charter school capital california charter schools conference panel presentation

Copyright © 2013 Charter School Capital, Inc.

BUILDING CHARTER

SCHOOL SUCCESS

Tuesday, March 12 2013 California Charter

Schools Conference San Diego, CA

Copyright © 2013 Charter School Capital, Inc.

Welcome.

3 Copyright © 2013 Charter School Capital, Inc.

SPEAKERS

•  Branché Jones – Education Consultant and Charter School Advocate

•  John Palmer – Attorney, Public Finance, Orrick, Herrington & Sutcliffe

•  Michele Huntoon – CPA, Associate Vice President, School Services California

•  John Helgeson – Co-founder, Charter School Capital

Panelists


TOPICS

•  Impact of Prop 30: EPA This Year and Next

•  Budget & Programming Planning

•  What is the Local Control Funding Formula (LCFF)?

What we will cover tonight


PROP 30

•  Continue to “withhold” 21.2% of annual Prop. 98 Revenue (based on LY P-2)

•  Distribute EPA funds in June and possibly July

– Will adjust EPA payment based on TY P-2

– Total Funds will not increase, but timing may change

Finishing this year


EPA Intake and Distribution

This Year

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Pece

nt o

f Ann

ual R

even

ues

Rec

eive

d Ea

ch M

onth

Fiscal Year 2012-2013

EPA EPA? GPE

EPA


PROP 30

•  State estimates tax revenues for EPA before June 30 in each year until 2018

•  ¼ amount estimated EPA transferred during last 10 days of each of the first

three quarters of each fiscal year

•  Last Q: State re-calculates the EPA estimate – too high or too low?

– 2015: there is an additional true-up based on the last two years’ tax

receipts

•  If Too High: the following quarterly payments will be reduced

•  If Too Low: the difference is deposited into the EPA for distribution

What will Prop 30 look like next year?


PROP 30

•  GPE funded by EPA, then In Lieu, then GPBG

•  Schools get 5% of their total funding July, 5% in August, and 9% in

September

•  We believe the 5-5-9 distributions and subsequent monthly warrants will be

net of funds disbursed from the EPA at the end of each quarter

What will Prop 30 look like next year?


PROP 30

Effect of the EPA on GPE Calculation

GPBG In-Lieu

GPBG In-Lieu EPA


POLICY UPDATE

•  Charter School Facility Grant Program and Charter School Revolving Loan Program shift from the DOE to the California State Finance Office

•  Modifying the funding determination process for non-classroom based charter schools by limiting it to the first and third years of operation in most instances

•  Expanding the Charter Schools Facility Grant Program to include eligibility for non-classroom based charter schools, as these schools still have facility needs for

instructional support

•  Extending for five years the 2012-13 requirement that school districts with identified surplus property and facilities first offer to sell those resources to charter

schools before selling them to other entities or disposing of those assets

Program changes


DEFERRALS

•  Governor’s proposed budget provides $1.9B to pay down deferrals

•  Likely equal to February and March deferrals

•  Leaves April, May and June deferrals to be paid down in later years

•  Still waiting on legislation that would put dollar amounts to specific months

•  Could change significantly before adoption

What do next year’s deferrals look like?


INTERYEAR DEFERRALS

Proposed for 2013-14

Amount Month Amount Month $521.7 million February 2013 Eliminated* July 2013 $1.03 billion March 2013 Eliminated* July 2013

$594.7 million April 2013 $390.9 million* July 2014 $763.8 million April 2013 $763.8 million August 2014 $1.976 billion May 2013 $1.976 billion July 2014

$2.5 billion June 2013 $2.5 billion July 2014

*The Governor’s budget for 2013-14 proposes to reduce the February, March and April deferrals by $0.53 billion, $1.03 billion, and $0.2 billion respectively

Information provided by School Services California


Deferral Schedule ’13-14

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

Perc

ent o

f of A

nnua

l Rev

enue

s R

ecei

ved

Each

Mon

th

Fiscal Year 2013-2014

GPE EPA


LCFF

•  Does away with revenue limit and restructures GPE •  Wraps more categorical money into base grant

– Unclear how this will impact charter schools •  Phases out deficit factor over 6 years •  Pays down deferrals over the same period ending in 2018-19 •  Establishes base grant for K-3, 4-6, 7-8, 9-12 •  Supplements the base grant

– English Language Learners and Low Income Students – Concentration of ELL’s and LIS’s over 50% student population, K-3 students

and high school students •  35% supplement per ADA for every ELL and LIS, plus additional 35% for each

ADA over 50% concentration •  11.2% supplement for K-3 students and 2.8% for high school students •  ELL student and concentration money must substantially benefit those students

What is the Local Control Funding Formula?


LCFF

•  Approximate increase in 2013-14 over 2012-13 is 10%, although charters in basic aid districts may feel less or no increase

•  On a hypothetical base grant of $6,342, the 35% supplement is approximately $2,220. This means in some high concentration districts a portion of the ADA could generate as much as $10,762

Some projections


EXAMPLE PROJECTION

•  FAME is a Public Charter School in Alameda County

•  ADA of 1,495

•  44% of the kids are free and reduced price meal eligible

•  26% are ELL

•  2011-12 per ADA was $6,199

•  2013-14 estimated at $6,421

•  2014-15 is projected at $6,764

•  Full implementation is projected at $9,453

FAME


Presentation available at: SlideShare.net/CharterSchoolCapital


Thank you.