BILL ANALYSIS
SENATE COMMITTEE ON EDUCATION
Gloria Romero, Chair
2009-2010 Regular Session
BILL NO: SB 378
AUTHOR: Romero
INTRODUCED: February 26, 2009
FISCAL COMM: Yes HEARING DATE: April 15, 2009
URGENCY: No CONSULTANT:Kathleen Chavira
SUBJECT : Charter School Facility Grant Program
SUMMARY
This bill expands eligibility for the Charter School
Facility Grant Program (CSFP) and requires the provision of
this funding in advance of current year expenses, instead
of as reimbursement for prior year expenses.
BACKGROUND
SB 740 (O'Connell, Chapter 892, Statutes of 2001), created
the Charter School Facility Grant Program for the purpose
of providing assistance with facilities rent and lease
expenditures for charter schools that meet certain
eligibility criteria. Eligible charter schools may receive
reimbursement for facilities rent and lease costs in an
amount of up to $750 per unit of classroom-based average
daily attendance (ADA), as certified at the second
principal apportionment, but no more than 75 percent of
their total annual facilities rent and lease costs. If
there are insufficient funds to reimburse all eligible
charter schools at the maximum level, the funding provided
to each school is reduced on a pro-rata basis.
To be eligible for reimbursement, a charter school site
must be geographically located within the attendance area
of a public elementary school in which at least 70 percent
of the pupil enrollment is eligible for free or
reduced-price meals, or serving a pupil population that
meets or exceeds 70 percent eligibility for free and
reduced-price meals. 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
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Proposition 39 are not eligible for reimbursement.
ANALYSIS
This bill :
1) Expands eligibility for Charter School Facilities
Program (CSFP) funding. More specifically it:
a) Reduces the free and reduced price
meal eligibility threshold from 70 percent to 50
percent in 5 percent increments, if funds remain
once allocations are made to all schools meeting
the original requirements of the Charter School
Facility Grant Program (CSFP).
b) Requires allocation of funds to
schools below the 70 percent threshold in order
of the highest eligibility percentage until all
funds are allocated.
c) Removes the prohibition against
appropriating CSFP funds for ADA generated in
nonclassroom-based instruction.
2) Changes the funding nature for the CSFP from
reimbursement to "forward-funding." Specifically it:
a) Requires that charter schools
receive funding under the CSFP within 120 days of
the start of a fiscal year in which costs are
incurred based upon estimates of their cost.
b) Authorizes the department to
withhold up to 25 percent of the total payment of
a school pending final documentation of actual
costs.
c) Requires that final payment be
allocated no later than 60 days after the start
of the following fiscal year.
3) Makes other technical changes.
STAFF COMMENTS
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1) Intent of the bill . According to the author, the
current eligibility criteria, which requires that 70
percent of students qualify for free or reduced price
meals, leaves out a large number of schools that serve
low-income students in high-poverty communities. The
author is also concerned that these funds are
allocated to charter schools only as reimbursement for
the prior year's facilities costs rather than in the
year costs are incurred, creating added budget
pressure and financial uncertainty for charter
schools. Additionally, the author contends that the
implementation of Proposition 39, which requires the
provision of facilities to charter schools, has
created some conflict between districts and charter
schools. The author asserts that the expansion
authorized by this bill could eliminate this conflict
since more schools could meet their facility needs
through the CSFP.
2) Reimbursement or grant program ? Since its inception,
the CSFP has operated as a reimbursement program. The
changes proposed in this bill would create a grant
program and forward fund based upon estimates of
expenses, rather than actual expenses incurred. It
does not appear that any other state-funded K-12
categorical program is funded in this way. Should a
program that has functioned successfully as a
reimbursement program be changed? What fiscal controls
exist for recouping funds apportioned if estimated
eligible expenses are not realized or if a charter
school ceases operation mid-year? Staff notes that
changing from a reimbursement to a grant program would
significantly increase the administrative duties and
costs to the CDE.
If it is the desire of the committee to change from a
reimbursement program to a forward funded grant
program, staff recommends the bill be amended to
advance a more modest amount (25%) at six months and
to allocate final payment once actual costs incurred
have been documented. Staff notes, however, that such
a change would not resolve the creation of additional
administrative burden on the department or address the
issues of fiscal accountability.
3) Classrooms for non-classroom based instruction ? Under
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current law, Charter School Facility Grant Program
(CSFP) funds may only be appropriated to charter
schools for ADA generated through "classroom-based
instruction" which means that pupils are under the
immediate supervision and control of a credentialed,
charter school employee, and 80 percent of the
instructional time occurs at the schoolsite, a
facility used principally for classroom instruction.
This bill would expand eligibility to include charter
schools that offer nonclassroom-based instruction such
as independent study. Although it is unclear how much
demand for CSFP funding would increase as a result,
the CDE reports that the ADA generated by
nonclassroom- based charters is significant.
Should independent study facilities be funded at the
expense of charter programs offering instruction at a
schoolsite? Are the facilities needs/costs for an
independent study resource center comparable to those
of a program where the vast majority of instructional
time occurs on site? How much will demand for CSFP
funding increase just on the basis of lowering the
poverty threshold for eligibility? Staff recommends
the bill be amended to restore current law in this
regard until the effects of lowering the poverty
thresholds can be assessed to determine whether there
is sufficient funding available to meet the needs of
charter schools offering classroom based instruction.
4) Funding . Current law provides "operational grant"
funding to districts that operate on a year round
multi-track schedule. Previously, in exchange for
this General Fund/Proposition 98 source of funds,
districts' school building capacity was increased,
thereby reducing their "eligibility" for state bond
funding for new school facilities construction. SB
658 (Romero, Chapter, Statutes of 2008) phases out the
multi-track year round operational grant program over
a 4-year period by reducing grant amounts by 20% each
fiscal year and exempts school districts receiving
these operational grants from the increase in school
building capacity beginning in 2008-09.
SB 658 also provided for the reallocation of these
funds to the Charter School Facility Grant Program.
According to the Assembly Appropriations
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Committee analysis of SB 658, approximately $19.4
million would be reallocated annually. When fully
implemented in 2012-13, funding for the Charter School
Facility Grant Program (CSFP) program will increase by
approximately $97 million for a total of $115 million.
SUPPORT
Association of California School Administrators
California Charter Schools Association
EdVoice
Los Angeles Unified School District
OPPOSITION
None received.