Funding for facilities can be a huge drain on charter schools' budgets. Almost every charter school uses funding from their general operating budget to cover facilities costs.
Facilities Equity Overview
Access to public school facilities remains a challenge for many of California's charter schools. Throughout the state, a large number of charters continue to struggle in acquiring and financing adequate school facilities. Several issues may contribute to those challenges, including limited state funding, expensive private leases, and school districts obstructing their ability to acquire available campus space. As a result, charter schools are forced to expend a disproportionate amount of their resources and time to address ongoing facilities challenges.
Charter schools struggle to obtain school sites that fit all of their needs. They look for sites that are in the right location, have enough classrooms, and provide access to important non-classroom space, like lunchrooms, auditoriums, and gyms. Once they have found a school site that meets their needs, they often struggle with facilities payments. Charter schools must pay their rent or mortgage costs directly out of their operating budgets, whereas traditional district schools do not incur these same costs in their general funds. Every dollar that a charter school spends on facilities is a dollar that isn't going directly to their educational program.
CCSA recognizes that facilities are an essential component to the success of a charter school, and we advocate throughout the state for charters to secure and retain long term, high-quality, affordable school space. Through aggressive advocacy, we continue to pursue the mission of ensuring that charter schools have access to facilities that enable them to meet their current and future educational programs.
Read the results of a comprehensive statewide facilities study, "An Analysis of The Charter Schools Facility Landscape in California," offering insight into the facilities issues charter schools face throughout the state of California and synthesizes comprehensive data collected and analyzed in 2014 from schools across the state that detail the facilities challenges of both classroom-based and nonclassroom-based charters.
The report is a collaborative effort by the National Charter School Resource Center (NCSRC), The Charter School Facilities Initiative (developed and managed by the Colorado League of Charter Schools), the National Alliance for Public Charter Schools (Alliance) and the California Charter Schools Association (CCSA). Learn more about the initiative.
Proposition 39, or "Prop. 39," was approved by California voters in 2000, and requires school districts to provide "reasonably equivalent" facilities to charter school students. In exchange for equal access to facilities, charter schools and their proponents agreed to support a measure to lower the voter threshold that districts need in order to pass school bonds from 67% to 55%.
Every year, hundreds of charter schools in California request facilities from their districts under Prop. 39. The process is somewhat involved and lengthy, stretching from November 1 through May 1. Charters submit requests to their local districts requesting space at a particular location for a projected number of students (Average Daily Attendance or "ADA"). Then they engage in a back-and-forth process with their districts about their requested ADA and the districts' preliminary and final offers for classroom and non-classroom space at existing district school sites.
Compliance on behalf of school districts remains a challenge, and this lack of compliance can create uncertainty for charter schools and the students and families they serve. Even when districts comply with Prop. 39, charters are often unsure where they will be located until April or May, which makes it difficult to recruit and retain their student body. And because some non-compliance with Prop. 39 still exists, schools sometimes don't know if they will be provided with an adequate number of classrooms or with appropriate non-classroom space -- two factors which significantly affect whether or not charters will accept the districts' offers. As a result, charters often pursue a parallel path of identifying a suitable private facility so that they won't be left without a satisfactory site come back-to-school time.
However, Prop. 39 remains a key resource to charter schools and charter school developers. Under Prop. 39, school facilities become immediately available to charter schools at the beginning of the school year, without having to wait for building construction or build-out of tenant improvements, as charter schools often experience on private sites. Additionally, charter schools typically access facilities under Prop. 39 at a fraction of the cost of securing a private facility, depending on the school district and geographic location. Finally, districts are required to provide classroom, specialized classroom, and non-classroom space to charter schools under Prop. 39, spaces which are difficult to obtain in a private facility setting.
CCSA is actively advocating, at local school districts, for long-term facilities solutions, such as multi-year Prop. 39 agreements between districts and charter schools. Multi-year arrangements would eliminate the uncertainty that charters face in the Prop. 39 process, and it would relieve districts of the yearly administrative and financial burden associated with the Prop. 39 cycle.
Through our statewide and legal advocacy teams, we monitor and seek to enforce district compliance with Prop. 39 statewide throughout California. In the last several years since CCSA has prioritized Prop. 39, district compliance has steadily increased, and charter schools are benefiting from this opportunity, more now than ever before.
- Learn more about Proposition 39, including our video and fact sheet
- Proposition 39 information for members, including templates and resources
Long-Term Arrangements On District Sites
One of CCSA's advocacy priorities is to create a clear process for charter schools to obtain long-term arrangements on district sites. Long-term arrangements are now typically negotiated on a school-by-school basis, rather than as part of a district wide policy. CCSA recognizes that charters need long-term arrangements so that they can provide a stable learning environment, from year to year, for their students and families. Moving every year--or even just the possibility of needing to move every year--makes it difficult for charters to retain their student body.
A few school districts have pioneered the path for long-term arrangements, and see the value in developing effective multi-year solutions. San Diego Unified School District now routinely offers long-term arrangements in their Prop 39 process, and in 2012, Sacramento City Unified approved long-term facilities solutions for their charters. Other districts have experimented with programs that offer charters long-term arrangements, but these programs have been limited in scope, and not accessible to all charter schools within the district.
CCSA strongly advocates for a transparent process, in every school district, that enables charters to obtain long-term arrangements for facilities on district sites. Just as traditional public school students have access to district facilities, so should charter-school students.
Many charter schools choose to lease private facilities, instead of locating on district sites. When leasing sites, charters choose between leasing from a commercial company or a nonprofit, such as a community center, a local church, or another educational organization. Depending on the neighborhood, it can be difficult to find these rental properties, and they are often costly compared to locating on a district site. Additionally, charters often deal with the burden of updating the site to fit the school's needs. For instance, a charter may need to renovate a former strip mall to make it useable as a school, or a charter may need to pack up their supplies every weekend if they rent from a church which uses the rooms for its school activities.
However, there are also benefits to leasing a private space. The charter is free from district bureaucracy, so the process for obtaining the site is usually quicker. The charter can choose vendors for services, such as maintenance and operations, which they might not be able to choose when locating on a district site. Even though charter schools are free under Prop. 39 to contract for their own ongoing maintenance and operations services, districts sometimes force their own services on charter schools as a condition of occupying district facilities. Charters may additionally enter into multi-year leases, rather than enter into a one year Prop. 39 arrangements, thereby providing the charter with an increased sense of physical stability.
CCSA assists charters which are locating on private sites by providing them with vendor resources, and by supporting state programs and reforms which assist charters in lowering facilities costs.
Charter schools in California are systematically underfunded, which impacts facilities funding as well.
Currently, charters are not included in most local bond measures, and therefore deprived of equitable funding for facilities.
CCSA advocates at the local level to ensure that charter schools are included in local bonds, by receiving their proportionate share of the funds, and utilizing the funds with greatest flexibility to address charter facility needs. Many Districts are now showing receptivity toward providing charters with a proportionate share of dedicated bond funds, and as a result, gaining a powerful ally through the charter community's support of local school bond campaigns.
Charter Schools Facilities Program
CCSA's advocacy efforts are making a big difference for schools in the Charter School Facilities Program (CSFP).
The CSFP was established in 2002 by Assembly Bill 14 and is funded by Proposition 47, Proposition 55 and Proposition 1D. The CSFP allows charter schools that provide site-based instruction access to state funding to build or renovate a school site. A charter school can apply directly or with the assistance of the school district and receive a reservation of funds for new facilities construction or rehabilitation of existing district-owned facilities.
The CSFP is administered by the State Allocation Board (SAB) and is part of a broader School Facilities Program which funds all public schools in California. Recently, millions of dollars have gone unused, and CCSA has fought for this funding is directed toward charter schools.
Last November, our efforts resulted in the SAB voting unanimously to use $22 million in unused cash to fund previously approved, shovel-ready charter school projects and kept $6.9 million for future charter school uses. The Board also unanimously voted to augment the previously set aside $73.5 million in future bond sale proceeds by an additional $20.7 million, meaning that all possible future CSFP advance fund releases will be covered through the next bond sale.
State Charter School Facilities Incentive Grants Program
The California School Finance Authority (CSFA) administers the Charter School Facilities Incentive Grants program (CSFIG) through the United States Department of Education (ED). This funding provides per-pupil funding for charter school facilities, similar to the SB 740 Program. Funds may be used for rent, lease, mortgage, debt service, and/or Proposition 39 pro-rata payments for existing or new facilities; or purchase, acquisition, design, construction, and/or renovation of a facility. Funding may be provided in conjunction with funding through SB 740.
In June, 2012, CSFA announced the sub-grantees for the latest funding round of the CSFIG. A new funding round will be dependent on ED funding for a grant in California. For more information, visit the State Treasurer's Website.
SB 740 Facility Grants
The Charter School Facility Grant Program was enacted by Senate Bill (SB) 740 (Chapter 892, Statutes of 2001, Education Code Section 47614.5) in 2001, and provides funding assistance to charter schools for rent and lease expenditures that meet specific eligibility criteria. To be eligible, charter schools must serve a student population with at least 70 percent of their pupils eligible for free or reduced price meals (FRL), or they must be physically located in the attendance area of a public elementary school with 70 percent or more FRL qualified students. Charter schools may be reimbursed $750 per ADA or up to 75 percent of their total lease or rental costs, whichever amount is lower. Funds may not be used to purchase facilities or for lease/purchase agreements.
Charter schools occupying school district, state, or federal facilities, or charter schools receiving facilities through Proposition 39 (in accordance with Education Code Section 47614) are not eligible for reimbursement through SB 740. Non-classroom based charter schools are also not eligible for lease reimbursements. Currently, more than 250 charters across California receive funding from the program.
CCSA continually advocates for key reform measures to ensure greater charter access to, and acquisition of increased SB-740 funds. Aside from successfully fighting for the release of millions of dollars delayed and owed to charters, CCSA continues to pursue reform strategies advocating for increased per pupil grants above the $750 per pupil cap, lowering the qualification requirements for free and reduced lunch below the 70% threshold, and seeking to enable charter operators to utilize SB 740 grants for debt service, as well as lease reimbursement payments.
SB 740 provides assistance to reduce the financial burden that leases pose on charter operating budgets, but it does not eliminate it. Unlike school districts that do not need to utilize their general fund budgets to pay for facilities, charters accepting SB 740 must still have to dedicate a portion of their operation budget to support facilities payments. Through SB 740 reform, CCSA seeks to level the playing field by reducing the charters outlay of facilities payments to nominal levels.
Charter School Facilities Credit Enhancement Grant Program
The California School Finance Authority (CSFA) offers funding for credit enhancement to support the acquisition, renovation or construction of charter school facilities, or the refinancing of existing charter school facility debt. Unlike traditional public schools, charter schools typically do not receive funding from their local school districts to purchase, lease, or improve facilities. Securing financing can be problematic for new charter schools because they often lack assets to pledge and operating histories that lenders can rely on to evaluate a loan application. As a result, charter schools frequently operate in temporary space that is poorly suited to their educational mission. These funds are intended to absorb some of the risks of making loans to charter schools for their facility needs.
Awards may be up to $1.5 million and can be used by charter schools that have been issued loans by or through CSFA for their facilities' needs. For more information and the application, visit the State Treasurer's Website.
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