CCSA Handbook on Developing Charter

School Facilities

Understanding the Facility Options Available and

Navigating the Facility Development Process

By CCSA’s Facilities Team

Updated February 2016

Introduction

I. Facility Planning –What Is the Plan?

i. Facilities and the Charter School Petition

ii. Needs Assessment

iii. Timeline

iv. Budget

v. Facilities Team

II. Site Selection –Which Site Best Suits the Charter School’s Needs?

i. Types of Charter School Facilities

ii. Key Considerations When Selecting a Site

III. The Facilities Lifecycle –How Long Will the Charter School Occupy the Facility?

i. Short-Term Facilities

ii. Long-Term Facilities

iii. Permanent Facilities

IV. Funding and Financing –How Will the Facility Be Funded?

i. Public Resources

ii. Private Resources

Appendix

i. Hiring the Professionals for the Project

ii. Broker Information Sheet

iii. Operating Budget Worksheet

iv. Permanent Facility Sources and Uses Worksheet

v. Charter School Facilities Program Flow Chart

Table of Contents

Introduction

Securing an adequate and affordable charter school facility is one of the most difficult

challenges confronting California charter schools. With this handbook, the California Charter

Schools Association (CCSA) hopes to provide a “road map,” to guide charter schools

through the various stages of the facilities acquisition and/or development cycle. This road

map provides a big picture overview of the facilities development process, introduces the

various facilities options available for charters, and includes hyperlinks to additional

resources. While the handbook includes information regarding Proposition 39 (“Prop. 39”),

the state law that requires school districts to provide reasonably equivalent facilities to

charter schools, the emphasis of the manual is on non-district facility options. As depicted in

the graphic below, this publication is organized into four sections: Facility Planning, Site

Selection, Facilities Lifecycle (which encompasses short-term, long-term, and permanent

facilities), and Funding and Financing.

First, the manual addresses core considerations of facility planning including the development

of short-term and long-term facility plans. In order to help charter school leaders take this

initial step, this handbook provides guiding principles for developing a facilities plan. Some of

the areas addressed include conducting a needs assessment, determining a facility timeline,

and analyzing the financial capacity of the charter operator.

After a charter school develops a facility plan, it is in better position to embark on the site

selection process. The Site Selection provisions included herein discuss the advantages and

disadvantages of the various facility options available for charter schools, ranging from the

traditional district-owned school building to commercial and industrial properties. The Site

Selection provisions also introduce key considerations for schools when selecting a site,

covering such topics as location, zoning, and environmental issues.

1

Incubate School

Short Term Facilities

Facilities

Planning

Site

SelectionLong-

Term

Facilities

Permanent

Facilities

Financing

The third section of this manual, regarding the Facilities Lifecycle, discusses short-term, long-

term and permanent facility stages and provides insights to consider at each stage. Lastly, at

every stage of the facilities development process, a charter school must consider how the

facilities will be funded, and hence the Funding and Financing section highlights various funding

options available at each stage.

The intention of this facilities guide is to introduce the various facility options available and

provide resources to help charter schools make more informed facilities related decisions.

The goal is to empower charter schools to more easily navigate the facilities development

process so they can spend less time on facilities-related issues and more time on

accomplishing their educational mission.

Finding a sustainable facility option is a significant challenge, but charter schools do not need

to feel alone in this quest. While many charter schools have limited resources, there are

many organizations willing and able to help school leaders tackle the facilities challenge.

Included in Appendix A is a list of real estate professionals. This list is solely meant as a

starting point, each school operator should carefully assess the qualifications and suitability of

professional partners in the school facilities development process. In addition to the list of

professionals, Appendix A contains a list of questions and guiding principles for helping to

choose the right professional for a project.

2

Facility Planning

Introduction

The first concrete step in starting a charter school is the drafting of a petition to submit to an

authorizing agency. The petition contains several elements, such as a description of the

educational program and methods for measuring pupil outcomes. A petition must also

provide information about the facilities to be used by the school and specify where the

school intends to locate (Cal. Ed. Code 47605(g)). It is therefore advantageous for charter

operators to have a school site identified at the very beginning of the petition process.

Convince Authorizer with Details

What can be reasonably done to convince an authorizer that a charter operator has a plan in

place to successfully implement an educational program in suitable facilities? If a charter

school operator intends to request a Proposition 39 facility, this should be mentioned in the

petition, along with the desired school site and/or geographic location.

However, if a charter school operator intends to locate the school in a non-district facility,

the following information should be included in the petition:

▪ A description of the types and potential locations of facilities needed to operate the size

and scope of the educational program proposed in the charter.

▪ In the event a specific facility has not been secured, evidence of the type and projected cost

of facilities that may be available in the general targeted location of the school should be

provided. This information should be aligned with the intended student population and

educational program presented.

▪ Specifics about the physical facility requirements (number of classrooms, possible school

sites or commercial rental options which fit the educational program).

▪ Reasonable estimates and supporting assumptions about the costs for the acquisition or

leasing of facilities to house the charter school (i.e. costs per square foot). This will be an

indication that viable facilities opportunities will not present a problem.

▪ Indication that a commercial real estate agent has or is in the process of identifying possible

sites.

▪ Timeline for the permitting process (use permit, etc.) based on conversations with

city/county government officials, architects and/or engineers.

▪ Realistic budget for permits and renovations.

▪ Timeline for any renovations and facility updates to meet code requirements.

Facilities and the Charter School Petition – The First Step

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Needs Assessment

5

The Educational Plan and School Mission

The first step in identifying a non-district charter school facility is to conduct a needs

assessment. The following table and questions provide a starting point for conducting a facility

needs assessment for the short-term and the long-term. The answers to these questions will

most likely be driven by the school’s mission, educational philosophy, and community being

served. Preparing a needs assessment should provide parameters for the type of facilities

required in order to meet the school’s educational goals. A charter school operator can use

the needs assessment to develop its facility plan and communicate to a real estate broker or

charter school facilities developer the vision for the site. The real estate broker will then

search for available space in the target area based on the needs assessment. Appendix B

includes a broker information worksheet which can also be used when speaking with a real

estate broker.

Year 1 Year 2 Year 3 Year 4 Example

Enrollment 500 students

Grade Levels 6th to 8th

Student:Teacher Ratio 25:1

Core Classrooms 20 rooms

Science Labs 1 room

Computer Labs 1 room

Specialty Classrooms 0

Reception / Offices 4 rooms

Work Room 1 room

Storage Closets 4 rooms

Commons / Lunch Area Indoor Space

Kitchen 1 room

Faculty Room 1 room

Bathrooms 5 bathrooms

Non-instructional space (i.e..

Multi-purpose room)

4,000+ square

foot multi-

purpose space

Parking Spaces 25 spaces

Fill in the table with the required number for each category for every year.

Additional Questions

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6

▪ Which neighborhoods will the charter school be serving? How far can the school be

located from the target neighborhoods (keeping in mind how the population being

served travels to school)?

▪ How will the students and staff be arriving to school (driving, public transportation,

walking, biking, etc.)? If driving, parking will need to be provided. If public

transportation, bus stops or transit lines need to be near the school site. If walking or

biking, adequate sidewalks and bike lanes need to be located near the site.

▪ What outdoor space is required for the physical education program (basketball court,

tennis court, sports fields, etc.)?

▪ What community assets would be preferred near the school site (public libraries, parks,

etc.)? This might provide opportunities for shared use of space if the site does not have

sufficient outdoor space for recreational activities.

▪ How much technology will be used in the classrooms? Does the site have sufficient

technology space and infrastructure to accommodate the instructional program?

▪ When will the charter school need to be opened and operating at a site? The more

tenant improvements or renovations required on a site, the longer it will take to prepare

for move in.

▪ What types of land uses are acceptable in the surrounding area (commercial, industrial,

residential)? The land use designations for the site and surrounding properties may

impact the length of time needed to get a facility approved for school use.

Timeline

For long-term and permanent facility options school leaders should carefully consider the

amount of time it will take for a facility to be approved for occupancy. As will be explained in the

Site Selection discussion below, several steps may be required before a facility is fit for school use

and a charter school operator must factor this timing into the overall facility plan. Once a site

has been identified, a charter school operator should work closely with the development team

(architects, engineers, contractors, consultants etc.) to develop timelines of the best and worst

case scenarios for the project. The timeline below illustrates how much time it might take to

complete the facility development process. Simple renovations or leasehold improvements may

take a few months while complete site development may take 18-24 months or longer. The

approval and permitting process timelines for projects may vary greatly depending upon a

number of factors, including but not limited to the complexity of the project, the approval

processes utilized by different municipalities, and the capacity of the municipality to handle

project applications during periods of increased construction activity in a given area. A more

thorough discussion of the steps involved in the renovation or construction of a charter school

facility begins on page 26.

GENERAL SPACE GUIDELINES FOR CHARTER FACILITIES

How Much Space is Required?

X =

X =

Facility P

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25 to 32 sq. ft. per

student

Number of Students

per Class

Size of Core

Classroom

70 to 100 square ft.

per studentNumber of Students

Facility Gross Sq. Footage

7

Facility P

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ACME Charter Elementary

500 Students NUMBER OF ROOMS SQUARE FEET

Core Classrooms 20 15,000

Science Labs 1 1,000

Computer Labs 1 1,000

Reception / Offices 4 1,000

Work Room 1 700

Storage Closets 4 1,000

Commons / Lunch Area Inside 7,500

Faculty Room 1 300

Bathrooms 5 3,000

Multi-purpose room 1 4,000

Circulation/Hallway n/a 3,000

Total 37,500 sq. ft

Sample Facility Needs Assessment

Budget –How Far Does the Facility Budget Go?

The budget is a picture of the project sketched out in numbers. The scope of the facility

project will depend on what the charter school can afford. An operating budget worksheet

is available in Appendix C for guidance in developing a budget. Some key questions school

leaders should ask while budgeting for a facility are as follows:

▪How much funding will it take to lease or buy a facility? The answer to this question is very

dependent on location. For example, real estate prices in San Francisco are much higher

than in other areas of the state, and can vary widely even within regions. The charter school

operator should consult with a real estate broker early in the process to get a basic

understanding of the costs in preferred locations.

▪How much money will it take to renovate or build a facility?

▪What funding sources are available? What can be raised? What is the short and long term

facility plan and is it feasible given the school’s financial resources?

8

Facility P

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Rule of Thumb: Annual Facilities Operating Budget

10 –20% of annual operating budget for facility expenses (rent or mortgage plus utilities) or

$600 -$1,100 per student per year for facilities

Rule of Thumb: Cost of Facilities

Cost of Leasehold Improvement or Renovation –starts at $75 -$100 per square foot

Cost of New Construction –starts at $150 per square foot

9

The Facilities Team

If a charter school operator chooses to house students in a non-district facility, he or she needs

to assemble a dedicated team of professionals in most cases. Finding the right facility for a

charter school is typically too complex and time consuming for one person working alone. It is

a major endeavor and will require a team of individuals working together. It is also important

that members of the team agree on a common purpose, possess a shared vision, and hold a

clear understanding of the school’s mission.

RequiredTeam Skills

Ideally, the facilities team should include members with some knowledge and skills in each of

these areas.

▪ Real Estate (site selection and acquisition)

▪ Legal (review and negotiate any lease or purchase agreements)

▪Architecture (design facilities that optimize school’s ability to meet its educational mission)

▪ Technology (infra-structure requirements)

▪ Education (incorporate education plan requirements in space planning/design)

▪ Construction (with an eye toward remodel needs and cost assessments)

Facility P

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Ask: Who internally is managing the facility process (e.g. board members, principal, others)?Who will be recruited for the facility team (e.g., architect, project manager, general contractor,etc.)?

School Director

Architect/Engineer

Planning Consultant

Construction Manager

General Contractor Subcontractors

Project Manager Real Estate Broker

Attorney

10

Site Selection:

Which Site Best Suits the

Charter School’s Needs?

Types of Charter School Facilities

Charter schools are housed in many different types of facilities, ranging from traditional school

buildings to renovated warehouses. The table below includes various types of facilities that a charter

school might consider, along with some of the advantages and disadvantages associated with each

facility type.

Type Pros ConsDistrict-Prop 39 Traditional school facilities

Facilities are furnished and equipped Technology infrastructure includedNo zoning or permitting issuesTypically the most affordable option

Can create charter/district tensionsLogistical challenges, school culture differencesOften must share campus with other schools Agreements often for short duration/term Yearly re-submittal often required

District-Non Prop 39 Many of the same “Pros” as Prop 39Typically longer term than Prop 39 Often includes room for growth

Sometimes not available in good conditionRetrofit might require DSA complianceLease costs can exceed other optionsOpportunities are limited in number

Commercial Office Space

Larger offices can be converted to classroomsParking supply typically adequateAvailable in abundance in urban areas

School use may not be allowed by local codeOutdoor activity space typically not availableCan be cost prohibitive in some areas Schools not always compatible with other uses

Industrial Warehouse Open floor plans provide flexibilityLarge spaces for non-classroom usesTypically have adequate parkingOften available at affordable lease rates

Extensive renovations often requiredSchool use may not comply with local codesHigher likelihood for hazardous materials Commercial vehicle traffic may be a concern

Church/Synagogue Often available at affordable lease ratesOften configured with classroomsOften include play areas and cafeteria Parking supply typically adequate

Sometimes offered as a shared useLogistical challengesMay create parking issues in community and during certain events

Community Center Often offered at affordable lease ratesOpportunities for after school programsTypically provide recreational spaceParking supply typically adequate

Often offered as a shared use.May not be configured with classroomsMay be a short-term arrangement

Portable/Modular Classrooms

DSA approvedCost-effective lease ratesSpecialty units available ( labs, etc.)Long term lease options often availableFaster than new construction

Can give impression of temporary statusOften requires substantial infrastructure cost (link to city utilities, sewage, etc.)Location can require city approvalRequires vacant land to lease or purchase

New Construction Tailored to school’s needs, programming and educational goalsProvides long term/permanent solution

Sometimes cost prohibitiveCan be difficult to secure affordable financingTypically requires at least 18 month timelineAffordable sites not always availableRequires significant time investment Requires assistance from consultantsZoning/land use approvals can be challenging

Site Se

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Key Considerations When Selecting a Site

When searching for a potential school site, there are a number of issues school leaders

should consider and this portion of the handbook will introduce several of those

considerations.

Please note that this section exclusively focuses on identifying non-district sites for school

use; it does not cover issues raised by the pursuit of district-owned facilities which are

discussed in detail in other portions of this handbook beginning on page 19.

The Importance of Location

In most cases, charter schools must focus their site identification efforts within the

geographic boundaries of the district that authorizes them (CA Ed. Code 47605.1).

However, many school districts in California cover large geographic areas. As a result,

those charter schools which are not rooted in any particular community or neighborhood

will often have a very broad range of facilities options available. The leaders of new charter

schools which have identified a desired community to serve, and existing charters that have

established a school in a specific community will likely have a much more focused approach

to their facility search. While finding the right site in a limited geographic area may be more

challenging, many charter leaders will pursue a focused search so that they may serve a

specific community and/or continue to receive the enrollment and other benefits associated

with longevity in a given area.

Site Se

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n

Ask: Is this site in a location that serves a majority of our families, where our enrollmenttargets can be met?

13

Leasing vs. Purchasing

Most charter school leaders will consider both leasing and purchasing a school facility, and the

deciding factor between these two choices often hinges upon whether or not the charter

school is willing and able to take on the financial obligations that typically come with school

facility ownership. However, there are many other issues to consider, and a charter school

operator should weigh all of the positives and negatives associated with both leasing and

purchasing a facility. The table below outlines some of the pros and cons of these two

options. Additional information about leasing and purchasing options is available in the

Facilities Lifecycle section.

PROS CONS

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Leasing

Purchasing

Less cash up front

Fewer maintenance obligations

Greater space options

Eligibility for SB 740

Opportunity to sublease

Scalability for larger schools

Full control of property

Permanence

Asset Appreciation

No asset appreciation/equity

Term of lease may not be long

Control of property limited

Lease rates often escalate

Initial cash outlay

Complex negotiations

Loan payment obligations

Reduced financial flexibility

14

Site Assessment

Charter school facilities are not subject to the same state building code regulations (such as

the Field Act) which apply to school district facilities, however charter schools are still

subject to local building code standards, per California Education Code Section 47610(d).

When evaluating a site, it is important to perform the proper “due diligence,” to determine if

a facility or property is suitable for the intended uses of the charter school. A careful, early

evaluation of the condition of a building and the property on which it is located, will save

time and money in the long run. A charter school operator should consult with an architect,

engineer, contractor/inspector, and attorney to develop a list of items to consider when

considering school sites. These members of a charter school facilities team will likely

recommend that a school investigate items such as:

▪ Zoning and Land Use Designations Applicable to the Property

▪ Environmental Conditions (often covered in a “Phase I Environmental Assessment”)

▪ Hazardous Substances (Lead-Based Paint and Asbestos are common concerns)

▪ Physical Condition of Buildings (Electrical, Plumbing, Roof, and Structural for example)

▪ Traffic Analysis (including a review of potential drop off/pick up locations for students)

▪ Parking Plan

▪ E-1 Occupancy Requirements

▪ Americans with Disabilities Act (ADA) Compliance

▪ Fire Code Requirements

▪ Facilities Requirements in Charter Petition

In addition to the condition of the actual site under consideration, properties in the area

surrounding the potential site will also need to be considered for their impact on potential

school sites. For example, freeways, railways, chemical storage tanks, high voltage electrical

lines, manufacturing centers, airports and runways, may have a significant negative impact on

the desirability of potential school sites, and in some cases may present legal obstacles to the

use of a site for a school.

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15

In addition to underlying zoning, a site might also be included in a "Specific Plan” area which

can add to the restrictions applicable to a parcel of property. A Specific Plan has more

specific provisions than the General Plan for a defined geographic area. This could create an

additional layer of approval as it may require that the project be submitted to a Design

Review Board (DRB). The DRB will make recommendations to the City Planning Department

for approval or denial of the project. They typically review aesthetic issues only, such as the

color of buildings, the location and number of windows, architectural elements, signage,

landscape/hardscape design, and fencing details.

Zoning Exemption – Under California Government Code Section 53094, school districts are

considered to be exempt from zoning regulations under certain circumstances. Some

charter schools have sought zoning exemptions by working with their authorizing districts,

and others have argued that charter schools should be able to obtain zoning exemptions on

their own. However, this area of California law is somewhat unsettled, and charter school

leaders interested in pursuing zoning exemptions should consult with their legal counsel and

carefully consider the legal issues surrounding zoning exemptions before proceeding. To find

the zoning information for property in a targeted area, please visit the city or county planning

department website.

Site Se

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n

In addition to zoning requirements, various other local government regulations may impact

the use of a site. The charter school operator should consult with an attorney, architect,

and/or engineer to understand what approvals are required for the school use of a potential

site. The project’s risk and cost increase as more agencies are involved in the project’s final

approval. As previously mentioned, this section and the list below pertain to private projects.

Projects that are on district land or are funded by state bonds may require additional

approvals, as governed by the Field Act.

Ask: How is the prospective site zoned? Will a CUP or Zone Variance be required? If so,

how long does the city planning staff think the approval process will take?

16

Occupancy Requirements

All schools must be permitted for educational occupancy, typically referred to as an “E”

occupancy, and meet the requirements of codes to assure student safety. The California

Building Code (CBC) defines requirements for Group E Occupancies, used for educational

purposes through the 12th grade. It outlines requirements to be met by the building

construction, location on the property, access and means of egress, accessibility and the way

in which it is designed to meet safety requirements such as fire sprinklers and/or alarm

systems, hallway width and exiting.

Additionally, cities and counties typically enact additions or revisions to the CBC, or Planning

Department regulations that add to the requirements for a project within their jurisdiction.

These requirements must be met by the proposed project(s) and are reviewed by the local

building department when plans are submitted for permits. It is important to remember that

building code requirements for a school are different from those for residential or

commercial use, and any professionals hired to assist with permits and Certificate of

Occupancy should have previous experience with school projects.

California law requires that all buildings be permitted by the state or the local building

department for their intended use. Once a building has been determined to be safe for use as

a school, the building department will issue a certificate indicating that the building is in the

proper condition to be occupied. Until the owner or renter of the facility is granted this

certificate, the building cannot be occupied.

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Charter schools should always be located in safe facilities with the proper documentation

and approvals. A Certificate of Occupancy for use as a school is proof of this compliance

with safety requirements. This important document should be 'in hand' before students

arrive for school.

Top Five "To Do" List for Site Selection and Occupancy

1. Perform the proper due diligence on the property, including understanding any

environmental assessments required, and reviewing the local zoning and building code

requirements before spending any time on plans

2. Hire an architect to develop plans to submit to the building department

3. Develop a realistic schedule for approvals, plans, permits, and construction

4. Make sure to obtain a Certificate of Occupancy before moving into a facility.

5. Submit the Certificate of Occupancy to the authorizing district, if required.

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Facilities

Lifecycle:How Long Will the Charter

School Occupy the Facility?

Charter School Facilities Lifecycle

Most charter school facilities options fall into one of three categories: short-term, long-term,

and permanent. While the preceding sections this handbook introduced the types of facilities

available to charter schools, and provided insight into the site selection process, this section

provides further details on various options available to charter schools as schools develop

and grow.

Short-Term Facilities

Proposition 39

Overview

Proposition 39 was written to ensure that all public school students have access to public

school facilities. When Prop. 39 was passed by California voters in 2000, there were two

components to the law. First, the threshold for the passage of a general obligation bond

measure to finance school construction was reduced from two-thirds to fifty-five percent, a

considerably easier standard to meet. Second, eligible charter schools would have access to

reasonably equivalent public school facilities.

The law serves to ensure "that public school facilities should be shared fairly among all public

school pupils, including those in charter schools. Prop. 39 requires school districts to make

"reasonably equivalent" facilities available to charter schools upon request.

Facilitie

s Life

cycle

Startup/Short Term

Prop 39Lease >5 yr

Limited site control

Long Term Lease Permanent

5-10 years +

Stability and greater site

control

Own or 25+ Year

Ground Lease

Full control of site and

facilities

19

History

Prior to the passage of Prop. 39, charter law permitted charter schools to use, at no cost,

school district facilities which the district was not using for instructional or administrative

purposes, or which were historically used as rental properties. Districts only sporadically

complied with this permissive law, and therefore access to adequate facilities became one of

the biggest challenges for charter school operators.

Prop. 39 imposed a mandatory duty on school districts to provide their charter school

students facilities that are "reasonably equivalent" to those used by non-charter students

within the district. The charter school facilities must be:

1. Contiguous (located together, not spread across campus or multiple sites)

2. Similarly furnished and equipped

3. Located near the area in which the charter wishes to locate

Eligibility

In order to be eligible for facilities under Prop. 39, charter schools must provide "reasonable

projections" of their average daily attendance (ADA) of at least 80 in-district students. In-

district students are those students who could attend a district school if they had not chosen

to enroll in the charter school.

Facilitie

s Life

cycle

Short-Term Start Up

Long-Term

Scaling

Permanent Home

20

Written Facilities Request Requirements

If a charter school is interested in applying for a Prop. 39 facility, it must submit a written

facilities request to the district by November 1st. A few of the key items that need to be

included in the written facilities request are as follows:

1. Reasonable Projections of ADA.

2. Methodology on how the ADA projection was determined. New charter schools or

charter schools with a substantial projected increase in its ADA must also provide

supporting documentation of its Prop. 39 request. Forms of supporting documentation

could include charter petition signatures, forms from parents indicating an intent to

enroll their children in the school, or any other forms of documentation to support

their ADA projections. Intent to enroll forms are particularly important and schools

should collect and submit at least 80 forms at a bare minimum. Given that districts will

often attempt to discount at least some of the ADA projected by a school, submitting

100 or more in district intent to enroll forms is recommended whenever possible.

3. Operational Calendar

4. Relevant information on the educational program.

5. Desired school site and/or geographic location.

A charter school should ask its district in writing for a copy of any school district board

policy or administrative regulation and any required form regarding charter school requests

for facilities under Proposition 39 and review these materials, if any, before it completes a

written request. In addition to numerous Prop. 39 resources, the CCSA website has a Prop.

39 Facilities Request Form Template available.

Cost for Use of District Facilities

School districts are allowed to charge charter schools a “capped” fee for use of district

facilities under Prop. 39. Prop. 39 provides districts with two options for charging charter

schools annually for the use of facilities: a pro rata share charge or an increased oversight

fee, which is typically set at 3% of the charter school’s yearly revenue.

Challenges

While Prop. 39 states that districts provide contiguous facilities, the term “contiguous” can

also refer to facilities located at more than one site. If the district cannot provide a single site

to accommodate the projected in-district average daily classroom attendance, the district can

offer more than one site, as long as it minimizes the number of sites assigned and considers

student safety, and only after the school district’s governing board has adopted written

findings that the charter school could not be accommodated at a single site.

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Facilitie

s Life

cycle

Prop 39 Pro Bono Review Program

A charter school operator should consult with legal counsel to receive advice regarding the

facilities request. In order to help CCSA member schools obtain high quality legal advice, CCSA

has created a Prop 39 Pro Bono Review Program which pairs schools with charter school

attorneys, who will advise charter school leaders throughout the Prop 39 process at no cost to

the school. Please check the Prop 39 pages of the CCSA website for additional information

regarding the Pro Bono Review Program, or email Prop39@ccsa.org.

Many charter schools are offered “co-locations” with existing public schools. In order for co-

locations to be successful, charter schools and district-run programs need to work together

and plan how the space will be shared.

Many school districts only offer a one-year allocation of facilities under Prop. 39, which forces

a charter school to make a written facilities request every year. There is no certainty that the

district will offer the facility again, although districts are not allowed to move charter schools

from district facilities “unnecessarily.” However, some charter schools have been able to

obtain long term arrangements for district facilities, either through the Prop 39 process, or

through negotiations with school districts which are sometimes referred to as “alternative

arrangements”.

22

Facilitie

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cycle

Facilitie

s Life

cycle

a viable option, this option tends to have a temporary feel for students, staff and parents. If

these options are not available for a charter school, it might be necessary to look for private

leasing opportunities, where more extensive tenant/leasehold improvements may be required

to meet E Occupancy requirements. If entering into a private lease agreement, it is important

that the charter school operator is mindful of certain lease provisions.

Long-Term Facilities

Short-Term

Start Up

Long -Term

Scaling

Permanent Home

Private Short Term Leases

In addition to a Prop 39 or alternative arrangement for a district facility, charter schools

sometimes share space with a religious institution, private school, or a community center,

such as Boys and Girls Club, YMCA, or a non-profit organization. (Please refer to page 12 for

additional information on the pros and cons of each of these charter school facility options.)

23

After a charter school has been established in short

term facility arrangement for a few years, it may

begin experiencing growing pains. If building or

purchasing a new school facility is not financially

feasible, the charter school’s leadership might

consider a long-term lease arrangement. The most

ideal, but not the most common, arrangement is a

long-term lease for a school building, whether it be

district-owned or private. Some charter schools

have also opted to install modular classrooms on a

school site. While modular or portable units can be

What to Look for in a Lease

In commercial leases the vast majority of lease provisions are negotiable. There are state

statutes governing certain lease provisions, but otherwise landlords and tenants are free to

negotiate most lease terms. It is important that a charter school operator fully understand

the terms of the lease agreement. With such an important decision at stake, it is crucial for

the charter school operator to hire a lawyer to review the lease agreement and guide the

negotiation process.

Leasing Terminology

• Leasing agreement – outlines responsibilities of landlord and tenant; details terms,

including amount to be paid monthly

• Term of lease – identifies dates when the lease is in effect and options to renew

• Maintenance/Insurance/Taxes – sets forth landlord and tenant obligations for costs

• Rent Abatement – given by landlord in form of reduced or waived lease payments

Key Considerations

Facilitie

s Life

cycle

Read the Lease’s Fine

Print Regarding:

• Maintenance

• Custodial duties

• Access to shared amenities

• Parking

• Utilities

• Security

Be Wary of Standard

Forms

Most shopping centers and office complexes use a custom or

standard form of their own. Be careful! These can be very

pro-landlord.

Access and Security Many leases grant landlords an unlimited right of access.

However, charter schools must ensure landlords comply with

security procedures to protect student confidentiality.

Property Tax

Exemption

Most landlords pass a pro rata share of property taxes onto

tenants. A public charter school is exempt from most real and

personal property taxes and may claim an exemption. The

exemption must be claimed in a timely manner. Lessor should

cooperate in obtaining the exemption and the benefit should

go to the charter school.

24

Use Provisions Check the lease for restrictions on hours of operation, signage

and other activities. School usage should include the right to

hold evening meetings, conferences, and fundraisers.

Confidentiality Many leases require the lease be kept confidential. Charter

schools subject to the Public Records Act could not agree as

the lease would be considered public record.

Protection Against

Changes in Funding

Many schools have negotiated a termination provision in the

lease to safeguard them from any third party actions resulting

in a substantial reduction in funding or in the ability of charters

to operate.

Questions to Ask before Leasing:

1. How are costs allocated between the landlord and tenant (i.e.. maintenance, repairs,

changes necessary to comply with laws-such as the Americans with Disabilities Act,

sprinkler/seismic retrofitting, etc.)?

2. Does the lease include any caps on common area maintenance charges/fees and taxes

which are passed along to the tenant?

3. Does the tenant have the right to assign the lease or sublet a portion of the premises

to another tenant? Does the tenant remain liable for the payment of rent and costs

after an assignment?

4. What is required of the tenant regarding the installation of tenant improvements?

What type of approval process does the landlord require?

5. Will the landlord agree to any restrictions on new tenants to prohibit new tenants that

might be incompatible with a school use?

6. Does the lease include any contingency provisions that would allow the school to

terminate without penalty if they are unable to obtain any necessary government or

district approval to operate a school at the leased premises?

Tip

Read the lease agreement’s fine print and thoroughly understand tenant responsibilities.

And remember, everything is negotiable!

Facilitie

s Life

cycle

25

For the purpose of this manual, a permanent

facility refers to a facility which is owned by the

charter school operator. Obtaining a

permanent facility should be a long term goal

for charter schools, as permanent facilities

provide numerous benefits that are not

associated with shorter term arrangements.

This section of the handbook will provide

information about constructing or renovating a

facility, and discuss the process and challenges

that a school will encounter on the road to

school facility ownership.

Budget and Timeline

Permanent Facilities

Short-Term

Start Up

Long -Term

Scaling

Permanent Sustainability

Facilitie

s Life

cycle

It is critical that charter school leaders understand the various costs that should be included

in the development project budget, whether for construction or renovation of a facility. The

development project budget typically consists of land acquisition costs, hard costs, and soft

costs. Hard costs include primarily construction costs and soft costs refer to costs

associated with such items as the preparation of plans and government permitting. Please

refer to the Permanent Facility Sources and Uses Worksheet in Appendix D for more

information on the items typically included under each category. The worksheet will help

guide a preliminary discussion on the various costs associated with facility development and

the funding and financing needed to cover these costs. In addition to significant costs, facilities

construction and renovation require a substantial investment of time. As previously noted in

the Facility Planning section, it usually takes 18-24 months from site acquisition to

construction completion. The typical steps involved in constructing or renovating a charterschool facility are depicted below.investment of time. As previously noted in the Facility Planning section, it usually takes 18

months from site acquisition to construction completion. The typical steps involved in

constructing or renovating a charter school facility are depicted below.

26

Facilitie

s Life

cycle

Project Construction Models

There are three common construction models that charter leaders should be familiar with:

traditional, design-build, and construction management. The three models differ with regards

to cost, scheduling, and the owner’s level of involvement with the project.

Traditional (Design-Bid-Build)

With the traditional construction model, a charter school has control over the selection and

management of the architect and general contractor. In addition, the selection process is

sequential. First, the charter school selects an architect who designs the project and

prepares the construction documents. With these construction documents, the charter

school then bids out the project to general contractors and selects a contractor based on

best fit and price.

Design-Bid-Build Diagram

Charter School

(Owner)

General

ContractorPrepares

Construction Docs

Selects and

Manages

Provides

Construction Docs

Constructs

School

Architect

Step 1: Charter School Selects Architect Step 2: Charter School Bids Out for General Contractor

Design-Build

One disadvantage with the Design-Bid-Build process is that the charter school manages two

parties separately and often spends a lot of time mediating between the architect and

contractor. With the Design-Build model, the charter school selects a firm that is

responsible for both the design and construction of the building. In this case, the charter

school has one point of reference for the design and construction of the project.

Charter School

(Owner)Architect + General Contractor

Prepares Construction Docs

and Constructs School

Design-Build Diagram

Selects and Manages

27

Facilitie

s Life

cycle

Construction Management

The last construction model involves the charter school hiring a construction manager (CM).

A CM can help manage the scheduling and costs of the construction project. If the charter

school operator wishes to have additional construction expertise on the team, hiring a CM

may be an option. There are three different construction management arrangements:

advisor, agent and contractor.

A CM advisor provides advice to the charter school on the construction process. This CM

arrangement is typically partnered with the Design-Bid-Build construction model. One of the

major challenges with this approach is that there are four parties (CM, contractor, architect,

and owner) that need to communicate and coordinate with each other.

A CM agent acts on charter school’s behalf and oversees all activities from project inception

to construction completion. This allows the charter school to not be intimately involved

with the project’s design and construction.

The last construction management role is CM as contractor. The CM contractor is hired

early in the design stage and both manages the project and acts as the general contractor.

The following diagrams illustrate the three CM arrangements.

The table on the following page highlights a few of the advantages and disadvantages with

each of the construction models.

Tip

The best construction model for an organization depends on how much internal real estate

expertise the organization has and the level of project involvement desired.

28

Facilitie

s Life

cycle

Advantages Disadvantages

Traditional

“Design-Bid-

Build”

• Owner Involvement: Can participate in the design

process.

• Schedule: Design and construction phases are

sequential so scheduling is straight forward.

• Cost: Usually reliable cost estimate since

contractor works with nearly completed

construction docs.

• Roles: Architect and contractor have clearly

defined roles and responsibilities.

• Cost: Not completely known until

after design stage.

• Schedule: Since sequential, a long

process and delays in any of the

phases backs up entire schedule

and can increase costs.

• Roles: Architect and contractor

may not get along and cause issues.

Design-Build • Owner Involvement: Provides input during design,

but once contractor is hired, has limited

involvement.

• Schedule: Architect and contractor can closely

coordinate to reduce time delays with

scheduling issues.

• Cost: Can get early cost estimates to help with

budgeting and financing.

• Roles: Single point of responsibility for design

and construction.

• Cost and Schedule: A more

complicated arrangement and the

owner may find it challenging to

participate in the cost and

scheduling discussions happening

between the architect and design-

build firm.

• Roles: Since architect is contracted

with the design-build firm, their

loyalty is with them and not the

owner.

Co

nst

ructi

on

Man

agem

en

t

Advisor • Owner Involvement: Can benefit from CM

expertise.

• Schedule: CM’s decision making authority and

management expertise may speed up process.

• Cost: CM’s review of construction docs may

reduce error and reduce unnecessary costs

later.

• Roles: Clearly defined rolls between parties.

• Cost: CM adds an extra cost.

• Schedule: Added levels of

coordination and overlapping areas

of authority may make the process

more lengthy and challenging.

• Roles: Owner has more parties to

manage and likelihood of conflicts

increases.

Agent • Owner Involvement: Can benefit from CM

expertise.

• Schedule: CM’s authority to make fiscal decisions

can speed up process.

• Cost: CM’s involvement in design phase can

benefit the project by estimating costs early and

then monitoring. Also same as Advisor.

• Roles: Owner can still competitively bid for

contractor.

• Cost: CM adds an extra cost.

• Schedule: Added levels of

coordination and overlapping areas

of authority may make the process

more lengthy and challenging.

• Roles: Owner has more parties to

manage and likelihood of conflicts

increases.

Contractor • Owner Involvement: Can benefit from CM

expertise.

• Cost: CM makes cost commitment early so

there is a level of security about costs.

• Schedule: With cost commitment, CM is

motivated to finish project on time.

• Roles: Architect and contractor have clearly

defined roles and responsibilities.

• Cost: CM adds an extra cost.

• Schedule: A linear process which

makes it lengthy.

• Roles: Owner has less control over

construction process and hence

project quality.

Advantages and Disadvantages of the Construction Models

29

Adapted from NCB Development Corporation’s The Answer Key.

Facilitie

s Life

cycle

LLC

CMO

Ownership Structures

A charter school operator has several options to consider when deciding how to hold title to

real estate that it purchases, and this decision should be carefully considered by the school

leadership as it has significant implications regarding the funding sources that are available to

charter schools. For example, the repayment of loans used to acquire real estate are not

eligible for reimbursement under the state’s lease grant program (SB 740*). However, some

schools have been able to work with legal counsel to set up a legal structure for the

ownership and leasing of facilities that allows schools to maintain SB 740 eligibility. If a charter

school chooses to own its facilities, it should seek legal counsel to provide advice on the

most appropriate ownership structure for the school.

Purchases/Constructs

School Facility with Loan

Holds Title to School

Facility

Lender

$Provides Loan

Uses CMO’s Rent

for Loan PaymentLeases

FacilityPays

Rent

Provides SB 740

Grant

*SB 740 will be discussed in further detail in the Funding and Financing section.

Tip

Seek legal counsel to discuss the best ownership structure for a particular situation.

State Program

$

30

Facilitie

s Life

cycle

Post Construction/Maintenance

After the facility construction or renovation process is over, the school facility will be ready

for use by the school, however, even carefully designed and built facilities will require

maintenance and upkeep moving forward. In order to meet these maintenance needs, a

charter school should include a line item in its capital budget for ongoing facilities

maintenance. While a charter school may not see the need to set aside a reserve for

deferred maintenance on a new or recently renovated facility, sooner or later repairs must

be made and a failure to do so will result in property deterioration or property impairment.

To properly manage facilities, school operators must know and understand the condition of

the facilities, which includes the estimated cost of deferred maintenance. A consultant can

assess the facilities and provide an estimate for the amount that should be reserved. By

including a deferred maintenance line item in the budget, the charter school commits to

annually setting aside a certain amount of its facility budget for future facility maintenance,

such as replacing a roof, repairing an air conditioning system, or upgrading an electrical

system. The fund reserve then accumulates annually until it needs to be drawn upon. This

reserve fund approach helps provide a more accurate capital budget forecast and ensures

that the charter school is financially prepared to meet future facility costs.

Tip

Set aside funds in the budget for future maintenance costs.

31

Funding and Financing:How Will the Facilities Be

Funded?

Public Funding Sources

As noted in the previous sections, there are several state, local and federal funding sources

available to provide facilities funding for charter schools. This section introduces various public

sources and provides hyperlinks to additional resources for those interested in learning more

about each program.

State Programs

General Purpose and Categorical Block Grants

Prior to 2013, the General Purpose Block Grant and Categorical Block Grant were the major

funding mechanisms for charter schools in every facility lifecycle stage. Although Block Grant

funding was a general source of revenue for charter schools and not only facilities, most charter

schools used at least a portion of this general funding for facilities related costs. The General

Purpose Block Grant was based on statewide average general purpose funding per unit of

average daily attendance (ADA) in specified grade level spans. The General Purpose Block Grant

was calculated as one amount and was mostly funded from a combination of state and local

revenues (Education Code sections 47633 and 47635). Most charter schools were eligible for the

grant.

The Categorical Block Grant covered 24 state-funded programs, in lieu of separate funding for

participation in those specific categorical programs, and in an amount per unit of ADA in

specified grade level spans. Charter schools did not have to apply for each program and were

given a lump sum based on their ADA.

Local Control Funding Formula

The 2013–14 State budget included a process for the gradual replacement of the Block Grant

System with a new Local Control Funding Formula (LCFF). For school districts and charter

schools, the LCFF creates base, supplemental, and concentration grants in place of most

previously existing K–12 funding streams, including revenue limits and most state categorical

programs.

The 2013–14 Budget Act provided $2.1 billion for school districts and charter schools and $32

million for COEs to support the first-year implementation of the LCFF. Until full implementation,

however, local educational agencies (LEAs) will receive roughly the same amount of funding they

received in 2012–13 plus an additional amount each year to bridge the gap between current

funding levels and the new LCFF target levels. The budget projects the time frame for full

implementation of the LCFF to be eight years. The LCFF includes the following components for

school districts and charter schools:

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Provided a base grant for each LEA equivalent to $7,643 per average daily attendance

(ADA). The actual base grants would vary based on grade span.

Provided an adjustment of 10.4 percent on the base grant amount for kindergarten

through grade three (K–3). As a condition of receiving these funds, the LEA shall

progress toward an average class enrollment of no more than 24 pupils in kindergarten

through grade three, unless the LEA has collectively bargained an annual alternative

average class enrollment in those grades for each school site.

Provided an adjustment of 2.6 percent on the base grant amount for grades nine

through twelve.

Provided a supplemental grant equal to 20 percent of the adjusted base grant for

targeted disadvantaged students. Targeted students are those classified as English

learners (EL), eligible to receive a free or reduced-price meal (FRPM), foster youth, or

any combination of these factors (unduplicated count).

Provided a concentration grant equal to 50 percent of the adjusted base grant for

targeted students exceeding 55 percent of an LEA’s enrollment.

Provided for additional funding based on an “economic recovery target” to ensure that

virtually all districts are at least restored to their 2007–08 state funding levels (adjusted

for inflation) and also guarantees a minimum amount of state aid to LEAs.

California's Charter School Revolving Loan Program (CSRLP)

The Charter School Revolving Loan Fund (CSRLF) provides low-interest loans of up to

$250,000 to new charter schools to help meet purposes established in the school's charter,

including leasing facilities and making necessary improvements to facilities. CSRLF charter

schools with startup funding and initial operating capital. Any charter school that is not a

conversion of an existing public school and has not yet completed the full term of its initial

charter is eligible for the program. The application process requires that a charter school

provide projected financial information for five years. The application includes a block grant

worksheet, a multi-year budget worksheet, and a cash flow worksheet. To apply for the loan

program visit the CSFA website.

Public Charter Schools Planning and Implementation Grant

A newly established or conversion charter school may apply for the Public Charter Schools

Planning and Implementation Grant. Grant funds are intended to support the final planning

and initial operation of the charter school, which may be applied to one-time leasehold

improvements. Charter schools can receive grants of up to $575,000. The CDE accepts

applications during two filing periods each calendar year. The first filing period is held from

January to March with funds distributed the following October and the second filing period is

held from August to October with funds distributed the following April. More information

on the Public Charter Schools Grant Program can be found on the CDE website.

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Charter School Facility Grant Program (SB 740)

Charter schools that either serve a student population or are located within an attendance

area in which 55% or more of students are eligible for the federal free or reduced lunch

program qualify for this state program. A charter school is funded at the lesser of $750 per

unit of classroom-based ADA, or up to 75 percent of its annual facilities rent and lease costs

for the school. While the program use to only allow for charter schools to apply for

reimbursement of the previous year’s lease expenditures, it now allows eligible charter

schools to apply for advance funding for the current year’s lease expenditure. However,

funds are first allocated to those charter schools seeking lease cost reimbursement. Please

note that under this program, only lease costs are eligible for reimbursement—the program

does not cover mortgage payments. However, some charter schools have worked with legal

counsel to establish a separate legal entity to hold title to school facilities, and then leased the

facility from the title holding entity in order to maintain eligibility for SB740 lease

reimbursement funds. Funding is also not generally not available for facilities costs incurred

by schools located in school district owned facilities. Schools interested in exploring this

approach should work with experienced charter school attorneys to discuss the pros and

cons of this approach. Additional information about the CSFGP is available on the California

School Finance Authority website.

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State Charter Schools Facility Incentive Grant Program

The California Treasurer's office also provides facilities funding, for lease, mortgage,

construction and renovation costs for charter schools. No individual grant may exceed

$250,000 per year for rent and lease assistance or $500,000 per year for construction

assistance. A charter school is eligible if it is in good standing with its chartering authority,

has been in operation for at least one year, provides at least 80% of instructional time at the

school site, and implements a lottery system if demand exceeds seat capacity. Unlike the SB

740 program, schools located in school district owned facilities are eligible for incentive grant

funding. Please visit the Treasurer’s office website for an application packet and additional

information about program dates.

Charter School Facilities Program (sometimes referred to as Prop 47, Prop 55, orProp 1D)

In 2002 Assembly Bill 14 established the Charter School Facilities Program (CSFP), which sets

aside bond monies for the construction of charter school facilities. CSFP received funding

from the following propositions:

1. Proposition 47 (2002) -$100 Million

2. Proposition 55 (2004) -$300 Million

3. Proposition 1D (2006) -$500 Million

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CSFP allows charter schools that provide site-based instruction access to state facility

funding. A charter school can directly or with the assistance of the school district apply for a

preliminary apportionment (reservation of funds) for new facilities construction or

rehabilitation of existing district-owned facilities that are at least 15 years old.

The last filing round for preliminary apportionment was in 2009. At its November 2013

meeting, the State Allocation Board (SAB) approved a new application filing period for the

Charter School Facilities Program (CSFP). The CSFP provides preliminary apportionments

(reservation of funds) for new construction projects and rehabilitation of district owned

existing facilities that are at least 15 years old. CSFP applications will be accepted by the

Office of Public School Construction (OPSC) between April 1, 2014 and May 30, 2014.

By participating in the CSFP, a charter school must seek state approvals for a charter school

facility project, in addition to any government approvals that may be required at the local

level. From site selection to site and plan approval to eventual fund release, a charter school

operator works with numerous state agencies at every step of the charter school facility

development process. The state agencies involved in the CSFP are as follows:

1. California Department of Education (CDE)

2. California School Finance Authority (CSFA)

3. Department of Toxic Substance Controls (DTSC)

4. Division of the State Architect (DSA)

5. Office of Public School Construction (OPSC)

6. State Allocation Board (SAB)

7. School Facilities Planning Division (SFPD)

Appendix E includes a flow chart of the Charter School Facilities Program with hyperlinks to

additional information at each stage of the process. The flow chart is solely meant as a high-

level overview. For a more comprehensive explanation of the CSFP process, please visit the

OPSC website and/or contact the district project manager.

The California Clean Energy Jobs Act

The California Clean Energy Jobs Act (Proposition 39), created a state program to provide

funding to local educational agencies to improve energy efficiency and create clean energy

jobs. The Act provides approximately $550 million annually from the State’s General Fund to

the Clean Energy Job Creation Fund, for five fiscal years beginning with the 2013-14 fiscal year.

This program provides funding to California's K-12 schools, including charter schools, and

community colleges, to complete a wide range of energy efficiency projects at school facilities,

ranging from the energy efficient light bulbs to solar panels.

This program utilizes two different determinations for charter school funding-- 85 percent is

based on the average daily attendance (ADA) reported as of P-2 for the prior year, and 15

percent based on the students eligible for free and reduced-price meals in the prior year. For

schools with ADA of 100 students or less $15,000 in funding could be available. Schools with

greater than 100 ADA, but 1,000 ADA or less – could receive the greater of the proportional

award based on ADA or $50,000. Schools with greater than 1,000 ADA but less than 2,000

ADA could receive the greater of the proportional award based on ADA or $100,000.

Schools with 2,000 ADA or greater would be eligible to receive proportional award based on

ADA. For additional information regarding the Clean Energy Jobs Act, please visit the

California Energy Commission website.

Local School Bonds

Depending on the relationship with its chartering district, a charter school may be able to

access funds through bonds issued by the school district. For example, the Los Angeles Unified

School District has agreed to make available approximately $402 million for charter facilities

construction from the proceeds of Measure Q school bond sales. Measure Q was passed by

voters in 2008.

Voters within the San Diego Unified School District (SDUSD) approved Proposition Z in

November of 2012. The ballot language for Proposition Z specifically allocated $350 million in

bond proceeds to charter school facilities projects. San Diego Unified has also agreed to the

establishment of the Charter School Facility Committee to review project and planning grant

applications from San Diego charter schools and recommend worthy projects for approval to

the SDUSD Board of Education. Additional information regarding Proposition Z can be found

on the SDUSD website.

CCSA will continue to advocate for the inclusion of charter school facilities funding in future

local school bond measures. In addition, CCSA has adopted a set of “Guiding Principles” to

help members of the charter school community that take part in the decision making process

regarding the allocation of these school bond funds to charter school facilities projects. The

Guiding Principles document and additional information and resources regarding local school

bonds can be found on the CCSA website.

37

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Federal Programs

Credit Enhancement for Charter School Facilities Program

The U.S. Department of Education’s Credit Enhancement for Charter School Facilities grants

help public charter schools improve their credit in order to obtain private sector capital to

buy, construct, renovate, or lease academic facilities. Credit enhancement provides a lender

with reassurance that a borrower will honor a financial obligation through additional

collateral, insurance, or a third party guarantee. The Credit Enhancement for Charter School

Facilities grants are intended to absorb some of the risk of making loans to charter schools.

CCSA is a grantee under this program. To learn more about CCSA’s grant visit our website.

This program provides grants to eligible entities to permit them to enhance the credit of

charter schools. Those who are eligible to apply for this federal program include: a) a public

entity, such as a State or local governmental entity; (b) a private, nonprofit entity; or (c) a

consortium of entities described in (a) and (b). Community development financial institutions

are common recipients of these credit enhancement grants, and charter schools can apply to

these organizations for credit enhancement opportunities. The following Private Resources

section contains information for several financing organizations that have credit enhancement

programs.

Please visit the U.S. Department of Education’s website for additional information the Credit

Enhancement for Charter School Facilities Program.

Qualified Zone Academy Bond (QZAB)

This federal program allows for the finance and repair (not construction) of public school

facilities. The QZAB program allows schools to issue taxable bonds that provide financial

institutions holding the bonds with a federal income tax credit in lieu of interest payments. A

QZAB is a loan, not a grant; however, due to the income tax credit, the borrower usually

only pays back the principal. Charter schools can apply directly to the state or through the

district in which they are located for these funds. To be eligible, the school must be located

in an Empowerment Zone or Enterprise Community or serve a student population with at

least 35 percent that qualify for free or reduced lunch. The Empowerment Zone and

Enterprise Community are designated economically distressed urban and rural areas. A

charter school operator can find out if its charter school is located in one of these areas by

visiting the U.S. Department of Housing and Urban Development website.

QZAB encourages private investment, both monetarily and programmatically. To qualify, a

charter school must receive private entity contributions worth at least 10% of the money

borrowed using the QZAB. In addition, a school must develop a partnership with a business

to develop a plan for how their combined efforts can improve student education. For more

information about applying for the QZAB program, please visit the CDE website.

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Qualified School Construction Bond (QSCB)

QSCBs can be issued as tax-credit bonds or as taxable bonds, where the charter school

receives a federal direct subsidy payment. The subsidy allows for the charter to have a very

low net cost of capital. Unlike QZABs, QSCBs can be used for both renovation as well as

new construction. In addition, charter schools do not need to be located in an

Empowerment Zone or Enterprise Community. The California School Finance Authority

(CSFA) administers and issues the Charter School QSCB allocations. For more information

about applying for the QSCB program, please visit the CDE website.

New Markets Tax Credits (NMTC)

The New Markets Tax Credit Program stimulates private investment and economic growth

in low-income communities by allocating a federal tax credit of 39% over seven years for

Qualified Equity Investments (QEIs) made through designated Community Development

Entities (CDEs). While CDEs can make equity investments in charter schools, CDEs more

often extend loans to charter schools for facilities projects in qualifying low-income census

tracts. A charter school operator can find out if his or her school is located in a NMTC

census tract by visiting the NMTC Qualifying Census Tracts Interactive Map. NMTC financing

benefits include reduced interest rates, seven-year terms, longer amortization periods or no

principal amortization, and debt cancellation.

United States Department of Agriculture Community Facilities Loans and Grants

Community Facilities Programs provide loans, grant and loan guarantees for essential

community facilities in rural areas including charter schools. Community Facilities Programs

can make and guarantee loans to develop essential community facilities in rural areas and

towns of up to 20,000 in population. The USDA Community Facilities Programs also provide

grants to assist in the development of essential community facilities in rural areas. Grants are

authorized on a graduated scale. Applicants located in small communities with low

populations and low incomes will receive a higher percentage of grants. For more

information, please visit the USDA website .

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Loan Program Specifics

The following table provides additional information on four major facility loan programs.

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Tax-Exempt BondsNew Market Tax Credits

(NMTC)

Qualified Zone Academy

Bonds (QZAB)

Qualified School

Construction Bonds

(QSCB) - Tax Credit and

Direct-Pay Methods

Eligibility 3-year operating history Charter schools located in an

eligible low-income community

or serving a low-income

population

Located in an Empowerment

Zone or Enterprise Community

or serve a student population

with at least 35 percent that

qualify for free or reduced

lunch.

3-year operating history,

projects ready for construction

preferred

Exit Strategy - Will the

charter school be

required to pay or

refinance most or all of

the principal at the end

of the loan term?

Permanent Financing,

amortization of 30-35 years -

No refinance risk

Refinance risk for typical

leveraged model, where the

80% loan amount is due in 7

years. However, if tax credits

are coupled with tax-exempt

bonds, this can be avoided

Maximum maturity set monthly,

has ranged from 15 to 19 years.

Depending on structure, it can

be fully amortized or have a

single principal payment at

maturity date

Maximum maturity set monthly,

has ranged from 15 to 19 years.

Depending on structure, it can

be fully amortized or have a

single principal payment at

maturity date

Prepay Options Can be called prior to maturity

at the school's option

Typically cannot be pre-paid

prior to maturity

Typically cannot be pre-paid

prior to maturity

Direct-Pay (taxable bond

option) typically has a 10-year

par call, meaning the charter

may redeem part or all of the

bond at face value in 10 years

Loan-to-Value (LTV)

Requirement - how much

the loan amount can be

of the project's value,

may need additional

equity or another loan

No LTV Requirements, 100%

Financing

High LTV, some "equity" from

tax credits

No LTV Requirements, but the

charter school must receive a

business donation that is not

less than 10 percent of the net

present value of the proceeds

of the QZAB bond

No LTV Requirements, but or

tax credit bonds, a charter may

need to offer additional interest

payments on top of the federal

tax credit in order to draw

capital market interest

Geographical Limitations None Yes, must serve a distressed or

highly distressed community or

target population

Yes, located in an

Empowerment Zone or

Enterprise Community

None

Flexibility in Uses (Allows

use for Construction,

Renovation, Acquisition,

Refinancing, Financing

Costs)

Yes Yes Funds can only be used for

Renovation

Funds cannot be used to

refinance long-term debt

Additional Notes Requires a reserve of one year

of debt service

Borrower will accrue equity

equal to subordinate debt at

end of 7-year financing period.

Interest-only for the life of the

financing. Not subject to

prevailing wage requirements

Subject to prevailing wage Subject to prevailing wage

40

Public Funding Requirements

While there are several public funding programs available for charter schools, it is important

to understand that the use of certain programs requires a charter school to comply with

regulations associated with the program that might not otherwise apply. Two of the most

common requirements attached to public funding are the Field Act and the Davis-Bacon Act.

Field Act

When state bond funds (i.e. Prop. 1D, 55 and 47) are used in the construction of a charter

school, the charter school must be designed in accordance with the Field Act. Field Act

compliance may also be triggered if a charter school is being constructed on district-owned

property or if local bond funds are used in conjunction with state bond funds for charter

school facility construction. If there are any questions, charters should consult with legal

counsel as to whether the project they are considering requires compliance with the Field

Act.

The Field Act requires that building designs follow high level building standards adopted by

the state. Division of the State Architect (DSA) enforces the Field Act requirements and

oversees the review of plans and the inspection process. The Field Act applies to both new

construction and rehabilitation projects.

Per the DSA website, the Field Act requirements are as follows:

• Licensed design professionals must prepare drawings and specifications for proposed

construction work.

• Drawings and specifications have to be verified by DSA for compliance with

applicable building codes.

• The building codes utilized in the design of school buildings contain structural

provisions superior to many other types of facilities, with consideration for known

seismic activity in California.

• The charter school must hire a DSA-certified inspector to oversee construction. The

inspector selection must be approved by the design professionals and the DSA.

• Changes to approved drawings and specifications for DSA-regulated portions of the

project shall be submitted and approved by DSA prior to commencement of work.

• At the conclusion of construction, the design professionals, the inspector and the

contractor shall file verified reports with DSA indicating the work has been

performed in compliance with the approved plans and specifications.

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41

Tip

If state bond funds are used in charter school facility construction, the project must be Field

Act compliant. Work with an architect that understands Field Act requirements.

Davis-Bacon Act – Prevailing Wage

The Davis-Bacon Act applies to federally funded or assisted construction projects. Charter

schools that participate in the State Charter School Facilities Incentive Grants Program,

Qualified Zone Academy Bond Program, and the Qualified School Construction Bond

Program must follow Davis-Bacon Act, which requires contractor to pay “prevailing wages

rates” set by the state (usually higher than local wages) and comply with certain record

keeping and other requirements.

For More Information on the Davis-Bacon Act

Davis-Bacon and Related Acts Home Page

United States Department of Labor

For More Information on the Field Act:

California Seismic Safety Commission’s Field Act Report. Provides a comparison between the

requirements of Field Act buildings and Non-Field Act buildings.

California Education Code: Field Act Information

Field Act: Design to Maximize Student Safety

DSA’s Field Act Presentation

Fundin

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42

Additional Requirements Associated with Public Funding

In addition to the Field Act and Davis-Bacon Act, local school district policies for school

construction, and the use of local school construction funding such as local school bond

dollars, may seek to require charter schools to comply with additional requirements such as

project labor agreements entered into by a school district and local labor unions, public

bidding requirements, and local prevailing wage regulations. In order to maximize the ability

of charter schools to deliver state of the art school facilities in the most efficient and cost-

effective manner, charter schools should remain free of unnecessary and inefficient

regulations. However, charter school leaders will need to decide on a case by case basis

whether or not to accept funding that has significant regulatory strings attached.

In addition to the public funding sources discussed above, there are several private sources

that can be utilized for charter school facility financing. As indicated in the diagram to the

right, public funding provides the foundation for facility funds needed. However, there may

still be a gap that needs to be filled with additional sources of money. Financing

organizations, private lenders, and donors can build off of public funding program and

provide additional financial assistance.

The organizations listed below aggregate and

leverage different financing mechanisms, such

as new markets tax credits, tax-exempt

bonds, credit enhancement and private

investment, to provide facility-related

financing opportunities for charter schools.

The type of funding made available, and

terms and conditions associated with that

funding vary from lender to lender, and

program to program. The following list of

financing organizations is not all inclusive, but

Private Resources - How to Fill the Equity Gap?

Fundin

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Financing Organizations

Capital Impact Partners–offers construction, renovation, and site acquisition loans, as well as,

revolving lines of credit to charter schools.

Excellent Education Development, Inc. (ExED)–Serving the Southern California market, ExED

offers New Market Tax Credit financing, assistance with packaging of loans and other funds,

and real estate consulting support.

Local Initiatives Support Corporation (LISC)--LISC provides short-term acquisition and

construction loans with an interest-only period as well as mini-permanent financing with a

seven-year term and up to a 20-year amortization period.

Low Income Investment Fund (LIIF)–for charter schools in low-income areas, LIIF provides

loans for the acquisition, construction and renovation of both leased and owned facilities.

43

provides an overview of some of the groups who offer programs to assist charter schools:

Private Lenders

In addition to the community development oriented financing organizations such as those

listed above, charter schools can also work with traditional lenders, such as banks, to secure

facility financing. However, some traditional lenders are not completely familiar with

charters schools, and therefore, it is necessary for charter schools to provide basic

information to the lender about how charter schools are organized and funded.

Donors

Donors and private individual investors can also supplement a charter school’s facility

financing needs. Charter schools can initiate a capital campaign to raise funds to cover costs

not met with public funding and private financing. A capital campaign is an organized

approach to raising grant money. Unlike fundraising, a capital campaign is planned around a

specific goal, usually a facilities project. From seeking small contributions to arranging for the

investor to buy a piece of property and lease it back to the school, there are various ways

that a charter school can reach its capital campaign goals.

Fundin

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44

Types of Private Lenders

Location / Contact Additional InformationLarge Regional and National

Commercial Banks

Loan officer in the real estate, non-

profit or small business department

Low-income communities may help

bank meet Community

Reinvestment Act goals

Small Community Banks Neighborhood banks near

proposed facility

May have lower minimum loan size

requirements and more flexible

terms

Community Development

Financial Institutions (CDFI)

A few CDFIs include Low Income

Investment Fund (LIIF), Local

Initiative Support Corporation

(LISC), and Capital Impact

Partners. Please see the previous

section on financing organizations

for more information on these

CDFIs

Many have dedicated loan pools for

charter schools

Facilities Developers State and national turnkey charter

facilities developers sometimes

provide project financing. See

CCSA’s vendor member guide for

more information

Compare rates and fees with what

might be available from other

lenders.

Seller Financing Speak with the individual seller of

the land or facility to learn if he or

she is interested in taking back a

mortgage

Lawyer and accountant helpful to

review terms of deal

Sources

Balboni, E., Bhatia, R., Olsen, K., McCuistion, S., & Meyers, J. (2010). 2010 Charter School

Facility Finance Landscape. The Educational Facilities Financing Center of Local Initiatives

Support Corporation.

California Department of Education. (2011). Retrieved 2011, from

http://www.cde.ca.gov/index.asp

California Department of General Services. (2011). Division of the State Architect . Retrieved

July 15, 2011, from http://www.dgs.ca.gov/dsa/Programs/progProject.aspx

California State Treasurer . (2011). California School Finance Authority. Retrieved July 1, 2011,

from http://www.treasurer.ca.gov/csfa/qscb.asp

Colon, B., Buck, J., & Moser, G. (2011). Selecting the Best Facility Financing for Your Charter

School Presentation. 18th Annual California Charter Schools Association Conference. Robert W.

Baird & Co., Buck Financial Advisors, LLC and Procopio, Cory, Hargreaves & Savitch, LLP.

Dunworth, K. (2011, June 30). Pacific Charter School Development. (S. Tirsbier, Interviewer)

Feinberg, D. (2011, July 8). LaunchPad Development Company. (S. Tirsbier, Interviewer)

King-Chavez Charter School. (2011). Charter School Facilities Primer Presentation. 18th

Annual California Charter Schools Association Conference.

Landecker, A., Gauger, C., & Bell, N. Facilities Development and Financing Presentation.

ExED and LISC.

Moser, G. V. Building Charter Schools. (p. 8). Procopio, Cory, Hargreaves & Savitch, LLP.

NCB Development Corporation. (2005). The Answer Key: How To Plan, Develop and Finance

Your Charter School Facility. Retrieved July 15, 2011, from NCB Capital Impact - Innovative

Community Lending: http://www.ncbcapitalimpact.org/default.aspx?id=42

45

Appendix

Appendix A

Hiring the Professionals for the Project

BROKERS

In order to begin the search for a project site for a school, the first person to contact is a

real estate broker. He or she will identify properties available for lease or sale that meet the

charter school operator’s needs. The following list is provided to assist with selecting the

right broker.

1. Choose an experienced broker – one who knows the targeted territory well.

2. Make sure the broker understands charter schools and the unique challenges they

face in finding properties. Find out if he/she has worked with other charter schools.

3. Get references! Check the broker out with other people. If a charter school

operator is going to invest the time to work with a broker, they should make sure it

is a credible broker.

4. Find a broker who is willing to actively seek out good properties and think creatively

about finding the right site for the charter school

5. Select the best qualified person regardless of affiliation. All brokers have access to

the Multiple Listing

6. Service and a broker does not have to be with a big name brokerage to be good.

7. Be upfront about what is affordable. Most brokers, in their enthusiasm to find a site,

will present totally unrealistic properties. That is a waste of time.

8. Check in with the broker frequently. Brokers are working on many deals

simultaneously and it is important to make sure that he/she is still looking for charter

school site opportunities.

9. Confirm that the broker understands that his commission is coming from the seller-

agent’s side of the deal, not from the client (the charter school). While the charter

school operator is not paying the commission, it is the broker’s fiduciary duty to

look out for their client’s best interest. Unfortunately, it is not unusual for

cooperating brokers to be indiscreet with each other and tip their client’s hand in

order to make a deal, and earn themselves a commission. Make sure the broker is a

principled person. Speak with people who have used the broker to confirm that he

or she is a principled person.

10.If the first meeting with the broker does not go well, chances are the partnership will

be rocky. Choose a broker that is the right fit and will negotiate for the best

interests of the charter school.

ARCHITECTS

Plans and permits for facilities will require the professional assistance of an architect and/or

engineer. Putting them on the team at the right time and selecting the right person for the

project is key to a successful venture. The earlier the architect is involved in the process, the

better he or she will be able to direct the site selection and design process, in order to

achieve the best results for the project. That said, it is often difficult to afford these

professional services before a site has been selected for the project. The charter school

needs to weigh the costs and benefits of having the profession on board early in the process.

47

Appendix A

Hiring the Professionals for the Project

The following questions and guiding principles will assist with selecting and finding the right

architect for the project.

1. How many charter schools has the professional worked with? If none, what public

or private schools has he/she worked on that most resemble the proposed charter

school? Ask for references and visit the projects they represent as being most like

the proposed charter school.

2. Provide a copy of the charter so they can get familiar with the charter school’s goals

and program needs. If they seem uninterested in the “mission,” it is a bad sign.

3. Meet with the principal of the firm and ask how much involvement will he, or she

have in your project. A firm that sends out the A team and then transfers the project

to the B or C team after the contract is signed should be avoided.

4. Ask to meet the project manager that will be assigned to the project. Make sure it is

a personality match. Good communication is critical.

5. Find out how flexible they are with deferring payment for services until funds

become available. This will not always be possible for small firms, but how the

architect responds to this conversation will give valuable information about the

willingness of the prospective architect to assist in any way possible.

6. Request an hourly fee contract with a cap for the “site search” portion of the

services. Some architects will be willing to evaluate potential sites for a minimal fee

knowing that they will get a better project in the end if they help to initially find the

right spot. It is also important to have the architect visit potential sites to better

evaluate their feasibility.

7. Once the site is selected, ask for a list of services and estimated costs to complete

the work required for occupancy. This could include structural engineering, civil

engineering, landscape architecture, electrical, mechanical, plumbing, engineering,

acoustical studies, environmental studies….and the list goes on. On the other hand,

it could be as simple as basic architectural space planning. Make sure the architect

lays out a complete picture of the steps that will be required to get to final

occupancy of the site and the estimated costs attached.

8. Ask for a project schedule that starts from the day the contract is signed to the day

the school is occupied. Make sure there is a contingency in place for unforeseen

delays.

9. If the project involves new construction or major renovation, ask for a comparative

analysis of delivery methods (construction models) for the project. Unless this issue

is visited early, some of the delivery methods will be eliminated.

10. If the site design must receive approval from an authorizing district, make sure the

architect has experience working with them. The project should not suffer as a result

of the architect’s learning curve delays.

11. Negotiate the scope of the project prior to signing the contract to avoid the cost of

additional services. It may help to have the firm prepare color renderings or

48

Appendix A

Hiring the Professionals for the Project

computer models of the proposed school to assist in financing or fundraising efforts.

Pretty pictures can go a long way.

GENERAL CONTRACTORS

Once the architect has developed a set of plans, specifications and general conditions for bid,

submit these “Bid Documents” to at least three general contractors to get the best price on

the work. Expect a typical bid process to last 2-4 weeks. Evaluation of the general contractor

(GC) requires some assistance. It may help to ask fellow charter school operators in the area

for references. When choosing and working with a GC, a charter school operator should

consider the following list of questions and tips:

1. What is the number of schools the firm has built? Make sure to contact the owners

for a reference.

2. If it is a public project, make sure the GC’s references are for public work. For

instance, if the project is funded with state bond funds, the GC should understand

the requirements of the Field Act. If it is a private project, make sure they have

experience with schools in the private sector, preferably in the jurisdiction of the

proposed charter school project.

3. Make sure the GC is prequalified. Prequalification documents are available from

multiple sources. The American Institute for Architects’ “A305 document:

Contractors Qualification Statement” is one example of a form which requests the

contractors qualifications and requires the contractor to get the document

notarized. Review the typical requirements for prequalification and include them in

the Bid Questions. Most contractors have readily available copies of their project

portfolios and qualifications.

4. Make sure the contractor is “bondable” for greater than the amount of the project.

A Performance and Payment Bond can be included in the contract to protect the

project in the event of the contractor jumping ship on the project or going out of

business. Performance and Payment Bonds typically cost 1-2% of the hard

construction costs. Some lending institutions have specific requirements for the

strength of the Bond.

5. Request a meeting with the job superintendent to be placed on the job. Ask for a full

resume of his/her project experience. Have a clear understanding of the schedule for

this person to know how busy he/she will be while overseeing the project. For

instance, find out how many jobs he will be supervising at a time and how often will

he be on the project site.

6. Evaluate the need for a construction manager. If it is a large project, it is money well

spent. Include the construction manager in the evaluation of the GC’s team.

7. Has the architect worked with the chosen contractor on other projects? If not, be

prepared for a bit of a learning curve. Each company has slight differences in

organization and processes.

8. Evaluate the personality compatibility of the team members. If the architect and GC

are constantly at odds, the project will suffer.

49

Appendix A

Hiring the Professionals for the Project

9. Set up clear lines of communication. Who will be the final decision maker on issues

that come up in the field? Understand the ‘change order’ process, which means

understand how much revisions or additional work that may be required beyond the

specified contract will cost.

10. Be sure to read the contract thoroughly and carefully before signing it. The architect

or construction manager should be able to help answer any questions.

11. It may also benefit the project to engage the GC early in the project during the

design development phase. GC’s can contribute in this phase by offering money-

saving solutions to design or material choices. They can also help prepare preliminary

cost estimates to show the reality of the project scope. While each firm is different,

engaging the GC early will most likely be done on an hourly contract basis prior to

signing the contract. Some firms might even perform the work for free based on

prior relationships but do not expect them to share their numbers with another GC

if they are not selected for the project.

INSPECTORS

Project inspectors are hired by the owner and are required by either the city or the state for

inspection of a portion of the work or the full project. Inspections required by the city

typically include concrete inspection and welding inspections. Lists of certified inspectors are

available on the Division of the State Architects (DSA) website or usually can be obtained

from the city building department. As interviews are rarely held for an inspector, the

following will assist in understanding the roles and responsibilities of inspectors required for

the project.

There are three basic types of inspectors:

• Project Inspector – (each state project must have a DSA Certified Project Inspector)

• Assistant Inspector - an assistant inspector may be utilized, or may be required to

assist the Project Inspector

• Special Inspector - A specially qualified person utilized, where required, to inspect

specific aspects of the work.

If a charter school operator is using state funds to construct or renovate the building or

building on state property, the inspection process is more complex. There are four

classifications of construction projects as defined below. All projects are "classified" by DSA

during plan review. A charter school operator must use an inspector who holds a certificate

in the classification for which the project was assigned.

The four project classifications:

Class 1 Project: Concrete or steel buildings

Class 2 Project: Wood –frame buildings

Class 3 Project: Modernization project, small-building project, non-structural work

Class 4 Project: Pre-manufactured, single-story, or single-story re-locatable buildings.

50

Appendix A

Hiring the Professionals for the Project

Project Inspector Certifications:

Class 1: May inspect ANY project

Class 2: May inspect a class 2, 3, or 4 project

Class 3: May inspect a class 3 or 4 project

Class 4: May inspect a class 4 project

Inspectors have the following general responsibilities:

1. Maintaining the Inspector’s Job File

2. Comprehension of the Plans & Specifications

3. Continuous Inspection of the Work (state requirement)

4. Record of Inspections & Inspected Work

5. Communications required by Inspector

6. Monitoring the Testing and Special Inspection Program

7. Monitor Assistant Inspector(s)

DEVELOPERS / DEVELOPMENT CONSULTANTS

While there are only a few developers solely dedicated to building charter schools, there are

individuals who can be hired as development consultants to guide one through part or all of

the development process. Their expertise can help the charter school operator select

architects, evaluate contractors, find acquisition and construction loans, hire lawyers, and

manage the process so the charter school operator can focus on instruction rather than

construction. Trade organizations with local chapters like the Urban Land Institute or the

American Institute of Architects may help with leads to such professionals.

OTHER PROFESSIONALS

Once a charter school operator has selected a site or building, it may be necessary for them

to hire the following professionals:

• Environmental Consultants: Perform Phase I or Phase II Environmental Assessments,

often times required by lending institutions or State funding agencies to assess the

environmental history and risk of a potential school site. It is also important to

evaluate the environmental condition of the site to see if any additional cleanup or

abatement is necessary and how much these will cost.

• Survey Engineer: Perform ALTA Survey of the property to identify property lines,

easements, utilities, and other details that will assist in the development. Lending

institutions usually require an ALTA Survey by a certified survey engineer.

• Abatement engineers: Mitigate environmental hazards caused by the presence of

asbestos or other harmful substance like lead paint.

• Appraisers: Perform as-is and as-built appraisal to assist in the purchasing and

financing of the project.

• Building Assessment Engineers: Perform Property Condition Report to evaluate the

existing condition of the potential school and the repairs or upgrades that may need

to be done, including renovations such as roofing, ventilation systems, seismic

51

Appendix A

Hiring the Professionals for the Project

retrofits, or environmental clean-up (mitigation).

• Lawyers with specific areas of expertise: Different firms have different specialties. For

example a transactional attorney can assist in the site acquisition phase while a

Construction Law attorney can assist in negotiating your construction contract.

• Land Use Consultants / Expediters: These professionals can help expedite the project

through City Planning departments and conditional use permit applications. These

processes can be very complicated and it may help to have the experience and

internal connections and relationships of these professionals. Some city planning

departments keep a database or contact list of such firms.

52

Appendix B

Broker Information Sheet

Date:________________________

Name of Charter School:_________________________________________________

Current Address:_______________________________________________________

Contact Person’s Name: _____________________ Phone Number:________________

Address: _____________________________________________________________

Search Area (Describe the search area and its boundaries):

Program (Age of students, grade levels, number of students):

Square Feet (How much space is needed?):

Growth Requirements (How much space will be needed for the following years):

Year One ___________ Year Two _____________ Year Three ________________

Schedule (Operational Occupancy Date):_____________________________________

53

Appendix B

Broker Information Sheet

Indicate what is acceptable:

Lease-______________ Purchase-_____________ Lease/ Option_________________

Ideal Term (Minimum, Maximum):

____________________________________________________________________

Price range that is acceptable:

____________________________________________________________________

Property / Building Type (Preferred type of building: commercial office, retail storefront,

other):

Construction (Are funds available for upgrades or must the existing space support a

school?):

Outdoor Space (How much space will be needed for a physical education program or

lunch area?):

Parking (Requirements / Needs):

54

Appendix B

Broker Information Sheet

Security Needs (Physical):

Community Asset Needs (Adjacency requirements: parks, auditoriums etc.):

Access to Public Transportation (Proximity- how close to bus lines etc.):

Additional Comments:

55

Appendix C

Operating Budget Worksheet

Year 1 Year 2 Year 3 Year 4 Year 5

Income

Per Pupil Allocation

Special Needs

Other govenrment grants

Food Service

Private Grants and Fundraising

Parent Contributions

Total Income

Expenses

Personal

Salaries

Benefits

Academic

Books / Materials

Academic Supplies

Instructional Equipment

Software / Computer Supplies

Field Trips

Operating Expenses

Advertising

Insurance

Janitorial

Office Supplies

Printing

Postage

Staff Development

Travel

Facilities

Rent / Lease

Repairs / Replacement

Utilities

Telephone

Transportation

Security System

Contracted Services

Bookkeeping / Auditing

Copier

Custodial

Internet Provider

Legal

Special Education

Student Testing

Management Fee

Food

Other

Depreciation

Extra-Curricular

Interest

Total Expenses

Net Income (Deficit)

56

Appendix D

Permanent Facility Sources and Uses Worksheet

Site Acquisition Costs

Site Acquistion Costs Total

Hard Costs

Construction / Renovation Costs Cash

Demolition Grants

Electrical Public

Plumbing Private

Heating / Ventilation Financing

Roof Public

Drywall and Painting Private

Carpet Donations

Windows

Fixtures and Fit-Out Grand Total

Sitework

Total Construction

Hard Cost Contingency (10% - 20%)

Hard Costs Total

Soft Costs

Soft Costs

Legal Fees

Appraisal

Architect

Project Manager

Engineering

Construction Insurance

Closing Costs

Financing Fees

Construction Loan Interest

Inspection Fees

Environmental Studies

Accountant

Security

Bonding

Total

Soft Cost Contingency (5%)

Total Soft Costs

Total Development Costs Total Sources

Uses of Funds Sources of Funds

57

Charter School Facilities Program (CSFP) Flow Chart

An Overview of the Prop. 47, 55, and 1D Application and Approval Process

Submit Application for Charter School Preliminary Apportionment Form

(SAB Form 50-09) and determine financial soundness with CSFA

Preliminary Apportionment:

Apply and prove financial

soundness.

AS OF AUGUST 2011, OPSC

WAS NOT ACCEPTING

PRELMINARY

APPORTIONMENT

APPLICATIONS.

Rehabilitation

Advanced Fund Request:

Priority Funding Process Filing

Periods occur twice/year (NOT

APPROVED BY OAL, YET)

SB 592 allows charters schools

to hold title to land. There are

different Charter School

Agreements if this course is

taken. Otherwise, charter

schools complete Charter

School Agreements that involve

the District in which the charter

school is located.

Secure Preliminary Plan and Final

Site Approvals from CDE and DTSC.

Also, receive local jurisdiction

approvals.

Obtain DSA Approval (refer to DSA-1

and DSA-3 forms) and CDE Final Plan

Approval

Architect and Engineer

prepare plans

Secure Final Plan Approval: Prepare

Construction Plans and work with

CDE and DSA for plan approvals.

Conversion to Final Apportionment:

Placement on Unfunded Approval

List, considered shovel-ready

Fund Release Process

Priority Funding Process Filing

Periods occur twice/year (NOT

APPROVED BY OAL, YET)

State Approval

Process

School

Development

Process

AND

AND

Construction and Progress Reporting

Submit Application for Funding (SAB Form 50-04) and corresponding documents

and demonstrate financial soundness with CSFA

Submit Progress and Expenditure Audit Reports

Start Construction

Request Advanced

Funds for Design

Request Advanced

Funds for Design

Receive Advanced Funds

Submit Charter School Agreements

Determine financial soundness with CSFA

Submit Application for Fund Release (SAB Form 50-05)

CSFP Process (Prop. 47, 55, and 1D)

Receive Funds

Identify a Site for

Acquisition

Advanced Site

Acquisition Funds

Request Advanced Site

Acquisition Funds

New Construction

Obtain Final Site Approval from CDE

and DTSC and Preliminary Plan

Approval from CDE

Receive local permits and entitlements

Demonstrate financial soundness with CSFA and provide proof of the matching

share of funds (50% for new construction and 40% for rehabilitation)

Request final fund release

Submit Application for Fund Release (SAB Form 50-05)

Advanced Design Funds

Obtain Contingent Site

Approval from CDE (Refer

to SFPD 4.01C)

Appendix E

58