Texas Credit Enhancement Program Application Instructions For Texas Open-Enrollment Charter Schools

Transcription

1 Texas Credit Enhancement Program Application Instructions For Texas Open-Enrollment Charter Schools Texas Public Finance Authority Charter School Finance Corporation Revised July 2013

2 Table of Contents Application Process Introduction... i Background... i Allowable Uses of Funds... ii Criteria... ii Timeline... ii Submission Instructions... iii Application Package... iv Application Form Applicant Contact Information and Certification... 1 Charter Holder and School Information... 1 Section A. Mission and Performance Ratings... 2 Section B. Governance... 2 Section C. Local Characteristics... 5 Section D. The Bonds and Bond Financed Projects... 6 Section E. Financial Strength... 8 List Of Documents That Must Be Attached... 9 Appendices Appendix A Scoring Matrix Appendix B Rules of the Texas Public Finance Authority Charter School Finance Corporation Appendix C Federal Definition of Charter School Appendix D Contact Information for Representatives of TCEP Consortium Members... 15

3 APPLICATION PROCESS Introduction This application form is issued in solicitation of applications from eligible charter schools for a round of TCEP grant awards. Background The Texas Credit Enhancement Program (TCEP) for Texas open enrollment charter schools was established to provide a guarantee fund for issuing tax exempt revenue bonds to provide financing for the acquisition, construction, repair, or renovation of Texas charter school facilities, including refinancing of facilities debt within federal program guidelines. (Federal program guidelines require that new construction or renovation be part of any project approved through this grant application.) This application is for an allocation of the credit enhancement guarantee fund. Schools will receive no grant funds directly. A consortium of Texas entities was awarded a federal grant to create the guarantee fund. The consortium consists of the Texas Public Finance Authority Charter School Finance Corporation (CSFC), the Texas Charter Schools Association (TCSA), which replaced the Resource Center for Charter Schools an original consortium member in spring of 2009, and the Texas Education Agency (TEA). The CSFC is a non profit corporation created by the Board of Directors of the Texas Public Finance Authority (TPFA), a state agency, pursuant to section of the Texas Education Code. The rules of the CSFC are included as Appendix B to this application. TPFA provides administrative and staff support for the CSFC. The CSFC is the entity responsible for awarding access to TCEP grant funds. Charter schools are welcome to contact the consortium representatives for guidance during the application development process. Contact Robert P. Coalter, TPFA s Executive Director, at robert.coalter@tpfa.state.tx.us for information on the bond issuance process; Arnoldo Alaniz, TEA, at arnoldo.alaniz@tea.state.tx.us for help gathering relevant TEA generated data; or Denise Pierce, TCSA, at dpierce@txcharterschools.org for other questions. A first round of grant awards was made in March This request for applications is to allocate approximately $1,037,209.20, of available grant funds. Amount of Funding the guarantee fund currently contains approximately $1,037, of funds that are not allocated. It is estimated that this amount could guarantee approximately $10,000,000 in total debt. In order that the fund serve as many charter schools as possible, charters may not apply for access to more than the lesser of $1,000,000 or the total guarantee funds available for award per series of bonds nor more than $3,000,000 maximum per charter holder, including any grant previously awarded. Page i

4 On July 11, 2013, the CSFC Board adopted a policy allowing grant award recipients to apply their credit enhancement awards to refunding bonds of the enhanced bonds. Among other requirements, the policy requires the awardee to give notice of its request to apply the award to refunding bonds to all charterholders to ensure broad access to available TCEP funds. In addition, the application of a grant award to refunding bonds will count as a new award against the Board s three award limitation. The policy is available in its entirety at the CSFC website. Allowable Uses of Grant and Bond Funds The TCEP guarantee fund may be allocated to bonds issued on behalf of Texas openenrollment charter schools to finance the acquisition, construction, repair, or renovation of Texas open enrollment charter school facilities or the refinancing of bonds including refinancing of facilities debt, within federal program guidelines. A grant may be awarded to credit enhance bonds issued or to be issued through any higher education authority in Texas created pursuant to Chapter 53 of the Texas Education Code. Criteria In order to be eligible for the TCEP, a charter must (1) meet the federal definition of charter school (Appendix C); (2) have earned no rating lower than Academically Acceptable or AEA: Academically Acceptable in the state accountability system at the district and campus level in 2009 and 2010; (3) have a status of Accredited as defined in 19 Texas Administrative Code (TAC) , and (4) earned at least a standard rating in the 2011 School Financial Integrity Rating System of Texas (FIRST) for charter schools. In addition to the above, if the charter holder plans to use the allocation of grant funds for expansion of a charter, the charter holder must meet eligibility requirements for an expansion amendment. Access to the allocation of grant funds will be awarded based on a combination of elements, including application scores, agency staff recommendations, and other criteria decided upon by the CSFC board. The CSFC will vote on TCEP applications at one or more public meetings. Applicants will be notified of the date(s), time(s), and location(s) of these meetings. Applications will be evaluated and must earn at least 140 points in order to receive an award. Grantees will forfeit access to grant funds if the proposed financing does not close within 12 months after the award of access to the TCEP fund and no request for extension has Page ii

5 been requested. A request for an extension must be submitted within 60 days of the expiration of the 12 month period, and must state the reason that the financing has not closed. If granted, an extension will not exceed 90 days from the end of the original 12 month period. A grantee that has forfeited access to grant funds is not prohibited from applying for an award again. Timeline This timeline will be used for the round of applications due by 5 o clock p.m. Central Time on November 15, August 15, 2013 November 15, 2013 November & December 2013 December 2013 Application Packets Available Applications Due Applications Evaluated Texas Public Finance Authority Charter School Finance Corporation Awards Grants Submission Instructions Applicants must submit the completed original application form plus five hard copies (six total completed application forms) plus the complete Application, as defined herein, on CD (compact disk.) The Application includes the completed application form and relevant requested attachments. The application form is provided as a Word document for your convenience to enter your responses. Please do not change the form. The completed application, copies and CD must be submitted by the date and time to the address given in the next paragraph. The attachments are to be labeled as directed and must be included in the order specified. If some attachments are not relevant to an application, or not available, please include a page clearly explaining the reason for omission. Applications must be received by the deadline (5:00 p.m. CT, on November 15, 2013) in the office of the Texas Public Finance Authority, William P. Clements Building, 300 W. 15 th Street, Suite 411, Austin, Texas The TPFA is not responsible for untimely delivery of materials sent via the U.S. Postal Service or any private commercial carrier, such as, UPS or FedEx. Page iii

6 Application Package In addition to the application form, this application package consists of the Title Page, Table of Contents, Introduction pages (i to iv), and the following documents provided as Appendices for applicants information only: Appendix A. Appendix B. Appendix C. Appendix D. A sample of the Scoring Matrix that the evaluators will use A copy of the administrative rules of the Texas Public Finance Authority Charter School Finance Corporation Definition of charter school in Public Law , Title V, Part B, Section 5210 Contact information for representatives of members of the TCEP consortium DO NOT SUBMIT COPIES OF THE TITLE PAGE, TABLE OF CONTENTS, INTRODUCTION (PAGES i to iv,) OR THE APPENDICES WITH YOUR APPLICATION. SUBMIT ONLY THE APPLICATION FORM, WHICH BEGINS WITH PAGE 1, SUPPLEMENTAL SHEETS IF YOU NEED THEM, AND THE REQUESTED ATTACHMENTS (LISTED ON PAGES 9 AND 10.) IF YOU ATTACH SUPPLEMENTAL SHEETS, CLEARLY MARK THE SECTION AND QUESTION NUMBERS TO WHICH THEY PERTAIN. Page iv

7 Texas Public Finance Authority Charter School Finance Corporation Texas Credit Enhancement Program (TCEP) Application For Texas Open Enrollment Charter Schools Applicant Name of Applicant (Charter Holder): Name of Texas Charter School benefiting from bond proceeds: Anticipated Maximum Amount of Bonds: Amount of Grant Requested: Individual Submitting Application Name: Address: City: Address: Phone Numbers: Superintendent or Equivalent Name: Address: City: Address: Phone Numbers: Charter State: State: Legal Name of Charter Holder: Date Charter First Granted: Date of Charter Last Renewal: Term of Charter: Title: Title: Does the Charter School meet the definition of Charter School in P.L (See Appendix C): Is the charter holder a 501 (c) (3) entity? Yes No ZIP Code: ZIP Code: Yes No Page 1

8 Section A: Mission and Performance Ratings 1. Explain the mission of the charter school. What measures are used to determine if the charter is fulfilling its mission? (Attach supplemental pages if necessary) 2. Name of Districts in which charter campuses are located County/District No 3 Campus Name(s) Campus No. District Accountability Rating 2010 Campus Accountability Rating 2010 District Accountability Rating 2011 Campus Accountability Rating 2011 Section B. Governance TAC (c) (6) (C) requires the governing body of the charter holder to retain authority over all non delegable duties. What if any duties have been delegated to another person or entity? 2. Is the charter adhering to its adopted bylaws? 3. Are members of the governing body of the charter holder, members of the governing body of the school(s), if any, and school officers as defined in 19 TAC (16) in compliance with the training requirements in Texas Education Code, ? If not, please explain. 4. Has the governing body of the charter holder adopted the following policies? Yes No a. Policies related to Students (i) A student code of conduct that complies with state law. Page 2

9 Section B. Governance (continued) (ii) (iii) (iv) (v) (vi) Employment policies and procedures that comply with state and federal law regarding employment discrimination, sexual harassment, Americans with Disabilities Act, Family and Medical Leave Act, workers' compensation, and employee grievance and discipline. Health and safety policies comply with state and federal law, including a defibrillator on each campus and certified personnel on staff. Policies on reporting child abuse and the administration of medication that comply with state law. A complaint process for students and parents that complies with state law and TEA regulations. A state Public Information Act policy and procedure. (vii) Family Educational Rights and Privacy Act (FERPA) policies that comply with state and federal law. (viii) Special education and bilingual/english as a Second Language policies that comply with state and federal law and TEA regulations. b. Financial Management Policies (i) (ii) (iii) (iv) (v) (vi) Financial Management policies and procedures that include the collection of data for the accounting and reporting of the use of grant funds, and the accounting requirements of FAR/FASRG. Debt Management policies, including a swap policy. Investment policies Policies that comply with state law for the procurement of services of construction professionals, including architects, engineers, and design professionals. A conflict of interest policy for Board members, corporate officers and key staff, including a nepotism policy, a whistleblower policy and a code of ethics. Policies and Procedures for accounting for inventory and property 5. Is the charter holder, school or any administrator, employee, or director involved in pending or potential litigation concerning the school, any Education Code chapter 39 proceeding, or any audit, investigation, review or other proceeding initiated by any state or federal authority, that may have a material impact on the operations and/or financial conditions of the school? If so, please explain. Page 3

10 Section B. Governance (continued) 6. Please provide the names, titles, occupations, and length of terms for members of the governing board of the charter holder. If a board member holds a license or is required to hold a license to practice a profession, please provide the license number and evidence of good standing with the licensing body. (Attach additional sheets if needed. Professional biographies are required as attachments.) Name Title/Office Occupation Term enter enter enter enter enter enter enter enter enter enter enter enter Page 4

11 Section C: Local Characteristics 1. a. In which traditional independent school district (ISD) is the charter school physically located? (If the charter has campuses that are physically located in more than one district, please list the ISD(s) in which the charter campus(es) whose facilities will benefit from the TCEP is (are) located. b. Identify any of the traditional school districts listed that were placed on Title I School Improvement status in 2012.* Charter School/Campus Traditional ISD in which the charter school or campus is located Improvement Plan 2012 (Indicate if any check mark) 2. Were any of the individual campuses listed above placed on Title I School Improvement status in 2012?* * Preliminary School Improvement District/Campus status lists available at 3. What was (were) the 2010 and the 2011 accountability ratings of the school district(s) named in Number 1? Traditional ISD 2010 District Rating 2011 District Rating 4. What percentage of the students served by the ISD(s) named in Number 1 are economically disadvantaged? See the District s most current AEIS Report at Traditional ISD listed in Number 1 Percentage of students that are economically disadvantaged Page 5

12 Section C: Local Characteristics (continued) 5. What percentage of the students served by the campus(es) that will receive the benefit of the TCEP award are economically disadvantaged? Charter Campus Name Campus No Percentage economically disadvantaged Note: The percentages reported above must be consistent with the percentages shown in TEA s most recent campus Academic Excellence Indicator System (AEIS) report, which can be found at SECTION D. The Bonds and Bond Financed Projects As stated in the Background, the purpose of the TCEP is to provide credit enhancement, in the form of funding a debt service reserve fund, for bonds issued to finance facilities for Texas openenrollment charter schools. For questions in this SECTION D, Numbers 1 through 4, if bonds have already been issued, you may respond by cross reference to relevant portions of the Official Statement, a required attachment. (See List of Required Attachments.) 1. Describe the purpose(s) for which proceeds of bonds will be or are being used. That is, what facilities will be acquired, constructed, renovated, or refinanced with the bonds for which you are applying for a TCEP award? Has there been a property appraisal for the facility? What is the appraised value and purchase price? Has a phase 1 environmental assessment been conducted and are there any areas of concern? 2. Exact Name of the Bonds 3. Date of Bond Issue (If bonds have not been issued, provide an estimated issue date and label it estimated. ) 4. Par Amount of Bonds (or anticipated maximum par amount) 5. Name, address, phone number, and address of Bond Counsel, if any 6. Name, address, phone number, address of Financial Advisor, if any 7. Name, address, phone number, and address of Underwriter, if any 8. a. What is the current capacity of existing facilities? b. Do you have a long range facilities plan? If so, please provide it. c. How will the bond financed facilities affect the school s capacity? (That is, will additional students be able to be enrolled? If so, how many?) Page 6

13 SECTION D. The Bonds and Bond Financed Projects (continue) 9. a. Do you have a waiting list? If so, approximately how many students are usually on the waiting list? b. How is it compiled and updated? c. If there is no waiting list, is there a lottery for applicants? If yes, please describe how the lottery is operated. d. If there is no waiting list or lottery, please describe how student population growth or demand for charter school services is quantified? 10. Enrollment by campus for , and Campus Name Campus No Enrollment Click here to enter enter enter Click here to enter enter enter Click here to enter enter enter Click here to enter enter enter Click here to enter enter enter 11. Describe any management contracts related to the bond financed facility, such as a food service contract, security services contract, janitorial services contract or lease benefitting a third party. Attach copies of any such agreements currently in place. Page 7

14 SECTION E. Financial Strength 1. What is the Charter s 2011 FIRST rating? (If you do not know the charter s rating, please contact the TEA Division of Charter School Administration at (512) ) 2. Does the charter have a contingency plan to sustain revenues in an emergency? Yes No If so, please explain. (For example, do you maintain property and casualty insurance, including business interruption insurance?) 3. List any previous long term facilities financings including prior bonds, bank loans, below market obligations to a donor, etc. (If bonds, provide the exact name, date, and par amount of the bond issue.) 4. a. If bonds have been issued previously, what is the current status of those bonds? b. Were they rated? If so, provide the name of the rating agency, date of the rating, and the rating. c. Have there been any supplemental rating actions on the bonds? If so, provide the name of the rating agency, the date of the supplemental action, and the substance of the supplemental action. 5. a. Does the school have formal or informal goals for cash flow management? b. How many months of operating cash does the school maintain? 6. If any debt (e.g., notes, loans, debt instruments other than bonds identified in Q.4 of this section) has previously been issued, what is the status of that debt currently? 7. Has the applicant previously received a grant from any state or federal entity, including TCEP? If, yes, please provide the name and contact information for the grantor, the amount of the grant, and the purpose for which the grant was awarded? SECTION F. Certification Of Governing Board s Chairperson I, (print or type name), certify that all responses and information provided in this application are true, accurate and complete to the best of my knowledge and belief and that the charter holder and school(s) are in compliance with all State charter requirements. Signature Date Page 8

15 LIST OF DOCUMENTS THAT MUST BE ATTACHED TO APPLICATION. In your submission, please identify the attachments by the number assigned here. document(s) is (are) not available, please provide an explanation. If a 1. An original or certified copy of the resolution of the applicant s governing body approving the submission of this application for a TCEP award. 2. Certificate of Good Standing for Non profit Corporation. 3. IRS Form 990 and Schedule K. 4. Professional biographies of members of the governing body and key staff of the school (the superintendent, chief financial officer, chief operating officer, principals etc.) include certificates of good standing from the applicable licensing bodies for those board members or key staff who hold professional licenses. 5. A description of the project(s) and the budget for the project(s) to be financed with bond proceeds and expenditure schedules. 6. A complete numerical analysis of the bond issue, which includes the par amount, sources and uses, costs of issuance, debt service schedule, and revenue or coverage projections. Clearly identify the projected enrollment or enrollment assumptions on which the projections are based. 7. The school s waiting list, or other method by which school projects future enrollment or enrollment growth. 8. Ratings reports. (This is not the letter from the rating agency stating the rating. It is the report explaining credit strengths and weaknesses and rationale for the rating.) 9. If bonds previously have been issued, attach the final official statement for the bonds. If bonds have not yet been issued, provide a draft preliminary official statement. (You may attach a single sheet referring to the complete documents on the CD.) 10. If debt other than bonds previously has been issued, attach a copy of the offering document, loan agreement or other document containing the terms of the debt agreement. 11. Audited financial statements for the preceding three years, or for each fiscal year of operation if less than three. (You may attach a single sheet referring to the complete documents on the CD.) 12. The current year operating budget and projections for the following three years. 13. A description of the charter holder s budgeting procedures and long term financial and capital planning process. Include, if available, policies for maintaining an appropriate cash balance, expenditure of fund balance, funding maintenance, and establishing reserve and replacement funds, and include any related documents. 14. Provide a copy of each policy listed under section B.3.(b) related to financial Page 9

16 management that the charter holder has adopted, if any. 15. A ten year cash flow projection, including revenues, operating and maintenance expenses, and debt service on the proposed bond issue. Clearly identify the projected enrollment or enrollment assumptions on which these projections are made. 16. Provide copies of any management contracts related to the bond financed facilities, such as a food service contract, security services contract, janitorial services contract, or lease benefitting a third party. 17. A signed acknowledgement that if the applicant is awarded a grant, the grantee will comply with reporting requirements as follows: Report to the TPFA Executive Director any of the following changes to any of the following within ten business days of the change or receipt of notification of the change for the life of the debt: A. Debt Management/SWAP Policies or Guidelines B. Credit Ratings C. Amortization Schedules D. Liquidity and Letters of Credit E. Bond insurance F. NCES Identification numbers associated with the transaction G. Amount of Leasehold improvements H. Changes in use of the property, including new management contracts for services. Page 10

17 APPENDIX A SCORING MATRIX Name of Charter Holder: Amount Requested: TPFA Scorer's Name: Date of TPFA Scoring: TEA Scorer's Name: Date of TEA Scoring: Strongly Disagree or No Section A. Mission Clarity and Success 1 The charter s mission is clearly described Meaningful Measures are used to determine whether the charter is fulfilling its mission The charter is fulfilling its mission based on these measures The charter earned a district level rating of Recognized (3 points) or Exemplary (5 points) in The charter earned a district level rating of Recognized (3 points) or Exemplary (5 points) in One or more of the charter s campuses earned a rating of Recognized or Exemplary in One or more of the charter s campuses earned a rating of Recognized or Exemplary in Section Totals % Section B. Governance 1 The governing body of the charter holder maintains authority over all non delegable duties The chair of the governing body of the charter holder states that the body functions according to its adopted bylaws. Strongly Agree or Yes 0 5 % of Total 3 The members of the governing body of the charter holder, (2) the members of the governing body of the charter school (if such a body exists), and (3) school officers (as defined by 19 TAC (16)) are in compliance with the training requirements in Texas Education Code, The charter holder has adopted the policies listed in Question B3(a) The charter holder has adopted the policies listed in Question B3(b) Page 11

18 6 There is no pending litigation that would have a material impact on operations or financial condition, based on the standard of materiality defined by FASB The biographies of the members of the governing body of the charter holder and key staff show expertise in education, finance, and/or management. Licenses in good standing Debt management and swap policies in place and show understanding of risks Financial management policies and procedures mitigate risks of fraud or waste Conflict of Interest policy addresses nepotism and states a Code of Conduct Section Totals % Section C. Local Characteristics The relevant charter campus is physically located within an independent school district (ISD) that has been placed on Title I School Improvement status in (If more than one charter campus is part of the grant application, and if any of the campuses meets this criterion, then yes. ) The relevant charter campus is physically located within an ISD that has at least one ISD campus that has been placed on Title I School Improvement status in (If more than one charter campus is part of the grant application, and if any of the campuses meets this criterion, then yes. ) The relevant charter campus is physically located within an ISD whose 2010 or 2011 accountability rating was less than Acceptable. (If more than one charter campus is part of the grant application, and if any of the campuses meets this criterion, then yes. ) The relevant charter campus is physically located within an ISD whose student population is 40% or more economically disadvantaged. (If more than one charter campus is part of the grant application, and if any of the campuses meets this criterion, then yes. ) The student population of the relevant charter campus(es) is at least 40% economically disadvantaged. (If more than one charter campus is part of the grant application, and if any of the campuses meets this criterion, then "yes.") Section Totals % Section D. Viability of and Need for Project 1a The proposed project is well defined and reasonable b The project is for instructional facilities as defined by 19 TAC and further described in the TEA document Instructional Facilities Allotment: Examples of Qualified and Non Qualified Projects, available at c The phase I environmental assessment has been conducted and indicates no areas of concern d The long range facilities plan is reasonable Current relevant facilities are or very near their capacity to hold students Page 12

19 3 4 The campus or campuses that are part of this application maintain a formal, written waiting list that is updated at least annually OR the school is under capacity and has no waiting list, but has reasonable procedures in place to recruit students, develop, maintain and update a waiting list or reasonable method of quantifying future enrollment. 0 5 The enrollment of the campus or campuses that are part of this application has not declined more 0 10 than 1% in any of the last three years according to PEIMS Snapshot enrollment figures. Section Totals % Section E. Financial Strength 1 The 2011 FIRST rating of the charter holder is one rating (6 points) or two ratings (10 points) above the minimum rating requirement to be eligible for this grant The charter holder has financial management expertise or has secured a team with such expertise The charter holder has construction expertise or has secured a team with such expertise According to the description offered in Question E2, adequate contingency plans are in place to sustain revenues (e.g., the charter holder has property and casualty insurance on owned facilities or business interruption insurance on leased facilities, etc.) Page The charter holder has received unqualified audit opinions for each of the last three years The audited annual financial statements show that the charter holder has a history of stable operating performance (e.g., operations are supported by operating revenues; the fund balance is increasing, exclusive of one time expenditures such as capital repairs; etc.) The audited financial statements show that the charter holder has at least 45 days' cash on hand The charter holder has previously obtained bond financing or a bank loan The charter holder has a credit rating of BB (S&P, Fitch) or Ba (Moody's) or higher The Preliminary Official Statement and other bond documents are substantially complete and contain covenants to mitigate credit risk The property appraisal has been completed, and the appraisal report shows that the appraised value of the currently held property is at least equal to debt outstanding, after the proposed financing. The endowment and/or fundraising revenues for FY 2010, 2011, and 2012, support capital expenditures and operations. The operating budget shows that current facilities costs (e.g. rent, mortgage, debt service) of the charter holder are less than 15% of the current annual operating budget. The operating budget projections show that projected facilities costs (e.g. rent, mortgage, debt service) of the charter holder are less than 15% of the projected annual operating budget The operating budget projections indicate projected stable operating performance (e.g., operations will be supported by projected operating revenues; the fund balance is projected to increase; etc.) The operating budget projections include projected maintenance costs of the proposed facilities. 0 5

20 17 18 The operating budget projections show that the charter holder has a reasonable reserve for future renewal and capital expenses and that the reserve is funded from the operating budget. The cash flow projection makes reasonable assumptions and shows sufficient revenue coverage for debt service and operations The budgeting procedures show that the charter holder has a reasonable policy for establishing and funding maintenance reserves or a renewal and replacement fund The financial analysis is substantially complete and makes reasonable assumptions The budgeting procedures show that the charter holder has a reasonable policy regarding the maintenance of the fund balances and cash flow requirements (e.g., maintain a cash balance is equal to 1 2 months operating cash flow) The cash flow projections and the financial analysis show that an enrollment increase is not required to support projected debt service The applicant has handled past debt obligations appropriately The applicant has handled past grant funds appropriately. 0 5 Section Totals % Total Points % Page 14

21 APPENDIX B RULES OF THE TEXAS PUBLIC FINANCE AUTHORITY CHARTER SCHOOL FINANCE CORPORATION ( RULES ) I. PURPOSE A. The Board of the Texas Public Finance Authority (the Authority ) established the Texas Public Finance Authority Charter School Finance Corporation (the Board or the Corporation ) for the specific and limited purpose to issue revenue bonds to finance or refinance educational facilities for open enrollment charter schools and facilities which are incidental, subordinate, or related thereto or appropriate in connection therewith all in accordance with and pursuant to Section , Texas Education Code (the Act ). Such purposes are to be accomplished by the issuance of revenue bonds through the Corporation (the Revenue Bonds ) as provided for under Act. B. INDEPENDENT STATUS OF THE CORPORATION. The Corporation shall act as an independent entity with primary responsibility for the Revenue Bond program. Such responsibility includes adopting these Rules for the submission and evaluation of applications for financing. The Corporation may exercise all rights, duties and responsibilities prescribed under the Act and these Rules. The Corporation shall issue rules as may be required for fair and efficient operation of the Revenue Bond program. Such rules shall conform with the Act. II. GENERAL A. BOARD. The affairs of the Corporation shall be managed by a Board of Directors which shall be composed of up to seven (7) members persons appointed by the Authority, in consultation with the Texas Commissioner of Education. B. TPFA & CONSULTANTS. The Corporation may engage any consultants or professionals necessary to conduct the business of the Corporation. Administration and technical support for the Corporation shall be provided through the Authority or any successor entity, which may include the following: 1. Receiving, delivering and filing correspondence; 2. Maintaining official business records of the Corporation; 3. Complying with open meeting notice and related requirements; 4. Maintaining the Corporation s financial books and providing necessary accounting services; 5. Performing work required in the solicitation of vendors and entering into contracts on behalf of the Corporation; and 6. Acquiring goods or services needed by the Corporation to fulfill its responsibilities. Page 15

22 III. FINANCING REQUEST 1. An open enrollment charter school considering revenue bond financing through the Corporation may contact the Authority s executive director for informal review, technical assistance and planning, or further information about the financing process at any time. 2. A school may request financing by submitting a Request for Financing ( Request ) to the Corporation, directed to the attention of the Authority s Executive Director, as agent for the Corporation. 3. As may be further determined by the Authority s Executive Director, the request may include the following documents and information: a. A resolution of the governing board of the school approving the request and delegating to an officer or employee authority and responsibility for pursuing the request and taking all actions necessary or required in furtherance of the financing; b. A one page executive summary addressing the following: i. Purpose and need for the financing and the project; ii. Summary description of the project and estimated project costs (note additional project information required in item (e) below) iii. Background information about the school including: 1. Location 2. Mission c. Financial information: 3. Number of years in operation; and 4. Governing board structure and board members. i. Copies of the school s most recent three years audited financial statements (or the audited financial statements for each year of operation if less than three); ii. IRS determination letter of the school s 501(c)(3) status; iii. Current year s operating budget and estimated budgets,(with revenue projected for five years in the future); and iv. Specific information concerning the school s current or historical financing efforts and other loans incurred, whether outstanding or paid. d. A copy of the school s charter and a copy of the charter renewal application, if any, or an explanation of the time requirements relating to the charter renewal process; e. A detailed preliminary project description and project budget, schematic drawings, plans and specifications, if available; and f. School performance history (i.e., student achievement scores, TEA ratings, etc.) Page 16

23 4. When a completed Request has been received, the Authority s staff will forward it to the Board of the Corporation and schedule an open meeting for the Board to consider the Request. 5. In considering a Request, the Board may: a. Approve the request, select outside consultants, and determine a method of sale; b. Request additional information for subsequent reconsideration of the Request; or c. Determine that a revenue bond financing is not economically feasible at the current time and reject the Request. d. Take any other action consistent with the purpose for which the Board was created. 6. When the Board gives final approval to the Request, the Authority staff and selected consultants will proceed with the financing, and, subject to successfully marketing the bonds, shall take any and all actions to complete the financing in a timely manner. Page 17

24 Appendix C FEDERAL DEFINITION OF CHARTER SCHOOL Under Public Law , Title V, Part B, Section 5210, the term charter school means a public school that in accordance with a specific State statute authorizing the granting of charters to schools, is exempt from significant State or local rules that inhibit the flexible operation and management of public schools, but not from any rules relating to the other requirements of this paragraph; A. is created by a developer as a public school, or is adapted by a developer from an existing public school, and is operated under public supervision and direction; B. operates in pursuit of a specific set of educational objectives determined by the school's developer and agreed to by the authorized public chartering agency; C. provides a program of elementary or secondary education, or both; D. is nonsectarian in its programs, admissions policies, employment practices, and all other operations, and is not affiliated with a sectarian school or religious institution; E. does not charge tuition; F. complies with the Age Discrimination Act of 1975, title VI of the Civil Rights Act of 1964, title IX of the Education Amendments of 1972, section 504 of the Rehabilitation Act of 1973, and part B of the Individuals with Disabilities Education Act; G. is a school to which parents choose to send their children, and that admits students on the basis of a lottery, if more students apply for admission than can be accommodated; H. agrees to comply with the same Federal and State audit requirements as do other elementary schools and secondary schools in the State, unless such requirements are specifically waived for the purpose of this program; I. meets all applicable Federal, State, and local health and safety requirements; J. operates in accordance with State law; and K. has a written performance contract with the authorized public chartering agency in the State that includes a description of how student performance will be measured in charter schools pursuant to State assessments that are required of other schools and pursuant to any other assessments mutually agreeable to the authorized public chartering agency and the charter school. Page 18

25 Appendix D Contact List Agency Contact Address Texas Public Finance Authority Robert P. Coalter Executive Director Physical Address 300 W. 15 th St., Suite 411 Austin, Texas Mailing Address P.O. Box Austin, Texas Texas Education Agency Arnoldo Alaniz Assistant Director Division of Charter Schools 1701 N. Congress Avenue Austin, Texas Texas Charter Schools Association Denise Pierce General Counsel 700 Lavaca Street, #930 Austin, Texas robert.coalter@tpfa.state.tx.us arnoldo.alaniz@tea.state.tx.us dpierce@txcharterschools.org Website Phone (512) (512) (512) Page 19