Design Tech Charter High School San Mateo Union High School District Staff Report and Analysis

Design Tech Charter High School San Mateo Union High School District Staff Report and Analysis Board Meeting: November 22, 2013-1 -

Introduction The San Mateo Union High School District (the District ) has received a charter petition on behalf of the Design Tech High School ( Design Tech ), which proposes to operate as a charter high school within the jurisdictional boundaries of the District, serving approximately 520 students in grades 9 through 12. Design Tech describes its educational model as emphasizing knowledge in action and extreme personalization. Design Tech states that it plans to use technology to implement its educational model and that students will learn a problem solving process called design thinking. A charter school is typically organized by a group of teachers, parents and community leaders or a community-based organization, and it is usually chartered by a local public school board or county board of education. Specific goals and operating procedures for the charter school are detailed in a proposed charter ( the petition ). In addition to the charter, there are sometimes contractual agreements between a chartering authority and a charter school, such as a Memorandum of Understanding, an agreement as to use of certain facilities, or other agreements regarding sharing of services, revenue, or expenses. In the instant case, District staff proposes that, in addition to the charter petition, Design Tech and the District enter into a Memorandum of Understanding ( MOU ) to address certain concerns that are not fully covered in the petition. A charter school is generally exempt from most laws governing school districts. However, California public charter schools are required to participate in statewide assessment tests. The law also requires that charter schools be nonsectarian in their programs, admission policies, employment practices, and all other operations. The law also prohibits the conversion of a private school to a charter school. Like other public schools, public charter schools may not charge tuition and may not discriminate against any pupil on the basis of ethnicity, national origin, gender, or disability. Aside from these restrictions, however, a charter school is basically free to use any alternative curriculum, method of teaching, discipline, employment, or even corporate governance, and the school board will either approve or disapprove the proposal according to the standards provided in the law. - 2 -

Petition Requirements Under California law, local district school boards may approve charter school petitions. Charter schools can also be approved directly by a county board of education or the state board of education and are referred to as county-wide or state-wide benefit schools. In addition, charter petitioners may appeal a district board s denial of their petition to the county board of education, and a county board s denial to the state board of education. A charter school petition is a detailed proposal to establish a new school that will run in the way described in the petition. Upon approval, the petition becomes the charter for the school in essence, an agreement by the school board that the school may proceed to operate in compliance with the program described in the petition. As a result, petitions are generally written in the form of proposed charter documents, which are then endorsed by the petition s signatories and submitted to the chartering authority for review and approval or denial. Anyone may develop, circulate, and submit a petition to establish a charter school. Cal. Educ. Code 47605(a) requires charter advocates to collect signatures to indicate support for the petition. For a new charter school that, as in this case, is not a conversion of an existing public school, charter developers must obtain the signatures of either 50 percent of the teachers meaningfully interested in teaching at the school, or 50 percent of the parents of pupils expected to enroll at the school. Section 47605 of the California Education Code states that there are sixteen required elements of a charter petition. A petition must address each element effectively describing how the school proposes to conduct its business in each relevant area so the authorizing agency can make a determination that the petition proposes a methodology that is consistent with sound educational practices. Failure to address each element with a reasonably comprehensive description renders the petition subject to denial for inadequacy. Each charter petition must therefore contain reasonably comprehensive descriptions of each of 16 required elements. These elements are as follows: 1. A description of the educational program of the school. If the proposed charter school will serve high school pupils, a description of how the charter school will inform parents about the transferability of courses to other public high schools and the eligibility of courses to meet college entrance requirements must be included in the charter petition. 2. The measurable pupil outcomes identified for use by the school. 3. The method by which pupil progress in meeting those pupil outcomes is to be measured. 4. The school s governance structure, including parental involvement. 5. The qualifications to be met by individuals employed by the school. 6. Procedures to ensure health and safety of pupils and staff. - 3 -

7. The means by which the school will achieve racial and ethnic balance among its pupils, reflective of the general population residing in the district. 8. Admission requirements, if applicable. 9. The manner in which annual financial audits will be conducted, and the manner in which audit exceptions and deficiencies will be resolved. 10. The procedures by which pupils may be suspended or expelled. 11. Provisions for employee coverage under the State Teachers Retirement System, the Public Employees Retirement System, or federal social security. 12. The public school alternatives for pupils residing within the district who choose not to attend charter schools. 13. A description of the rights of any employee of the school district upon leaving the employment of the school district to work in a charter school, and of any rights of return to the school district after employment at a charter school. 14. A dispute resolution process. 15. A declaration whether or not the charter school will be the exclusive public school employer of the charter school employees. 16. The procedures to be used if the charter school closes. Cal. Educ. Code 47605(b)(5)(A)-(P). Timeline for Consideration of Petitions Under section 47605(b) of the California Education Code, a local governing board must hold a public hearing for a proposed charter within 30 days of receiving the completed petition, and, within 60 days from receipt of the petition, must either approve or deny the charter. This time line may be extended by 30 days if both parties agree to the extension. The Board of Trustees received the Design Tech charter petition on September 12, 2013 and the first public hearing was held on October 2, 2013. Therefore, the Board would ordinarily have had to make a decision to approve or deny the charter by November 11, 2013. However, by agreement with the charter petitioners, the date for the meeting to consider the charter petition was extended to November 22, 2013. - 4 -

Standards to Approve the Petition The governing board of the school district shall grant a charter for the operation of a school... if it is satisfied that granting the charter is consistent with sound educational practice. Cal. Educ. Code 47605(b) (emphasis added). The Education Code does not define sound educational practice for purposes of this section and that determination, in this case, is for the Governing Board to make, based on the evidence presented to it. The burden is on the charter applicants to establish the soundness of the educational program that they offer in the petition. On the other hand, the Charter Schools Law of 1992 expressly endorses the use of new and innovative teaching methods, Cal. Educ. Code 47601(c), so the novelty of a teaching approach is not itself a reason to find it inconsistent with sound educational practice. Moreover, [i]n reviewing petitions for the establishment of charter schools pursuant to this section, the chartering authority shall be guided by the intent of the Legislature that charter schools are and should become an integral part of the California educational system and that establishment of charter schools should be encouraged. Cal. Educ. Code 47605(b). The school board looks to its staff and, when necessary, legal counsel to provide an analysis of the overall program proposed by a charter petition, but it is ultimately the responsibility of the Board to weigh the evidence, resolve any conflicts, and make a determination regarding whether the charter should be granted. Whatever the Board s decision, it should rely upon written documentation and other available evidence in making that determination. Staff Analysis of These Standards in Relation to the Design Tech Petition Staff has reviewed the Design Tech petition and recommends approval of the petition with direction to staff to work with the petitioners to address remaining areas of concern regarding Design Tech s proposed programs and operations, through the development, execution and implementation of an MOU and other appropriate means. Curriculum & Assessment/Special Programs: Staff in these departments believe that the petition can be granted consistently with sound education practices if the following operational details are required and implemented by the District and the petitioners: (1) The Charter School shall submit its curriculum to University of California (UC)/California State University ( CSU ) for approval under A G requirements. (2) The Charter School will meet annually with District-level staff curriculum staff by June 1 st to review and consult on course offerings for the following year. (3) The Charter School should identify English Language Learners ( ELL ) by means in addition to the California Language Development Test ( CELDT ), using other - 5 -

criteria that assess students reading, writing, and speaking proficiency to help ensure that students will not be misidentified. (4) Students progress in English acquisition should be measured and monitored with protocols or assessments that formally assess English acquisition beyond the CELDT to ensure that students are appropriately re-designated to accurately reflect their English proficiency level. (5) The Charter School should engage with the District on the implementation of new English Language Development ( ELD ) standards as they become available and on ensuring the provision of explicit research-based ELD instruction that incorporates an analysis of how students with different English proficiency levels will accelerate language learning and move toward full proficiency, and that specifies which assessments will be used, how often students will be assessed, and what benchmarks will monitor proficiency development. Staff believes that the District and Design Tech can address these concerns in the MOU between the two parties. Attendance & Welfare: District staff believes that the petition can be granted consistently with sound education practices if the following operational details are required and implemented by the District and the petitioners, as provided in the draft MOU. Specifically, staff notes that the petition provides no right of appeal to any neutral agency in the event of an expulsion, whereas students may not be expelled from the schools of the District without being provided a notice of their right to appeal to the County Board of Education. Staff recommends that the Board of Trustees consider requesting that provision be made for an appeal to a neutral agency to assure students are afforded ample due process rights. Staff also recommends that a student should be entitled to return to Design Tech upon completion of a term of expulsion, as with any California public school. Human Resources: District staff believes that the petition can be granted consistently with sound education practices, provided that Design Tech addresses certain human resourcesrelated concerns raised by staff. Recruitment is to focus on professional, effective and qualified personnel for all potential employees. Given Design Tech s unique program design, the school will face challenges recruiting in all of the job categories listed administrative, instructional support, and noninstructional support who are qualified to provide instruction in Design Theory and the school s curriculum, as well as committed to the school s expectations. The petition provides a career pathway and expectations for a teacher s first years of employment with Design Tech. There are three categories of teachers at Design Tech: 1) Rock- Star Teacher, 2) Teacher-Leader, and 3) Teacher/Professor Each of these categories requires teachers to assume additional roles besides teaching students. Given that the petition indicates that the average salary of Design Tech teachers will be $50,000 (with average benefits budgeted at $12,000 per teacher) and that, as noted, there are several different types of - 6 -

instruction/facilitation expected of teachers during the normal course of their work days, these added expectations may be difficult to achieve and sustain. Average teacher salary is budgeted at $50,000 annually, with average benefits budgeted at $12,000, and it is difficult to ascertain whether a $50,000 annual average salary is realistic, as the school s teacher salary scale in the petition runs from $40,000 to $96,000. The petition also anticipates that some teachers will work at $40,000 per year, but given the demanding job description in the petition, it may be a challenge to find professional, effective and qualified teachers willing to work for that amount. Notably, an average annual salary of $50,000 is lower than the lowest salary on the SMUHSD certificated teacher salary schedule, which is $54,854, and far lower than the average annual SMUHSD teacher salary of over $85,000. The $12,000 annual average for benefits provided in the budget will require employee contributions if they have dependents. The petition also states that an Educator Preparation Program intended for the credentialing of teachers will be established at the school. Additionally, the petition identifies a long-term goal of adding a graduate school of education to Design Tech. These endeavors appear to be very ambitious and will require significant time and resources of the school s administrators and staff. In particular, the marketing, hiring, processing, and compliance aspects of these programs would require dedicated resources, planning time, and successful accreditation Staff therefore recommends that Design Tech proponents be asked for further information on how it will ensure adequate time and resources to implement these programs and that the MOU address this matter. Staff further notes that the Design Tech petition does not lay out a clear plan for scaling up its staff as enrollment increases in future years. Ten positions are proposed in the charter that would be in addition to the teaching staff. It is not clear if these positions will be combined or even needed in the first years of the school s existence. Business Services: District staff believes that Design Tech will need to make certain changes to the assumptions underlying their budget proposal First, while staff expects that the charter school will be funded under the Local Control Funding Formula at the apportionment level determined by the California Department of Education ( CDE ), the CDE has yet to finalize the apportionment. The petition assumes a per-pupil Local Control Funding Formula (LCFF) apportionment of $8,957. However, based on information available to District staff, including Financial Crisis Management Assistance Team s (FCMAT) LCFF calculator, a more realistic LCFF per-pupil apportionment is $7,297.33. This calculation is defined as the LCFF phase-in entitlement and the San Mateo County Office of Education has confirmed this is the District s likely funding obligation to the Charter School. The net difference in the per-pupil apportionment between the petition and the District obligation as reflected in the FCMAT calculation is ($1,659.67), resulting in a total difference in revenues of ($238,993). By contrast, the 2014 15 budget proposal projects an excess of revenues of $66,828. The decrease in LCFF resources therefore results in a deficit condition of ($172,165) in the school s first year. Utilizing the prior year s beginning balance, the minimum expenditure reduction - 7 -

required to balance the Charter School s books in the first year is $100,915. Staff recommends that the Board of Trustees require the Design Tech charter petitioners to address this apparent deficit condition. Second, staff is concerned by what appear to be overly optimistic cohort attendance projections. The budget proposal anticipates that enrollment will not fluctuate between years and that cohort survival will be close to 100%. The projections assume that 150 students will enroll in the program the first year and will remain with Design Tech until they graduate. In the second year of operations, the freshman class is projected at 140 and the projections assume that all of these students will graduate from Design Tech in four years. The District s experience calls this assumption into question. Typically, some students disenroll from a school between grades for a variety of reasons. Meanwhile, students are less likely to enroll in a new high school after their freshman year. Overall, fewer people graduate from a high school program as begin it as freshmen. Enrollment is the driving factor for determining revenues, and moderate fluctuations in projections may result in revenue shortfalls. The Charter School needs to ensure that its budgeting appropriately address and reflect these attrition trends. Third, more detailed information about the school s instructional program is needed in order to fully address the validity of the school s staffing model. The student population is anticipated to be composed of 12% ELD students, 19% free and reduced lunch and 10% economically disadvantaged. As noted, the budget initially includes five teachers. The salaries and benefits expense projections seem reasonable for the five positions (putting aside the separate question of whether recruitment is realistic at the projected compensation levels However, staff believes that further information should be provided to explain how five teachers will constitute an adequate level of staffing to provide the breadth and depth of curriculum and support services for a diverse student population providing ELD services, special education services, counseling, dean, co-curricular activities, athletics and intervention specialists.. In addition, the substitute budget appears low. A new school may require intensive staff development, department planning time, as well as sick time. The Charter School is likely to experience higher costs in these areas than is being projected in the budget. Fourth, the food budget appears insufficient to provide a viable student nutrition program. In staff s experience, a greater allocation is required to deliver a baseline program and the Charter School needs to take this into consideration in developing its nutrition program budget. District staff believes that the petition can be granted consistently with sound education practices if the following operational details are required and implemented by the District and the petitioners through the MOU or otherwise: (1) The District will distribute property tax revenues three times a year to the Charter School, mirroring the County's distribution of property tax monies to the District. (2) The District's total funding obligation will reflect the minimum obligation required by the State with the allocation validated by the County Office of Education. - 8 -

(3) A list of all students, addresses of both parents, and home district will be provided to the school district before that start of each school year. (4) The Charter School will obtain liability insurance with policy limits of $5 million per occurrence. (5) The charter will unfailingly comply with the state timelines for providing the District with required financial information. (6) The Charter School fulfills its own reporting requirements to state and federal agencies and does not claim any intention of relying upon District staff to do so on its behalf, and will not claim that any failure to do so was a responsibility of the District. (7) If occupying District facilities, any modifications must be approved by the District and all applicable agencies in advance of any work commencing. If approval is not granted, the cost to remove the modification will be back charged to the Charter School from the revenue allocation. (8) The Charter School will immediately communicate all incidents that could impact the charter. (9) The budget model should be revised to reflect the LCFF per pupil apportionment approved by the San Mateo County Office of Education, to incorporate more prudent enrollment projections along with viable strategies to address unanticipated changes in revenue reductions or expenditure increases, to address staff s instructional programming concerns, to provide for a viable student nutrition program, and to provide a viable plan to address contingencies. Special Education: The petition proposes that the Charter School will operate as a school of the District for purposes of special education for at least the first three years. However, the petition appears not to make provision for the education of Special Education students to the same extent as if the students attended a District school. For example, a school site of the District would employ staff necessary to provide a far broader range of special education services than proposed to be made available at Design Tech. The petition makes reference to an RSP teacher, but not the provision of teachers for students with more severe disabilities than mild-tomoderate. This would be expected of a District school and staff recommends that Design Tech be asked to state how it intends to serve students with more significant needs. However, staff believes that the petition can be granted consistently with sound education practices if the following special education-related operational details are required and implemented by the District and the petitioners as provided by the draft MOU: (1) The Charter School should have a credentialed Resource Specialist teacher on salary and on-campus for the provision of services on-campus to students with mild-to-moderate disabilities within the school setting. - 9 -

(2) The Charter School should be initially responsible for having its case manager call the IEPs for students presently enrolled in the school. (3) The Charter School will be the custodian of the student s cum file and the student s Special Education records shall be retained at the District office, with copies retained at the Charter School site. Charter School shall be responsible for obtaining records from any prior school attended. (4) The District Director of Special Education or Psychologist will provide any assessment plans or prior written notices. (5) The District will provide transportation only to district resident students; the District will not offer transportation to students enrolled from outside the District. (6) Budget contingencies should be provided for Special Education costs, and the petitioners should describe a plan for the provision of services to students with needs more intensive than those that can be addressed by a Resource Specialist teacher. Grounds for Denial of Petition The first and most basic ground for denial is that the standard for approval (that the governing board is satisfied that granting the charter is consistent with sound educational practice ) has not been met. Cal. Educ. Code section 47605(b) also specifies that a local educational agency shall not deny the approval of a charter petition unless it makes written factual findings, specific to the particular petition, that: 1. The charter school presents an unsound educational program. 2. The petitioners are demonstrably unlikely to successfully implement the program set forth in the petition. 3. The petition does not contain the required number of signatures. 4. The petition does not contain an affirmation of each of the conditions described in Cal. Educ. Code section 47605(d). 5. The petition does not contain reasonably comprehensive descriptions of all of the 16 required elements of the petition. The overarching rule is that a denial must be specific to the petition; a school district cannot rely solely on a policy against the establishment of charter schools in the district. - 10 -

The first factor is simply the converse of the ground for approval, relating to whether the program described by the petition is sound (from an educational perspective, which is broader than merely whether instructional methods are sound). The second factor addresses circumstances where the Board finds it unlikely that the charter school will be able to implement an otherwise sound program. The third factor is sometimes an issue when signatures cannot be validated (or when the signatories deny they actually intend to enroll or teach in the school). The fourth factor merely requires an affirmation and is rarely an issue. The fifth factor is sometimes used to deny petitions when the charter petition is vague and effectively unenforceable (e.g. the school will follow Ed Code on school closure ). Vague and merely aspirational promises made in the petition should be challenged by the board and bolstered by the petitioners with additional practical details until the board is satisfied that approval is consistent with sound educational practices. A petition shall not be denied based on the actual or potential costs of serving individuals with exceptional needs. Cal. Educ. Code 47605.7(a). Staff Analysis of This Standard in Relation to the Design Tech Petition Staff have reviewed the Design Tech petition and do not recommend denial of the petition on any of the bases established by the law. The petition has not, in the view of staff, presented an unsound educational program, nor are petitioners demonstrably unlikely to successfully implement the program they have laid out. The petition contains the required number of signatures and contains the necessary affirmations. Finally, the petition contains reasonably comprehensive descriptions of the 16 required elements. Appeals If the board denies the petition for establishment of a charter school, the decision may be appealed by the submittal of the petition before the county board of education, which conducts a new set of hearings and can either grant or deny the petition in its own discretion. Cal. Educ. Code 47605(j). Denial by the county board allows the charter petitioners to appeal to the state board of education. Post-Petition Considerations A petition to establish a new charter school may be granted for a period not to exceed five years. Cal. Educ. Code 47607(a)(1). Five years is a maximum, not a minimum, for new petitions. A district board that approves a charter petition submitted by a non-profit public benefit corporation is entitled to appoint a single representative to the board of directors of the nonprofit whose charter was granted. Cal. Educ. Code 47604(b). However, the school district does - 11 -

not become liable for the debts or obligations of the charter school if the district has complied with all oversight responsibilities required by law. Cal. Educ. Code 47604(c). A chartering authority has ongoing duties toward a school it has chartered, including a duty to identify at least one staff member as a contact person for the charter school, to visit each charter school annually, to ensure that each charter school under its authority has complied with all reports required of charter schools by law, to monitor the fiscal condition of each charter school, and to provide timely notification to the state Department of Education whenever a charter renewal is granted or denied; the charter is revoked; or the charter school is ceasing operation for any reason. Cal. Educ. Code 47604.32. In return, the charter school has a duty to respond to all reasonable inquiries of its operations by the chartering authority (Cal. Educ. Code 47604.3) and to annually prepare and submit reports to its chartering authority, including financial reports. Cal. Educ. Code 47604.33. A charter school that projects to enroll at least 80 students who would ordinarily attend schools of a school district may demand that the school district provide reasonably equivalent facilities for that number of students. Cal. Educ. Code 47614(b). The purpose of this section is to provide charter school students a fair share of the facilities of their district on a basis equal to students attending district schools. A chartering authority may charge its actual costs for supervisorial oversight of a charter school. Cal Educ. Code 47613. The charge for these actual costs may not exceed 3% of the charter school s revenue if the chartering authority is providing substantially rent-free facilities, or 1% of the charter school s revenue if it is not. For these purposes, the charter s school s revenue is equal to its general purpose entitlement and categorical block grant. A school district may enter into agreements with its charter schools for the provision of shared services or facilities. Many charter schools have, in addition to their charter petition documents, a Memorandum of Understanding to address operational concerns. Summary of Staff Recommendation It is the recommendation of the Superintendent that the Board do the following: 1. Take action by a motion, a second and a simple majority vote to approve the Design Tech petition for the establishment of the charter high school described in the petition for a period of five years; 2. Direct staff to execute a Memorandum of Understanding ( MOU ) with Design Tech s non-profit public benefit corporation for the operation of the school and the performance of the promises appearing in the MOU substantially in the form provided in draft in your Board packet and with any additional matters directed by the Board at the time of the hearing; 3. Appoint a Board Member to serve as a voting member of the Board of Directors of the Design Tech non-profit public benefit corporation pursuant to Cal. Educ. Code - 12 -

47604(b), and giving such person direction to work cooperatively with the rest of the Design Tech Board of Directors to resolve issues of concern to the viability and success of the Design Tech Charter High School; 4. Appoint the Superintendent as the contact person for the charter school and as the person to the perform the District s duties pursuant to Cal. Educ. Code 47604.32; 5. Give guidance to staff regarding any special concerns you may have with regard to the District performing its oversight responsibilities pursuant to Cal. Educ. Code 47604(c); and 6. Direct staff to begin work with the Design Tech representatives for the provision of reasonably equivalent facilities from among the facilities presently owned by the District that are adequate to house the portion of Design Tech s enrollment that represents students who would otherwise attend District schools, seeking to provide Districtowned facilities that reasonably meet Design Tech s preferred specifications, but not to purchase or lease additional facilities for Design Tech s use at the present time. - 13 -

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