PARADISE UNIFIED SCHOOL DISTRICT RESOLUTION NO. 16/17:16 ADOPTING RECOMMENDED FINDINGS OF FACT REGARDING THE ACHIEVE CHARTER HIGH SCHOOL CHARTER PETITION WHEREAS, pursuant to California Education Code section 47605 et seq., the Paradise Unified School District (“PUSD” or the “District”) Board of Trustees is required to review charter school petitions submitted to the District and grant or deny the proposed charter. WHEREAS, the Achieve Charter High School (“ACHS”) charter petitioners submitted a charter school petition to the District on November 15, 2016, for a grades 9-12 charter school to be located at 6480 Clark Road, 6462 Clark Road, and 6227 Melody Lane in Paradise, California, for a fiveyear term from July 1, 2017 through and including June 30, 2022. WHEREAS, California Education Code section 47605 and California Code of Regulations, Title 5, section 11967.5.1, require the PUSD Board of Trustees to grant or deny a charter petition within sixty (60) days of receipt of the charter petition, unless that timeline is extended for up to thirty (30) additional days by mutual written agreement of the parties. WHEREAS, the California State Board of Education has developed criteria to be used for the review of charter school petitions presented to the State Board pursuant to Education Code section 47605(j)(2). (California Code of Regulations, Title 5, section 11960 et. seq.) Education Code section 47605(j)(2) states, “The criteria shall address all elements required for charter approval, as identified in subdivision (b) and shall define ‘reasonably comprehensive’ as used in paragraph (5) of subdivision (b) in a way that is consistent with the intent of this part.” Because the State Board of Education reviews charter petitions that have been denied by school districts, the District reviews charter school petitions for compliance with the State Board of Education regulations. WHEREAS, during a special meeting of the PUSD Board of Trustees on December 14, 2016, a public hearing on the ACHS charter petition was conducted in accordance with the provisions of Education Code section 47605(b), at which time the PUSD Board of Trustees considered the level of public support for the ACHS charter petition by teachers employed by the District, other employees of the District, and parents, as required by Education Code section 47605(b). WHEREAS, Achieve Charter School of Paradise’s Superintendent, Casey Taylor, and several of Achieve Charter School of Paradise’s students and parents addressed the PUSD Board of Trustees in support of the ACHS charter petition during the December 14, 2016 public hearing. WHEREAS, there was no discernable public support for the ACHS charter petition from teachers employed by the District or other employees of the District. No teachers or other employees of the District spoke at the public hearing in support of the ACHS charter petition. A majority of the public who spoke in support of the Achieve Charter High School charter petition were employed by or affiliated with the existing Achieve Charter School of Paradise. WHEREAS, all of the members of the PUSD Board of Trustees have read and fully considered the ACHS charter petition; the ACHS Budgets: First Year Budget including start-up costs, StartUp Cost Notes, Year Two and Three Projected Budgets (“Budget”); and this Resolution. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 1 of 59 WHEREAS, in reviewing the ACHS charter petition, the PUSD Board of Trustees has been cognizant of the intent of the Legislature that charter schools are and should become an integral part of the California educational system and that the establishment of charter schools should be encouraged. WHEREAS, in reviewing the ACHS charter petition, District staff, working with Superintendent Donna Colosky and with District legal counsel, have reviewed and analyzed all of the information presented by the ACHS charter petition and the Achieve Budget, including materials related to the operation and potential effects of the proposed ACHS. Because the District’s staff review finds that granting the ACHS charter petition is not consistent with sound educational practice, District staff have made a recommendation in the form of this Resolution to the PUSD’s Board of Trustees that the November 15, 2016 ACHS charter petition be denied. NOW, THEREFORE, BE IT RESOLVED that the PUSD Board of Trustees finds that all of the above recitals are true and correct and incorporates them herein by this reference. BE IT FURTHER RESOLVED that the PUSD Board of Trustees, having fully considered and evaluated the November 15, 2016 ACHS charter petition, hereby denies the ACHS charter petition pursuant to Education Code section 47605(b) and finds that granting the ACHS charter petition is not consistent with sound educational practice based upon the following factual findings specific to the November 15, 2016 ACHS charter petition: I. THE ACHS CHARTER PETITIONERS ARE DEMONSTRABLY UNLIKELY TO SUCCESSFULLY IMPLEMENT THE PROGRAM SET FORTH IN THE ACHS CHARTER PETITION [Education Code section 47605(b)(2)]; and II. THE ACHS CHARTER PETITION FAILS TO CONTAIN REASONABLY COMPREHENSIVE DESCRIPTIONS OF EIGHT (8) OF THE FIFTEEN (15) REQUIRED ELEMENTS OF A CHARTER PETITION. [Education Code section 47605(b)(5)]. BE IT FURTHER RESOLVED that the PUSD Board of Trustees hereby finds that all of the foregoing findings are supported by the following specific facts: I. THE ACHS CHARTER PETITIONERS ARE DEMONSTRABLY UNLIKELY TO SUCCESSFULLY IMPLEMENT THE PROGRAM SET FORTH IN THE ACHS CHARTER PETITION. [Education Code section 47605(b)(2)] California Education Code section 47605(b)(2) provides that a charter petition may be denied if specific facts support a finding that “[t]he petitioners are demonstrably unlikely to successfully implement the program set forth in the petition.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 2 of 59 A. The ACHS Charter Petition Budget Presents An Unrealistic Financial And Operational Plan For The Proposed Achieve Charter School. California Code of Regulations, Title 5, section 11967.5.1(c) states that factors to be considered in determining whether charter petitioners are “demonstrably unlikely to successfully implement the program” include: “(3) The petitioners have presented an unrealistic financial and operational plan for the proposed charter school. An unrealistic financial and operational plan is one to which any or all of the following applies: “(A) In the area of administrative services, the charter or supporting documents do not adequately: “1. Describe the structure for providing administrative services, including, at a minimum, personnel transactions, accounting and payroll that reflects an understanding of school business practices and expertise to carry out the necessary administrative services, or a reasonable plan and time line to develop and assemble such practices and expertise. “2. For any contract services, describe criteria for the selection of a contractor or contractors that demonstrate necessary expertise and the procedure for selection of the contractor or contractors. “(B) In the area of financial administration, the charter or supporting documents do not adequately: “1. Include, at a minimum, the first-year operational budget, startup costs, and cash flow, and financial projections for the first three years. “2. Include in the operational budget reasonable estimates of all anticipated revenues and expenditures necessary to operate the school, including, but not limited to, special education, based, when possible, on historical data from schools or school districts of similar type, size, and location. “3. Include budget notes that clearly describe assumptions on revenue estimates, including, but not limited to, the basis for average daily attendance estimates and staffing levels. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 3 of 59 “4. Present a budget that in its totality appears viable and over a period of no less than two years of operations provides for the amassing of a reserve equivalent to that required by law for a school district of similar size to the proposed charter school. “5. Demonstrate an understanding of the timing of the receipt of various revenues and their relative relationship to timing of expenditures that are within reasonable parameters, based, when possible, on historical data from schools or school districts of similar type, size, and location.” (California Code of Regulations, Title 5 § 11967.5.1(c)(3).) Due to discrepancies identified during the District staff’s review of the ACHS charter petition, the Certified Public Accountants firm of Onisko & Scholz, LLP was retained to prepare an independent Review and Analysis of the ACHS Petition and Budget. The Onisko & Scholz, LLP Certified Public Accountants Review and Analysis is attached as Exhibit A hereto and incorporated herein by this reference. The Onisko and Scholz, LLP Certified Public Accountants Review and Analysis of the ACHS Petition and Budget concludes that ACHS’s Budget presents an unrealistic financial and operational plan for the proposed ACHS. The Onisko and Scholz, LLP Certified Public Accountants Review and Analysis of the ACHS Petition and Budget also states at pages 1 and 2: EXECUTIVE SUMMARY After a comprehensive review of the Achieve Charter High School charter petition and Budget as submitted to the Paradise Unified School District on November 15, 2016, we conclude that the Achieve Charter High School charter petition's Budget presents an unrealistic financial and operational plan for the proposed Achieve Charter High School. Our findings can be summarized as follows: 1) The Achieve Charter High School charter petition’s Budget omitted $100,000 in capital outlay costs. The omitted $100,000 in capital outlay costs decreases ACHS’s year one ending fund balance from $116,102 to $16,102. ACHS’s 2017-2018 year one adjusted ending fund balance of $16,102 represents only a 1% financial reserve and fails to meet the 5% fund balance financial reserve percentage required by California Code of Regulations, Title 5, Section 15450. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 4 of 59 2) The ACHS charter petitioners failed to account for $232,350 out of $375,000 in Public Charter School Grant Program (PCSGP) restricted start-up funds, present one-time start-up costs that may be unallowable ongoing costs, commingle restricted start-up funds with ongoing unrestricted funds, and use $180,650 in restricted un-spent startup funds as part of ACHS’s year one beginning fund balance to subsidize year one unrestricted operational costs and cash flow. The ACHS charter petitioners rely heavily on loans totaling $543,818 from Achieve Charter School of Paradise, Inc., the nonprofit operating Achieve Charter School K-8 (ACS). There are no Achieve Charter School of Paradise, Inc. commitment letters, Board minutes authorizing loans, or other loan documents included in the ACHS charter petition or Budget notes to support ACHS’s loans alleged in the charter petition and Budget notes. The ACHS charter petition and Budget notes fail to provide any narrative or analysis of how ACS’s budget and cash flow may or may not be impacted by loaning funds to ACHS. Furthermore, loaning funds from Achieve Charter School of Paradise, Inc. as funds from ACS to ACHS may be considered an unallowable gift of public funds. 3) The Achieve Charter High School either failed to present a year one 2017-2018 Cash Flow Statement or mislabeled their year one Cash Flow Statement as 20162017 instead of 2017-2018. The ACHS charter petitioners fail to describe how they arrived at their cash flow revenues and expenditures accrual amounts. Evaluating the ACHS charter petition as submitted by the ACHS charter petitioners means that the ACHS charter petition failed to present a 2017-2018 Cash Flow Statement. 4) The Achieve Charter High School charter petition’s Budget fails to present sufficient detailed Budget notes that clearly describe ACHS financial budget projections pursuant to California Code of Regulations, Title 5, section 11967.5.1(c)(3)(B). ACHS fails to provide supplementary information describing how the proposed Achieve Charter High School charter school’s revenues, costs, and cash flows were projected, either through historical data or comparative analytics from other charter schools or school districts of similar type, size and location. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 5 of 59 5) The Achieve Charter High School charter petition’s Budget fails to specify the required criteria for the selection of contractors as required by California Code of Regulations, Title 5, section 11967.5.1(c)(3)(A). The ACHS Budget notes fail to identify and present the names and detailed descriptions of the services to be provided by ACHS’s budgeted professional and consulting service providers, especially those vendors that may be affiliated with or related to the ACHS charter petitioners in any way. 6) The Achieve Charter High School charter petition’s Budget fails to identify special education encroachment costs in the ACHS Budget or to explain why special education encroachment costs are not budgeted. The PUSD Board of Trustees hereby specifically adopts the findings of the Onisko & Scholz, LLP Certified Public Accountants Review and Analysis of the ACHS Charter Petition and Budget and finds that the ACHS charter petitioners are demonstrably unlikely to successfully implement the program set forth in the ACHS charter petition because the ACHS charter petition and budget present an unrealistic financial and operational plan for the proposed ACHS. B. The ACHS Charter Petitioners Are Demonstrably Unlikely To Successfully Implement The Program Set Forth In The Petition Because The ACHS Charter Petitioners Are Unfamiliar With The Requirements Of Law That Would Apply To The Proposed ACHS. California Code of Regulations, Title 5, section 11967.5.1(c) states the following as a factor to be considered in determining whether charter petitioners are “demonstrably unlikely to successfully implement the program”: “(2) The petitioners are unfamiliar . . . with the content of the petition or the requirements of law that would apply to the proposed charter school.” 1. The ACHS charter petitioners are unfamiliar with Education Code section 48907 and the Education Code’s statutory requirements related to “Student exercise of freedom of speech and press.” The ACHS charter petitioners are unfamiliar with the requirements of law related to “Student exercise of freedom of speech and press” pursuant to Education Code section 48907. California Education Code section 48907 states: “(a) Pupils of the public schools, including charter schools, shall have the right to exercise freedom of speech and of the press including, but not limited to, the use of bulletin boards, the distribution of printed materials or petitions, the wearing of buttons, badges, or other insignia, and the right of expression in official Copyright 2017 © Paradise Unified School District. All rights reserved. Page 6 of 59 publications, whether or not the publications or other means of expression are supported financially by the school or by use of school facilities, except that expression shall be prohibited which is obscene, libelous, or slanderous.” (Emphasis added.) ... “(b) The governing board or body of each school district or charter school and each county board of education shall adopt rules and regulations in the form of a written publications code, which shall include reasonable provisions for the time, place, and manner of conducting such activities within its respective jurisdiction.” (Emphasis added.) The ACHS charter petition fails to provide a written publications code regarding “Student exercise of freedom of speech and of the press” and fails to acknowledge or even mention ACHS students’ right to freedom of speech and of the press. The PUSD Board of Trustees therefore finds that the ACHS charter petitioners are demonstrably unlikely to successfully implement the program because the charter petitioners are unfamiliar with the requirements of law that would apply to the proposed charter school. 2. The ACHS charter petitioners are unfamiliar with the legal requirements related to jurisdictional limitations on the locations of charter school facilities. The ACHS charter petitioners are unfamiliar with the requirements of law related to jurisdictional limitations to locations of facilities that apply to charter schools under California Education Code section 47605(a)(1). California Education Code section 47605(a)(1) requires: “A petition for the establishment of a charter school shall identify a single charter school that will operate within the geographic boundaries of that school district. A charter school may propose to operate at multiple sites within the school district if each location is identified in the charter school petition.” (Emphasis added.) The ACHS charter petition contains the following affirmation and assurance at page 3: “The Charter School shall comply with any applicable jurisdictional limitations to locations of its facilities. [Ref. Education Code Sections 47605 and 47605.1]” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 7 of 59 The ACHS charter petition states at page 16: “Achieve Charter High School will be located within the geographic boundaries of Paradise Unified School District, as authorized pursuant to Education Code Section 47605. Achieve is in lease negotiations with owners of the property at 6480 Clark Rd, 6462 Clark Rd, and 6227 Melody Ln Paradise, California.” The ACHS charter petition states at page 9: “Achieve Charter School plans to operate the 6th-8th grade middle school program (90 students) on the new Achieve Charter High School's campus. This will strengthen Achieve Charter School's middle school 6th-8th grade program, and allow Achieve Charter High School to build slowly, one grade at a time, starting with 120 9th grade students, in a financially sustainable way. This will allow for shared staff and resources between middle and high school programs. Costs for shared staff and materials by both schools will be reflected in each charter school's budget.” The ACHS charter petition fails to identify a single charter school that plans to operate within the geographic boundaries of the Paradise Unified School District. Instead, the ACHS charter petition proposes a new grades 9-12 charter school including “6th – 8th middle school” students from Achieve’s existing K-8 charter school, with both programs operating at facilities located at 6480 Clark Road, 6462 Clark Road, and 6227 Melody Lane, Paradise, California within the Paradise Unified School District’s geographic boundaries. By relocating students in grades 6-8 of the existing Achieve K-8 charter school to the proposed location of the ACHS 9-12 charter school, the ACHS charter petitioners are attempting to operate two charter schools within the geographical boundaries of the Paradise Unified School District in violation of California Education Code section 47605(a). The PUSD Board of Trustees therefore finds that the ACHS charter petitioners are demonstrably unlikely to successfully implement the program because the charter petitioners are unfamiliar with the requirements of law that would apply to the proposed charter school. 3. The ACHS charter petitioners are unfamiliar with the legal requirements related to statewide standards and student assessments. The ACHS charter petitioners are also unfamiliar with laws regarding statewide standards and student assessments. Page 2 of the ACHS charter petition contains the following affirmation and assurance: “The Charter School shall meet all statewide standards and conduct the student assessments required, pursuant to California Education Copyright 2017 © Paradise Unified School District. All rights reserved. Page 8 of 59 Code Section 60605 and any other statewide standards authorized in statute, or any other pupil assessments applicable to pupils in non-charter public schools.” California Education Code section 60605 explicitly states, “(g) This section shall become inoperative on July 1, 2011.” The ACHS charter petitioners’ reference to an inoperative Education Code section evidences their unfamiliarity with laws regarding statewide standards and student assessments. The PUSD Board of Trustees therefore finds that the ACHS charter petitioners are demonstrably unlikely to successfully implement the program because the charter petitioners are unfamiliar with the requirements of law that would apply to the proposed charter school. C. The ACHS Charter Petitioners Are Demonstrably Unlikely To Successfully Implement The Program Set Forth In The Petition Because The Petitioners Personally Lack The Necessary Background In Areas Critical to the Charter School’s Success. California Code of Regulations, Title 5, section 11967.5.1(c) states that a factor to be considered in determining whether charter petitioners are “demonstrably unlikely to successfully implement the program” is whether: “(4) The petitioners personally lack the necessary background in the following areas critical to the charter school’s success, and the petitioners do not have a plan to secure the services of individuals who have the necessary background in these areas: (A) Curriculum, instruction, and assessment. (B) Finance and business management.” According to the information provided by their own charter petition, the proposed ACHS administrators personally lack the necessary background in the areas of high school curriculum and instruction, or high school finance and business management, and the ACHS charter petition fails to include a “plan to secure the services of individuals who have the necessary background in these areas.” Pages 110-119 identify the following individuals responsible for overseeing the operations of the proposed ACHS charter school: Casey Taylor Proposed Superintendent; Korin Baber Proposed Chief Business Officer; Kelli Gordon Proposed Principal of Culture and Climate; and Ryan Van Roekel Proposed Principal of Curriculum and Instruction. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 9 of 59 Based on the information provided in the ACHS charter petition concerning the professional experience of these individuals, the ACHS charter petitioners personally lack the necessary backgrounds in areas critical to the charter school’s success. 1. The ACHS charter petition fails to identify individuals who have the necessary background in high school “Curriculum, instruction, and assessment.” Page 110 of the ACHS charter petition identifies Casey Taylor as the proposed Superintendent, Ryan Van Roekel as the proposed Principal of Curriculum and Instruction, and Kelli Gordon as the proposed Principal of Culture and Climate for the proposed ACHS. a. Casey Taylor’s lack of any high school curriculum, instruction, or assessment experience Pages 112 and 113 of the ACHS charter petition list the following credentials for Ms. Taylor as the proposed ACHS Superintendent: “Education:  Bachelor of Arts in Liberal Studies from Westmont College, Santa Barbara  Clear Administrative Services Credential Work and Related Experience:  Kindergarten Teacher, St. Thomas More  School Program Developer and Founder, Achieve Charter School  Principal/Superintendent, Achieve Charter School  Board Member, Paradise Rotary Club  Region 2 Member Council Representative, California Charter Schools Association  Chair, Butte County Charter Leaders Network  20 years education experience.” However, the ACHS charter petition fails to identify any experience that qualifies Ms. Taylor to “oversee the operations and staff of both the Achieve Charter School K-8 program and the Achieve Charter High School” as stated at page 110 of the ACHS charter petition. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 10 of 59 Further, the ACHS charter petition does not state that Ms. Taylor possesses any experience, administrative, teaching, or otherwise, at the high school level. In fact, the only teaching position Ms. Taylor has ever held, as identified by the ACHS charter petition is “Kindergarten Teacher, St. Thomas More.” It is unclear how Ms. Taylor’s “20 years of education experience,” which does not include any experience in high school curriculum, instruction, or assessment, would enable her to simultaneously oversee both ACHS and the K-8 Achieve Charter School of Paradise. As stated at pages 112 and 113 of the ACHS charter petition, proposed ACHS Superintendent Casey Taylor’s experience does not include any experience managing or even working at a high school. The ACHS charter petition therefore fails to identify any administrative experience qualifying Ms. Taylor to serve as the Superintendent at the proposed ACHS. b. Kelli Gordon’s lack of high school curriculum, instruction, and assessment experience Pages 117 and 118 of the ACHS charter petition list the following credentials for Kelli Gordon as the proposed ACHS Principal of Culture and Climate: “Education:  Bachelors of Arts Liberal Studies, California State University Chico  Multiple Subject California Teaching Credential Work and Related Experience:  High School Ski Team coach, Paradise High School  Substitute Teacher, Paradise Unified and Thermalito Unified School Districts  Long-term 5/6 substitute/classroom teacher Ponderosa Elementary School  Middle School Program Developer and Founder; Achieve Charter School  Senior Project Mentor and Judge Panelist, Paradise High School  Math, Language Arts, History and Student Government Teacher 6th – 8th grades, Achieve Charter School  Board Member, Teacher Representative, Achieve Charter School Copyright 2017 © Paradise Unified School District. All rights reserved. Page 11 of 59  Achieve Charter High School Design Team Member  12 years education experience.” Absent from Ms. Gordon’s listed credentials are an Administrative Credential or any administrative experience, high school or otherwise. Ms. Gordon’s finite high school experience as identified by the ACHS charter petition is limited to Ms. Gordon’s experience as “High School Ski Team coach, Paradise High School” and “Senior Project Mentor and Judge Panelist, Paradise High School.” The ACHS charter petition therefore fails to identify any meaningful or administrative experience qualifying Ms. Gordon to serve as the Principal of Culture and Climate at the proposed ACHS. c. Ryan Van Roekel’s lack of high school curriculum, instruction, and assessment experience Page 118 of the ACHS charter petition lists the following credentials for Ryan Van Roekel as the proposed ACHS Principal of Curriculum and Instruction: “Education:  Bachelor of Arts Biology, Bachelor of Arts French, University of Kansas  Masters Instruction and Curriculum, University of Colorado, Denver Work and Related Experience:  Teacher – 2nd Grade, Bertha Heid Elementary School, Thornton, CO  Teacher and Standards Development, American International School of Cape Town, Cape Town, R.S.A  Teacher – 2nd Grade, Gerber Elementary School, Gerber, CA  Teacher – 3rd Grade, Achieve Charter School  Teacher – Sciences, Math, STEAM 6th-8th grades, Achieve Charter School  Administer of Technology, Achieve Charter School  Achieve Charter High School Design Team Member  16 years of education experience.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 12 of 59 Similar to Ms. Taylor’s and Ms. Gordon’s lack of relevant experience, Mr. Van Roekel’s listed experience fails to provide any evidence of administrative, teaching, or other experience at the high school level. Of the three ACHS administrators identified by the ACHS charter petition, only Ms. Gordon possesses any experience working in a high school environment, but only as a “High School Ski Team coach, Paradise High School” and a “Senior Project Mentor and Judge Panelist, Paradise High School.” Based on Ms. Taylor’s personal lack of experience in working in a high school environment, it is clear that Ms. Taylor lacks the necessary background in “Curriculum, instruction, and assessment” to oversee the proposed ACHS as Superintendent. The PUSD Board of Trustees therefore finds that the ACHS charter petitioners are demonstrably unlikely to successfully implement the program because the proposed ACHS administrators personally lack the necessary background in the areas of high school “Curriculum, instruction, and assessment” and that the ACHS charter petition fails to contain a “plan to secure the services of individuals who have the necessary background in this area” as required by California Code of Regulations, Title 5, section 11967.5.1(c)(4)(A). 2. The ACHS charter petition fails to identify individuals who have the necessary background in “Finance and business management.” Page 114 of the ACHS charter petition identifies Korin Baber as ACHS’s proposed Chief Business Officer and lists Ms. Baber’s following credentials: “Education:  Bachelors of Psychology and Child Development, California State University, Chico  Masters Industrial Organization/Human Resources, St. Mary’s College, Moraga Work and Related Experience:  Human Resources, United Healthcare  Sales, Wyeth Pharmaceuticals  Business Manager, Paradise Hearing and Balance  Chief Business Officer, Achieve Charter School.” Absent from Ms. Baber’s credentials is any experience in finance or any business management experience pertaining to the operation of a high school. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 13 of 59 Because the ACHS charter petition identifies Ms. Baber as the designated individual for overseeing the proposed ACHS’s finances and business management, the ACHS charter petition fails to identify individuals with the necessary background in “Finance and business management” specific to the operation of a high school. The PUSD Board of Trustees therefore finds that the ACHS charter petitioners are demonstrably unlikely to successfully implement the program because the charter petitioners personally lack necessary background in the areas of high school “Finance and business management,” and that the ACHS charter petition fails to contain a “plan to secure the services of individuals who have the necessary background in these areas” as required by California Code of Regulations, Title 5, section 11967.5.1(c)(4)(B). D. The ACHS Charter Petitioners Are Demonstrably Unlikely To Successfully Implement The Program Set Forth In The Petition Because The ACHS Charter Petition Fails To Adequately Describe The Facilities Needed To Operate The Educational Program Proposed In The ACHS Charter Petition. California Code of Regulations, Title 5, section 11967.5.1(c)(3) states that other factors to be considered in determining whether charter petitioners are “demonstrably unlikely to successfully implement the program” are: “(D) In the area of facilities, the charter and supporting documents do not adequately: “1. Describe the types and potential location of facilities needed to operate the size and scope of educational program proposed in the charter. “2. In the event a specific facility has not been secured, provide evidence of the type and projected cost of the facilities that may be available in the location of the proposed charter school. “3. Reflect reasonable costs for the acquisition or leasing of facilities to house the charter school, taking into account the facilities the charter school may be allocated under the provisions of Education Code section 47614.” Education Code section 47605(g) states: “The governing board of a school district shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the school, the manner in which administrative services of the school are to be provided, and potential civil liability effects, if any, upon the school Copyright 2017 © Paradise Unified School District. All rights reserved. Page 14 of 59 and upon the school district. The description of the facilities to be used by the charter school shall specify where the school intends to locate.” The ACHS charter petition and supporting documents fail to adequately describe the facilities needed to operate the size and scope of the educational program proposed in the ACHS charter petition as required by California Code of Regulations, Title 5, section 11967.5.1(c)(3)(D)(1) because: 1. The ACHS charter petition fails to adequately describe the types and potential location of facilities needed to operate the size and scope of educational program proposed in the charter. California Code of Regulations, Title 5, section 11967.5.1(c)(3)(D)(1) states as a factor to be considered in determining whether charter petitioners are “demonstrably unlikely to successfully implement the program”: “In the area of facilities, the charter and supporting documents do not adequately: (1) Describe the types and potential location of facilities needed to operate the size and scope of educational program proposed in the charter.” The ACHS charter petition states at page 160 that: “The 6-12 school site, which will accommodate grades 6-8 of [the] Achieve Charter School and grades 9-12 of Achieve Charter High School, may be located at 6480 Clark Rd, 6462 Clark Rd, and 6227 Melody Ln Paradise, California. “Once fully built out to serve approximately 590 6th-12th grade students, the facility will include 23 general education classrooms including 4 with labs, a school office, Superintendent’s office, 2 School Directors’ offices, business office, board room, staff work room.” (Emphasis added.) The ACHS charter petition fails to explain how the identified facilities are adequate to support the operation of the proposed ACHS 9-12 charter school and the Achieve Charter School of Paradise 6-8 grade program, which ACHS charter petitioners state will serve approximately 590 students. It does not appear that the proposed ACHS school site will be large enough to accommodate ACHS’s projected enrollment of 590 6th through 12th grade students. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 15 of 59 ACHS charter petitioners identify 7.5 acres of land located at 6480 Clark Road, 6462 Clark Road, and 6227 Melody Lane for development of the proposed facility but fail to specify how ACHS intends to physically divide the facility between Achieve’s high school and middle school students, or whether the ACHS charter petitioners intend to permanently locate 6-8th grade students from Achieve Charter School of Paradise at the same location as ACHS’s 9-12th grade students. The California Department of Education’s 2000 Edition, “School Site Analysis and Development,” states that a school site for grades 9-12 with 401-600 students enrolled requires a total of 24 acres with class size reduction and 23.2 acres without class size reduction pursuant to California Code of Regulations, Title 5, section 14010. Based on this information, the proposed ACHS charter school site is very small in comparison to the acreage requirement for school district high schools with enrollment identical to ACHS’s projected enrollment. In fact, the proposed ACHS charter school site will have less than 1/3 the total usable acres required for school district high school sites with 401-600 9th through 12th grade students enrolled. Placing a 590 student grade 6-12 school on such a small site will not allow for adequate athletic facilities and will have significant adverse environmental and traffic effects on surrounding Paradise residents’ homes that the ACHS charter petition fails to consider. The ACHS charter petition also fails to identify any safety measures to address the possible physical and psychological harm that could result from the shared use of a small single school site serving 11-year-old 6th grade students and 19-year-old 12th grade students. Further, because Achieve Charter School of Paradise grades 6-8 students are not included in the ACHS charter petition’s proposed educational program, it is inappropriate for the ACHS charter petitioners to include those students in ACHS facilities plan. The ACHS charter petition also makes blanket statements as to the suitability of the facilities for educational purposes, stating that: “The Charter School shall comply with Education Code Section 47610 by utilizing facilities that are either compliant with the Field Act or facilities that are compliant with the California Building Standards Code.” (Page 23.) “All facilities of the School shall be accessible for all students with disabilities in accordance with the ADA.” (Page 79.) “Details such as building maintenance, replacement plans, expansion, and related financial projections are being discussed. This information will be shared with the charter authorizing agency as soon as possible along with documentation sufficient to provide reasonable evidence that the charter school facility is safe, habitable, and well-suited for its educational purpose.” (Page 160.) Copyright 2017 © Paradise Unified School District. All rights reserved. Page 16 of 59 First, rather than containing details concerning the suitability of the proposed facilities for educational purposes, the ACHS charter petition states that “Details such as building maintenance, replacement plans, expansion, and related financial projections are being discussed,” conceding that the ACHS charter petition fails to contain the details regarding the suitability of the proposed ACHS site for ACHS educational purposes because such details have yet to be finalized. Second, the ACHS charter petition states that “Information will be shared with the charter authorizing agency as soon as possible along with documentation sufficient to provide reasonable evidence that the charter school facility is safe, habitable, and well-suited for its educational purpose,” conceding that the ACHS charter petition fails to contain information and documentation evidencing that the proposed ACHS facilities are “safe, habitable, and well-suited” for the ACHS’s educational purpose. Third, the lack of details contained in the ACHS charter petition regarding ACHS’s proposed facilities prevents the District from determining whether the facilities will comply with the Field Act, California Building Standards Code, or Americans with Disabilities Act as claimed by the ACHS charter petitioners. Based upon information contained in the ACHS charter petition, housing students at the proposed site is extremely unrealistic, and the facilities are not suitable for the proposed educational purpose or compliant with the Field Act or Americans with Disabilities Act. The PUSD Board of Trustees therefore finds that the ACHS charter petition fails to adequately describe the types and potential location of facilities needed to operate the size and scope of educational program proposed in the charter as required by California Code of Regulations, title 5, section 11967.5.1(c)(3)(D)(1). 2. The ACHS charter petition fails to provide “evidence of the type and projected cost of the facilities that may be available in the location of the proposed charter school.” [California Code of Regulations, Title 5, section 11967.5.1(c)(3)(D)(2)] The ACHS charter petition states the following regarding its proposed location of facilities at page 160: “It is the intent to serve 90 6-8th grade students and 120 9th grade students in the first year, requiring 8 general education classrooms with one lab, a school office, Superintendent's office, 2 School Directors' offices, business office, board room, staff work room, 4 boys bathrooms, 4 girls bathrooms, 1 unisex bathroom, 2 staff bathrooms, cafeteria/kitchen/multipurpose room, 1 intervention classroom, l special education office, counseling/guidance office, music room/art room, student board/presentation room, open project workspace, outside paved court area, outside eating area, outside grass fields.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 17 of 59 However, the ACHS charter petition states at page 16 that: “Achieve is in lease negotiations with owners of the property at 6480 Clark Rd, 6462 Clark Rd, and 6227 Melody Ln Paradise, California,” indicating that the ACHS charter petitioners have failed to secure a specific facility. Therefore, the ACHS charter petitioners must provide “evidence of the type and projected cost of the facilities that may be available in the location of the proposed charter school” pursuant to California Code of Regulations, Title 5, section 11967.5.1(c)(3)(D)(2). However, the ACHS charter petition fails to provide sufficient evidence of the type and projected cost of the facilities, including evidence of the projected costs of developing the proposed ACHS site. The ACHS charter petition states at page 21 that “owners have expressed interest in entering a 25 year lease and assistance in developing the property with utilities and infrastructure,” conceding that the proposed ACHS site, in its current state, cannot accommodate ACHS’s facilities without substantial infrastructure development. The ACHS charter petition also fails to provide any information about the ACHS charter petitioners’ plan to fund the development of ACHS’s proposed facilities if the property owners do not assist “in developing the property with utilities and infrastructure.” Further, the ACHS charter petition states the following regarding the septic system for the proposed property at page 21: “This property is 7.5 acres, centrally located, properly zoned as Community Commercial, has percolation testing reports for septic design flow [of] up to 13,000 gallons per day.” Community members have commented that the proposed ACHS facilities will actually require a secondary treatment gross hydraulic load rate of 7.55 x 2000 gallons per day per acre or 15,100 gallons per day instead of 13,000 gallons per day to meet the septic system needs of ACHS’s proposed facilities. ACHS’s septic requirements will further increase because of ACHS’s plans for inclusion of a kitchen for food preparation and service. Additionally, the property is not located in an area zoned for school use and the charter petitioners will therefore need to obtain a zoning change or exemption, further adding to the expense and time required to complete ACHS’s facilities. The ACHS charter petition fails to identify or explain the costs to develop the Clark Road/Melody Lane property to accommodate a grades 6-12 charter school facility. Appendix I Achieve Charter High School Budget Documents only identifies the following costs associated with the proposed ACHS facilities:  Regarding “Capital Outlay,” Appendix I states, at page 3, “ACHS set aside $100,000 in capital outlay to prepare a facility for its use.” The ACHS charter petition then states the following regarding the “capital outlay” expenses for 2017-2018: “100,000 – Renovations, e.g. carpet, cubicles, bathrooms.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 18 of 59  Regarding “Rent,” Appendix I states at page 8: “120,000 - $10000 per Monthly Rate, increasing 5% annually.” The PUSD Board of Trustees therefore finds that the ACHS charter petitioners fail to provide evidence of the type and projected cost of the facilities that may be available in the location of the proposed charter school as required by California Code of Regulations, Title 5, section 11967.5.1(c)(3)(D)(2). 3. The ACHS charter petition fails to “reflect reasonable costs for the acquisition or leasing of facilities to house the charter school.” [California Code of Regulations, Title 5, section 11967.5.1(c)(3)(D)(3)] Again, the ACHS charter petitioners intend to lease the property at “6480 Clark Rd, 6462 Clark Rd, and 6227 Melody Ln Paradise, California” and state that the property owners have “expressed interest” in developing the property. The ACHS charter petitioners identify the following expenses to lease the developed property: $120,000 in 2017-2018, $126,000 in 2018-2019, and $132,300 in 2019-2020. However, because the ACHS charter petitioners have failed to provide any evidence of the projected costs of developing the identified site, including the costs to rezone or to obtain a zoning exemption for the property, or to install utilities and infrastructure on the currently undeveloped property, including installation of a septic system that can support a grades 6-12 school site, it is unclear whether the projected rent expenses of $120,000 in 2017-2018, $126,000 in 2018-2019, and $132,300 in 2019-2020 are reasonable. Further, while the ACHS charter petitioners project $100,000 in capital outlay expenses and $120,000 in rent expenses for 2017-2018, the ACHS charter petition fails to identify the actual costs to either ACHS charter petitioners or to the “owners of the property” to develop the property at “6480 Clark Rd, 6462 Clark Rd, and 6227 Melody Ln Paradise, California” for use as a charter school facility to accommodate the proposed grades 6-12 school site as required by California Code of Regulations, Title 5, section 11967.5.1(c)(3)(D)(2). The District notes that the amount set aside by ACHS charter petitioners for capital outlay ($100,000) and the notes provided “Renovations, e.g. carpet, cubicles, bathrooms” in the November 15, 2016 ACHS charter petition are nearly identical to that which was stated in the September 20, 2016 ACHS charter petition regarding a 64,000 square foot warehouse at 5399 Clark Rd, Paradise, CA. Budget note 17 at page 5 of the September 20, 2016 ACHS charter budget states the following regarding the $100,000 budgeted for capital outlay, “Building Improvements carpet, cubicles, bathrooms, renovations.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 19 of 59 The ACHS charter petitioners fail to explain why the November 15, 2016 ACHS charter petition identifies the same amount in capital outlay expenses and the same types of capital outlay projects for the proposed ACHS school facility consisting of modular buildings as the September 20, 2016 ACHS charter petition which proposed the repurposing of a 64,000 square foot former newspaper facility. The ACHS charter petitioners’ failure to provide information about the actual costs to be paid by the ACHS 9-12 charter school to lease the proposed facilities prevents the District from determining whether the budgeted amount for leasing the facilities reflects reasonable costs. The PUSD Board of Trustees therefore finds that the charter petitioners are demonstrably unlikely to successfully implement the program because the ACHS charter petition fails to adequately describe the facilities needed to operate the educational program proposed in the ACHS charter petition. II. THE ACHIEVE CHARTER PETITION FAILS TO CONTAIN REASONABLY COMPREHENSIVE DESCRIPTIONS OF EIGHT (8) OF THE FIFTEEN (15) REQUIRED ELEMENTS OF A CHARTER PETITION. [Education Code section 47605(b)(5)] Education Code section 47605(b)(5) requires that the ACHS charter petition contain reasonably comprehensive descriptions of all fifteen of the required elements of a charter petition listed at Education Code sections 47605(b)(5)(A) through 47605(b)(5)(O). The ACHS charter petition’s failure to contain a reasonably comprehensive description of even one statutorily required element is a legal basis for denial of the charter petition. The PUSD Board of Trustees finds that the ACHS charter petition fails to contain reasonably comprehensive descriptions of at least eight (8) of the fifteen (15) required elements of a charter petition, as evidenced by the following specific facts: A. The ACHS Charter Petition Fails To Contain A Reasonably Comprehensive Description Of The Educational Program Of The Proposed ACHS. [Education Code section 47605(b)(5)(A)] Education Code section 47605(b)(5)(A) requires that the ACHS charter petition contain a reasonably comprehensive description of: “(i) The educational program of the charter school, designed, among other things, to identify those whom the charter school is attempting to educate, what it means to be an ‘educated person’ in the 21st century, and how learning best occurs. The goals identified in that program shall include the objective of enabling pupils to become self-motivated, competent, and lifelong learners.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 20 of 59 The ACHS charter petition fails to contain a reasonably comprehensive description of the educational program of the proposed charter school for the following reasons: 1. The ACHS charter petition fails to clearly describe its target student population and fails to include a framework for instructional design that is aligned with needs of the pupils that the charter school has identified as its target student population. California Code of Regulations, Title 5, section 11967.5.1(f)(1) states factors to be considered in determining whether a charter petition does not contain a “reasonably comprehensive description” are whether the charter petition’s description of the educational program, as required by Education Code section 47605(b)(5)(A), at a minimum, the charter petition: “(A) Indicates the proposed charter school’s target student population, including, at a minimum, grade levels, approximate number of pupils, and specific educational interests, backgrounds, or challenges.” ... “(C) Includes a framework for instructional design that is aligned with the needs of the pupils that the charter school has identified as its target student population.” The ACHS target student population is identified generally at pages 10 and 18 of the ACHS charter petition. The ACHS charter petition states at page 10: “Achieve Charter High School’s mission is to provide ALL students in our community a unique, rich academic experience to produce graduates who are career and college ready.” The ACHS charter petition states at page 18: “ACHS’s educational program is based on the instructional needs of our target student profile. ACHS targets the following students: 1. Students residing in the Paradise Unified School District attendance area and surrounding areas within Butte County whose academic needs necessitate a small school environment with personalized attention and variability in learning opportunities; and Copyright 2017 © Paradise Unified School District. All rights reserved. Page 21 of 59 2. Students whose social and emotional needs necessitate a safe, small learning community where personal connections are made.” However, the ACHS charter petition fails to clearly describe the grade levels, approximate number of pupils, or specific educational interests, backgrounds, or challenges of ACHS’s target student population, as required by California Code of Regulations, Title 5, section 11967.5.1 (f)(1)(A). The ACHS charter petition also fails to include a framework for instructional design that is aligned with needs of the pupils that the charter school has identified as its target student population. The ACHS charter petition contains an inconsistency with respect to the grade levels and number of pupils to be served by the proposed ACHS charter school. The ACHS charter petitioners provide the following response to the question of “Whom the school is attempting to educate and target student population” at page 18: “The Charter School will serve approximately 500 students in grades 9-12 beginning with the initial enrollment of approximately 120 9th graders in 2017-2018. The Charter School intends to add a grade level targeting 120 students each year until completely built out with 9th-12th grades and a full student population of approximately 500 students.” However, the ACHS charter petition states at page 18 that the school’s targeted growth for grades 9-12 as 480 students in 2020-2022, a difference of approximately 20 students. Simultaneously, the ACHS charter petition states at page 160: “The 6-12 school site, which will accommodate grades 6-8 of Achieve Charter School and grades 9-12 of Achieve Charter High School, may be located at 6480 Clark Rd, 6462 Clark Rd, and 6227 Melody Ln Paradise, California. . . . It is the intent to serve 90 6-8th grade students and 120 9th grade students in the first year[.]” Although the ACHS target student population encompasses “ALL students in our community,” the ACHS charter petition fails to contain any details about how the proposed ACHS charter school intends to serve students who are socioeconomically disadvantaged, homeless, or living in foster care, which comprise a large number of students enrolled in the District. According to the Paradise Unified School District’s Local Control Funding Formula State Priorities Snapshots for the 2015-2016 reporting year, 2,310 PUSD students, or approximately 66% of the District’s total enrollment, were socioeconomically disadvantaged. 67 PUSD students, or 1.9 % of the District’s total enrollment in 2015-2016, were homeless. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 22 of 59 Data on the California Department of Education’s website shows the District’s total count of matched foster students by school of enrollment and grade for 2015-16 was 55, or approximately 1.6 % of the District’s total enrollment. Given the large number of students in the District who are socioeconomically disadvantaged, homeless, and living in foster care, the ACHS charter petition should have but fails to describe a specific plan to ensure that the demographics of the community are proportionately reflected in the ACHS’s enrollment. The ACHS charter petition fails to specifically address how these at-risk student populations will benefit from ACHS’s proposed educational program. In fact, the existing Achieve Charter School of Paradise’s 2015-2016 Unduplicated Pupil Count Data shows that for 2015-2016, the Achieve K-8 charter school enrolled 1 English learner, 0 Foster students, 0 Homeless students, and only 97 students eligible for the Free & Reduced Meal Program or 41.6% of the Achieve K-8 charter school’s enrollment. The percentage of students eligible for the Free & Reduced Meal Program enrolled at the Achieve K-8 charter school in 2015-2016 is 24.4% less than that of the District as a whole. Achieve Charter School of Paradise’s numbers also fall short of the percentages of students that were eligible for the Free & Reduced Meal Program enrolled at the District’s two existing high schools, Paradise Senior High School (52.0%) and Ridgeview High School (Continuation School) (82.8%). Further, the ACHS charter petition fails to present a true “small school” model as claimed by the ACHS charter petitioners. The ACHS charter petition states at page 31, “It is the objective of ACHS to maintain a 30:1 student/teacher ratio.” The ACHS charter petition’s stated goal of providing a “small school option that can foster a personalized learning approach to more specifically meet their unique needs and provide a more equitable and effective learning environment” is inconsistent with the ACHS charter petition’s inability to commit to smaller class sizes beyond its stated goal of maintaining a 30:1 student/teacher ratio. The ACHS charter petition inadequately explains how all of the ACHS charter petition’s various learning options will be made possible at a small school where the objective is to maintain a 30:1 student/teacher ratio. The ACHS charter petition fails to specify the number of teachers that will be hired to ensure that small class sizes are possible. The ACHS charter petition also fails to describe how ACHS’s courses will be scheduled and staffed such that students are able to pursue one of three chosen “pathways,” courses required for graduation, dual enrollment college courses, career and technical education courses, and online courses. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 23 of 59 The PUSD Board of Trustees therefore finds the ACHS charter petition fails to contain a reasonably comprehensive description of the educational program of the proposed ACHS charter school because the petition fails to clearly describe its target student population and fails to include a framework for instructional design that is aligned with needs of the pupils that the charter school has identified as its target population. 2. The ACHS charter petition fails to provide a reasonably comprehensive description for the process of development of the curriculum and teaching methods. California Code of Regulations, Title 5, section 11967.5.1(f)(1)(E) states as a factor in determining whether a charter petition provides a reasonably comprehensive description of the educational program of the school whether the charter petition at a minimum: “Indicates the instructional approach or approaches the charter school will utilize, including, but not limited to, the curriculum and teaching methods (or a process for developing the curriculum and teaching methods) that will enable the school’s pupils to master the content standards for the four core curriculum areas adopted by the SBE pursuant to Education Code section 60605 and to achieve the objectives specified in the charter.” The ACHS charter petition identifies the following Project Lead the Way courses as “curricular materials being considered” at page 43: “Project Lead the Way Principals of Engineering, Computer Integrated Manufacturing, Environmental Sustainability.” Project Lead the Way is a nonprofit organization that provides a “transformative learning experience for K-12 students and teachers across the U.S.” through “activity-, project-, and problem-based (APB) instructional design center[ed] on hands-on, real-world activities, projects, and problems that help students understand how the knowledge and skills they develop in the classroom may be applied in everyday life.” However, the ACHS charter petition fails to identify the process that ACHS will utilize to develop, plan, fund, and implement any aspect of the proposed Project Lead the Way curriculum identified at page 43 of the ACHS charter petition. The “Plan your Investment” tool at the Project Lead the Way website, available online at investment.pltw.org/vproducts, identifies the following costs for implementing the Project Lead the Way courses identified at page 43 of the ACHS charter petition: Copyright 2017 © Paradise Unified School District. All rights reserved. Page 24 of 59 PLTW Engineering (9-12) for 20 students Computer Integrated Manufacturing Equipment and Supplies Professional Development Registration $29,770.75 $2,400.00 Environmental Sustainability Equipment and Supplies Professional Development Registration $16,738.49 $2,400.00 Principles of Engineering Equipment and Supplies Professional Development Registration $12,710.53 $2,400.00 Annual Participation Fee Total cost: $3,000.00 $69,419.77 The Project Lead the Way website’s “Plan your Investment” tool calculates the cost for implementing the Project Lead the Way courses identified in ACHS’s charter petition for 30 students instead of 20 students to be $89,626.03. The successful implementation of the Project Lead the Way curriculum also requires significant investment in ACHS teachers’ professional development, including three phases of professional development training: Readiness Training, Core Training, and Ongoing Training. Regarding teacher training, the Project Lead the Way Frequently Asked Questions webpage also states the following: “After registration, your school will select one or more individuals to become PLTW Launch Lead Teachers. After completing online Readiness Training, the Lead Teacher(s) will engage in a hands-on, comprehensive two-and-a-half day training that introduces them to the activity-, project-, problem-based (APB) pedagogy that is the cornerstone of all Project Lead the Way programs. Pedagogy is delivered through exposure to a set of hands-on activities from the PLTW Launch modules. The Lead Teacher then has responsibility to train other teachers in the building, aid in inventory management, and play the role of coach and guide. Grade-level teachers in the building become certified to teach PLTW Launch modules through completion of on-demand Readiness Training; an in-building, inperson Core Training delivered by their Lead Teacher; and completion of module specific on-demand Core Training.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 25 of 59 While the Project Lead the Way website indicates a clear need for financial investment in terms of implementation expenses and ongoing professional development, the ACHS charter petition fails to provide a reasonably comprehensive description of or to budget for any aspect of the implementation of Project Lead the Way curriculum at the proposed ACHS beyond referencing Project Lead the Way. The PUSD Board of Trustees therefore finds that the ACHS charter petition fails to provide a reasonably comprehensive description of the ACHS charter petitions proposed curriculum regarding the implementation Project Lead the Way at the proposed ACHS charter school. 3. The ACHS charter petition fails to provide a reasonably comprehensive description of the implementation of the ACHS’s proposed dual enrollment program. The ACHS charter petition states at page 21 that the ACHS charter school will offer “dual enrollment with local colleges” as part of its plan to “increase the number of Ridge students eligible to attend a four year college and increase student achievement.” The ACHS charter petition further states at page 32 that: “In addition to site-based coursework, students in their Junior and Senior years will have the opportunity to take courses for college credit, through dual enrollment agreements with both Butte Community College and CSU Chico.” The ACHS charter petition states that the proposed ACHS charter school will offer the following courses through dual enrollment agreements with “Butte College or CSUC” at pages 54 through 57:  Dual Enrollment Math via Butte College or CSUC as an option to Calculus;  Physics or Chemistry & Engineering Design: Dual Enrollment Science via Butte College or CSUC as an option to Solving Local & Global Challenges; and  Dual Enrollment World Languages with Butte College or CSUC as an option to UCCI Spanish III for the Entrepreneurial Mind. However, the ACHS charter petition fails to identify the steps that ACHS will take to implement the proposed dual enrollment program. While the ACHS charter petition states at page 32 that “students will have the opportunity to take courses for college credit through dual enrollment agreements with both Butte Community College and CSU Chico,” the reality is that neither Butte Community College nor California State University, Chico offer a dual enrollment program at this time. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 26 of 59 Instead, Butte College offers a concurrent enrollment program, which, according to the Butte College website “allows high school students to fulfill high school and college requirements by attending Butte College courses at a much lower cost per unit,” meaning that ACHS students participating in Butte College’s concurrent enrollment class would be taught by Butte College professors. Similarly, CSU Chico offers a High School Scholars Program, which, according to the CSU Chico webpage, allows high school students “access to courses that have not been filled by regularly enrolled CSU Chico students,” meaning that ACHS students participating in CSU Chico’s High School Scholars Program would be taught by CSU Chico professors. Further, at the December 14, 2016 public hearing, ACHS charter petitioners identified a third college, Shasta College, as a partner for ACHS’s proposed dual enrollment program. While Shasta College does offer a dual enrollment program, meaning that ACHS students participating in Shasta College’s dual enrollment program would actually be taught by qualified ACHS teachers, the Shasta College webpage states that: “Shasta College extends its educational, cultural, and recreational facilities and services to all people in Shasta, Tehama, and Trinity Counties, including parts of Lassen, Modoc, and Humboldt Counties.” Even if a dual enrollment partnership with Shasta College was viable, the ACHS charter petition fails to contain any description of how ACHS would meet the requirements of Shasta College’s Dual Enrollment program. Because ACHS students would be taught by ACHS teachers under a dual enrollment agreement with Shasta College, ACHS must meet Shasta College’s “Instructor Qualifications,” which, according to the Shasta College webpage, require ACHS teachers “to meet the minimum qualifications to teach at a California Community College.” The 2014 California Community Colleges Chancellor’s Office Minimum Qualifications For Faculty and Administrators in California Community Colleges, accessible at http://californiacommunitycolleges.cccco.edu/Portals/0/FlipBooks/2014_MQHandbook/#/0, requires community college teachers to have a Master’s Degree in the core academic subject (Physics, Chemistry, Math, etc.). The PUSD Board of Trustees therefore finds that the ACHS charter petition fails to provide a reasonably comprehensive description of the ACHS charter petitions proposed curriculum regarding the implementation of the proposed dual enrollment program identified in the ACHS charter petition. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 27 of 59 4. The ACHS charter petition fails to provide a reasonably comprehensive description of how the proposed ACHS charter school will meet the needs of students with disabilities. California Code of Regulations, Title 5, section 11967.5.1(f)(1) states that factors to be considered in determining whether a charter petition contains a “reasonably comprehensive description” of each of the specified elements are whether the charter petition’s description of the educational program, as required by Education Code section 47605(b)(5)(A) at a minimum: “(G) Indicates how the charter school will meet the needs of students with disabilities, English learners, students achieving substantially above or below grade level expectations, and other special student populations.” “(H) Specifies the charter school’s special education plan, including, but not limited to, the means by which the charter school will comply with the provisions of Education Code section 47641, the process to be used to identify students who qualify for special education programs and services, how the school will provide or access special education programs and services, the school’s understanding of its responsibilities under law for special education pupils, and how the school intends to meet those responsibilities.” The ACHS charter petition and supporting documents demonstrate that ACHS is not prepared to adequately meet the needs of students with disabilities. Page 68 of the ACHS charter petition states: “Achieve Charter High School will apply to be its own local educational agency (“LEA”) in conformity with Education Code Section 47641(a). The Charter School will seek membership either in the Butte County SELPA or in the El Dorado Charter SELPA. Achieve Charter High School petitioners requested to submit an LEA application for Achieve Charter High School to the Butte County SELPA in October [2016], but the request was denied being the charter was not yet approved. The petitioners plan to attend the El Dorado Charter SELPA Prospective Members Meeting in January, and submit an LEA application by the March 1st deadline. The El Dorado Charter SELPA accepts LEA application by the March 1st deadline. The El Dorado Charter SELPA accepts LEA applications on behalf of new charter petitions before they are approved. If Achieve Charter High School is not granted membership in SELPA, the school will remain, by default, a public school of its authorizer for purposes of special education, pursuant to Education Code Section 47641(b).” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 28 of 59 Following the denial of their application for membership in the Butte County SELPA as an LEA, the ACHS charter petitioners now intend to submit an application to the El Dorado Charter SELPA by March 1, 2017. However, the ACHS charter petition contains an unsigned copy of the “Achieve Charter High School’s LEA Petition Presented to Butte County Special Education Local Plan Area Governance Council” (“Butte County SELPA LEA Petition”) dated September 30, 2016. Therefore, it is unclear whether the ACHS charter petitioners intend to submit the September 30, 2016 LEA petition to the El Dorado Charter SELPA, or whether and to what extent ACHS charter petitioners will modify its Butte County SELPA LEA Petition. The ACHS charter petition also states at page 81 that “Achieve Charter High School shall comply with all requirements of the Butte County or El Dorado SELPA's Local Plan. A full continuum of special education programs and related services shall be provided by Achieve Charter High School as required by an eligible student's Individualized Education Program.” However, the ACHS charter petition fails to describe the “full continuum of special education programs and related services” to be provided to students or the credentials ACHS teachers will hold to serve a range of students from severely handicapped to learning disabled to emotionally disturbed. Further, given ACHS’s limited budget for special education and related services, it does not appear that the ACHS charter petitioners genuinely intend to provide a “full continuum of special education and related services” to students with disabilities. Page 10 of the ACHS Butte County SELPA LEA Petition identifies the following positions that will provide services at ACHS related to special education: “School Psychologist/Coordinator – Achieve Charter High School will directly employ a school psychologist with the appropriate credentials to coordinate special education assessments and final reports. The school psychologist will conduct psychological assessments for students referred for special education. She may assist the Educational teacher by administering achievement tests as necessary. The school psychologist will be BICM (Behavior Intervention Case Manager) trained. She will manage all SEIS data. “Education Specialist – Achieve Charter High School will directly employ an Education Specialist, who will hold appropriate credentials to provide Specialized Academic Instruction, administering achievement tests, and/or gathering existing achievement data as part of the assessment process. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 29 of 59 “Speech and Language Specialist – Achieve Charter High School will directly employ or utilize a SELPA regional provider for a Speech and Language Specialist who will hold appropriate credentials to perform all screenings, provide direct services, and assessments for students referred for articulation or language disabilities. “School Nurse – Achieve will contract directly or through BCOE for a school nurse who holds a school nurse credential and appropriate qualifications to conduct hearing, vision and other medical assessments as needed. “Adaptive Physical Education Teacher – Achieve Charter High School will work with a SELPA regional provider for an adaptive physical education teacher who will hold appropriate credentials to administer needed physical education assessments. “Occupational Therapist – Achieve Charter High School will utilize a SELPA regional provider for an occupational therapist who will hold appropriate credentials to administer needed occupational therapy assessments. “Physical Therapist – Achieve Charter High School will contract directly with a private physical therapist who will hold appropriate credentials to administer educationally necessary physical therapy assessments. “CBO – Achieve Charter School of Paradise Inc.’s Chief Business Officer will provide CASEMIS reporting. “Other services to be contracted with Butte County SELPA as needed will include: Orientation and Mobility/Visual Impairment Specialist/DHH teacher/Orthopedic Impairment Specialist, etc. A detailed description of the professionals to be employed by Achieve Charter High School is included later in the application.” Despite the many special education personnel identified in ACHS’s LEA application, the only special education services actually identified by the ACHS Budget for 2017-2018 are $68,800 in “Teacher-Special Ed” expenses for “1.2 FTE: psychologist (.20) and RSP teacher (1.0).” ACHS’s expenses related to “Teacher-Special Ed” increase in 2018-2019 to $134,800 with the addition of a full-time psychologist. Based on the expenses relating to special education identified by the ACHS charter petition, ACHS will staff a total of two full-time employees relating to special education, one full time RSP teacher, and one full-time psychologist by 2019-2020, by which time the ACHS charter petition projects an enrollment of 360 students. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 30 of 59 Because the ACHS charter petition budgets only minimal amounts for special education related services, the proposed high school will not be adequately staffed to serve students with more severe disabilities. Therefore, the ACHS charter petition’s description of how ACHS will meet the needs of students with disabilities is not reasonably comprehensive. Further, the ACHS charter petitioners have a poor record of serving disabled students at the existing Achieve K-8 charter school, causing serious concerns as to whether ACHS will adequately meet the needs of disabled students at the ACHS 9-12 charter school. According to the District’s and Achieve K-8’s Local Control Funding Formula State Priorities Snapshots, 14% of District students in 2015-2016 were disabled compared to only 8% of Achieve K-8 charter school’s students in 2015-2016. The ACHS charter petitioners’ poor record for serving disabled students is also evident by comparing the 2016 California Assessment of Student Performance and Progress (“CAASPP”) scores of the Achieve Charter School of Paradise students with disabilities to Achieve Charter School of Paradise students with no reported disability, as shown in the graph below: Chart 1: Comparing CAASPP Results – Achieve Students with Disabilities v. Achieve Students without Disabilities 2015 CAASPP 2016 CAASPP % meeting or % did not % meeting or % did not meet exceeding state meet state exceeding state state standards standards standards standards Students with 25% 56% 17% 67% Disabilities – ELA Students without 54% 14% 63% 12% Disabilities ELA Difference 29% 42% 46% 55% Students with 25% 50% 8% 58% Disabilities - Math Students without 48% 10% 55% 12% Disabilities - Math Difference 23% 40% 47% 46% * Source: CAASPP website Chart 1 above shows:  That in 2015, the percentage of Achieve students with no reported disabilities that met or exceeded state standards for ELA more than doubled that of Achieve Students with disabilities, while three times as many Achieve Students with disabilities did not meet state standards on ELA compared to Achieve Students with no reported disabilities. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 31 of 59  Further, the percentage of Achieve Students with no reported disabilities that met or exceeded state standards for Math nearly doubled that of Achieve Students with disabilities, while four times as many Achieve Students with disabilities did not meet state standards on Math compared to Achieve Students with no reported disabilities.  In 2016, the number of Achieve Students with no reported disabilities that met or exceeded state standards for ELA more than tripled that of Achieve Students with disabilities, while more than five times as many Achieve Students with disabilities did not meet state standards on ELA compared to those Achieve Students with no reported disabilities.  Further, the percentage of Achieve Students with no reported disabilities that met or exceeded state standards for Math was nearly seven times more than that of Achieve Students with disabilities, while the percentage of Achieve Students with disabilities that did not meet state standards for Math was nearly five times greater than those Achieve Students with no reported disabilities. These significant gaps in the CAASPP performance of two student subgroups served by the same school indicate that students with disabilities have not been adequately served at the existing Achieve grades K-8 charter school. The PUSD Board of Trustees therefore finds the ACHS charter petition fails to contain a reasonably comprehensive description of the educational program of the proposed ACHS charter school because the petition fails to demonstrate that the proposed charter school will meet the needs of students with disabilities. 5. The ACHS charter petition fails to provide a reasonably comprehensive description of how the proposed high school will meet the needs of students achieving substantially above grade level expectations. The ACHS charter petition also fails to specifically identify how its instructional design will align with the needs of students achieving substantially above grade level expectations. The goals, actions, and measurable outcomes aligned with the eight State priorities contained at pages 82-97 of the ACHS charter petition indicate that high-achieving students will not be appropriately challenged in ACHS’s proposed educational program. Page 89 of the ACHS charter petition states that ACHS will not offer Advanced Placement (“AP”) courses but will provide “rigorous instruction in core courses and provide AP exam study classes before and/or after school to prepare students for the AP exam.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 32 of 59 The ACHS charter petitioners fail to describe the process to ensure ACHS students acquire the knowledge necessary to pass the rigorous AP examinations. The ACHS charter petitioners do not cite any source that finds ACHS’s “AP exam study classes” are an effective means of preparing students to pass AP examinations. This fact contradicts the “career and college readiness” theme presented by the ACHS charter school petition. The California Department of Education has found that AP courses are a strong measure for college and career readiness: “Both AP/IB appear to be technically strong measures of college and career preparedness. . . . Incorporating AP/IB as a measure of preparedness serves multiple purposes for a variety of stakeholders. Students gain significant educational currency in the form of college credit and resume building from participating and taking AP/IB exams. The AP/IB data reported on schools would be understandable to a variety of stakeholders, including the general public interested in how schools are preparing students for college.” (Educational Policy Improvement Center, “Measures for a College and Career Indicator: Research Brief on Advanced Placement and International Baccalaureate”, California Department of Education (Apr. 4, 2014).) State Superintendent of Public Instruction Tom Torlakson has “strongly urge[d] those high schools that offer AP courses in fewer than five subjects to consider the various options available for making AP and other rigorous courses available.” (Letter titled, “Update Regarding Advanced Placement and Other Rigorous High School Course Options,” dated September 26, 2016.) Achieve fails to offer AP courses yet expects its students to take and pass AP exams. Achieve claims it will support academically high-achieving students by offering additional “study courses” during optional morning and afternoon periods. The ACHS charter petition states at page 61: “Our rigorous instructional model ensures students are challenged, and with additional AP exam study courses, will be prepared for AP exams. ... In addition, student [sic] will be offered AP exam study courses before or after school, and offered the opportunity to accelerate learning through online or college courses.” While approximately 62.08% of the 2,611,172 students who took AP exams in May 2016 earned passing scores of 3 or higher, the ACHS charter petitioners anticipate that only half of ACHS students will pass their AP exams. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 33 of 59 In 2015, California high school students ranked fifth in the nation in the percentage of graduates who earned a score of three or higher on an end-of-course AP exam taken during their high school years. This demonstrates that California students are eager to engage in challenging and rigorous coursework that prepares them for college and 21st century careers. However, the ACHS charter petition’s failure to offer AP courses demonstrates that ACHS students will not be given the opportunity to enroll in coursework at ACHS that will prepare them for college and 21st century careers. Therefore, high achieving students enrolled at ACHS will be educationally disadvantaged, and the ACHS charter petition fails to provide a reasonably comprehensive description of how the proposed ACHS charter high school will meet the needs of high-achieving students. 6. The ACHS charter petition fails to provide a reasonably comprehensive description of ACHS’s proposed independent study program. California Education Code section 47612.5 requires that charter schools providing independent study comply with Article 5.5 (commencing with Section 51745) of Chapter 5 of Part 28 of the Education Code and implementing regulations adopted thereunder. California Education Code section 51749.5(a) provides: “(a) Notwithstanding any other law, and commencing with the 2015–16 school year, a school district, charter school, or county office of education may, for pupils enrolled in kindergarten and grades 1 to 12, inclusive, provide independent study courses pursuant to the following conditions: “(1) The governing board or body of a participating school district, charter school, or county office of education adopts policies, at a public meeting, that comply with the requirements of this section and any applicable regulations adopted by the state board. “(2) A signed learning agreement is completed and on file pursuant to Section 51749.6. “(3) Courses are taught under the general supervision of certificated employees who hold the appropriate subject matter credential pursuant to Section 44300 or 44865, or subdivision (l) of Section 47605, meet the requirements for highly qualified teachers pursuant to the federal No Child Left Behind Act of 2001 (20 U.S.C. Sec. 6301 et seq.), and are employed by the school district, charter school, or county office of education at which the pupil is enrolled, or by a school district, charter school, or county office of education that has a memorandum of understanding to provide the instruction Copyright 2017 © Paradise Unified School District. All rights reserved. Page 34 of 59 in coordination with the school district, charter school, or county office of education at which the pupil is enrolled. “(4) (A) Courses are annually certified, by school district, charter school, or county office of education governing board or body resolution, to be of the same rigor and educational quality as equivalent classroom-based courses, and shall be aligned to all relevant local and state content standards. “(B) This certification shall, at a minimum, include the duration, number of equivalent daily instructional minutes for each schoolday that a pupil is enrolled, number of equivalent total instructional minutes, and number of course credits for each course. This information shall be consistent with that of equivalent classroombased courses.” (Emphasis added.) California charter schools must provide physical education courses consistent with their individual charter. The ACHS charter petition requires pupil participation in physical education courses. ACHS’s proposed educational program allows students to enroll in independent study to fulfill physical education requirements but fails to comply with the above statutory requirements for implementing an independent study program. The ACHS charter petition states at page 53: “Students participate in physical education taken through independent study, often conducted with instructors as mentors.” The ACHS charter petition fails to contain the proposed high school’s policies regarding independent study or produce any timeline for drafting and adopting such policies in a public meeting. The ACHS charter petition further violates Education Code section 51749.5 by failing to provide for or require a written learning agreement between ACHS and its pupils. The ACHS charter petition states at pages 53-54: “Off-Campus Sports courses award physical education Off-Campus Sports credit for off-campus sports activities (e.g., swimming, weigh training, or any individual or team sports) taken at a community center of other location off the Charter School campus. For students needing to satisfy their required PE coursework, Achieve Charter High School will provide courses during both 0 period and 9th period in addition to independent program monitoring by a credentialed PE teacher.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 35 of 59 The District cannot determine how ACHS pupils will satisfy the physical education credits required by ACHS’s charter itself because the ACHS charter petition fails to identify any policies or provisions governing the proposed ACHS independent study program. The ACHS charter petition also fails to identify and explain the criteria for ACHS students to utilize “Off-Campus Athletic Team Sports” to satisfy ACHS’s physical education requirements. The PUSD Board of Trustees therefore finds that the ACHS charter petition fails to contain a reasonably comprehensive description of the educational program of the proposed ACHS because the ACHS charter petition fails to provide a reasonably comprehensive description of ACHS’s proposed independent study program. B. The ACHS Charter Petition Fails To Contain A Reasonably Comprehensive Description Of The Proposed ACHS’s Governance Structure. [Education Code section 47605(b)(5)(D)] Education Code section 47605(b)(5)(D) requires that the ACHS charter petition contain a reasonably comprehensive description of: “The governance structure of the charter school, including, but not limited to, the process to be followed by the charter school to ensure parental involvement.” California Code of Regulations, Title 5, section 11967.5.1(f)(4) requires that a charter petition, at a minimum: “(A) Includes evidence of the charter school’s incorporation as a non-profit public benefit corporation, if applicable.” “(B) Includes evidence that the organizational and technical designs of the governance structure reflect a seriousness of purpose necessary to ensure that: 1. The charter school will become and remain a viable enterprise. 2. There will be active and effective representation of interested parties, including, but not limited to parents (guardians). 3. The educational program will be successful.” The ACHS charter petition describes the governance structure of the proposed charter school at pages 103 through 108. The ACHS charter petition states at page 103: “The Charter School will be operated by the duly constituted California nonprofit public benefit corporation, Achieve Charter School of Paradise, Inc., that currently operates Achieve Charter School, a K-8 school authorized by the Paradise Unified School Copyright 2017 © Paradise Unified School District. All rights reserved. Page 36 of 59 District. The Achieve Charter School of Paradise, Inc. Board of Directors will govern both schools in accordance with applicable California Corporations Code Sections and its adopted bylaws which shall be consistent with the terms of this charter. As provided for in the California Corporations Code, Achieve Charter High School will be governed by the Achieve Charter School of Paradise, Inc. Board of Directors, whose members have a legal fiduciary responsibility for the well-being of the Charter School.” The ACHS charter petition states at page 9 that: “Because of Achieve Charter School's success with their K-8 program, and the increasing demand for its educational program to extend from Kindergarten to High School, Achieve will open a new 9-12 charter school called Achieve Charter High School ("ACHS"). The Achieve Board of Directors ("Board") will govern both the K-8 and 9-12 charters.” The Achieve K-8 charter school and proposed ACHS 9-12 charter school will be governed by the same Board of Directors, which currently only oversees the operation of the existing Achieve K-8 charter school. Despite the ACHS charter petition’s assertion that: “[T]he Achieve Charter School of Paradise, Inc. Board of Directors will govern both schools in accordance with applicable California Corporations Code sections,” the ACHS charter petition is in fact in violation of California Corporations law because the Articles of Incorporation attached to the ACHS charter petition as Appendix G state: “The specific purposes for which this corporation is organized are for the operation of a California public charter school for educational services.” (Emphasis added.) The Achieve Charter School of Paradise nonprofit corporation was formed and was authorized by the California Secretary of State for the purpose of operating a single charter school – the Achieve K-8 charter school – not multiple charter schools. While the ACHS charter petition states at page 9 that the charter petitioners intend to “share staff and resources between middle and high school programs,” the ACHS charter petition and Budget fail to explain if and how the finances of the two separate Achieve charter schools are to be managed in relation to each other, how any costs, resources, services, and staff are shared among the two charter schools, and whether any such sharing of costs, resources, services and staff is identified in the Budget as submitted with the ACHS charter petition. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 37 of 59 The ACHS charter petition and Budget fail to describe any methodology used to ensure a fair and appropriate distribution of costs of such shared Achieve employees or a plan for assuring that all funds generated by and apportioned to ACHS are maintained and expended for the educational benefit of ACHS students. California Education Code section 47604.32(d) requires the District to “[m]onitor the fiscal condition of each charter school under its authority.” According to the ACHS charter petition’s own language, Achieve Charter School of Paradise, Inc. plans to operate two charters under one Board of Directors. ACHS’s proposed shared governance structure would prevent the District from carrying out its statutory oversight duty under Education Code section 47604.32(d) to monitor the proposed ACHS’s fiscal condition. Further, the bylaws included with the ACHS charter petition as Appendix G are not signed or adopted by Achieve’s Board of Directors. This fact is evidenced by the blank “Certificate of Secretary” included at page 14 of the bylaws. The District is therefore unable to evaluate whether the bylaws submitted with the ACHS charter petition are in fact the bylaws under which the Achieve Board of Directors will operate in governing both the existing Achieve K-8 charter school and the proposed ACHS, or whether the unsigned bylaws submitted with the ACHS charter petition have since been amended. The ACHS charter petition also fails to explain Achieve’s relationship with the Students First Foundation. The ACHS charter petition states at page 11: “In response to community demand, the Achieve Board of Directors decided to pursue the possibility of opening a high school program. The Board created the Students First Foundation to support funding and facility options for the potential expansion.” However, the relationship between the Students First Foundation and the Achieve Board of Directors is not clearly explained. The ACHS charter petition fails to describe when, how and in what dollar amounts the Students First Foundation will “support funding and facility options for potential expansion.” Although the California Secretary of State Business Entity Search webpage lists the “Students First Foundation” as an active corporation whose agent for service of process is lead petitioner Casey Taylor, neither the California Attorney General’s Registry of Charitable Trusts website nor the IRS Exempt Organizations Select Check website recognize the “Students First Foundation” as a registered charity as of January 5, 2017. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 38 of 59 Therefore, Ms. Taylor is simultaneously the agent for service of process of an apparently for-profit corporation that purports to “support funding and facility options for potential expansion” of Achieve charter schools, the current Achieve K-8 charter school superintendent, and the lead petitioner and superintendent for the proposed ACHS 9-12 charter school, yet the ACHS charter petition’s “School Leadership Organizational Chart” fails to identify “Students First Foundation” and its role in the Achieve organization. 1. The ACHS charter petition fails to contain a reasonably comprehensive description of the proposed ACHS’s governance structure because it is in reality a material revision. The ACHS charter petition’s shared governance structure and plans to share resources, facilities, and staff between the existing Achieve K-8 and the proposed 9-12 charter schools indicate that the ACHS charter petitioners are in reality attempting to materially revise their existing K-8 charter by expanding Achieve’s current K-8 program to serve students in grades 912. The California Department of Education “Charter School Oversight and Monitoring Guidance from the California Department of Education Charter Schools Division for charter school authorizers” webpage, available at http://www.cde.ca.gov/sp/cs/as/authguidance2.asp, states: “Charter Petition Material Revisions Material [revisions] can be a change to any aspect of a petition. Some examples of material revisions include:  Expansion to additional grade levels  Change in grade levels served  Expansion to additional sites  Changes to the governance structure  Changes to the admissions preference/policy  Changes to the educational program  Changes to enrollment.” (Emphasis added.) By submitting the ACHS charter petition, which simply adds to the grades served at Achieve’s existing K-8 charter school and which changes the existing Achieve charter school’s governance structure, ACHS’s charter petition is in reality a material revision. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 39 of 59 Under Education Code section 47607(a): “(1) . . . A material revision of the provisions of a charter petition may be made only with the approval of the authority that granted the charter. The authority that granted the charter may inspect or observe any part of the charter school at any time. (2) Renewals and material revisions of charters are governed by the standards and criteria in Section 47605, and shall include, but not be limited to, a reasonably comprehensive description of any new requirement of charter schools enacted into law after the charter was originally granted or last renewed.” (Emphasis added.) The ACHS charter petitioners are attempting to expand Achieve’s existing K-8 program to a grades K-12 charter school by circumventing the statutory statutorily required submission of a material revision, in violation of Education Code 47607(a). It is clear ACHS charter petitioners are attempting to take advantage of the fact that Education Code section 47605(j) provides for the right to appeal the denial of a charter petition, whereas under Education Code section 47607(a), “[a] material revision of the provisions of a charter petition may be made only with the approval of the authority that granted the charter.” In fact, following a meeting between the District superintendent and the principal/superintendents of three of the District’s four charter schools held in July 2016, Ms. Taylor stated to District personnel that Ms. Taylor intended to open a new grades K-12 charter school with a new charter number and to close the existing grades K-8 charter school. Ms. Taylor also stated that she wanted to submit a new petition rather than material revision because she could not risk the District denying the material revision. The PUSD Board of Trustees therefore finds that the ACHS charter petition fails to contain a reasonably comprehensive description of the governance structure of the proposed ACHS charter school. C. The ACHS Charter Petition Fails To Contain A Reasonably Comprehensive Description Of The Qualifications To Be Met By Individuals To Be Employed By The Proposed Achieve Charter High School. [Education Code section 47605(b)(5)(E)] Education Code section 47605(b)(5)(E) requires that the ACHS charter petition contain a reasonably comprehensive description of “[t]he qualifications to be met by individuals to be employed by the charter school.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 40 of 59 California Code of Regulations, Title 5, section 11967.5.1(f)(5) requires, at a minimum, the qualifications to be met by individuals employed by the school: “(A) Identify general qualifications for the various categories of employees the school anticipates (e.g., administrative, instructional, instructional support, non-instructional support). The qualifications shall be sufficient to ensure the health, and safety of the school’s faculty, staff, and pupils. “(B) Identify those positions that the charter school regards as key in each category and specify the additional qualifications expected of individuals assigned to those positions. “(C) Specify that the requirements for employment set forth in applicable provisions of law will be met, including, but not limited to credentials as necessary.” (Emphasis added.) The ACHS charter petition does not to contain a reasonably comprehensive description of the qualifications to be met by individuals to be employed in ACHS’s proposed 9-12 program because the ACHS charter petition’s language concerning the qualifications to be met by individuals to be employed by the charter school fails to demonstrate that the individuals employed will have the skills or experience necessary to implement and operate a grades 9-12 charter high school program. 1. Qualifications of the Achieve Charter High School Superintendent The ACHS charter petition provides the following description of the ACHS “Charter School Superintendent” at page 110: “The Superintendent is hired by the Achieve Charter School of Paradise, Inc. Board of Directors to oversee the operations and staff of both the Achieve Charter School K-8 program and the Achieve Charter High School. The Superintendent is responsible for overseeing the operations of Achieve Charter School of Paradise, Inc. in all of its aspects, including working with the Charter School Board of Directors, the Parent Advisory Councils from both schools, the School District or County authorizer, students, parents, and community members and the other governing bodies specified by local and state law.” (Emphasis added.) However, the Achieve charter petition fails to require the knowledge, skills, and abilities to qualify a candidate to “oversee the operations and staff of both the Achieve Charter School K8 program and the Achieve Charter High School.” (Emphasis added.) Copyright 2017 © Paradise Unified School District. All rights reserved. Page 41 of 59 Page 112 of the ACHS charter petition lists the following “knowledge, skills, and abilities” required of the ACHS Superintendent:  Superb communication and community-buildings skills  Entrepreneurial passion  Experience in school management  Knowledge of charter school management  Deep knowledge of curriculum development and program design  A record of success in developing teachers  California Teaching Credential  Administrative Credential or Master’s Degree  5 plus years teaching and/or administrative experience. Although the ACHS charter petitioners propose to operate a grades 9-12 high school, the ACHS charter petition fails to require high school teaching or administrative experience of the proposed ACHS superintendent, the ACHS employee responsible for overseeing the operations of the proposed ACHS charter school as stated in ACHS’s charter petition at page 110. 2. Qualifications of the Achieve Charter High School Chief Business Officer The ACHS charter petition provides the following description of the duties and responsibilities of the ACHS “Chief Business Officer” at page 113: “The Chief Business Officer is responsible for all fiscal management, reporting and business operations for Achieve Charter High School, as well as those of the Achieve Charter School K-8. The Chief Business Officer reports directly to the Superintendent, provides information to the Achieve Charter School of Paradise Inc. Board of Directors, and is available to answer financial and business related questions from all stakeholders. Duties include but are not limited to:  Development and administration of school budgets in accordance with generally accepted accounting principles;  Oversee budget line item revisions when necessary and report changes regularly to the Board; Copyright 2017 © Paradise Unified School District. All rights reserved. Page 42 of 59  Presentation of monthly financial reports to the Charter School board;  Oversee the annual financial audit;  Manage the following business services: accounts payable and receivable, payroll, purchasing, deposits, reimbursements, budget development, revenue projections, vendor contracts, independent contractors, asset inventory, and fundraising oversight;  Prepare and submit the following reports: National School Lunch Program, CALPADS and Student Information, attendance reporting, State & Local Fiscal Reporting, Board/Parent Advisory Council Presentations;  Oversee and update personnel files, contracts, benefits, and human resource policies;  Oversee the Charter School insurance program, safety compliance, and liability policies;  Attend meetings with the Chief Financial Officer of the District or authorizer on fiscal oversight issues periodically;  Provide all legally required financial reports to the District, County, and State.” Pages 113 and 114 of the ACHS charter petition list the following “knowledge, skills, and abilities” required of the ACHS Chief Business Officer:  Superb accounting skills  Detail oriented  Entrepreneurial passion  Experience in business services  Knowledge of charter school finance  Bachelor’s Degree (Business, Human Resources)  A record of success in managing budgets and businesses Copyright 2017 © Paradise Unified School District. All rights reserved. Page 43 of 59  5 plus years finance experience  Charter School CBO training is strongly preferred and will be required upon hire if not already obtained prior to hire. Although the ACHS Chief Business Officer is “responsible for all fiscal management, reporting and business operations for Achieve Charter High School,” the ACHS charter petition does not require prospective ACHS Chief Business Officers to possess any experience in the “fiscal management, reporting and business operations” of a high school. The ACHS charter petitioners apparently do not intend to comply with their own charter petition by hiring a Chief Business Officer who meets the qualifications listed in the ACHS charter petition, because the ACHS charter petition requires a Bachelor’s Degree in either Business or Human Resources while ACHS’s proposed Chief Business Officer Karen Baber does not possess a Bachelor’s Degree in either Business nor Human Resources. Instead, Ms. Baber’s degree listed at page 114 of the ACHS charter petition is a “Bachelors of Psychology and Child Development.” 3. Qualifications of the Achieve Charter High School Principals The ACHS charter petition provides the following descriptions of the duties and responsibilities of the ACHS Principals at page 116: “The School Principals will be the instructional leaders at Achieve Charter High School and will be responsible for ensuring the School and students achieve outcomes outlined in this charter petition. Two Co-Principal positions will be developed with responsibilities focused on cultivating and overseeing the culture and climate of ACHS, and on developing and overseeing the instruction and curriculum of ACHS. Delineated duties will be developed based on the Co-Principals areas of experience, passion, and expertise. The Achieve Charter High School Principals report to the superintendent.” Pages 117 of the ACHS charter petition lists the following “knowledge, skills, and abilities” required of the ACHS Principals:  Superb communication and community-building skills  Deep knowledge of curriculum development and program design  Experience in performance assessment and project-based learning  A record of success in developing teachers Copyright 2017 © Paradise Unified School District. All rights reserved. Page 44 of 59  Entrepreneurial passion  Knowledge of school management  California Teaching Credential  5 plus years teaching and/or administrative experience  Administrative Credential or Master’s degree in education is preferred. Although the ACHS charter petition states that “school principals will be the instructional leaders at Achieve Charter High School and will be responsible for ensuring the School and students achieve outcomes outlined in this charter petition,” the ACHS charter petition fails to require any high school teaching or administrative experience of either of the ACHS principals. Not only does the ACHS charter petition fail to list relevant experience in a high school setting sufficient to oversee a high school, but the individuals identified as the Principal of Curriculum and Instruction, Ryan Van Roekel, and the Principal of Culture and Climate, Kelli Gordon, both lack any teaching or administrative experience at a high school level. The ACHS charter petition also fails to list a single subject teaching credential for either Mr. Van Roekel or Ms. Gordon. Further, searching for Mr. Van Roekel and Ms. Gordon on the California Commission on Teacher Credentialing website’s “Search for an Educator” tool results in finding that neither Mr. Van Roekel nor Ms. Gordon have ever possessed a single subject teaching credential. In fact, as stated above, the only high school experience possessed by either Mr. Van Roekel or Ms. Gordon is Ms. Gordon’s experience as a “High School Ski Team coach” and a “Senior Project Mentor and Judge Panelist” at Paradise High School. 4. Qualifications of the Achieve Charter High School Special Education Coordinator The ACHS charter petition provides the following descriptions of the duties and responsibilities of the ACHS Special Education Coordinator at page 114: “The Special Education Coordinator reports directly to the Superintendent and oversees the Special Education program at both Achieve Charter High School and Achieve Charter K-8.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 45 of 59 Page 115 of the ACHS charter petition sets out the following “required knowledge, skills, and abilities” for the ACHS Special Education Coordinator:  Deep knowledge and experience in Special Education Law  Deep knowledge and experience in the Individual Education Program Process  Knowledge of Special Education timelines and compliance issues  Superb communication skills  Ability to work with Special Education and general education staff  Strong organizational skills  Ability to form strong relationships with students and parents  Understanding of State Standards, State required testing, and appropriate accommodations. However, absent from ACHS’s stated “required knowledge, skills, and abilities” for the ACHS Special Education Coordinator are any educational requirements, including whether a Master’s degree, a Bachelor’s degree, or even a high school degree is required for the ACHS Special Education Coordinator position. Additionally, the ACHS charter petition’s stated “required knowledge, skills, and abilities” for the ACHS Special Education Coordinator position fail to state the required experience with adequate specificity to ensure the qualifications of future ACHS Special Education Coordinators. The PUSD Board of Trustees therefore finds that the ACHS charter petition fails to contain a reasonably comprehensive description of “[t]he qualifications to be met by individuals to be employed by the charter school.” D. The ACHS Charter Petition Fails To Contain A Reasonably Comprehensive Description Of The Proposed Achieve Charter High School’s Admission Requirements. [Education Code section 47605(b)(5)(H)] Education Code section 47605(b)(5)(H) requires charter petitions to contain a reasonably comprehensive description of pupil admission requirements, if applicable. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 46 of 59 California Code of Regulations, Title 5, section 11967.5.1(f)(8) requires: “To the extent admission requirements are included in keeping with Education Code section 47605(b)(5)(H), the requirements shall be in compliance with the requirements of Education Code section 47605(d) and any other applicable provision of law.” The ACHS charter petition identifies the proposed ACHS charter school’s admission preferences at page 127: “Admission preferences in the case of a public random drawing shall be given to the following students in the following order: 1. Siblings of enrolled students 2. Children and/or grandchildren of employees, limited to 10% of enrollment 3. Students who reside within the boundaries of the District 4. Students who are currently enrolled in Ponderosa Elementary School and students who reside in the Ponderosa Elementary School attendance area (for purposes of SB 740 Charter School Facility Grant Program) 5. All other applicants.” Education Code section 47605(d)(2)(B) permits admission preferences at the discretion of the chartering authority on an individual school basis and only if consistent with the law. Education Code section 47605(d)(2)(B) provides: “If the number of pupils who wish to attend the charter school exceeds the school’s capacity, attendance, except for existing pupils of the charter school, shall be determined by a public random drawing. Preference shall be extended to pupils currently attending the charter school and pupils who reside in the district except as provided for in Section 47614.5. Other preferences may be permitted by the chartering authority on an individual school basis and only if consistent with the law.” Therefore, the decision whether to permit an admissions preference for siblings of enrolled students and children and grandchildren of ACHS employees is to be made by the PUSD Board of Trustees as the chartering authority, and not by the ACHS charter petitioners. The PUSD Board of Trustees hereby declines to authorize the proposed unlawful admissions preferences contained in the ACHS charter petition. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 47 of 59 The extension of admissions preferences to children and grandchildren of Achieve employees also violates Education Code section 49011(b)(4) in that “privileges related to educational activities” (i.e. enrollment preference) are “based on whether or not the school received money or donations of goods or services from a pupil or a pupil’s parents or guardians.” Faculty members of ACHS would provide the charter school with goods or services by way of their employment and/or support of ACHS. Additionally, Education Code section 47614.5(c)(2) states: “A charter schoolsite is eligible for funding pursuant to this section if the charter schoolsite meets either of the following conditions: “(A) The charter schoolsite is physically located in the attendance area of a public elementary school in which 55 percent or more of the pupil enrollment is eligible for free or reduced-price meals and the charter schoolsite gives a preference in admissions to pupils who are currently enrolled in that public elementary school and to pupils who reside in the elementary school attendance area where the charter schoolsite is located. “(B) Fifty-five percent or more of the pupil enrollment at the charter schoolsite is eligible for free or reduced-price meals.” The extension of admissions preferences first to siblings of enrolled students, then to children and grandchildren of ACHS employees, then to students who reside within the boundaries of the District, and students who are currently enrolled in Ponderosa Elementary School and students who reside in the Ponderosa Elementary School attendance area, violates the mandate under Education Code section 47614.5(c)(2) requiring that preference in admissions must be given to “pupils who are currently enrolled in that public elementary school and to pupils who reside in the elementary school attendance area where the charter schoolsite is located.” Furthermore, the ACHS charter petition’s admissions preferences are inconsistent with the admissions preferences stated in ACHS’s Student and Guardian Handbook, as shown in Chart 2 below: Copyright 2017 © Paradise Unified School District. All rights reserved. Page 48 of 59 Chart 2: Comparing the ACHS Charter Petition’s Admissions Preferences as stated in the November 15, 2016 ACHS Charter Petition and ACHS’s Student and Guardian Handbook Charter Petition, pg. 127 Student and Guardian Handbook, pgs. 3-4 1. Siblings of enrolled students 1. Siblings of enrolled students 2. Children and/or grandchildren of employees, limited to 10% of enrollment 2. Children and/or grandchildren of employees, limited to 10% of enrollment 3. Students who reside within the boundaries of the District 3. Students who qualify for free or reduced price meals 4. Students who are currently enrolled in Ponderosa Elementary School and students who reside in the Ponderosa Elementary School attendance area (for purposes of SB 740 Charter School Facility Grant Program) 4. Students who reside within the boundaries of the District 5. All other applicants. 5. Students who are currently enrolled in Paradise Elementary School and students who reside in the Paradise Elementary School attendance area (for purposes of the SB 740 Charter School Facility Grant Program) 6. All other applicants The ACHS Student and Guardian Handbook also violates section 47614.5(c)(2) by extending admissions preferences to siblings of enrolled students, then to children and grandchildren of Achieve employees, and then to students who qualify for free or reduced price meals, students who reside within the boundaries of the District, and students who are currently enrolled in Paradise Elementary School and students who reside in the Paradise Elementary School attendance area, instead of offering preference in admissions to “pupils who are currently enrolled in that public elementary school and to pupils who reside in the elementary school attendance area where the charter school is located.” Because ACHS’s charter petition and its supporting Student and Guardian Handbook are inconsistent and both violate California Education Code section 47614.5(c)(2), the ACHS charter petitioners have failed to provide a reasonably comprehensive description of the proposed ACHS charter school’s admission requirements. The ACHS charter petition also indicates that ACHS’s admission policies may unlawfully deny students admission on the basis of their citizenship status. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 49 of 59 The ACHS charter petition states at page 26: “Upon admission, students will be required to submit an enrollment packet that includes the following:  Student enrollment form  Proof of Immunization  Home Language Survey  Completion of Emergency Medical Information Form  Proof of minimum age requirements, e.g. birth certificate  Release of records.” On May 8, 2014, the United States Department of Justice and the United States Department of Education sent a “Dear Colleague” letter to school districts throughout the United States. The letter included an attachment entitled, “Fact Sheet: Information on the Rights of All Children to Enroll in School.” The May 8, 2014 “Dear Colleague” letter cites Plyler v. Doe, a 1982 United States Supreme Court case, in which the Supreme Court held that a state may not deny access to public education to any child residing in the state regardless of whether the child is undocumented or a non-citizen, or if his parents are undocumented or are non-citizens. The “Dear Colleague” letter states in part, “[local education agencies] must ensure that [they] do not discriminate on the basis of race, color, or national origin, and that students are not barred from enrolling in public schools at the elementary and secondary level on the basis of their own citizenship or immigration status or that of their parents or guardians.” The fact sheet attached to the “Dear Colleague” letter further states that school officials may request documents verifying the age of the student but may not refuse to enroll a student because he or she lacks a birth certificate, or has records that indicate a foreign place of birth. The PUSD Board of Trustees therefore finds the ACHS charter petition fails to contain a reasonably comprehensive description of the pupil admission requirements for the proposed ACHS charter school. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 50 of 59 E. The ACHS Charter Petition Fails To Contain A Reasonably Comprehensive Description Of The Procedures By Which Pupils Can Be Suspended Or Expelled From The Proposed Achieve Charter High School. [Education Code Section 47605(b)(5)(J)] Education Code section 47605(b)(5)(J) requires that the ACHS charter petition contain a reasonably comprehensive description of “[t]he procedures by which pupils can be suspended or expelled.” California Code of Regulations, Title 5, section 11967.5.1(f)(10) requires that charter petition suspension and expulsion procedures at a minimum: “(A) Identify a preliminary list, subject to later revision pursuant to subparagraph (E), of the offenses for which students in the charter school must (where non-discretionary) and may (where discretionary) be suspended and, separately, the offenses for which students in the charter school must (where non-discretionary) or may (where discretionary) be expelled, providing evidence that the petitioners reviewed the offenses for which students must or may be suspended or expelled in non-charter public schools. (B) Identify the procedures by which pupils can be suspended or expelled. “(C) Identify the procedures by which parents, guardians, and pupils will be informed about reasons for suspension or expulsion and of their due process rights in regard to suspension or expulsion. “(D) Provide evidence that in preparing the lists of offenses specified in subparagraph (A) and procedures specified in subparagraphs (B) and (C), the petitioners reviewed the lists of offenses and procedures that apply to students attending noncharter public schools, and provide evidence that the charter petitioners believe their proposed lists of offenses and procedures provide adequate safety for students, staff, and visitors to the school and serve the best interests the school's pupils and their parents (guardians). “(E) If not otherwise covered under subparagraphs (A), (B), (C), and (D): “1. Provide for due process for all pupils and demonstrate an understanding of the rights of pupils with disabilities in regard to suspension and expulsion. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 51 of 59 “2. Outline how detailed policies and procedures regarding suspension and expulsion will be developed and periodically reviewed, including, but not limited to, periodic review and (as necessary) modification of the lists of offenses for which students are subject to suspension or expulsion.” (Emphasis added.) The proposed ACHS charter school’s suspension and expulsion policies fail to “demonstrate an understanding of the rights of pupils with disabilities in regard to suspension and expulsion” and deny ACHS pupils with disabilities their legal right to due process as required by California Code of Regulations, Title 5, section 11967.5.1(f)(10) because the ACHS charter petition fails to “provide for due process for all pupils[.]” (Emphasis added.) The ACHS charter petition states at page 145: “The pupil shall have no right of appeal from expulsion from the Charter School as the Charter School Board of Directors’ decision to expel shall be final.” The proposed ACHS charter school’s failure to provide pupils an opportunity to be heard on appeal clearly violates ACHS pupils’ due process rights under California Code of Regulations, Title 5, section 11967.5.1(f)(10)(E)(1), which requires that charter petitioners provide for due process for all pupils. The proposed ACHS charter school’s suspension and expulsion policies also fail to “demonstrate an understanding of the rights of pupils with disabilities in regard to suspension and expulsion” and deny ACHS students with disabilities their legal right to due process as required by California Code of Regulations, Title 5, section 11967.5.1(f)(10) because the ACHS charter petition fails to comply with federal law governing the procedures for a “manifestation determination.” Code of Federal Regulations, Title 34, section 300.530(e) states: “(e) Manifestation determination. (1) Within 10 school days of any decision to change the placement of a child with a disability because of a violation of a code of student conduct, the LEA, the parent, and relevant members of the child's IEP Team (as determined by the parent and the LEA) must review all relevant information in the student's file, including the child's IEP, any teacher observations, and any relevant information provided by the parents to determine‒ (i) If the conduct in question was caused by, or had a direct and substantial relationship to, the child's disability; or Copyright 2017 © Paradise Unified School District. All rights reserved. Page 52 of 59 (ii) If the conduct in question was the direct result of the LEA's failure to implement the IEP. (2) The conduct must be determined to be a manifestation of the child's disability if the LEA, the parent, and relevant members of the child's IEP Team determine that a condition in either paragraph (e)(1)(i) or (1)(ii) of this section was met. (3) If the LEA, the parent, and relevant members of the child's IEP Team determine the condition described in paragraph (e)(1)(ii) of this section was met, the LEA must take immediate steps to remedy those deficiencies.” (Emphasis added.) The ACHS charter petition fails to state that the proposed ACHS will comply with Code of Federal Regulations, Title 34, section 300.530(e)(3)’s requirement that “immediate steps” must be taken “to remedy [the] deficiencies” of the LEA’s failure to implement the IEP. The PUSD Board of Trustees therefore finds that ACHS charter petition’s pupil suspension and expulsion procedures fail to meet the minimum requirements of California Code of Regulations, Title 5, section 11967.5.1(f)(10), and the ACHS charter petition therefore fails to contain a reasonably comprehensive description of the pupil suspension and expulsion policies and procedures to be used at the proposed ACHS. F. The ACHS Charter Petition Fails To Contain A Reasonably Comprehensive Description Of The Manner By Which Staff Members Of The Proposed Achieve Charter High School Will Be Covered By The Public Employees’ Retirement System. [Education Code section 47605(b)(5)(K)] Education Code section 47605(b)(5)(K) requires charter petitions to contain a reasonably comprehensive description of “[t]he manner by which staff members of the charter school will be covered by the State Teachers’ Retirement System, the Public Employees’ Retirement System or federal social security.” California Code of Regulations, Title 5, section 11967.5.1(f)(11) requires that: “The manner by which staff members of the charter schools will be covered by the State Teachers’ Retirement System, the Public Employees’ Retirement System, or federal social security, as required by Education Code section 47605(b)(5)(K), at a minimum, specifies the positions to be covered under each system and the staff who will be responsible for ensuring that appropriate arrangements for that coverage has been made.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 53 of 59 The ACHS charter petition states at page 150: “Employees at Achieve Charter School shall participate in individual 403(b) retirement plans as applicable to the position, along with federal social security. The Chief Business Officer shall be responsible for ensuring that appropriate arrangements for coverage are made.” The ACHS budget narrative states: “Employees participate in a 403-b retirement savings program; ACHS contributes 8% of salary for eligible employees.” (Emphasis added.) The ACHS charter petition fails to comply with 5 CCR section 11967.5.1(f)(11) because it does not specify “the positions to be covered under each system or” to identify the certificated and classified ACHS staff members who are eligible to participate in the retirement plans. The PUSD Board of Trustees therefore finds that the ACHS charter petition fails to contain a reasonably comprehensive description of the manner by which ACHS staff members will be covered by the Public Employees’ Retirement System. G. The ACHS Charter Petition Fails To Contain A Reasonably Comprehensive Description Of Dispute Resolution Procedures. [Education Code section 47605(b)(5)(N)] Education Code section 47605(b)(5)(N) requires charter petitions to include the procedures to be followed by the charter school and the entity granting the charter to resolve disputes relating to provisions of the charter. The ACHS charter petition fails to provide a reasonably comprehensive description of ACHS’s dispute resolution procedures because the ACHS charter petition does not clearly define “internal disputes” as used in the ACHS charter petition’s description of dispute resolution procedures. The ACHS charter petition states at page 154: “The Charter School shall have an internal dispute resolution process to be used for all internal disputes related to the Charter School’s operations.” The ACHS charter petition fails to contain or define “internal disputes related to the Charter School’s operations” that will be resolved under the school’s internal policies, including whether complaints of bullying, unauthorized student fees, or other uniform complaints constitute “internal disputes.” The ACHS charter petition also fails to describe what procedures or policies will be used to resolve such disputes. Copyright 2017 © Paradise Unified School District. All rights reserved. Page 54 of 59 The Student and Guardian Handbook included as Appendix C to the ACHS charter petition states at page 23 that: “The Charter School shall develop a comprehensive policy to prevent and immediately remediate any concerns about discrimination or harassment at the Charter School (including employee to employee, employee to student, and student to employee misconduct). Misconduct of this nature is very serious and will be addressed in accordance with the Charter School's discrimination and harassment policies.” (Emphasis added.) The ACHS charter petition fails to contain the proposed charter school’s “comprehensive” anti-discrimination and harassment policies and procedures. There is no information about ACHS’s procedures for investigating or remediating allegations of harassment or discrimination. Instead, the ACHS charter petition claims that it “shall develop” comprehensive antidiscrimination and harassment policies and procedures. Furthermore, Education Code section 47605(b)(5)(N) requires the ACHS charter petition to describe the “procedures to be followed by the charter school and the entity granting the charter to resolve disputes relating to provisions of the charter.” (Emphasis added.) The ACHS charter petition fails to describe such procedures. The ACHS charter petition states at page 154: “If mediation does not resolve the dispute, either party may pursue any other remedy available under the law.” The ACHS charter petition fails to contain procedures to actually resolve disputes because there may be no “other remedy available under law” to resolve the dispute. The PUSD Board of Trustees therefore finds that the ACHS charter petition fails to contain a reasonably comprehensive description of the proposed ACHS’s dispute resolution procedures. H. The ACHS Charter Petition Fails To Meet The Minimum Requirements For Providing A Reasonably Comprehensive Description Of The Procedures To Be Used If The Charter School Closes. [Education Code section 47605(b)(5)(O)] Education Code section 47605(b)(5)(O) requires charter petitions to contain a reasonably comprehensive description of the procedures to be used if the charter school closes. California Code of Regulations, Title 5, section 11962, “Definition of Procedures for School Closure” states that “procedures” as in “description of the procedures to be used if the charter school closes” means, at a minimum, each of the following: Copyright 2017 © Paradise Unified School District. All rights reserved. Page 55 of 59 “(a) Designation of a responsible entity to conduct closure-related activities. “(b) Notification of the closure of the charter school to parents (guardians) of pupils, the authorizing entity, the county office of education . . ., the special education local plan area in which the school participates, the retirement systems in which the school's employees participate . . . and the California Department of Education . . . “(c) Provision of a list of pupils in each grade level and the classes they have completed, together with information on the pupils' district of residence, to the responsible entity designated in subdivision (a). “(d) Transfer and maintenance of all pupil records, all state assessment results, and any special education records to the custody of the responsible entity designated in subdivision (a), except for records and/or assessment results that the charter may require to be transferred to a different entity. “(e) Transfer and maintenance of personnel records in accordance with applicable law. “(f) Completion of an independent final audit within six months after the closure of the school that may function as the annual audit . . . “(g) Disposal of any net assets remaining after all liabilities of the charter school have been paid or otherwise addressed . . . “(h) Completion and filing of any annual reports required pursuant to Education Code section 47604.33. “(i) Identification of funding for the activities identified in subdivisions (a) through (h).” (Emphasis added.) The ACHS charter petition states at page 155: “Closure of the Charter School will be documented by official action of the Charter School Board. The action will identify the reasons for closure. The official action will also identify an entity and person or persons responsible for closure-related activities.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 56 of 59 The ACHS charter petition fails to meet the minimum requirements of Education Code section 47605(b)(5)(O) because California Code of Regulations, Title 5, section 11962(a) requires “[d]esignation of a responsible entity to conduct closure-related activities” within the charter petition, not at the time of closure. The ACHS charter petition also fails to adequately describe the “[d]isposal of any net assets remaining after all liabilities of the charter school have been paid or otherwise addressed” as required by California Code of Regulations, Title 5, section 11962(g). Page 156 of the ACHS charter petition states: “On closure of the Charter School, all assets of the Charter School, including but not limited to all leaseholds, personal property, intellectual property and all ADA apportionments and other revenues generated by students attending the Charter School, remain the sole property of the Charter School and shall be distributed in accordance with the Articles of Incorporation upon the dissolution of the nonprofit public benefit corporation. Any assets acquired from the District or District property will be promptly returned upon Charter School closure to the District. The distribution shall include return of any grant funds and restricted categorical funds to their source in accordance with the terms of the grant or state and federal law, as appropriate, which may include submission of final expenditure reports for entitlement grants and the filing of any required Final Expenditure Reports and Final Performance Reports, as well as the return of any donated materials and property in accordance with any conditions established when the donation of such materials or property was accepted.” (Emphasis added.) The above ACHS charter petition language references provisions in Achieve’s Articles of Incorporation related to distribution of assets, but fails to specifically describe how any net assets remaining after the liabilities of the charter school have been paid will be disposed of. The Articles of Incorporation attached to the ACHS charter petition as Appendix G state: “On the dissolution or winding up of the corporation, its assets remaining after payment of, or provision for payment of, all debts and liabilities of this corporation, shall be distributed to a nonprofit fund, foundation, or corporation which is organized and operated exclusively for educational purposes and which has established its tax-exempt status under Section 501(c)(3) of the Internal Revenue Code.” Copyright 2017 © Paradise Unified School District. All rights reserved. Page 57 of 59 Because the Achieve nonprofit corporation is not required to dissolve upon ACHS’s closure, it is unclear how the net assets remaining will be disposed of after the liabilities of the charter school have been paid. As the charter petitioners acknowledge at page 9 of the ACHS charter petition, the proposed ACHS 9-12 charter school and existing Achieve K-8 charter school will be governed by the same Board of Directors. Even if the proposed ACHS 9-12 charter school closes, the Achieve nonprofit corporation and the Achieve K-8 charter school may still be operating. Neither the ACHS charter petition nor the Articles of Incorporation specifically describe how net assets remaining after any liabilities of ACHS have been paid will be disposed upon closure of the proposed ACHS. Further, because both charter schools are to be governed and operated by the same corporation, it is unclear how the District or Achieve could distinguish ACHS’s liabilities from Achieve Charter School of Paradise’s liabilities. The ACHS charter petitioners admit at page 9 that the existing K-8 school and the proposed 9-12 school will share staff and resources. The PUSD Board of Trustees therefore finds that the ACHS charter petition fails to contain a reasonably comprehensive description of the procedures for charter school closure as required by Education Code section 47605(b)(5)(O). Copyright 2017 © Paradise Unified School District. All rights reserved. Page 58 of 59 NOW THEREFORE, BE IT FURTHER RESOLVED that the terms of this Resolution are severable. Should it be determined that one or more of the findings and/or the factual determinations supporting the findings are invalid, the remaining findings and/or factual determinations and the denial of the November 15, 2016 Achieve Charter High School charter petition shall remain in full force and effect. In this regard, the PUSD Board of Trustees specifically find that each factual determination, in and of itself, is a sufficient basis for the finding it supports, and each such finding, in and of itself, is a sufficient basis for denial. The foregoing Resolution No. 16/17:16 was considered, passed and adopted by the PUSD Board of Trustees at its special meeting of January 12, 2017. DENYING THE NOVEMBER 15, 2016 ACHIEVE CHARTER HIGH SCHOOL CHARTER PETITION AYES: NOES: ABSENT: ABSTAIN: STATE OF CALIFORNIA COUNTY OF BUTTE Donna Colosky, Secretary, Board of Trustees of the Paradise Unified School District of Butte County, California, hereby certifies that the above foregoing Resolution was duly and regularly adopted by said Board at a special meeting thereof held on the 12th of January 2017 and passed by a _____ vote of said Board. IN WITNESS WHEREOF I have hereunto set my hand and seal this January 12, 2017. ____________________________________ Donna Colosky Secretary, Board of Trustees Copyright 2017 © Paradise Unified School District. All rights reserved. Page 59 of 59 EXHIBIT A Onisko and Scholz, LLP CPA Review and Analysis of the Achieve Charter High School Charter Petition and Budget 5000 E. Spring Street Suite 200 Long Beach, California 90815-5213 Telephone (562)420-3100 Facsimile (562)420-3232 January 6, 2017 Members of the Paradise Unified School District Board of Trustees Ms. Donna Colosky Superintendent Paradise Unified School District 6696 Clark Road Paradise, CA 95969 Re: Review and Analysis of the Achieve Charter High School Charter Petition and Budget as Submitted on November 15, 2016 Dear Ms. Colosky and Members of the Paradise Unified School District Board of Trustees: Thank you for providing the Achieve Charter High School (ACHS) November 15, 2016 charter school petition and Budget for our review. As you requested, we have reviewed and analyzed the ACHS November 15, 2016 charter school petition and Budget as submitted by the Achieve Charter High School charter petitioners. Our findings are presented in this report. EXECUTIVE SUMMARY After a comprehensive review of the Achieve Charter High School charter petition and Budget as submitted to the Paradise Unified School District on November 15, 2016, we conclude that the Achieve Charter High School charter petition's Budget presents an unrealistic financial and operational plan for the proposed Achieve Charter High School. Our findings can be summarized as follows: 1) The Achieve Charter High School charter petition’s Budget omitted $100,000 in capital outlay costs. The omitted $100,000 in capital outlay costs decreases ACHS’s year one ending fund balance from $116,102 to $16,102. ACHS’s 2017-2018 year one adjusted ending fund balance of $16,102 represents only a 1% financial reserve and fails to meet the 5% fund balance financial reserve percentage required by California Code of Regulations, Title 5, Section 15450. 2) The ACHS charter petitioners failed to account for $232,350 out of $375,000 in Public Charter School Grant Program (PCSGP) restricted start-up funds, present one-time start-up costs that may be unallowable ongoing costs, commingle restricted start-up funds with ongoing unrestricted funds, and use $180,650 in restricted un-spent startup funds as part of ACHS’s year one beginning fund balance to subsidize year one unrestricted operational costs and cash flow. The ACHS charter petitioners rely heavily on loans totaling $543,818 from Achieve Charter School of Paradise, Inc., the nonprofit operating Achieve Charter School K-8 (ACS). There are no Achieve Charter School of Paradise, Inc. commitment letters, Board minutes authorizing loans, or other loan documents included in the ACHS charter petition or Budget notes to support ACHS’s loans alleged in the charter petition and Budget notes. The ACHS charter petition and Budget notes fail to provide any narrative or analysis of how ACS’s budget and cash flow may or may not be impacted by loaning funds to ACHS. Furthermore, loaning funds from Achieve Charter School of Paradise, Inc. as funds from ACS to ACHS may be considered an unallowable gift of public funds. 3) The Achieve Charter High School either failed to present a year one 2017-2018 Cash Flow Statement or mislabeled their year one Cash Flow Statement as 2016-2017 instead of 2017-2018. The ACHS charter petitioners fail to describe how they arrived at their cash flow revenues and expenditures accrual amounts. Evaluating the ACHS charter petition as submitted by the ACHS charter petitioners means that the ACHS charter petition failed to present a 2017-2018 Cash Flow Statement. 4) The Achieve Charter High School charter petition’s Budget fails to present sufficient detailed Budget notes that clearly describe ACHS financial budget projections pursuant to California Code of Regulations, Title 5, section 11967.5.1(c)(3)(B). ACHS fails to provide supplementary information describing how the proposed Achieve Charter High School charter school’s revenues, costs, and cash flows were projected, either through historical data or comparative analytics from other charter schools or school districts of similar type, size and location. 5) The Achieve Charter High School charter petition’s Budget fails to specify the required criteria for the selection of contractors as required by California Code of Regulations, Title 5, section 11967.5.1(c)(3)(A). The ACHS Budget notes fail to identify and present the names and detailed descriptions of the services to be provided by ACHS’s budgeted professional and consulting service providers, especially those vendors that may be affiliated with or related to the ACHS charter petitioners in any way. 6) The Achieve Charter High School charter petition’s Budget fails to identify special education encroachment costs in the ACHS Budget or to explain why special education encroachment costs are not budgeted. PARADISE UNIFIED SCHOOL DISTRICT STANDARDS FOR REVIEWING THE ACHIEVE CHARTER HIGH SCHOOL CHARTER PETITION AND BUDGET The Paradise Unified School District (PUSD) standards for reviewing charter petitions comply with Education Code 47605(g) and the California Code of Regulations, Title 5, sections 11960-11969. Education Code Section 47605(g) states, “The governing board of a school district shall require that the petitioner or petitioners provide information regarding the proposed operation and potential effects of the charter school, including, but not limited to, the facilities to be used by the school, the manner in which administrative services of the school are to be provided, and potential civil liability effects, if any, upon the school and upon the school district. The description of the facilities to be used by the charter school shall specify where the school intends to locate. The petitioner or petitioners shall also be required to provide financial statements that include a proposed first-year operational budget, including startup costs, and cash flow and financial projections for the first three years of operation.” 2 The California Code of Regulations (“CCR”) identifies the critical importance in the charter petition review process of a charter school’s budget, budget notes and assumptions at Title 5, Subchapter 19-Charter Schools, Article 2-General Provisions. CCR, Title 5, section 11967.5.1(c)(3)(B) states that an unrealistic financial and operational plan for the proposed charter school exists when the charter or supporting documents do not adequately include: 1. “[A]t a minimum, the first-year operational budget, start-up costs, and cash flow, and financial projections for the first three years. 2. Include in the operational budget reasonable estimates of all anticipated revenues and expenditures necessary to operate the school, including, but not limited to, special education, based, when possible, on historical data from schools or school districts of similar type, size, and location. 3. Include budget notes that clearly describe assumptions on revenue estimates, including, but not limited to, the basis for average daily attendance estimates and staffing levels. 4. Present a budget that in its totality appears viable and over a period of no less than two years of operations provides for the amassing of a reserve equivalent to that required by law for a school district of similar size to the proposed charter school. 5. Demonstrate an understanding of the timing of the receipt of various revenues and their relative relationship to timing of expenditures that are within reasonable parameters, based, when possible, on historical data from schools or school districts of similar type, size, and location.” FINDINGS OF FACT I. ACHS’s UNREALISTIC 2017-2018 YEAR ONE FUND BALANCE The Achieve Charter High School charter petition presents three budget documents. • The first ACHS budget document is titled, Multiyear Budget Summary which summarizes ACHS’s major revenue and expenditure account object codes such as summary object code 4000, Books & Supplies. This report will refer to the Multiyear Budget Summary document as the Budget Summary. The ACHS Budget Summary is the only budget document which presents ACHS’s beginning and ending fund balance, operating income or loss, and ending fund balance as a percentage of expenses which is a measure of fund balance reserves. • The second ACHS budget document is also titled, Multiyear Budget Summary, but is not a summary. Instead, the second ACHS budget document is a budget presenting individual account line items which total to the summary accounts described above. For example, the ACHS summary account Books & Supplies is object code 4000. The Books & Supplies object code 4000 summary account is comprised of: o Object code 4100, Approved Textbooks & Core Curricula Materials o Object code 4320, Educational Software 3 o Object code 4325, Instructional Materials & Supplies, and other similar 4000 series Books and Supplies object codes. The example object code numbers 4100, 4320, and 4325, all within the object code 4000 group summarize into one single total in the summary object code 4000 of Books & Supplies. This report will refer to this document as the Budget. The ACHS Budget does not present any beginning or ending fund balance, operating income or loss, or ending fund balance as a percentage of expenses reserve for economic uncertainty as does the ACHS Budget Summary. • The third ACHS budget document is titled, Monthly Cash Forecast which presents how cash is received and spent monthly and represents ACHS’s month to month cash flow. This report will refer to this document as the Cash Flow Statement. The ACHS Budget Summary fails to include the total for object code 6000, Capital Outlay expenses within ACHS’s overall total expenses. The ACHS Budget Summary total expenses for 2017-2018 year one, is therefore missing $100,000 of additional capital outlay expenditures identified in the Budget from object code 6200, Buildings & Improvement of Buildings. The detailed object code Budget has a budget line item titled, “TOTAL EXPENSES” with a total of $1,454,522 but there is a second budget total line below Total Expenses titled, “TOTAL EXPENSES including depreciation” which is $1,354,522 and is $100,000 less. The only account line item or summary account that is exactly $100,000 is the Capital Outlay account. The ACHS Budget Summary total expenses of $1,354,522 is missing the additional $100,000 of capital outlay expenses from the detail Budget. If the additional capital outlay expenses had been included in the Budget Summary, total Budget Summary expenses would be $1,454,522 rather than $1,354,522. Further confusing the ACHS Budget Summary is that the ACHS Budget Summary shows Capital Outlay of $100,000 but it is presented below the 2017-2018 year one ending fund balance and not as part of total expenses. Without detailed Budget notes explaining why Capital Outlay of $100,000 is not included in 2017-2018 year one total expenses, ACHS’s total expenses are understated and fund balance is overstated by $100,000. The additional unrecognized $100,000 of capital outlay expenses has the following adverse effects on the ACHS Budget Summary: • The 2017-2018 year one operating loss increased from ($64,548) to ($164,548). • The 2017-2018 year one ending fund balance decreased from a positive $116,102 to $16,102. Increases in expenses cause a decrease in available fund balance. Table I below illustrates this adverse effect on ACHS’s year one fund balance. 4 Table I Achieve Charter High School Capital Outlay Expense Correction Capital Outlay Expense Correction Effect on Fund Balance Description Beginning Fund Balance ACHS Start-Up Year One Budget Budget Restricted Un-Restricted 2016-17 2017-18 $ Operating Income/(Loss) - Original - $ 180,650 180,650 Operating Income/(Loss) - Adjusted Capital Outlay Expense (64,548) (100,000) (164,548) - Adjusted Operating Income/(Loss) 180,650 Ending Fund Balance $ 180,650 $ Fund Balance Reserve as a percentage of total expenses • 16,102 1% The 2017-2018 year one ending fund balance as a percentage of expenses or fund balance reserve decreases from 9% to 1%. The decrease to 1% in fund balance reserve is calculated by dividing the adjusted ACHS 2017-2018 year one ending fund balance of $16,102 by the adjusted 2017-2018 year one total expenses of $1,454,522. o Required reserves for economic uncertainties are defined at 5 CCR §15450 Reserves, as follows: “(a) Available reserves for any of the budget year or two subsequent fiscal years are not less than the following percentages or amounts as applied to total expenditures and other financing uses: the greater of 5% or $55,000 for districts with 0-300 ADA the greater of 4% or $55,000 for districts with 301-1,000 ADA 3% for districts with 1,001-30,000 ADA 2% for districts with 30,001-400,000 ADA 1% for districts with 400,001 and over ADA” o ACHS proposed 2017-2018 year one Average Daily Attendance (ADA) is 108: ACHS’s ADA of 108 means that the ACHS 2017-2018 year one reserve for economic uncertainties should be 5% of total expenditures but instead is only 1% of total expenditures. o The ACHS Budget Narrative describes Contingencies and Reserves: ACHS’s Budget narrative at Contingencies and Reserves states, “In each fiscal year the school plans to exceed a budget reserve equal to 5% of total annual expenses.” The ACHS Budget Summary and Budget fail to meet ACHS’s own required 5% per fiscal year reserve requirement within ACHS’s 2017-2018 year one of operations. 5 The ACHS 2017-2018 year one ending fund balance fails to meet sufficient reserve requirements for contingencies, reserves, and economic uncertainties as required by CCR, Title 5, section 15450 and fails to meet ACHS’s own 5% reserve requirement. Therefore, ACHS’s failure to meet the 5% reserve requirement results in an unrealistic financial operational plan for the proposed ACHS charter school. II. ACHS’s UNREALISTIC START-UP BUDGET ACHS Budget Narrative states, “ACHS applied for $375k in start-up grant funds in September 2016...If for some reason the grant application is not approved, ACHS will apply in the second round in spring 2017…If that application is not funded, Achieve Charter School of Paradise’s Board of Directors has approved lending up to $350,000 to support ACHS’s start-up expenses.” The ACHS Budget Summary and Budget fail to present sufficient detailed Budget Narratives or Budget notes explaining how ACHS’s start-up costs will be funded should ACHS not be awarded the PCSGP grant. ACHS’s Budget identifies PCSGP revenue of $275,000 in the 2016-2017 start-up year and an additional $100,000 in 2017-2018, year one, totaling $375,000 for the proposed ACHS charter school. • The ACHS charter petition Budget Narrative describes that if the PCSGP application is not funded, “Achieve Charter School of Paradise’s Board of Directors has approved lending up to $350,000 to support ACHS’s start-up expenses.” The ACHS Budget Narrative, section, Cash Flow states, “A draft of the Achieve Charter School of Paradise’s 2015-16 audit report is included to show the lending capacity of the school.” • The ACHS charter petition or Budget Narrative and Budget notes: • o Fail to present any supporting documentation that the Achieve Charter School of Paradise’s Board of Directors has authorized lending up to $350,000 to ACHS. o Fail to describe why Achieve Charter School of Paradise’s Board of Directors will only loan $350,000 when the ACHS Budget requests $375,000 in start-up funds and how the ACHS Budget will be adjusted for the $25,000 less in start-up funds. o Fail to describe how Achieve Charter School of Paradise, Inc., the nonprofit operating the Achieve Charter School, K-8 (ACS), can convert or divert as a loan, without the loan being considered a gift of $350,000 of public funds, from ACS to ACHS because the proposed ACHS charter school is a separate charter school from ACS. The ACHS Appendix F, Achieve Charter High School Local Education Area Application, at page 20 states, “The Achieve Charter School of Paradise Inc. Non Profit Public Benefit Corporation has an un-appropriated reserve of $746,807 and will loan the 9th-12th grade program approximately $174,618 for operational costs… It will also loan the 9-12 program $369,200 for start-up costs for a total loan of $543.818.00.” (sic) o The ACHS Budget, Budget Narrative, Budget notes, and Cash Flow Statement fail to present any supporting documentation or information about an additional operational costs loan of $174,618, or how the ACHS start-up costs loan has changed from $350,000 as described in the Budget notes to $369,200 as presented in Appendix F, or if the $369,200 is a separate start-up loan in addition to the $350,000 start-up loan. 6 o The ACHS charter petition, Budget Narrative or Budget notes fail to describe how Achieve Charter School of Paradise, Inc., the nonprofit operating the Achieve Charter School, K-8 (ACS), can convert or divert $543,818 as loan(s) from ACS to another charter school such as ACHS, without it being considered a gift of public funds. o The ACHS charter petition, Budget Narrative or Budget notes fail to describe how Achieve Charter School of Paradise, Inc., the nonprofit operating the Achieve Charter School, K-8 (ACS), proposed loan of $543,818 from ACS to ACHS will affect ACS’s reserve of $746,807 and ACS’s own cash flow. The California Department of Education (CDE) has provided Public Charter School Grant Program resources at the CDE’s website at, http://www.cde.ca.gov/sp/cs/as/csexpenses.asp. The CDE website describes allowable PCSGP expenditures and factors affecting charter schools’ eligibility for reimbursement and provides the following guidance: Federal Guidance Federal guidance pertaining to allowable costs under the PCSGP may be found in the following documents:  Elementary and Secondary Education Act (ESEA) 5204(f)(3)  U.S. Department of Education (ED) Charter Schools Program (CSP) Nonregulatory Guidance  Office of Management and Budget (OMB) Circular A-21, Cost Principles for Educational Institutions  OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments  OMB Circular A-122, Cost Principles for Non-Profit Organizations  ED Cash Management Policies for Grants and Cooperative Agreements The CDE has provided Public Charter School Grant Program resources in the CDE’s website at, http://www.cde.ca.gov/sp/cs/as/csexpenses.asp. The CDE website states: “There are a number of factors that contribute towards the allowability of an expense. Developing an understanding of these principles will aid you in allocating expenses to the grant when the eligibility of an expense is not clear, or when an allocated expense is called into question and there is a need to obtain clarification.” The CDE website also states that: three factors affecting eligibility for PCSGP grant reimbursement are: 1. “Costs incurred must be one-time in nature and may not include ongoing operational costs. When making the distinction between one-time and ongoing costs, it is helpful to ask the following questions: Is the expense required to operate the school? Will the school continue to incur the expense after the grant has ended? Answering “yes” to either of the above questions most likely indicates that the expense is not one-time in nature, and is most likely not allowable. 7 2. Costs incurred must correlate to a grant objective or a Work Plan objective. The purpose of the PCSGP grant is to foster the development of high-quality charter schools in California. The Work Plan is the medium by which applicants propose activities with measurable outcomes that will enhance the quality of their school. Other grant objectives include: informing the community about the school; and acquiring necessary equipment, educational materials, supplies, and curriculum. 3. All purchases must be reasonable and necessary to the completion of the grant objectives or the initial operation of the school. Goods and services purchased using grant funds should correlate to some need reflected in the approved charter petition or the approved Work Plan in the grant application. Expenses will be questioned if they appear to be unreasonable or unnecessary to the essential operation of the charter school or the completion of the grant objectives.” Even though ACHS budgets for a total of $375,000 in PCSGP start-up revenue, the ACHS Budget only spends $94,350 in the 2016-2017 start-up year and $48,300 in ACHS’s 2017-2018 year one. ACHS’s start-up costs of $94,350 and year one start-up costs of $48,300 total $142,650, not $375,000. The ACHS charter petitioners fail to explain in their Budget Narrative or Budget notes where the remaining $232,350 ($375,000 - $142,650 = $232,350) in start-up costs are budgeted or why ACHS has not budgeted the remaining $232,350 in ACHS start-up costs. As described above concerning the PCSGP program, the CDE website states, “Goods and services purchased using grant funds should correlate to some need reflected in the approved charter petition or the approved Work Plan in the grant application.”; however, the ACHS Budget and charter petition fail to present the ACHS charter petitioners PCSGP Work Plan or to demonstrate in ACHS’s Budget how the grant funds correlate to a need reflected in the ACHS charter petition. Not only is $232,350 of remaining ACHS start-up costs not budgeted, but of the $142,650 budgeted start-up costs in years one and year two, the ACHS Budget fails to identify the nature of start-up costs as one-time or ongoing and how the budgeted amounts were determined. Public Charter School Grant Program requirements related deficiencies in the 2016-2017 ACHS start-up Budget are: • Office supplies of $1,000 fail to present any Budget notes describing the need or how the amount was determined. • Non Classroom Noncapitalized Items of $14,000 fail to describe how many picnic tables are to be purchased or how the $14,000 amount was determined. • Equipment Leases of $1,500 may be considered ongoing costs. The ACHS Budget notes fail to describe in detail how the $1,500 cost may be allowable. • Fingerprinting of $600 fails to present any Budget notes describing why the $600 is an allowable start-up cost. 8 • Communications-Internet/Website Fees of $1,500 may be considered ongoing costs. The ACHS Budget notes fail to describe in detail how the $1,500 cost may be allowable. • Communications-Telephone & Fax of $1,375 are considered ongoing costs. The ACHS Budget notes fail to describe in detail how the $1,375 cost may be allowable. Public Charter School Grant Program requirements related deficiencies in the ACHS 2017-2018 year one Budget start-up costs are: • Approved Textbooks & Core Curricula Materials of $30,000 are presented in the Budget notes as “$250 per New Student based on average charter start-up costs”; however, the ACHS Budget notes fail to present any comparative “average charter start-up costs” to support the $30,000 amount. • Art & Music Supplies of $9,975 are presented in the Budget notes as “Start up for elective costs music, art, language”; however, the ACHS Budget notes fail to present any information that such “elective costs” may be allowable under the PCSGP grant program or how the $9,975 amount was determined. • PE Supplies of $3,325 are presented in the Budget notes as “Start up for elective costs PE”; however, the ACHS Budget notes fail to present any information that such “elective costs” may be allowable under the PCSGP grant program or how the $3,325 amount was determined. • Legal Fees of $5,000 are presented in the Budget notes as “Start up legal expenses”; however, the Budget notes fail to present any information of how the legal costs may be allowable under the PCSGP grant program or how the $5,000 amount was determined. The ACHS 2016-2017 start-up Budget presents revenue of $275,000 and expenses of $94,359 leaving a 2016-2017 start-up Budget ending balance of $180,650 as shown in Table II below. The ACHS Budget Summary’s 2017-2018 year one fund balance begins with the unexpended start-up balance of $180,650. PCSGP funds are restricted funds and may not be used to pay for ongoing operations of the proposed ACHS charter school. The remaining 2016-2017 ACHS start-up balance of $180,650 is carried over into ACHS 2017-2018 year one operating Budget and therefore commingles restricted start-up funds with ongoing unrestricted funds. The ACHS 2017-2018 year one Budget: • Fails to segregate restricted PCSGP 2016-2017 start-up funds from the ACHS 2017-2018 Budget’s operational funds, • Fails to provide any Budget Narrative, Budget notes or assumptions explaining in detail the use of the restricted start-up funds and how start-up funds in the 2017-2018 year one Budget are segregated sufficiently from unrestricted operating funds such that restricted start-up funds and unrestricted operating funds are not commingled, and • Fails to explain how the PCSGP start-up funds are not funding any ongoing operational costs. 9 Restricted PCSGP start-up funds should not be commingled with unrestricted and operational costs. Restricted PCSGP start-up funds should also not be used as part of ACHS’s unrestricted fund balance. The ACHS 2017-2018 year one beginning fund balance begins with the restricted start-up 2016-2017 ending fund balance of $180,650. Restricted and unrestricted funds should not be commingled and should be accounted for separately. As shown in Table II, removing the $180,650 in 2016-2017 remaining unspent restricted start-up funds from ACHS’s 2107-2018 year one unrestricted operations results in an ACHS 2017-2018 year one Budget Summary ending fund balance deficit of ($164,548). Table II Achieve Charter High School Restricted Start-Up Costs Adjustments Description Beginning Fund Balance ACHS Start-Up Budget Restricted 2016-17 $ Operating Income/(Loss) - Original Operating Income/(Loss) - Adjusted Capital Outlay Expense Adjusted Operating Income/(Loss) Ending Fund Balance $ - Year One Adjusted Budget Un-Restricted Year One Budget Un-Restricted 2017-18 $ Adjustments 180,650 $ 2017-18 (180,650) $ - 180,650 (64,548) - (64,548) 180,650 (100,000) (164,548) - (100,000) (164,548) 180,650 $ 16,102 $ (180,650) $ (164,548) A deficit of ($164,548) in ACHS 2017-2018 year one ending fund balance means the 2017-2018 year one ACHS charter petition Budget Summary fails to meet the required Title 5 CCR §15450 fund balance reserve requirement of 5%, and therefore presents an unrealistic financial operational plan for the proposed ACHS charter school. PCSGP Start-up funds are permitted to be spent for allowable start-up costs only. The ACHS charter petitioners’ Budget Summary and Budget should not have based ACHS’s proposed 2017-2018 year one Budget on unspent restricted start-up costs that may be subsidizing the proposed ACHS charter schools unrestricted fund balance and cash flow. Start-up funds being used by ACHS for cash flow purposes is also discussed in section III, ACHS Unrealistic Cash Flow Statement of this report. Therefore, the ACHS charter petitioners have: • Prepared a Budget based on PCSGP revenue that ACHS may not be awarded; • Presented Start-up costs that may not be allowable; 10 • Used unspent restricted start-up costs to subsidize ACHS’s 2017-2018 year one operations, fund balance, and cash flow; • Presented conflicting loan amounts from Achieve Charter School of Paradise, Inc., the nonprofit corporation operating ACS; and • Presented undocumented loans from Achieve Charter School of Paradise, Inc., the nonprofit operating ACS in the ACHS charter petition or Budget notes. These loans may be a gift of public funds and therefore unallowable. The ACHS start-up Budget fails to present detailed start-up costs Budget notes and assumptions as required by CCR, Title 5, section 11967.5.1(c)(3)(B); and presents many material deficiencies such that ACHS’s Budget Summary and Budget present an unrealistic financial operational plan for the proposed ACHS charter school. III. ACHS’s UNREALISTIC CASH FLOW STATEMENT The ACHS Budget includes three years of Cash Flow Statements. The Cash Flow Statement years presented in the ACHS charter petition are labeled as 2016-2017, 2018-2019, and 20192020. Missing from ACHS’s Cash Flow Statements is the 2017-2018 year. Analyzing the ACHS charter petition, Budget Summary, Budget, and Cash Flow Statements as submitted, which includes how ACHS’s financial documents are labeled by the ACHS charter petitioners, means the ACHS charter petitioners have failed to provide their first year 2017-2018 cash flow as required by CCR, Title 5, section 11967.5.1(c)(3)(B) and results in the ACHS charter petitioners having provided an unrealistic financial and operational plan for the proposed ACHS charter school. If 2016-2017 Cash Flow Statement was mislabeled and is meant to be their 2017-2018 first year Cash Flow Statement, ACHS’s beginning cash balance in ACHS’s mislabeled 2016-2017 Cash Flow Statement begins by using $180,650 of restricted PCSGP start-up funds. For purposes of this analysis, this report will examine ACHS’s 2016-2017 Cash Flow Statement as if it were the 20172018 year one or first year Cash Flow Statement. Both ACHS’s Budget notes and ACHS’s presented Cash Flow Statements fail to present any Budget notes describing how ACHS’s Cash Flow accrual amounts were determined. Year One Beginning Cash of $180,650: ACHS has presented its year one Cash Flow Statement beginning cash as $180,650; however, using restricted PCSGP start-up cash to subsidize unrestricted operational costs, such as salaries and benefits, of the proposed charter school may be commingling of funds and a disallowed use of PCSGP funds. Failing to provide any Budget notes describing how the ACHS charter petitioners determined that using restricted PCSGP start-up funds to subsidize ACHS’s unrestricted operational cash flow is allowed should have been, but was not disclosed in ACHS’s Budget Narrative or Budget notes. 11 Year One Cash Flow Accruals Amounts: ACHS’s Budget and mislabeled 2016-2017 Cash Flow Statement fail to present any Budget Narrative or Budget notes or assumptions describing how the ACHS’s charter petitioners determined their year one Cash Flow Statement accruals of accounts receivables and accounts payables of the following revenues and expenditures: Revenues: • LCFF Entitlement $94,970 • Federal Income $7,418 • Other State Income $43,673 • Total Accrual Revenues $146,061 Expenditures: • Services & Other Operating Expenses $712 • Total Accrual Expenditures $712 Because the ACHS charter petitioners: • Failed to present the required first year 2017-2018 Cash Flow Statement, • Failed to describe how beginning cash of $180,650 in restricted PCSGP start-up funds can be allowed to subsidize ACHS’s unrestricted operating costs, and • Failed to present any budget notes describing how the ACHS charter petitioners arrived at their cash flow statement revenues and expenditures accrual amounts totaling $146,061 and $712 respectively, the ACHS year one Cash Flow Statement amounts presented are unrealistic and fail to comply with CCR, Title 5, section 11967.5.1(c)(3)(B). IV. ACHS’S UNREALISTIC BUDGET NOTES AND ASSUMPTIONS Detailed Budget notes and assumptions are a critical component of constructing and implementing a charter school budget. Explaining throughout ACHS’s Budget how ACHS arrived at each of its presented Budget line item amounts would have demonstrated that the ACHS charter petitioners are competent and transparent and that they understand financial accounting, the timing of charter school cash flow, and how ACHS will receive and spend the proposed ACHS charter school’s funds, but the ACHS charter petitioners failed to provide any such explanations. The Achieve Charter High School Budget Narrative’s first paragraph states, “Assumptions and analysis are based on historical data from Achieve Charter School of Paradise and other start-up charter schools in California.” However, no other start-up charter high school historical data of similar type, size, and location was provided in the ACHS charter petition Budget, nor referenced in any of the ACHS charter school Budget notes. 12 Furthermore, the ACS June 30, 2016 audit report is insufficient as historical comparative data because the audit report fails to present comparative detailed account level financial amounts similar to the ACHS Budget. 5 CCR section 11967.5.1(c)(3)(B) requires the ACHS charter petitioners to present detailed budget notes and assumptions that clearly describe how ACHS’s budget amounts were determined. ACHS should have, but failed, to present detailed budget notes and assumptions, narratives, and documentation based on historical data from schools or school districts of similar type, size, and location. ACHS’s failure to present detailed budget notes and assumptions means ACHS cannot show it has submitted a Budget based on sound and verifiable data. Examples of unsupported or missing ACHS Budget notes, Budget Narratives, assumptions and documentation are: 1. Staffing and Benefits: Salary and Staffing Schedule a. The ACHS charter petition Budget Narrative states, “ACHS founding teachers have an average salary of approximately $65,000; this is in line with the salary schedule set by the Achieve Charter School of Paradise’s Board of Directors to be adopted when ACHS opens.” • The ACHS Budget Narrative or Budget notes fail to describe who ACHS’s “founding teachers” are, the difference between “founding teachers” and non-founding teachers, if shared staffing teachers are considered “founding teachers”, or how many founding versus non-founding teachers and other types of teachers there are at the proposed ACHS charter school. • The ACHS Budget Narrative and Budget notes fail to include the salary schedule to be set by the Achieve Charter School of Paradise’s Board of Directors. • The ACHS Budget Narrative and Budget notes also fail to present any calculations, schedules, tables, or other analysis supporting an approximate average salary of $65,000 or how any of the ACHS budgeted certificated and classified teachers and staff salary amounts were determined. • The ACHS charter petition, Budget Summary, Budget, Budget Narrative, or Budget notes fail to present; any staffing detail table or schedule identifying ACHS’s staff positions, shared staffing percentages, or individual staff position’s salary amounts. Shared Salaries and Materials b. The ACHS charter petition, at page nine, states, “Achieve Charter School plans to operate the 6th-8th grade middle school program (90 students) on the new Achieve Charter High School’s campus…This will allow for shared staff and resources between middle and high school programs. Costs for shared staff and materials by both schools will be reflected in each charter school’s budget.” • The ACHS charter petition, Budget Summary, Budget, Budget Narrative, or Budget notes fail to present any staffing detail allocation tables or schedules identifying any of ACHS’s shared staff positions, shared staff percentages, or shared staff salary amounts. • The ACHS charter petition, Budget Summary, Budget, Budget Narrative, or Budget notes fail to present any staffing benefits detail allocation tables or schedules identifying shared staff positions benefits, shared staff benefits percentages, or shared staff benefits amounts. 13 • The ACHS charter petition, Budget Summary, Budget, Budget Narrative, or Budget notes fail to present any materials detail allocation tables or schedules identifying the types of shared materials, shared materials percentages, or shared materials amounts. Benefits c. The ACHS Budget Narrative states, “ACHS projects spending $6,000 per year per employee in year one on health insurance…Employees participate in a 403-b retirement savings program; ACHS contributes 8% of salary for eligible employees.” The ACHS charter petition, Element K – Retirement Systems, at page 150 states, “Employees…shall participate in individual 403(b) retirement plans as applicable to the position…” Selected 2017-2018 ACHS Budget Employee Benefits ambiguities are: Health & Welfare Benefits: • Health & Welfare Benefits of $58,200. o The 2017-2018 ACHS Budget notes state, “$6000 per participant per year…” o The ACHS Budget Narrative and Budget notes fail to identify why the Budget Narrative states, “$6,000 per year per employee” but the ACHS Budget notes state “$6000 per participant per year.” o The ACHS Budget Narrative and Budget notes fail to identify how many participants versus employees will receive health and welfare benefits. Retirement Benefits: • Other Employee Benefits of $52,402. o The 2017-2018 ACHS Budget notes state, “8.00% of applicable payroll for 403-b” o The ACHS Budget Narrative and Budget notes fail to identify: o  Why the ACHS Budget Narrative states, “Employees participate in a 403b retirement savings program”,  Why ACHS’s Budget notes state, “8.00% of applicable payroll for 403-b”, and  Why ACHS Charter petition Element K states employees shall participate in the 403-b “as applicable to the position.” The ACHS charter petition, Budget Narrative and Budget notes fail to describe how many participants versus employees versus applicable employee positions will receive ACHS’s 403-b plan retirement benefits. 14 In other words, it is left undefined whether the ACHS 403-b retirement plan is for all ACHS employees, or only a specific class of ACHS employees, and which ACHS staff members are to receive 403-b retirement benefits. • The ACHS 2017-2018 Budget notes identify the 403-b percentage is 8%. The Achieve Charter School of Paradise, June 30, 2016 audit report, Note 5: Retirement Plan, at page 10 of the audit report states, “The School offers to all employees the opportunity to participate in their 403(b)(7) plan and the School matches contributions up to 3% of employee’ gross salary. There is no vesting or vesting period.” The ACHS Budget Narrative and Budget notes fail to identify why the ACHS 2017-2018 Budget notes use 8% of applicable payroll for the 403-b retirement plan while the ACS audit report included in the ACHS charter petition identifies the 403-b matching contribution is only 3%. The ACHS charter petition, Budget Summary, Budget, Budget Narrative, or Budget notes fail to present any staffing benefits detail allocation table or schedule identifying which ACHS staff positions will receive benefits, the types of benefits each staff member receives, and the benefits amounts. ACHS’s Budget fails to describe: • Which health plans are offered, • Who are the providers, • ACHS’s health plan’s compliance with the Affordable Health Care Act, • How ACHS determined benefits for each classification of ACHS employees, • How ACHS employees qualify and vest for health and welfare benefits, and • How ACHS’s per employee benefits costs compare to other similar charter schools or district’s employee benefits costs. 2. Account Level Budget Notes: The ACHS charter petition and Budget fail to present any account level Budget notes explaining how the ACHS charter petitioners determined the costs presented for each year of ACHS’s Budget. The ACHS charter petitioners simply stating in the Budget notes that a budgeted amount is based on a per student amount without providing any supporting documentation, Budget tables or Budget schedules identifying how the per student amount was determined and allocated results in ACHS’s budget notes being incomplete and insufficient. Using ACHS’s year one, 2017-2018 Budget numbers as a reference, examples of incomplete ACHS Budget notes and assumptions, include, but are not limited to: a. 2017-2018 Books and Supplies: • Approved Textbooks & Core Curricula Materials at $30,000. 15 The Budget notes state, “$250 per New Student based on average charter start-up costs” but no average or comparative charter start-up costs were provided to support the ACHS Budget notes. ACHS’s Budget notes fail to describe how many textbooks and core curricula materials, what types of books and materials, what grade levels the books and materials are intended for and fail to identify the vendors, from where ACHS will purchase the books and materials. • Educational Software at $8,000. The ACHS Budget notes state, “Canvas, iRead, Lexia, Aeries, etc.”, but no quantities, amounts, or other information is presented about the software nor what other software “etc” represents. • Office Supplies at $6,000. The ACHS Budget notes state, “$50 per student” but ACHS failed to present how ACHS determined the per student amount and how the $50.00 amount is comparative to other charter schools. • Student Food Services at $69,984. The ACHS Budget notes state, “Assumes that 0.86 of total food service cost is reimbursed: service through PUSD.” The ACHS Budget notes fail to explain how the ACHS charter petitioners arrived at $69,984 in student food services expense, how the ACHS charter petitioners know PUSD will continue to provide food services for ACS, and whether PUSD has the additional food service capacity to and desires to provide food service for ACHS. b. 2017- 2018 Services & Other Operating Expenses: • Utilities – All Utilities at $28,000. The ACHS Budget notes state, “Based on current ACS costs”; however, no current ACS comparative costs are provided as part of the ACHS Budget notes. Further, the ACS June 3, 2016 audit report submitted as part of the ACHS charter petition fails to present any Utilities costs for comparison purposes. • Rent at $120,000. The ACHS Budget notes state, “$10000 per Monthly Rate…” The ACHS charter petition at page 21 states, “Achieve Charter School is currently in lease negotiations with property owners at 6480 and 6462 Clark Rd and 6227 Melody Ln. This property is 7.5 acres…has percolation testing reports for septic design flow up to 13,000 gallons per day…The owners have expressed interest in entering into a 25 year lease and assistance in developing the property with utilities and infrastructure.” The ACHS charter petition, Budget Narrative, or Budget notes and assumptions fail to present any supporting documentation of how $10,000 per month is a sufficiently budgeted lease amount. 16 The ACHS charter petition and Budget Narrative or Budget notes and assumptions fail to describe how the ACHS charter petitioners know that: o The septic percolation flow of up to 13,000 gallons per day is sufficient for the proposed ACHS facility. o A secondary treatment gross hydraulic load will not require a larger gallon per acre amount. o ACHS’s waste discharge requirements will not require ground water monitoring wells. o Whether a public hearing for ACHS’s septic design will be required and what concerns the residents may have about the ACHS facility and its impact on ground water, o The proposed ACHS kitchen, cafeteria, and multipurpose room will not modify the septic requirements or increase ACHS’s facilities costs. Page 160 of the ACHS charter petition states, “Once fully built out…the facility will include…cafeteria, kitchen, multipurpose room…”; therefore, ACHS does plan for kitchen facilities. o • Construction of the proposed ACHS facility can be completed and ready for students and staff to safely occupy when the proposed ACHS opens in its 2017-2018 year one. Repairs & Maintenance – Building at $3,500. There are no ACHS Budget notes associated with this cost. • Accounting Fees at $8,769. The ACHS Budget notes state, “Per audit contract”; however, no audit contract was provided. • Consultants – Other 1, Consultants - Other 2, and Technology Services at $8,959, $4,000, and $15,000 respectively. The ACHS Budget notes state; o Consultants – Other 1, “SpEd bill backs”; however, there is no explanation of what “SpEd bill backs” represent or why such “bill backs” will cost $8,959. o Consultants – Other 2, “Nursing”; however, there is no explanation of what type of nursing consulting services will be provided or why the cost is only $4,000. o Technology Services, “Systems set-up and consulting”; however, there are no Budget notes describing what “system set-up and consulting services” means, and the type(s) of technology software and equipment to be used. Transparent and detailed descriptions of all professional and consulting service providers, especially identifying any affiliated or related service providers, should have been but fail to be included in ACHS’s charter petition or Budget notes. 17 The ACHS charter petitioners fail to describe how they determined that ACHS’s budgeted consulting and technology services amounts are sufficient. The ACHS Budget notes also fail to identify which law firm(s), consultant(s), accountant(s), auditors, technology service providers, etc. are being considered by ACHS; and whether any of the consultants are affiliated or related parties to ACHS. Regarding ACHS’s professional, consulting, and contracted services, including auditors, attorneys, and other service providers, the identities of such individuals and their service companies should be fully disclosed, and as much of the following information as is known to the ACHS charter school petitioners should have been but failed to be included within the ACHS charter petition or Budget notes: i. The names of all individual professionals, consultants and service companies, ii. The Internal Revenue Service income tax form, under which the individual and/or organization files federal income taxes, such as 1120 Corporation or 990 Not-for-Profit, etc., iii. State of incorporation, iv. How long the service companies and individuals have been in business, copies of professional licenses, and areas of expertise, v. Number of California clients served and references from a representative sample of California clients, vi. Names and relationships of principals and full disclosure of any pre-existing relationships or potential conflicts of interest with any of the ACHS charter school petitioners or ACHS staff members, vii. The financial terms of each attorney, consultant and service company contract with the ACHS charter school petitioners, as well as comparison data from other similar service companies such as service cost agreements, fee agreements, etc., viii. Copies of actual or prospective MOUs and contracts between each attorney, consultant and service companies and the proposed ACHS charter school, ix. Contract termination rights of the proposed ACHS charter school, if any, x. Organizational and operational contract terms between the service companies and the ACHS charter school, xi. Service company and consultant’s employee’s limits of authorization. California Code of Regulations, Title 5 section 11967.5.1(c)(3)(A) states: “An unrealistic financial and operational plan is one to which any or all of the following applies: 18 (A) In the area of administrative services, the charter or supporting documents do not adequately: 1. Describe the structure for providing administrative services, including, at a minimum, personnel transactions, accounting and payroll that reflects an understanding of school business practices and expertise to carry out the necessary administrative services, or a reasonable plan and time line to develop and assemble such practices and expertise. 2. For any contract services, describe criteria for the selection of a contractor or contractors that demonstrate necessary expertise and the procedure for selection of the contractor or contractors.” The ACHS charter petition and Budget fail to comply with CCR, Title 5 section 11967.5.1(c)(3)(A) by failing to describe the required criteria for the selection of contractors; therefore, the ACHS charter petition and budget present an unrealistic financial and operational plan for the proposed ACHS charter school. c. 2017- 2018 Capital Outlay: • Buildings & Improvement of Buildings at $100,000. The ACHS Budget notes state, “Renovation, e.g. carpet, cubicles, bathrooms”; however, the Budget notes fail to describe how many cubicles and bathrooms, the location of the renovations, how many square feet the renovations and carpet will cover, the vendor(s) involved assisting with renovations, and time lines, etc., for completion of renovations. 5 CCR section 11967.5.1(c)(3)(B) requires charter petitioners to provide detailed budget notes and assumptions that clearly describe how ACHS’s budget amounts were determined. The ACHS charter petitioners should have, but failed, to present detailed budget notes and assumptions, narratives, and documentation based on historical data from schools or school districts of similar type, size, and location; therefore, the ACHS charter petition and budget present an unrealistic financial and operational plan for the proposed ACHS charter school. 3. Special Education Staffing Costs and Special Education Encroachment Special education and related services are discussed in the ACHS charter petition at pages 68 through 82. ACHS Appendix F, Achieve Charter High School Local Education Area Application, at page 20 states, “Achieve Charter High School is budgeting for a full-time Educational Specialist, a .2 Special Education Coordinator/School Psychologist, a .1 Speech and Language Specialist, and a .1 Nurse…Achieve Charter High School plans to encroach on the general budget by $58,108.00…The Achieve Charter School of Paradise Inc…will loan the 9th – 12th grade program approximately $174,618…including the $58,000 encroachment in year one.” • The ACHS Budget identifies $68,800 for object code 1148, Teacher Special Ed and the corresponding Budget notes state, “1.2 FTE: psychologist (.20) and RSP teacher (1.0): psychologist FT beginning YR 2.” An RSP teacher is a Resource Specialist Program teacher. • Comparing the ACHS charter petition special education staffing positions with the ACHS Budget notes staffing positions identifies significant discrepancies. 19 The ACHS Budget is missing the Speech and Language Specialist and a Nurse positions identified in ACHS Appendix F. The ACHS Budget identifies $4,000 set aside for Consultants – Other 2 for Nursing but this is a consulting position and not a staff position. • Because ACHS’s Budget and Budget notes fail to present any staffing schedule or detailed staffing plan, and fail to budget for a Speech and Language Specialist and a Nurse position, the unbudgeted ACHS special education staffing expenditures are understated and present an unrealistic financial and operational plan for the proposed ACHS charter school. The ACHS Budget fails to budget for $58,100 in special education encroachment expense described above or fails to describe in detail why special education encroachment costs were not budgeted in the ACHS Budget. ACHS failed to present any Budget notes, Budget Narrative, or analysis describing how the ACHS charter petitioners calculated their encroachment amount of $58,100. • Using comparable Special Education data from the PUSD and ACHS’s projected year one average daily attendance of 108, ACHS should have but failed to budget for any special education encroachment costs this report calculates as $106,034. ACHS’s projected special education encroachment of $106,034 is determined by dividing 2015-2016 PUSD total unfunded special education costs of $3,158,053 by Paradise Unified School District’s total ADA of 3,216.58 which results in $981.80 per ADA of special education encroachment. $981.80 per ACHS ADA multiplied by ACHS’s total ADA of 108 results in ACHS’s special education encroachment calculated amount of $106,034. The ACHS charter petition and Budget fail to present detailed Budget notes and assumptions that document why the ACHS charter petitioners did not provide a detailed special education Budget Narrative or Budget notes based on historical data from charter schools or school districts of similar type, size, and location. Because the ACHS charter petitioners failed to provide detailed special education costs Budget notes or assumptions, the ACHS charter petition and Budget fail to comply with 5 CCR section 11967.5.1(c)(3)(B) and present an unrealistic financial and operational plan for the proposed ACHS charter school. 4. LCFF Entitlement Revenue: The ACHS Budget Narrative states, “The Local Control Funding Formula (LCFF)…Using the Fiscal Crisis and Management Assistance Team (FCMAT) calculator version 17.2b…the LCFF rates used are as follows…”; however, no LCFF calculator worksheets or the LCFF Excel workbook spreadsheets were provided as supporting documentation that ACHS’s LCFF revenue was accurately calculated and presented in the ACHS Budget. 20 CONCLUSION When providing their budget as required by Education Code section 47605(g) and California Code of Regulations, Title 5, section 11967.5.1(c)(3)(B), the ACHS charter school petitioners should have but failed to provide complete and accurate Budget notes and assumptions describing in detail the amounts presented in ACHS’s Budget. Detailed Budget notes and ACHS’s documentation supporting ACHS’s Budget amounts are a critical component of the basis upon which approval of the ACHS charter petition is granted. The ACHS Budget Narrative states, “Assumptions and analysis are based on historical financial data from Achieve Charter School of Paradise and other start-up charter schools in California.” However, the ACHS charter petitioners failed to provide any historical spending experience or budget analysis comparing Achieve Charter School of Paradise and other start-up charter schools in California with Achieve Charter High School. The ACHS charter petitioners rely heavily on unsubstantiated and potentially unallowable loans totaling $543,818 from The Achieve Charter School of Paradise, Inc. The ACHS Budget Summary omitted $100,000 in capital outlay costs and the ACHS Budget Summary fails to meet the 5% fund balance financial reserve required by California Code of Regulations, Title 5, §15750 and by ACHS’s own charter petition. ACHS’s start-up costs and cash flow are unrealistic. ACHS’s start-up costs fail to be fully budgeted and many of ACHS’s budgeted start-up costs may be considered unallowable ongoing costs and to be disallowed for reimbursement. ACHS’s Budget and Cash Flow Statement rely on restricted PCSGP start-up funds to subsidize ACHS’s unrestricted fund balance and operating costs and cash flow. Based on the ACHS charter petition and Budget as submitted, the Achieve Charter High School charter petitioners have failed to clearly describe the material assumptions necessary to support the budgeted amounts and cash flow presented in ACHS’s Budget. Overall, in our professional opinion, because of the material nature of the ACHS charter petitioners’ omissions from the ACHS Budget Narrative, Budget notes and assumptions, including ACHS’s unbudgeted special education encroachment costs, omitted capital outlay costs, insufficient fund balance reserves, use of restricted PCSGP start-up funds for cash flow, and missing year one 2017-2018 Cash Flow Statement, the Achieve Charter High School charter petition and Budget present an unrealistic financial and operational plan for the proposed ACHS charter school. Thank you for allowing us to be of service to the Paradise Unified School District. Sincerely, Onisko & Scholz, LLP 21