Charter Development 101: Pre-Approval Moving from charter idea to

Charter Development 101: Pre-Approval Moving from charter idea to charter approval. Presented by the Charter Association in cooperation with Business and Development Specialists For California Charter Schools

Course Overview Audience: New Charter Developers Purpose: Help new charter developers understand the charter development process, and present key strategies and the primary elements needed to complete a charter school application successfully. However, the goal of this workshop is not only to prepare developers to write a charter application, but also to prepare them to successfully open and run a school. Outline: – Hour 1: Timeline, Team, Mission & Vision – Hour 2: Education Plan, Assessments, & Special Education – Hour 3: Financial and Operational Plans – Hour 4: Legal Issues for Charter Developers 2 California Charter Schools Association, EdTec Inc., SMY&M 2004

Hour 1: Timeline, Team, Mission Overview of Hour 1: – Charter development and approval timeline – Vision and Mission statements – Charter development team – Creating an efficient development process 3 California Charter Schools Association, EdTec Inc., SMY&M 2004

Timeline Although some charter development processes can take as little as four months, developers should plan on the process taking about a year (assuming the developers have a clear idea of the school they want to create). Month 1: Pull together team, apply for grants, if applicable. Month 2: Develop Vision and Mission Month 3 & 4: Develop detailed outline of curriculum; begin to recruit community partners and support. Month 5-6: Create first draft of charter. Month 6-7: Edit and finalize charter; collect signatures; continue to recruit community partners and support. Month 7-8: Submit charter; develop presentation for public hearing. Month 8-9: Public hearing. Month 9-10: Charter approval [or] appeal to the county. Month 10-11: Hearing at the county Month 11-12: Charter approval [or] appeal to the state; apply for charter school number (soft deadline May 21; hard deadline May 31) California Schoolsat Association, Month 12 & 13: Hearing andCharter approval state board EdTec Inc., SMY&M 2004 4

Timeline: Curriculum The curriculum outline is a critical component of the charter petition and, of course, the school itself. Some developers spend over a year creating the curriculum; plan on the curriculum taking at least 2 months (assuming the developers are already well underway in understanding the type of school they want to create.) The curriculum will evolve as the school grows and matures. 5 California Charter Schools Association, EdTec Inc., SMY&M 2004

Timeline: Approval The Law: The district has 30 days to hold a hearing on the charter petition once submitted, and another 30 days to make a final decision. Extensions may be granted by mutual consent up to a total of 90 days. The Reality: It is not uncommon that a district will hold a hearing in 30 days after submittal, however, the decision period will likely be longer than 30 days. Check with your sponsoring district to find out what their process is. Some districts will review drafts before formal submittal. Others, such as LAUSD, have a long process, and strongly encourage submitting a draft in the November timeframe to get a decision by March or April. 6 California Charter Schools Association, EdTec Inc., SMY&M 2004

Timeline: Approval (2) Be thoughtful about the timing of the submittal to the district. – If you think the school board members will be allies in the process, make sure the hearing date is not around major holidays. – Try to ensure that your supporters can attend the hearing date. Community support at the hearing can influence the publicly-elected school board. 7 California Charter Schools Association, EdTec Inc., SMY&M 2004

Timeline: Appeals Upwards of 90% of charter petitions are approved at the local level (district). Petitioners should focus their energy on gaining approval at the local level by: – Putting together a solid petition. – Dotting the “i’s” and crossing the “t’s”: ensure everything is in order. – Work whatever political channels you might have including working cooperatively with district staff, building relationships with school board members, and bringing in influential community partners. 8 California Charter Schools Association, EdTec Inc., SMY&M 2004

Timeline: Appeals (2) However, if your charter is not passed at the local level, you can appeal to the county and then to the state. – The county appeal process is identical to the district process (30 days 30 days). You must submit the same charter as you submitted to the county as well as the official “findings” from the district (reason the district denied petition). Counties seem to rarely approve petitions on appeal. – The state has 60 days to hold a hearing and then 30 days to make a decision. This seems in conflict with the charter law that says that the whole process may only take 180 days, but such is the reality. The state board has a standard by which it must evaluate charter petitions which is set in regulation. Make sure your charter petition addresses all the standards set forth in the regulations if you hope for charter approval on appeal to the state. §11967.5.1. Criteria for the Review and Approval of Charter School Petitions by the State Board of Education. 9 California Charter Schools Association, EdTec Inc., SMY&M 2004

Timeline: Key Dates Some dates that may impact when you want to submit your charter: – Prop 39: Charter applicants may submit a Prop 39 request for a facility from the sponsoring district, if the school submits its charter by November 14. The school must then submit a Prop 39 request by January 1, and must have its charter approved by March 1. – Startup/Implementation Grant: The next grant cycle for the Federal charter school grant program will likely be in the Winter. If you haven’t been approved you can apply for a start-up and implementation grant ( 450,000 total) from the state. – Advance Apportionment: Approved charters can be pre-funded by the state based on projected ADA figures. In order to get the advance apportionment, the charter must submit its charter number application (after being approved) by the end of May to the Charter School’s office at the CDE. 10 California Charter Schools Association, EdTec Inc., SMY&M 2004

Vision and Mission Develop articulate and precise Vision and Mission Statements! The initial work should begin with a clear understanding and definition of your mission, vision and goals (outcomes). Spend sufficient time developing your mission and vision. These are the heart and soul of your school and should be the driving force behind your school and all future decisions. 11 California Charter Schools Association, EdTec Inc., SMY&M 2004

Mission Statement What is a Mission? A mission is not a description of your program or your curriculum strategies. A school mission is a GOAL. Missions should precisely describe what the school does and for whom. School goals should be measurable. 12 California Charter Schools Association, EdTec Inc., SMY&M 2004

Mission Statement (2) Align standards, assessment and curriculum with school vision and missions. Use the school’s mission and vision in making decisions in all other areas. 13 California Charter Schools Association, EdTec Inc., SMY&M 2004

Mission Statement (3) Consider the following questions when writing a mission: – What are the ultimate goals for student achievement? – What is the vision for how the school will best prepare its students? – What is the vision for what the school will be in five years and in ten years? 14 California Charter Schools Association, EdTec Inc., SMY&M 2004

Mission & Vision Statements (4) Sample Mission / Vision Statements: “High Tech High provides students with rigorous and relevant academic and workplace skills, preparing its graduates for rewarding lives in our increasingly technological society.” The primary goals of High Tech High are: To integrate technical and academic education in a school that prepares students for post-secondary education and for leadership in the high technology industry. To increase the number of educationally disadvantaged students in math and engineering who succeed in high school and postsecondary education and who become productive members and leaders in San Diego's high technology industry. To provide all HTH students with an extraordinary education, and to graduate students who will be thoughtful, engaged citizens prepared to take on the difficult leadership challenges of the 21st century. 15 California Charter Schools Association, EdTec Inc., SMY&M 2004

Mission & Vision Statements (5) Sample Mission / Vision Statements: The mission of the Lighthouse Community Charter School (LCCS) is to prepare a diverse, K-12 student population for higher education or the career of their choice by equipping each child with the skills, knowledge, and habits of mind to become a self-motivated, competent, lifelong learner. To be fully educated and prepared for the 21st century, we believe every child must maintain a natural curiosity about the world, relentlessly pursue their goals, construct and communicate knowledge, display personal and social responsibility, work collaboratively with others, and reflect consistently on their growth as a learner. For each child to reach his or her fullest potential, we believe: Every child must be held to clearly articulated, high expectations for achievement, The school, families, and community must collaborate to meet the cognitive, social, emotional, and physical needs of every child, and Teachers must be engaged in a reflective and collaborative environment of ongoing professional development that is focused on student achievement. 16 California Charter Schools Association, EdTec Inc., SMY&M 2004

Mission Statement (6) Make your description believable, understandable, motivating and achievable. How will your school fit the needs of your students and parents, your staff and your community? 17 California Charter Schools Association, EdTec Inc., SMY&M 2004

Required Skill Sets What are the critical skill sets you need for a successful effort? What are your key teams and committees? Disclaimer Please note that many of the items we will be discussing today are NOT required petition elements and not grounds for denial. Your teams or experts will play a continuing role in the development of your programs and your school and we have given you a broad overview of the skills sets you will need to acquire. California Charter Schools Association, EdTec Inc., SMY&M 2004 18

Teams Development Key Teams: – Education/Curriculum & Assessments/Outcomes (Hour 2) – Business/Finance (Hour 3) – Fundraising – Facilities – Technology – Governance (Hour 4) – HR/Staffing – Community and Public Relations/ Outreach These are the primary areas of responsibility and these “teams” have roles which extend beyond the petition-only phase. 19 California Charter Schools Association, EdTec Inc., SMY&M 2004

Team: Business and Finance Business/Finance: (more in hour 3) – Development of a Business Plan – Create school budgets, including a cash flow budgets that reflect the academic focus of the school. – This team needs to understand the state funding mechanism and cash flow issues. Districts look very closely at the budgets for the school. Since charter schools tend to operate more efficiently than districts (by necessity given the funding levels), districts are often skeptical of the charter school’s budgets. Be sure to back up every line item with reasonable assumptions. 20 California Charter Schools Association, EdTec Inc., SMY&M 2004

Team: Education & Assessments Education & Assessments (more in Hour 2) – Curriculum: Based on Research & State Standards. Who is school educating? What does it mean to be an educated person in the 21st C?, *How does learning best occur? Students to be Served - identify school’s population, grade levels, numbers, etc. – Develop an academic accountability plan Developing a solid, research-based curriculum and assessment plan is naturally fundamental to getting a charter approved and a school open. This committee will have the largest amount of work and should be strongly committed to the school and its mission. 21 California Charter Schools Association, EdTec Inc., SMY&M 2004

Team: Facilities Facilities: – – – – – – Conduct a needs assessment Identify options Evaluate and inspect potential sites Review Codes, ordinances and regulations Meet with City Planning Dept. Prop 39 Request an option? Districts often challenge charter schools on their facilities options as part of the charter review process, so it is best to have realistic facilities possibilities that are accurately reflected in the school’s budget. California Charter Schools Association, EdTec Inc., SMY&M 2004 22

Team: Technology Technology: – Technology Plan – Integral part of Curriculum – Curriculum drives the technology, not other way around. 23 California Charter Schools Association, EdTec Inc., SMY&M 2004

Team: Governance Governance: – – – – – – – – Determine a governance structure Recruit potential Board members Develop Bylaws Distinguish roles and responsibilities of the Board Develop a Board manual and calendar Identify legal status, tax exempt status Review the Brown Act Evaluation Plan for Board Districts look closely at the governance structure of a school, and will want to see that the governance plan in the charter is consistent with the school’s corporate bylaws. California Charter Schools Association, EdTec Inc., SMY&M 2004 24

Team: HR HR/Staffing/Handbooks: – Create “draft” personnel policies and handbook – Create “draft” parent/student handbooks – Develop hiring policies and procedures (write job descriptions) – Develop staff evaluation process and policies – Design benefits packages, vacation policies, pension plans, workers compensation, unions representation – Establish parent contracts – Develop a school calendar Draft contracts, handbooks, etc. can go a long way toward convincing a district that the charter school is prepared to open in the Fall. 25 California Charter Schools Association, EdTec Inc., SMY&M 2004

Team: Community Outreach Community & Public Relations: – Develop an action plan – PR - positive image of school – Marketing & Enrollment – Parent and Community Venues – District Liaison (Trustees & Superintendent) 26 California Charter Schools Association, EdTec Inc., SMY&M 2004

Charter Development 101: Pre-Approval Moving from charter idea to charter approval Hour 2: Curriculum & Assessment Presented by the Charter Association in cooperation with Business and Development Specialists For California Charter Schools

Elements A-C The charter petition requirements have three core education elements: – Curriculum and education program – Student outcomes – Assessments to measure student outcomes Every major part of the curriculum (at least each core subject) should follow the pattern to the right. Education Program leads to Student Outcomes Which are measured by assessments, which in turn inform 28 California Charter Schools Association, EdTec Inc., SMY&M 2004

Elements A-C After the pedagogical approach has been identified, it may help to organize elements A-C in a table to ensure the alignment of curriculum, outcomes, and assessments, e.g.: Curricular Approach /Curriculum Physics Lab/experiential learning Student Outcomes Students will understand the basic laws of Newtonian physics Assessments Authentic assessments, portfolios, CST 29 California Charter Schools Association, EdTec Inc., SMY&M 2004

Education Program: Element A Education Philosophy, based on Research & Standards. – Whom is the school educating? – What does it mean to be an educated person in the 21st C? – How does learning best occur? Students to be Served: – Identify school’s population – Grade levels – Numbers, etc. Curriculum & Instructional Design: – – – – Framework aligned with target population. Basic learning environment Teaching methods Materials and technology 30 California Charter Schools Association, EdTec Inc., SMY&M 2004

Education Program: Curriculum CURRICULUM AND INSTRUCTIONAL DESIGN Include a framework for instructional design How will the school meet the needs of the targeted student population? Answer should include: – – – – – – – – Curriculum What is to be taught and why? Methodology How is it to be taught? Resources/materials What resources/ materials will be employed? Learning Environment Where does learning take place? 31 California Charter Schools Association, EdTec Inc., SMY&M 2004

Education Program: Curriculum Explain methodology/ approach What instructional approach, learning styles, methodologies will be used to promote student achievement of desired goals? Sample: “There are many educational theories and practices that have proven to be effective in the classroom environment; XYZ schools will not subscribe to only one approach. We believe in allowing successful teachers to teach in an environment that supports their own successful practices and strategies.” -”It is the intention of Small Town Academy to model its instructional program after the ten characteristics of successful small schools outlined by the School Redesign Network at Stanford University. .” “The following instructional strategies will be used in the classroom: Project based learning Cooperative learning” “Fundamental to our approach is service learning ” 32 California Charter Schools Association, EdTec Inc., SMY&M 2004

Education Program: Curriculum What are the areas of study? Start with a purpose statement and/or a rationale. “The curriculum is based on the belief that knowledge is information put to use and that to be informed is to be responsible ” “The curriculum framework described herein is based upon the California Content Standards for grades five through eight, and is designed to prepare students for the best high schools, colleges, and universities in the country. Teachers will work with the School Leader to supplement this curriculum with their own innovations, research, and expertise.” Next describe the content to be covered Samples: Science: While it’s based on the California State Board of Education Science framework, the curriculum emphasizes exploration and discovery through hands on experimentation . Mathematics: The math curriculum will provide students with the skills they need to excel in advanced math tracks at top high schools in the country 33 California Charter Schools Association, EdTec Inc., SMY&M 2004

Education Program: Curriculum Resources What resources will be drawn upon to deliver and strengthen the curriculum? Tools and resources can include: Technology Curricular materials such as state/district approved textbooks Specialized curriculum such as reading recovery Expertise unique to your community 34 California Charter Schools Association, EdTec Inc., SMY&M 2004

Planning for all types of students Authorizers will look for evidence that charter developers have thought about how to address the needs of many types of students, specifically: – Academic low achievers – Academic high achievers – English Learners – Special Education students 35 California Charter Schools Association, EdTec Inc., SMY&M 2004

Academic Outcomes Academic outcomes Expectations for core content areas and necessary academic skills such as critical thinking skills, communication, etc Exit outcomes What skills, attitudes, habits will students need to have to graduate? Core Academic Skills Mathematics: Students will develop abilities to reason logically and to understand and apply mathematical processes and concepts, including those within arithmetic, algebra, and other mathematical subjects. Critical Thinking : Students will think critically, creatively, and reflectively in making decisions, analyzing information, and solving problems. Life long learning Skills: Work ethic; Study skills Promotional outcomes How will students matriculate through grades? Students will advance and progress by demonstrating mastery of critical benchmarks of performance at designated times . Mastery of the objectives at each grade level will be the basis for promotion 36 California Charter Schools Association, EdTec Inc., SMY&M 2004

Academic Outcomes Explore a wide variety of student outcome possibilities: – – – – – – Subject-matter competency Academic achievement improvement Leadership growth Engagement in academic and non-academic activities Placement into college or career Re-designation to Fluent English Speaker Set realistic goals for achievement growth. Bear in mind the benchmarks set by NCLB and the state (addressed in the following slides) to ensure that the school’s goals at least meet the state and federal goals. 37 California Charter Schools Association, EdTec Inc., SMY&M 2004

Assessment Assessments & Outcomes: How do you know you are doing a good job? Describe the outcome you expect. API & AYP How will you meet your API and AYP targets? Methods of Assessment Variety of objective assessment methods, (STAR, CAHSEE, student portfolios, authentic assessments.) Dissemination of Assessment How to use assessment for continuous improvement. Communications with major stakeholders. 38 California Charter Schools Association, EdTec Inc., SMY&M 2004

State Standardized Test Primer Test Type of test Scoring Output Date Administered CA English Language Development Test (CELDT) Test proficiency in English for non-native speakers. Five levels of proficiency: Beginner, Early Intermediate, Intermediate, Early Advanced, Advanced (and then students test out) Used to determine Limited English Proficient funding and factors into Similar schools rank on API. Testing window is July 1 – Oct 31. CA High School Exit Exam (CAHSEE) Standards-based test covering state standards through Grade 10. Only grade 10 testing is required, but students who fail either ELA or Math must retake that part until they pass (they have five more chances). Use of CAHSEE as a prerequisite for graduation from HS has been postponed until 2006. Pass/Fail in ELA and Math (10 th graders this year will need to pass by the time they are seniors.) Grade 10 pass rate factors into API for high schools. (10% weight) Multiple testing dates in winter and Spring (Feb, March, and May) Physical Fitness Test (PFT) aerobic capacity (cardiovascular endurance), body composition (percent of body fat), abdominal strength and endurance, trunk strength and flexibility, upper body strength and endurance, and overall flexibility Various measures of fitness (speed, flexibility, endurance, etc) Spring 39 California Charter Schools Association, EdTec Inc., SMY&M 2004

State Standardized Test Primer California has a variety of standardized tests to track student performance, the core of which is STAR: Test Type of test Scoring Output Date Administered California Standards Test (CST) Tests students on proficiency on grade level state content standards (ELA and Math in 211; History in 8, 10, 11; Science in 5, 9-11; Comp in 4 & 7). Absolute standard set by panel of experts. Five levels of proficiency: Advanced, Proficient, Basic, Below Basic, Far Below Basic 80% of API Testing window is mid April-mid May California Achievement Test (CAT6) Norm-referenced achievement test relative to national sample of students. (Reading, Language, Spelling, Math in 2-8; Reading, Language, Math, Science in 9-11)) National Percentage Rank in quartiles 20% of API Same as CST Spanish Assessment of Basic Education (SABE) Norm-referenced achievement test. (Reading, Spelling, Language, Math in 2-11) Sometimes used with EL. Referenced percentile rank in quartiles. (Reference Percentile is the mean reference normal curve equivalent.) Not factored into API Mid-Marchmid-May. CA Alternative Performance Assessment Standards-based test for students with severe cognitive disabilities. (ELA and Math in 2-11) At or above proficient standard Replaces CST for eligible students on API score. Mid-April – mid-May 40 California Charter Schools Association, EdTec Inc., SMY&M 2004

Adequate Yearly Progress (AYP) API is the centerpiece of California’s accountability model. The new AYP is state’s accountability model for No Child Left Behind (NCLB). Whereas API is a growth accountability model, AYP is status model based on absolute benchmarks. Failure to meet AYP (on the same indicator) in successive years has serious implications for schools that accept federal funds (Title I, II ) 41 California Charter Schools Association, EdTec Inc., SMY&M 2004

Alternative Assessments Many charter schools use alternative assessment measures to track their progress internally and report to the chartering agency (these assessments do not replace the statemandated assessments discussed previously) – Digital Portfolios Digital repository of essays, photos of projects, etc. School should have clear rubric on how portfolios are assessed to ensure consistency. – Non-academic measures of progress Surveys of student satisfaction Attendance rates, parent participation, etc. Technology skills measured by CTAP annual surveys 42 California Charter Schools Association, EdTec Inc., SMY&M 2004

Formative Assessments Some schools also use ongoing formative assessments to help shape the learning program during the course of the year. Formative assessments help teachers and students understand where more work needs to be done while there is still time to address academic weaknesses. Some vendors provide computer-based assessments that align with the state standards, including: – Renaissance Learning – EduSoft, PLATO, others California Charter Schools Association, EdTec Inc., SMY&M 2004 43

Assessments Outcomes Assessment Students will exceed the average performance levels of students in schools with similar demographics in the District in reading, English, and mathematics. California Assessment Test-6th Edition (CAT-6), California Standards Test. Students will possess a strong foundation of basic academic skills and will maintain progress towards benchmarks of proficiency in all academic subjects as defined by the California Core Content Standards. CAT-6, California Standards Test, Golden State Examinations (beginning in seventh grade), student portfolios, student journals, daily subject area monitoring, projects, unit tests, ongoing teacher assessments. 44 California Charter Schools Association, EdTec Inc., SMY&M 2004

Special Education Plan for Special Education Process to identify Special Education pupils How will school provide services and programs What are the legal responsibilities and how will school meet these obligations 45 California Charter Schools Association, EdTec Inc., SMY&M 2004

SPED Responsibilities What are the responsibilities of Charter Schools to Meet the Needs of Special Education Students? – Comply with a student’s IEP by providing: a “free, appropriate public education” (FAPE) with access to the “full continuum” of special education services in the “least restrictive environment.” – Comply with: Individuals With Disabilities Act Americans With Disabilities Act (ADA) Section 504 of US Rehabilitation Code. – Adhere to SELPA Local Plan (Special Education Local Planning Area) – May not discriminate against an “otherwise qualified” student. 46 California Charter Schools Association, EdTec Inc., SMY&M 2004

SPED Qualifications Who Qualifies for Special Education? Learning Disabled Students: Students with a severe discrepancy between their ability and achievement in one or more of: oral expression, listening comprehension, written expression, basic reading skill, reading comprehension, mathematics calculation, mathematics reasoning. Physically Disabled Students: Students with physical disability, such as: asthma, obesity, muscular dystrophy, growth issues, cancer, diabetes, hearing loss, impaired vision, ADD/ADHD, recovering students 47 California Charter Schools Association, EdTec Inc., SMY&M 2004

SPED Options When drafting the language of your charter as it relates to special education consider the following questions: – Who will be responsible for serving students? – Who will be responsible for funding services? 48 California Charter Schools Association, EdTec Inc., SMY&M 2004

Special Education Options (2) Charter Schools have three basic options for receiving services: 1. As a school within the District (the default): You pay the“encroachment” and they provide service and take the risk 2. Become your own LEA and join a SELPA: You receive approx. 650 in state and federal funds / ADA, and handle all Sped (with the risk) 3. Create your own SELPA By default a charter school is a public school of its granting agency for special education purposes. Most petitioners will restate their intention to remain a public school of the granting agency in the charter. By law, the granting agency must ensure that students of the charter school are provided with services and funding for special education in the same manner as other students in the granting agency. 49 California Charter Schools Association, EdTec Inc., SMY&M 2004

Special Education Options (3) Becoming your own LEA Must provide verifiable written assurances in petition or otherwise that the charter school will participate as a local educational agency in a special education plan area (SELPA). An LEA is solely responsible for compliance with IDEA with regard to services and funding of services. LEA benefits/burdens: Benefits: participation in SELPA governance; no encroachment fee to granting agency; management of own special education services Burdens: unforeseeable, potentially catastrophic financial risk; risk of noncompliance Creating your own LEA Authorized by law, but difficult to understand how it could legally work. 50 California Charter Schools Association, EdTec Inc., SMY&M 2004

SPED Options (4) Key points to remember – Your charter will likely limit flexibility on which option you can choose – The MOU with the District probably will specify funding and responsibility – Start early to identify and serve students since they need it and will create liability if you don’t do it properly SPED is one of the hardest (and most expensive) areas to tackle – Children with special needs deserve extra-ordinary attention – Failure to deliver needed services creates huge legal risks and significant parental dissatisfaction – Districts often consider charter schools as lower priority – Costs (on average) exceed available state and federal funding Per ADA extra charges range from 0 to 800! California Charter Schools Association, EdTec Inc., SMY&M 2004 51

Charter Development 101: Pre-Approval Moving from charter idea to charter approval. Hour 3: Financial and Operational Plans Presented by the Charter Association in cooperation with Business and Development Specialists For California Charter Schools

Financial Plan A complete charter petition (element VII) includes financial and operational information that demonstrates that the developers understand how to run a school, including: – The financial plan for a charter school, showing: A sustainable budget and cash flow projections using realistic assumptions How the school plans to manage its growth financially A good understanding of school funding and budgeting – A plan for finding appropriate facilities – A marketing plan for attracting students, teachers, and resources – Information on how the school will manage its day-today operations, payroll, accounting, transportation, etc. 53 California Charter Schools Association, EdTec Inc., SMY&M 2004

Financial Plan Charter petitioners should have someone on their development team who can help devise or oversee the creation of a solid, realistic, fiscallysound financial plan. Understanding the key, standard tools for presenting the financial plan will aid in the creation of the financial plan. The next few slides outline the three main financial statements, and main funding sources and expense drivers in charter school budgets. 54 California Charter Schools Association, EdTec Inc., SMY&M 2004

Financial Statements Income Statement – Describes how much money the organization is expected (or did) make or lose over a set period of time (typically a year) – Broadly tells the developer and board where funds will come from and where they will be spent. Often used in yearly budgeting. – Interim (e.g. monthly) statements track progress against budget Cash Flow Statement – Tracks the flow of cash into and out of the organization, typically on a monthly basis – This statement will tell management if the organization will be able to pay its bills on time (a 150K check due from the state in two months won’t pay the teachers’ salaries today) – The cash flow statement is the most important financial statement for the day-to-day management of the school. Balance Sheets – Snapshot look at a school’s financial position: cash in the bank, receivables due immediately, current payables (bills), and assets. – A valuable tool to reconcile the accounts of the school California Charter Schools Association, EdTec Inc., SMY&M 2004 55

Income Statement Startup Grant 2004-05 Operating 2005-06 2006-07 Total SUMMARY Revenue General Block Grant 8100 Federal Income 8300 Other State Income 8600 Local Revenue 400,000 - 435,765 26,600 47,201 - 435,765 26,600 447,201 - 856,625 101,080 87,191 - 1,238,505 142,576 112,841 - 400,000 509,566 909,566 1,044,896 1,493,922 Operating Expenses Ceritificated Salaries 2000 Classified Salaries 3000 Employee Benefits 4000 Books & Supplies 5000 Services & Other Operating Exp. 6000 Capital Outlay 75,000 45,000 8,500 150,000 39,220 37,280 202,000 18,903 42,029 7,000 220,008 - 277,000 63,903 50,529 157,000 259,228 37,280 376,012 45,080 102,042 26,650 449,012 10,000 518,178 50,256 139,598 92,300 631,663 10,000 Total Operating Expenses 355,000 489,940 844,940 1,008,796 1,441,995 45,000 19,626 64,626 36,100 51,927 19,626 64,626 (45,000) 30,000 49,626 49,626 36,100 55,726 51,927 (30,000) 55,726 107,653 25,348 30,264 43,260 8010 Total Revenue 1000 SACS Categories Operating Income Fund Balance Beginning Balance Operating Income Non-Operating Cash Expense Other Cash Sources (Line of Credit) Ending Balance Recommended Reserve (3% of Statuatory Reserve (3% of Expenses) Expenses) (45,000) - 19,626 56 California Charter Schools Association, EdTec Inc., SMY&M 2004

Cash Flow Statement Startup Annual Pre-J uly Beginning Cash Sources of Cash Block Grant ADA Funding In Lieu of Taxes Categorical Funding Economic Impact Aid Instructional Time & Staff Dev Lottery Title I Supplemental Programs Implementation Grant Fundraising Total Sources Uses of Cash Compensation & Benefits Books & Supplies Operational Costs Capital Outlays Total Uses Non-Operating Outflow - 400,000 - Ending Cash Reserve Unrestricted Fund Balance 32,376 12,438 11,504 200,000 Sept 21,504 82,970 23,008 4,372 2,879 Oct Nov 75,669 44,499 15,339 15,339 1,345 886 180,000 - 400,000 509,566 200,000 128,500 150,000 39,220 37,280 262,932 7,000 220,008 - 55,000 22,500 7,844 37,280 355,000 489,940 122,624 45,000 - Aug 244,028 191,737 16,815 11,072 3,588 12,000 26,600 3,726 - 191,504 113,229 15,339 17,570 36,750 67,500 15,688 - 36,750 30,000 15,688 - 26,293 15,000 17,771 - 26,293 2,444 17,771 26,293 2,444 17,771 119,938 82,438 59,064 46,508 46,508 45,000 Line of Credit Net Cash Flow J ul 19,626 100,000 (100,000) 9,000 32,376 (19,938) 9,066 54,165 (31,170) (19,939) 32,376 12,438 21,504 75,669 44,499 24,561 3,679 7,277 9,750 11,522 12,917 14,312 28,697 5,161 11,754 64,147 31,582 10,248 57 California Charter Schools Association, EdTec Inc., SMY&M 2004

Balance Sheet Balance Sheet As of February 29, 2004 ASSETS A snapshot at this point in time Current Assets Checking/Savings General Checking Petty Cash Total Checking/Savings 170,051 439 170,491 Other Current Assets Security Deposits 441 Total Other Current Assets 441 Total Current Assets 170,931 Fixed Assets 8,334 TOTAL ASSETS 179,265 LIABILITIES & EQUITY Accounts Payable 23,310 Equity Net Income Total Equity 155,955 155,955 TOTAL LIABILITIES & EQUITY 179,265 58 California Charter Schools Association, EdTec Inc., SMY&M 2004

Revenue Drivers Enrollment and attendance which translate into Average Daily Attendance are the main revenue drivers for charter schools. Rates of Free and Reduced Lunch eligibility and English Learner status are other major revenue drivers, (which is one reason why it is essential to collect accurate FRL information about your students early before school starts, and make sure that all eligible students are CELDT tested). Schools don’t reach scale until about 250-300 students, so school developers need to be creative in their budgeting to make the first few years work financially (or get a start-up/implementation grant or other philanthropy). California Charter Schools Association, EdTec Inc., SMY&M 2004 59

Funding Model Overview Funding Sources – Charter school block grant (State) General purpose grant (includes local property taxes and state aid (in lieu) – The split depends on your district Categorical block grant – Economic Impact Aid For schools serving economically disadvantaged and English Language Learner students (students who fall into both categories can be double counted) – Other Sources Title I – V Federal Programs CA Lottery Class Size Reduction (K-3) Instructional Materials Realignment Instructional Time & Staff Development School Library Supplemental Hourly Program 60 California Charter Schools Association, EdTec Inc., SMY&M 2004

Budget Drivers & Assumptions Funding Assumptions (03/04) – – – – – – – General Block Grant (Prop tax & State Aid) Grades K-3: 4,690 per ADA Grades 4-6: 4,737 per ADA Grades 7-8: 4,890 per ADA Grades 9-12: 5,670 per ADA Categorical Block Grant Grades K-3: 280 per ADA Grades 4-6: 280per ADA Grades 7-8: 280 per ADA Grades 9-12: 280 per ADA Title 1 450 per eligible student Economic Impact Aid (ELL and FRL) 110 per eligible student Class-size reduction 906 per K-3 student in classes of 20 Lottery 120 per ADA Supplemental Hourly Instruction 3.52 per student hour of supplemental instruction delivered General Assumptions: Enrollment by grade % of Daily Attendance ADA Students eligible for Free & Reduced Lunch (FRL) programs Number of English Language Learners (ELL) Student:Teacher ratios Property Taxes and State Aid The amount of the General Block Grant is fixed annually But the proportion paid by local property taxes varies by District Since the timing of funds changes depending on this proportion, research it early All budget assumptions are rough estimates only; costs vary widely based on school size, type, district, etc. Developers need to perform their own thorough due diligence to create their own budgets. Per student funding estimates are provided by the CSDC. CAVEAT: 61 California Charter Schools Association, EdTec Inc., SMY&M 2004

Timing of Funds (Received) Jul Property Tax State Aid CatBGrnt Ec.Im Aid Lottery Class Size Red Staff Dev Title I–V* Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 6% 12% 8% 8% 8% 8% 8% 2/6th 1/6th 1/6th 1/6th 1/6th As adjusted by PI 34% 24% 2/6th 1/6th 1/6th 1/6th 1/6th As adjusted by PI No cash flow in first year; funds are added to 2 nd year apportionment 25% 75% Adjust No cash flow in first year; reimbursement in following year 40% 40% 20% 62 California Charter Schools Association, EdTec Inc., SMY&M 2004

Timing of Funds Sample First Year Revenue Flow (received) 128 students, K-5 (20, 20, 20, 20, 24, 24); 95% attendance; 50% FRL; 56%/44% Block/Prop tax (Oakland) 700,000 700,000 683,014 636,532 595,811 600,000 600,000 502,848 500,000 400,000 336,038 543,570 500,000 409,885 400,000 316,551 300,000 300,000 197,789 200,000 158,815 Title I Class Size Red. State Aid; CatBGrant; EIA Property Tax Accumulated 200,000 178,302 100,000 100,000 14,615 0 0 JUL JUN MAY APR MAR FEB JAN DEC NOV OCT SEP AUG JUL 63 California Charter Schools Association, EdTec Inc., SMY&M 2004

Expense Drivers Typically, a charter school budget will have the following main expense drivers: – Teacher salaries – Administrative overhead and salaries – Benefits – Facilities – Curriculum – Capital Outlay – Other operating expenses Salaries Admin Benefits Facilities Curriculum Capital Outlay Other 64 California Charter Schools Association, EdTec Inc., SMY&M 2004

Expense Drivers (2) Given the main expense drivers of a school, it is important to carefully look at how the following items affect the budget: – Student:teacher ratio and student:employee ratio (student:teacher ratios of 18-20:1 for elementary is common; 23-25:1 for middle and HS.) – Average teacher salaries and salary growth projections. – Level of employee benefits. – Facilities needs and costs. 65 California Charter Schools Association, EdTec Inc., SMY&M 2004

Operational Plan: Facilities The charter petition regulations ask petitioners to identify a potential site for the school. This means that developers need to spend some time and effort finding a site, even before the charter petition is approved. Unfortunately, the funding levels for charter schools are low which closes out a wide part of the market, and few traditional commercial spaces will meet a school’s needs. 66 California Charter Schools Association, EdTec Inc., SMY&M 2004

Operational Plan: Facilities Facility rules of thumb: – Charter schools typically spend 500- 900 per student on facilities (8-18% of ADA). – Most schools range from 60-120 sq ft per student. High school students typically require more space with labs, etc., – Classrooms typically range from 700-1000 sq ft. Kindergarten classrooms tend to be a little larger to accommodate activity areas. – Generally, charter schools should try to find facilities that cost 1 per square foot/month (this is hard to find.) California Charter Schools Association, EdTec Inc., SMY&M 2004 67

Marketing Plan Identifying and recruiting potential students can be a difficult process. It is best to have a clear plan of how the school will become known in the community. Useful marketing techniques for charter schools include: – Connecting with community groups and faith-based organizations. – Generating buzz through well-placed advertisements and newspaper articles. – Disseminating brochures in multiple languages. – Visiting potential feeder schools. – Being extremely diligent about using a contact database to track prospective students and potential funders and partners. Follow up with people who showed any interest. 68 California Charter Schools Association, EdTec Inc., SMY&M 2004

Fundraising Key points to remember – Start early – Don’t count on it in the budget unless you are highly certain – It takes staff time (or money to hire an outsider) to raise money Sources of fundraising – State start-up/implementation grant (up to 450,000) Unfortunately the 2004 cycle is delayed. RFA will not be out until Fall with cash available in spring/summer 2005 The timing of the funding cycle may be advantageous to charter developers who are starting the process now because the application requires a reasonably comprehensive outline of what the school intends to accomplish. Charter developers that start the process now will be well prepared by the Fall to write authoritatively about what their charter vision is. Probably only 1 in 10 applications will be funded – Philanthropic Great source, but requires time/relationships/differentiated story – – – – National Council of La Raza (if primarily Hispanic) Bay Area Coalition for Essential Schools Gates Foundation (need to go through intermediaries) Local Foundations – School-based fundraising Board fundraising “Bake Sales” 69 California Charter Schools Association, EdTec Inc., SMY&M 2004

Operational Plan: Food Service Charter Schools can avoid providing food service completely. HOWEVER, many schools find that the school environment suffers without a food service program, especially if students are not eating well at home. Independent of whether the school offers a food service program, it is critical to collect the “Free and Reduced Lunch” forms for students, since many Title and Economic Impact Aid funds are based on percentages of students qualifying for Free or Reduced Lunch (even if they don’t receive the lunch). Free and Reduced Lunch forms should be collected (and verified!), if at all possible, before school begins to start benefits as quickly as possible. California Charter Schools Association, EdTec Inc., SMY&M 2004 70

Direct vs. Indirect Funding Direct Funding – State funds flow from state to county to charter school – Benefits: No district delays Reduced district oversight fee (sometimes) – Negatives: Must fill out own Consolidated Application, LEA Plan Indirect Funding – State funds flow from state to county to district to charter school – Benefits: Charter is rolled into district ConApp, – Negatives: Subject to district delays which may put significant burden on school cash flow Larger oversight fee (sometimes) California Charter Schools Association, EdTec Inc., SMY&M 2004 71

Calendar & Bell Schedule Often the calendar and bell schedule are integral elements of the curriculum plan, and can help demonstrate to the chartering authority that the school will meet minimum instructional minutes (next slide). Setup Instructional Calendar and Bell Schedule – Verify instructional minutes requirements are met (next slide). – Verify the calendar meets the minimum requirement of 175 days of instruction. – Consider reclassifying instructional days beyond 175 as “supplemental instruction days” to tap into extra funding. – Consider the benefits and costs of adopting the sponsoring district’s calendar. If your school is planning to receive services from the district, such as SPED, being on district schedule may be important. District attendance reporting dates may be aligned with the district’s calendar. – If you expect increasing or decreasing enrollment, optimize calendar to obtain highest average daily attendance. 72 California Charter Schools Association, EdTec Inc., SMY&M 2004

Calendar & Bell Schedule Minimum Annual Instructional Minutes Requirements Grade Level Inst. Minutes Req. Kindergarten Grades 1-3 Grades 4-8 Grades 9-12 36,000 50,400 54,000 64,800 Basic “passing time” rules (from CASBO) – All grade levels: Passing time may not exceed 10 minutes and must be equal between all classes. Kindergarten: No passing time allowed, but recesses are considered instructional. Grades 1-6: No lunch passing time (e.g. no passing time just before or after lunch period); no recess passing time. Grades 7-12: One lunch passing time (either just before or just after lunch period) 73 California Charter Schools Association, EdTec Inc., SMY&M 2004

Contracts & Staffing Policies Increasingly, chartering authorities are expecting charter petition applicants to have draft contracts and employee handbooks to show that they are “demonstrably likely to successfully implement the program set forth in the petition.” It is a good idea to start early on contracts and policies in any case – certainly before staff are hired, which often comes quickly on the heels of approval: – Although it may seem obvious to create legally-sound employee contracts before hiring staff, it is not uncommon that contracts are an afterthought that surface as hiring is taking place. – Employee contracts take time to develop and refine (weeks typically), and represent the binding agreement between the school and its employees. Spend the time early in charter development to create contracts that the Board and ED are comfortable with. – Similarly, employee handbooks, which are typically legally-binding attachments to the contract, need to be developed early. School policies should be hammered out before misunderstandings take place among staff and the organization. – There are many resources available to help schools create draft employment contracts and handbooks/policies, however, schools should consider seeking legal counsel to weigh in on the final drafts. 74 California Charter Schools Association, EdTec Inc., SMY&M 2004

Insurance Several types of insurance – Health Insurance ( 250- 400/employee/month; up to 800 if it cover dependents): Often is very attractive if offered through the district Many schools have to buy it commercially as a small business – Expensive, with limited plans – shop through a broker Some JPA’s exist, but not always cheaper (especially if your staff is young) – Workers Comp (based on total payroll (2.5%-5% of payroll) – School Liability (covers lawsuits against the school) Make sure it covers sports / field trips / autos – School property (covers fire, theft, etc.) – Directors Liability (covers decisions by the Board) School liability, property, and D&O work out to about 50- 80/student – Staff Liability (covers actions by teachers & staff) Options for coverage – – – – Private sources CCSA (very good program that covers workers’ comp and possibly liability) Chartering Agency Joint Powers Agencies The process to get insurance quotes and activate the insurance can take 2-3 months. 75 California Charter Schools Association, EdTec Inc., SMY&M 2004

Funding Flow: Direct or Indirect Direct Funding – State funds flow from state to county to charter school – Benefits: No district delays Opportunity to apply directly for funding programs – Negatives: Must fill out own Consolidated Application, LEA Plan, and apply for other potential state and federal funds independently of district. Indirect Funding – State funds flow from state to county to district to charter school – Benefits: Charter is rolled into district ConApp; District does LEA Plan Some Districts may provide cash flow assistance – Negatives: Subject to district delays which may put significant burden on school cash flow It may take as much effort to get your fair share of federal and state funds as applying for them directly. 76 California Charter Schools Association, EdTec Inc., SMY&M 2004

Charter Development 101: Pre-Approval Moving from charter idea to charter approval. Hour 4: Legal Issues for Charter Developers Presented by the Charter Association in cooperation with Business and Development Specialists For California Charter Schools

Charter Developers Legal Rights Know the legislative intent (47601) Understand the signature requirement (47605) Understand the five bases for denial (47605(b) (1)-(5) – unsound educational program – unlikely to succeed – required signatures – required affirmations – reasonably comprehensive descriptions 78 California Charter Schools Association, EdTec Inc., SMY&M 2004

Suggested developer reading: Know the SBE regulations on approval Review the CDE analyses of charters on appeal Review SBE approved charters Know the granting agency regulations on approval Know the District's past history with charter schools Know the County approval process Know your options (State or COE-wide etc) Know the CDE website QandA 79 California Charter Schools Association, EdTec Inc., SMY&M 2004

Top 10 legal issues on charter approval: Comprehensiveness of charter petition Facilities issues (the zoning/CEQA/building codes) Special education delivery and funding Conflict of interest\Brown Act Credentialing 80 California Charter Schools Association, EdTec Inc., SMY&M 2004

Top 10 legal issues on charter approval: Admissions issues (founders/preferences/requirements) Liability and insurance Audit standards (GASB v. FASB) Charter school closure procedures Private school conversion 81 California Charter Schools Association, EdTec Inc., SMY&M 2004

MOU development with school district: Now done before charter approval No legal requirement Can be more detailed than charter Allows approval with conditions 82 California Charter Schools Association, EdTec Inc., SMY&M 2004

Charter school credentialing: Know section 47605 (l) Review CDE legal opinion June 30, 2003 – – – – Credential a condition of apportionment No credential needed for non-core, noncollege prep Teacher assignment not condition apportionment No COE oversight Inspection by granting agency NCLB impacting flexibility 83 California Charter Schools Association, EdTec Inc., SMY&M 2004

The Brown Act: Applicability to charter schools? Meetings in public, not public meetings Regular meetings with 72 hour notice Special meetings with 24-hour notice Limited closed session ability No serial meetings Penalties/Cure 84 California Charter Schools Association, EdTec Inc., SMY&M 2004

Union and labor issues: Right to organize Employee organization rights Sacramento High School Representation rights Card checks 85 California Charter Schools Association, EdTec Inc., SMY&M 2004

Proposition 39: Proper paradigm/sharing facilities General obligation of district Timely annual request Contentious negotiations Legal challenges – – – Reasonably equivalent Contiguous Pupil records 86 California Charter Schools Association, EdTec Inc., SMY&M 2004