, a direct loan program, a bond program, and a preference for purchasing or leasing public school property.

Per Pupil Facilities Aid

District of Columbia funds. The DC Council in 1998 passed the Uniform Per Student Funding Formula for Public School and Public Charter Schools Act, which serves as the basis for current funding procedures. Each of the District's public charter schools is entitled to a per-pupil facilities allowance in addition to funds the Uniform Per-Pupil Funding Formula provides.

Since charter schools are not part of the DC government, they cannot obtain funding from the city's capital budget. The facilities add-on provides an amount based roughly on the District of Columbia Public Schools' (DCPS') per-pupil capital spending.

The facilities allowance is calculated as follows:

  1. The DCPS' approved capitol budget is divided by the previous school years'DCPS total pupil count, as defined in § 38-2906, to determine the DCPS per-pupil facility cost.
  2. For fiscal year 2004 and succeeding fiscal year, the facility allowance for charter schools is determined as described above, except that the DCPS per pupil facility cost for the previous five years will be averaged with the current year's DCPS per-pupil facilities cost to determine the charter school per pupil facility allowance. The facility allowance is then multiplied by the number of students estimated to be attending each charter school to determine the actual facility allowance payments to be received by each charter school. For each year after fiscal year 2004, this "moving average" includes only the most recent 5-years' DCPS per-pupil facility cost.
  3. The entire annual payment for facilities, including those for new charter schools, is provided in the first payment of the fiscal year.

The facilities allowance cost for fiscal year 2004 is $26,977,258. The public charter schools non-residential facilities allowance cost for fiscal year 2004 is $1,981. The public charter schools residential facilities allowance cost for fiscal year 2004 is $5,349.

(See District of Columbia Official Code 2001 edition Division VI, Education, Libraries, and Cultural Institutions, Title 38, Educational Institutions, Subtitle X, School Funding, Chapter 29, Uniform Per Student Funding Formula, Subchapter I, General, §38-2908 Facilities Allowance for Public Charter School.)

Federal funds. The District of Columbia is one of four grant recipients under the US Department of Education's State Charter School Facilities Incentive Grants Program. The District of Columbia's grant has two components: a General Facilities Allowance component and a School Choice component.

The General Facilities Allowance component will provide a per-pupil facilities allowance to eligible public charter schools based on the number of students estimated to be enrolled in such schools in fiscal year 2005. To be eligible for the General Facilities Allowance, a public charter school must provide evidence that 65 percent of the school's student population participates in the free and reduced-cost lunch program.

The School Choice component will provide an additional per-pupil facilities allowance to eligible public charter schools based on the number of students estimated to be enrolled in such schools in fiscal year 2005. Eligible applicants are public charter schools that meet the General Facilities Allowance requirements for this grant and can show that 25 percent of the student population resides within the school boundaries of either a transformation school, persistently dangerous school, or a school that failed to meet Adequately Yearly Progress for two consecutive years.

Credit Enhancement

Credit enhancement is the act of improving the credit worthiness of an entity, often to improve its ability to secure a loan or lease for a facility.

District of Columbia funds. The Office of Public Charter School Financing and Support (OPCSF), which was established in 2003, administers a credit enhancement fund. These funds are available to public charter schools and non-profit organizations that provide appropriate certification that it is duly authorized by two or more public charter schools in the District of Columbia to act on their behalf in obtaining financing. All funds are administered by OPCSF, except that no grant or loan may be made without the approval of a committee described in section 603 (e)(3)(c) (iii) of the Student Loan Marketing Association Act of 1996 (20 U.S.C. 1155(e)(3)(iii)). This independent loan committee is comprised of five members; two members are appointed by the Mayor and three are appointed by the DC Public Charter School Board.

The Credit Enhancement Fund helps provide access to financing to District of Columbia public charter schools to acquire, renovate and construct school facilities by pledging collateral. The Fund also guarantees leases.

As of January 2005, the credit enhancement fund has credit enhanced ten charter school loans and funded nine direct loans to charter schools. This includes a $45 million bond offering that is the largest bond deal for a charter school in the country. The total amount expended in both funds is $16,646,000 leveraging $87,890,000 from financial institutions.

Federal funds. The OPSCFS is responsible for administering a $5,088,242 grant award from the U.S. Department of Education through the Credit Enhancement for Charter School Facilities grant program. The OPSCFS intends to use these funds to facilitate the issuance of a bond to fund a Public Charter School Facilities Incubation Demonstration Model.

Direct Loan Fund

The OPCSF also administers a Direct Loan fund that provides loans to construct, purchase, renovate, and maintain charter school facilities. These loans may not exceed $2,000,000 per charter school. To be eligible for a loan under this fund, an applicant must be a public charter school with a charter in effect pursuant to the District of Columbia School Reform Act of 1995 that meets or exceeds its performance goals as outlined in its originating charter. A charter school may use facility maintenance funds granted to them by the District of Columbia Public Schools to repay these loans.

District of Columbia Revenue Bond Program

The District of Columbia Revenue Bond Program provides below market interest rate loans to help lower the cost of funds available for capital projects in several areas including elementary and secondary facilities. The program generates funds through the issuance and sale of District of Columbia revenue bonds, notes, or other obligations. Proceeds from the sale of tax-exempt issuances may be used to finance, refinance and reimburse costs of acquiring, constructing, restoring, rehabilitating, expanding, improving, equipping and furnishing real property, and related and subordinate facilities. Limitations may apply to the use of bond proceeds for the acquisition of land and the purchase of existing property, depending on the location of the site and type of applicant.

The Office of the Deputy Mayor administers the program for Planning and Economic Development.

Preference to buy or lease

The District of Columbia provides charter schools with the "right of first offer" to purchase or lease DCPS' surplus school properties at below market rates, provided that doing so will not result in a significant loss of revenue that might be obtained from other dispositions or use of the property. (See §38-1802.09, District of Columbia Public School Services to Public Charter Schools.

The District of Columbia has several laws that help charter schools obtain school facilities. These laws use different approaches in assisting charter schools with this need, including per-pupil facilities aid, credit enhancement, a direct loan program, a bond program, and a preference for purchasing or leasing public school property.


 
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Last Modified: 04/10/2007