December 30, 2010 Senator Shan Tsutsui Representative Calvin ...

Neil Abercrombie Maunalei Love 

Governor Executive Director 

December 30, 2010 

Charter School Administrative Office 

1111 Bishop Street, Suite 516 

Honolulu, Hawaii 96813 

Tel: 586-3775 Fax: 586-3776 

Senator Shan Tsutsui Representative Calvin Say 

President of the Senate Speaker of the House of Representatives 

State Capitol, Room 409 State Capitol, Room 431 

Honolulu HI 96813 Honolulu HI 96813 

Dear President Tsutsui, Speaker Say 

and Members of the Hawaii Legislature: 

Pursuant to Senate Concurrent Resolution 108, and on behalf of the Charter Schools 

Funding Task Force, I am transmitting a copy of the "Charter Schools Funding Task Force 

Final Report". 

In accordance with section 93-16, Hawaii Revised Statutes, we have also 

transmitted a printed copy of this report to the Legislative Reference Bureau Library. 

The public may view an electronic copy of this report on our agency's website at the 

following link: www.hcsao.org/pages/resources 

Should you have any questions about this report, please don't hesitate to contact 

Bob Roberts at 586-3777, or via e-mail at bob.hcsao.org 

Sincerely, 

Vanelle Maunalei Love 

Executive Director 

Charter Schools Administrative Office 

C: Legislative Reference Bureau Library

Aloha: 

2010 CHARTER SCHOOL FUNDING TASK FORCE 

January 3,2011 

The Charter School Funding Task Force, as created by Senate Concurrent 

Resolution 108 (2010) is pleased to submit this final report. This report contains our 

findings and recommendations that we would like the Administration, the Legislature and 

other stakeholders to consider as the discussion on finding an equitable funding solution 

for Hawaii’s charter schools continues. 

The Task Force convened in August of 2010 and concluded its meetings in 

December. During these five months many issues relating specifically to facilities 

funding arose and the task of creating a dedicated and equitable funding source proved to 

be much more challenging as it was apparent funding was not the only issue. Issues of 

need, reliability and fairness in funding also arose. 

Given the fact that each charter school has different facilities needs (brick and 

mortar versus trailers) and lease or rent costs, using a per pupil based formula for 

facilities may not be the most equitable or practical way of distributing funds. One 

possible way to address the varying facility needs could be to move from formula based 

funding to one based on need. The Task Force hopes that the concept of needs based 

funding is seriously considered by all stakeholders as this discussion moves forward. 

The Task Force is also aware that the 2010 Supplemental Budget included a 

proviso that directs $1,909,049 toward charter school facilities funding and tasked the 

Charter School Administrative Office (CSAO) with developing a methodology to 

distribute these funds. The CSAO was also directed to prepare a report containing a 

detailed breakout of facility related expenditures for the last completed fiscal year for 

each charter school and the method of funding. As this report is still being completed by 

CSAO, the Task Force submits its proposals and asks that the Administration, the 

Legislature and other charter school stakeholders take a look at the task force’s 

recommendations alongside CSAO’s report. 

The members of the Task Force recognize that many questions still remain 

unanswered and that the recommendations contained in this report by no means represent 

the perfect solution to creating an equitable funding source for Hawaii’s charter schools. 

These findings and recommendations reflect a new starting point for the Administration, 

the Legislature, charter schools, and the community at large to discuss.

As the Chair of the task force, I would like to express my personal thanks to the 

Task Force members for all their hard work and dedication to finding an equitable means 

of funding Hawaii’s charter schools. And a special thank you to the charter school 

stakeholders and members of the public who attended and participated at the meetings. 

Your participation in the process greatly helped the Task Force better understand the 

needs of our charter schools. 

Very Truly Yours, 

‘-4,&.I—~ 

‘ØØ~ Representative Marcus R. Oshiro, Chair 

2010 Charter School Funding Task Force

REPORT TO THE TWENTY-SIXTH LEGISLATURE 

STATE OF HAWAII 

2011 

PURSUANT TO S.C.R. 108, S.D. 2 

REQUESTING THE CONVENING OF A TASK FORCE TO ESTABLISH A 

CONSISTENT FUNDING FORMULA, PROCESS, OR BOTH, BY WHICH 

EQUITABLE FUNDING TO CHARTER SCHOOLS IS DETERMINED

CHARTER SCHOOLS FUNDING TASK FORCE 

FINAL REPORT TO THE 2011 STATE OF HAWAII LEGISLATURE 

Table of Contents 

Executive Summary........................................................................................................................ 2 

Background ..................................................................................................................................... 3 

Findings........................................................................................................................................... 9 

Recommendations........................................................................................................................... 9 

Remaining/Unresolved Issues....................................................................................................... 11 

Appendices.................................................................................................................................... 12 

1



Executive Summary 

The Charter Schools Funding Task Force was convened by the 2010 Legislature to examine 

various issues pertaining to charter school funding. The Task Force was made up of members of 

the legislature, the charter school community, the Department of Education and the Department 

of Budget and Finance. The Task Force met nine times over August through December 2010. 

The Task Force examined each of the items identified within SCR108. Because of the 

significance of facilities funding for charter schools that issue became the primary focus of the 

Task Force. In addition to the Task Force recommendations The Task Force found: 

• that changes made in statute during the 2010 legislative session helped to clarify 

the funding formula for charter school operations, 

• that some variances continue to exist in funding for charter schools specifically 

with SPED, Federal Funding and other non-general fund appropriations, 

• that the Department of Education’s appropriations for routine repair and 

maintenance are only partially reflected in the funding formula for charter school 

appropriations, 

• that a portion of the amount apportioned for operating funding for charter schools, 

per the statutory funding formula was redirected, per budget proviso, to create a 

funding source for charter school facilities. 

As a result of its work the Task Force recommends the following two actions take place: 

• Revise the language in the statutory formula for funding charter school operations 

such that State General Fund appropriations included for neighbor island schools 

routine repair and maintenance (AGS 807) costs are included within the base 

calculation used to determine the per pupil amount for charter school operations. 

• Include a new funding formula in statute for a facilities “needs based” formula 

that considers the amount of building space needed to adequately house enrolled 

students at each charter school and that this formula: 

o Take into consideration the differing amounts of space needed to 

adequately provide for primary age students and secondary age students 

o Take into consideration the amount of building space provided at no cost 

to the charter school (generally from State of Hawaii sources) 

o Adjust the building space calculation for charter schools that have a 

reduced building space need due to incorporating a distance learning or 

online learning component to their program. 

o That this formula incorporate a factor for the approximate cost of leasing 

building space in urban and rural areas throughout the State of Hawaii 

o That the CSAO and CSRP be responsible for the appropriate distribution 

of the funding to the charter schools. 

2



Because of time constraints, the Task Force was unable to fully address all of the issues outlined 

in Senate Concurrent Resolution 108 and other issues presented to it during its investigations. 

These issues are identified in the Remaining/Unresolved Issues section of this report. 

Background 

SCR 108 Creating the Task Force 

The Charter Schools Funding Task Force (CSFTF) was created as a result of Senate Concurrent 

Resolution 108 (SLH, 2010) requesting the convening of a task force to establish a consistent 

funding formula, process, or both, by which equitable funding to charter schools is determined 

(see Appendix 1 for a copy of SCR 108). 

SCR 108 further requests that the CSFTF examine the following in making its determination: 

1. Detailed information on the existing funding sources of the charter schools’ per pupil 

allocation; 

2. Detailed information on the Department of Budget and Finance’s method of 

calculating the Department of Education’s per-pupil allocation and the charter 

school’s per-pupil allocation amounts; 

3. Discrepancies and the reasons for discrepancies in calculations of per-pupil 

allocations for non-charter public schools and charter schools by various agencies; 

and 

4. The portion of debt service, repair and maintenance, and capital improvement 

expenses that should be paid by charter schools. 

Membership of the Task Force 

Representatives of various departments and offices of listed organizations were requested 

to convene as members of the Task Force. The following individuals were the members 

of the Charter Schools Funding Task Force: 

1. Marcus Oshiro, Chairperson of the House Committee on Finance 

2. Donna Mercado Kim, Chairperson of the Senate Ways and Means 

Committee (recused herself from the Task Force after the December 6, 2010 

meeting) 

3. James Brese, CFO of the DOE 

4. Georgina Kawamura, Director of Finance (represented by Neal Miyahira 

during most of the meetings) 

5. Megan McCorriston, Executive Director of Hoò ka koò Corporation 

6. Alapaki Nahale-a, Executive Director of the Hawaii Charter Schools 

Network (replaced by Steve Hirakami starting with the December 13, 2010 

meeting) 

7. Bob Roberts, CFO of the CSAO 

8. Carl Takamura, Charter School Review Panel 

Meetings of the Task Force 

The Task Force met 9 times (August 16, September 1, September 28, October 26, 

November 15, November 29 and December 6, December 13 and December 20). See 

Appendix 2 for Agendas and Meeting minutes of these meetings. 

3



Issues that were considered by the Task Force 

SCR 108 identified four issues for the Task Force to examine. The following paragraphs 

describe the issues to be examined and the actions taken by the Task Force: 

1. Detailed information on the existing funding sources of the charter schools’ per pupil 

allocation: 

This issue was addressed at length in the report submitted to the Task Force from the 

Senator Takamine Work Group. The Task Force received this report and a presentation 

from members of the work group. In addition the Task Force requested and received 

follow-up information pertaining to the findings of the Work Group report. These events 

occurred during the August 16 and September 1, 2010 Task Force meetings and are 

described in more detail later in this report. Information pertaining to the existing 

funding sources of the charter schools’ per pupil allocation is included in Appendix 3. 

2. Detailed information on the Department of Budget and Finance’s method of calculating 

the Department of Education’s per-pupil allocation and the charter school’s per-pupil 

allocation amounts: 

This issue was addressed by the submission of information provided by the Department 

of Budget and Finance’s representative to the Task Force which stated that B&F follows 

the formula included in statute in calculating the per pupil allocation for charter schools. 

A sample calculation of the methodology used by the Department of Budget and Finance 

in determining its recommendation for Charter School appropriations is provided in 

Appendix 12. 

3. Discrepancies and the reasons for discrepancies in calculations of per-pupil allocations 

for non-charter public schools and charter schools by various agencies: 

As with the information pertaining to the funding sources for charter schools, this issue 

was addressed in the Work Group report, Appendix 3. Readers of this report interested in 

further information on this subject are referred to that document. The Task Force 

addressed this issue by focusing on the single largest discrepancy in charter school 

funding – facilities. 

4. The portion of debt service, repair and maintenance, and capital improvement expenses 

that should be paid by charter schools. 

This issue is addressed by the Task Force in its recommendation for a new “needs based” 

facilities funding formula for charter schools. 

Funding Formula, Facilities Funding and Related Issues 

August 16, 2010 

The first meeting of the CSFTF occurred on August 16, 2010. At this meeting members 

introduced themselves and discussed the rules under which the Task Force would conduct 

4



its business. Representative Oshiro was elected the Chair of the Task Force and Senator 

Kim was elected Vice Chair. The Task Force also discussed future meeting dates and 

data/reports to be presented at the next Task Force Meeting. 

During this meeting a presentation was delivered by Taffi Wise and Katie Benioni, 

representatives of the group that met with Senator Takamine, to the Task Force. The 

result of this work was a series of recommendations that were included in a report from 

the Senator Takamine Work Group (hereinafter referred to as the Work Group report). A 

complete copy of the report, titled “Understanding Public School Funding Fiscal year 

2009-10” is provided as Appendix 3. The following summarizes the recommendations of 

this group: 

1. Create a reliable system to allow charter schools access to federal 

competitive grant opportunities. 

2. Ensure that services provided in lieu of funding are equitable. 

3. Move Non-SPED funding within EDN 150 to EDN 100. 

4. Establish Charters as an LEA to access federal funding. 

5. Give Charters a proportionate share of facilities funding. 

6. Create a mechanism for post school opening funding adjustments. 

7. Educate legislators and B&F on how the funding formula functions in 

relation to the budget appropriation. 

8. Collaborate with the DOE in advocating for adequate per pupil funding. 

At the conclusion of the August 16, 2010 meeting CSFTF members requested for their 

next meeting: 

● Status of Recommendations from the Senator Takamine Work Group report 

● Discussion regarding the pros and cons of future appropriations to charter schools being 

made on a formula basis or using the same process as other State Departments (formula 

v. line-item budget request). 

● Discussion regarding the Budget Proviso language (Act 180) pertaining to charter schools 

and impacts due to that language. 

. 

September 1, 2010 

At the September 1, 2010 Task Force meeting members received reports from Mr. Brese 

and Mr. Roberts regarding the current status of the recommendations of the Work Group 

report that was presented at the prior Task Force meeting (see Appendix 4). These items 

were discussed at length by the Task Force. 

The Task Force also received information and discussed the concept of changing the 

appropriations process for charter schools from a formula basis to a line-item basis. 

Task Force members agreed that the impact on charter schools from the Budget Proviso 

language was adequately addressed during the discussion of the recommendations of the 

Work Group. 

At the conclusion of this meeting the Task Force members agreed that the role of the 

Task Force be to “fine tune” the formula process rather than establishing a new funding 

mechanism or recommending that the charter schools funding process be based on a lineitem 

request. 

5



Members also requested that the following items/issues be discussed at the next CSFTF 

meeting: 

● Mr. Brese stated that at the next Task Force meeting, additional funding 

considerations will parallel those decisions made by the Legislature as described 

in the text of the DOE’s response to KALO Recommendation #6 as presented in 

Status of 8 KALO Recommendations. Mr. Brese stated that facilities funding 

considerations and EDN 500 are the two biggest issues that the Task Force will 

need to consider for inclusion or exclusion. 

● Mr. Takamura suggested that CIP funding should also be addressed at the next 

Meeting. 

● Mr. Nahale-a suggested that facilities funding should be addressed, and how 

private dollars can be brought into the funding mix. 

● Mr. Nahale-a asked that access to federal and SPED funding be considered in 

relation to how those funding dollars are spent in supporting the administrative 

office effort to secure and administer funding, and whether federal fund 

proposals should be done collectively or independently by Charter Schools. 

● Mr. Takamura noted that it is the Panel’s responsibility to examine fiscal 

accountability and to determine possible re-authorization of particular charters, 

and proposed that this issue be considered at the next Meeting. 

● Mr. Miyahira said that an overview of State bond funding should be examined in 

regards to its role in supporting in-state educational facilities. 

● Vice Chair Kim asked that a volunteer determine how other states are handling 

the facilities funding issue, and to present this at the next meeting. 

September 28, 2010 

Ruth Tschumy and Amy Vorderbruegge presented information to the Task Force 

regarding the CSRP’s reauthorization process. Bob Roberts presented information 

regarding the template charter schools use in submitting budget and financial information 

to the CSAO and CSRP (Appendix 7). 

Reports were also provided to the Task Force during this meeting regarding CIP funding 

for Charter Schools, Charter Schools Facilities Funding and Private Resources, an 

overview of State of Hawaii bond funding and research on how other states address 

charter schools facilities funding. At the conclusion of this meeting Chair Oshiro 

requested that Taffi Wise (Kanu o ka Aina Charter School) and Alapaki Nehala-e present 

information to the Task Force at their next meeting regarding Public-Private Partnership 

examples in Hawaii that aided in the funding of facilities for certain Hawaii Charter 

Schools. 

October 26, 2010 

At the October 26, 2010 Task Force Meeting Taffi Wise (Kanu o ka Aina) and Marci 

Sarsona (Ke Kula o Samuel Kamakau) delivered presentations regarding the specific 

efforts made by their charter schools in addressing the schools facilities needs through the 

use of public-private partnerships (appendices 8 & 9). Both of these presentations 

provided details as to how officials at these schools, creatively and efficiently developed 

solutions for the planning, design and financing phases of their facilities programs. 

However, for each school after these phases were completed the charter schools were left 

6



with debt service obligations which are currently funded from the charter schools 

operating funds. 

Bob Roberts delivered a presentation regarding how public-private partnerships can be 

viewed as one element in comprehensive program of providing resources for the 

development of facilities for charter schools (Appendix 10). The primary conclusion of 

his presentation was that while private-public partnerships can help to pay for many of 

the up-front planning and design costs of facilities they rarely provide funding for 

construction costs. As a result, and per the examples provided by Kanu o ka Aina and Ke 

Kula Samuel Kamakau the current result of public-private partnerships in funding charter 

school facilities is unfunded debt service costs that are currently funded by charter 

schools from their operating funds. 

Alapaki Nahala-e delivered a presentation regarding the political considerations 

regarding public-private partnerships (Appendix 11). Mr. Nahala-e stated that the 

purpose for charter schools is to elevate the success of all students. This is accomplished 

through innovation, reaching underserved populations of students and creating choice for 

parents and students. However, in order to achieve these goals charter schools need 

adequacy and equity in funding. This presentation also addressed the issue that the 

expectations for charter schools are different and that because charter schools have 

autonomy it appears that some believe they should not expect equity in funding. In fact 

charter schools are subject to all of the same academic, health and safety, collective 

bargaining and compliance issues as other public schools. With respect to the autonomy 

issue, charter schools do have a greater degree of autonomy than regular public schools, 

yet with all of the compliance issues this autonomy is not as great or expansive as is 

commonly thought. 

At the conclusion of the October 26, 2010 meeting the Task Force members agreed to 

leave the agenda for the next meeting (November 15, 2010) open for discussion of the 

information that was provided to the Task Force during its prior meetings. 

November 15, 2010 

During this task force meeting members focused on the details of a formula to address 

facilities funding for charter schools. Several issues were identified during this 

discussion that had not been previously addressed: 

Assuming that the formula suggested by Neil Miyahira forms the basis for the 

recommendation how will conversion charter schools facilities needs (primarily major 

repair & maintenance) be addressed? 

How will the facilities needs of conversion schools that have an approved amended DIP 

to expand the grade levels that they serve beyond those grade levels where the conversion 

charter school is the school of record for students in that attendance area? Currently there 

is only one conversion charter school in this situation (Kamaile Academy). Task Force 

members discussed this issue and agreed that for schools in this situation that the 

enrollment due to the expanded grade levels would be counted as start-up school 

enrollment for the purposes of the proposed facilities funding formula. 

7




The Task Force met briefly on this date to discuss the elements of the Task Force Report. 

December 13, 2010 

During this meeting of the Task Force the members focused on the formula to be 

included in the recommendation. Representative Oshiro mentioned that during 

discussions with colleagues problems with the initially recommended formula came to 

light. The primarily problem with the current (debt service based) version of the formula 

is that because it is based on debt service and enrollment it does not distinguish between 

charter schools that have a higher need for facilities funding and charter schools that have 

a lower need for facilities funding. 

After much discussion the members of the Task Force agreed that a formula that was 

needs based would take into consideration the cost of leasing facilities within the 

geographical area that the school is located in, the amount of space that the school needs 

to adequately house the enrolled students and the amount of space that the charter school 

is currently occupying that is being provided at no, or very low cost, from State owned 

facilities. Steve Hirakami volunteered to present a sample of a “needs based” formula at 

the next task force meeting. 


During this meeting Steve Hirakami presented an example, using data from Hawaii 

Academy of Arts and Sciences PCS, on how a “needs based” facilities funding 

methodology could work. This example was discussed by members of the task force. Bob 

Roberts agreed to draft formula language based on this example to be included in the 

final draft of the report. 

Survey of Facilities Funding for Charter Schools in Other States 

Task Force members received a copy of the 2010 Charter School Facility Finance 

Landscape (Appendix 6: Elise Balboni, 2010). This report summarized each of the 

significant facilities finacing programs available to charter schools. The report identified 

the non-profit organizations, tax-exempt programs, federal initiatives and state initiatives 

that existed in 2010 for the purpose of supporting charter schools in developing school 

facilities. Further, the report provided a state-by-state analysis of the implementaion of 

these programs within each state. This report concludes that a lack of access to 

appropriate public facilities or to public funding for faciltiies continues to be a major 

obstacle to charter school operators. Of the 40 states with a charter school law only 11 

provide additional funding specifically for charter schools. As a result charter school 

operators have had to turn to a combination of public and private financing in order to 

address their facilities needs. 

History of Facilities Funding for Charter Schools in Hawaii 

In fiscal year 2006-07, the Hawaii State Legislature appropriated $3,174,000 specifically 

to address the facilities needs of Hawaii’s charter schools. These funds were distributed 

by the CSAO to the 23 start-up charter schools operating in that year. The distribution to 

the start-up charter schools was based on the charter schools official enrollment count 

and was equal to $686.12 per pupil. 

8



Findings 

In fiscal year 2010-11, per requirements of Budget Proviso 39.1 (Act 180 SLH, 2010), up 

to $1,909,049 in charter school operating funds were directed to be used to fund charter 

school facilities in an amount equal to $197 per pupil with any excess funds being 

deposited into a special reserve account within the State Treasury. Because the actual 

official enrollment count was slightly under the projected enrollment count only 

$1,778,122 of these funds were actually distributed to the charter schools. The remaining 

$130,927 will be deposited into the special account as provided by law. 

In no other years have State funds been appropriated to provide for the facilities costs 

incurred by the State’s charter schools. 

The Task Force finds that changes in statute made during the 2010 legislative session 

helped to clarify the calculation of the per pupil funding for charter school operations. 

This has been a process that has taken many years. The committee further finds that the 

next step in this process should be the development of a formula for funding charter 

schools facilities needs. 

The Task Force finds that some variation remains in the appropriation of funding for 

charter schools. Specifically the task force noted variation in federal funding, SPED and 

other non-general fund appropriations. These variations may not be specific to charter 

schools; rather they appear to disproportionately affect small and rural schools. 

The Task Force finds that the Department of Education public schools routine repairs and 

maintenance costs are only partially reflected in the DOE’s budget. Oahu regular public 

school R&M costs are reflected in EDN 400 since DOE has assumed repair and 

maintenance operations on Oahu. However, neighbor island routine R&M costs are 

reflected in DAGS’ budget AGS 807. This appropriation has not been included in the 

formula calculation for charter school operations. 

The Task Force finds that in the 2010 legislative session that a portion of the charter 

school operating funds ($197 per enrolled student), calculated per statutory formula, was 

redirected, per budget proviso, to provide a funding source for charter school facilities. 

The effect of this on charter schools was that no additional facilities funding beyond what 

was calculated per statute was provided. Rather an amount that should have been 

provided for operating funding was instead provided as facilities funding. This had the 

effect of decreasing the amount of resources available for the charter school for 

operations below the comparable amount provided to the DOE per statutory formula. 

Recommendations 

The Charter Schools Funding Task Force makes the following two 

recommendations to the Hawaii State Legislature: 

(1) Revise the language in statute such that the charter schools per pupil funding formula 

for operations includes within the formula base DAGS’ appropriation code AGS 807 

9



(Neighbor Island Routine R&M). This appropriation, included within the DAGS 

budget, is for routine repair and maintenance of DOE neighbor island facilities and 

has been excluded from the charter schools funding formula in prior years. Routine 

repair and maintenance costs for DOE facilities located on the island of Oahu are 

included within the DOE’s budget (EDN400) and has been part of the charter schools 

funding formula in past years. 

(2) Included in statute a new funding formula, distinct from the formula used to 

appropriate operational funding for charter schools, to address charter schools’ 

facilities needs. It is recommended that the formula for calculating this appropriation 

be a needs based formula, that the CSAO & the CSRP be responsible for the 

appropriate distribution of these funds, and that the formula contain the following 

elements: 

For each charter school, a calculation of the total square feet of authorized facilities space 

shall be computed. A separate calculation shall be made for students enrolled in primary 

grades (K-6) and students enrolled in secondary grades (7-12). The total authorized 

facilities space calculation shall be the sum of the primary grades and secondary grades 

calculations. Authorized space by definition, includes classroom space and common area 

space (cafeteria, administration, libraries, and all other indoor space). 

These calculations shall be based on the number of students enrolled in the school (OEC) 

times a “students per square feet” factor. The students per square feet factor shall be 

comparable to the actual square footage per student provided to students enrolled in 

Hawaii’s regular public schools. There shall be two factors calculated: (1) Students per 

square feet in primary grades and (2) students per square feet in secondary grades. 

A calculation shall be made of the amount of “State of Hawaii” provided space. This 

calculation shall be made similar to the authorized space calculation and shall include all 

space provided to the charter school on a discounted or free basis by the State of Hawaii. 

For charter schools that include distance learning, on-line learning or programs of a 

similar nature regardless of how the program is described, an adjustment factor shall be 

applied to the school’s enrollment count for the purpose of making a reasonable 

approximation of the amount of space needed by the school for its operations. 

Average annual cost per square foot of leased space, to be used in this calculation, shall 

be determined annually by the State of Hawaii Department of Accounting and General 

Services (DAGS). 

The recommended formula to be used is as follows: 

(1) Number of enrolled students - primary grades times online learning 

adjustment factor times students per square feet in primary grades 

(2) Number of enrolled students – secondary grades times online learning 

adjustment factor times students per square feet in secondary grades 

(3) Total authorized square feet of space (1 plus 2) 

(4) Amount of space provided by the state of Hawaii 

(5) Net authorized square feet of space (3 minus 4) 

10



(6) Facilities funding support (5 times average annual cost per square foot of 

leased space) 

See Appendix 13 for an example of how this formula could be applied. 

Remaining/Unresolved Issues 

Because of the short time line available to the Task Force, and the complexity of the issues 

discussed, the Charter Schools Funding Task Force focused its attention on the issue of facilities 

funding for charter schools. As a result certain other issues were not addressed in detail. A partial 

list of these issues include: (1) charter schools access to federal funding; (2) charter schools 

access to special education services/funding; and, (3) access, as appropriate, by charter schools to 

other non-general funds (e.g. Developer Impact Fees, Hawaii School-level Minor Repair & 

Maintenance from State Individual Tax Returns). 

11



Appendices 

1. Senate Concurrent Resolution 108 (2010) 

2. Agendas and meeting minutes of the CSFTF 

3. Understanding Public School Funding Fiscal Year 2009-10 (Senator Takamine Work Group 

Report) 

4. Status Reports RE: Recommendations of the Work Group 

5. No Appendix 

6. Balboni, Elise et al. 2010 Charter School Facility Finance Landscape. Local Initiatives Support 

Corporation. June 2010. 

7. Charter Schools’ Standardized Financial Reporting Model, Fiscal Year 2010-11 

8. Ke Kula ò Samuel M. Kamakau Laboratory Public Charter School’s Presentation to the Charter 

Schools Funding Task Force (example of a public-private partnership) 

9. Kanu o Ka Aina’s “Where Aloha Lives.” Presentation to the CSFTF (example of a public-private 

partnership) 

10. CSAO’s Charter Schools Facilities Funding – A Proposed Framework 

11. HCSN’s “The Politics of Charter Schools Facilities Funding.” 

12. Sample Department of Budget and Finance Charter Schools Appropriation Calculation 

13. Sample Application of a “Needs Based” Facilities Funding Formula 

12

Charter Schools Funding Task Force Final Report APPENDIX 2 

Date: August 16, 2010 



To: Members, Charter Schools Funding Task Force 

From: Maunalei Love, Executive Director 

Subject: Charter Schools Funding Task Force Proposed Agenda 

1. Call to Order (5 minutes) 

2. Member Introductions (5-7 minutes) 

a. James Brese- DOE CFO; 

b. Bob Roberts- CSAO CFO; 

c. Senator Donna Mercado-Kim- Senate Finance Chair; 

d. Representative Marcus Oshiro- House Finance Chair; 

e. Georginna Kawamura- Budget & Finance Director; 

f. Carl Takemura- Charter School Review Panel; 

g. Megan McCorriston- Ho'okako'o; 

h. Alapaki Nahale'a- Hawaiì Charter School Network 

3. Task Force Organization (25 minutes) 

a. Election of Officers 

i. Selection of a Task Force Chair 

ii. Selection of a Task Force Vice Chair 

b. Schedule of Future Meetings 

c. Discussion Regarding Task Force Meeting Protocols (facilitator, 

form, content, open to public, public input, subject to 

sunshine law, expectations of CSAO support, etc.) 

1


4. Presentation and Discussion Regarding the Provisions of S.C.R. #108- 

Brief History and Convening of Task Force (20 minutes) 

a. Purpose 

b. Goals 

c. Outcomes 

5. Presentation and Discussion on Senator Takamine’s Budget Work 

Group Findings- KALO Funding Comparison Study (Including HRS 

302B-12, SLH 2010) (1 hour) 

6. Agenda Items for Next CSFTF Meeting (5 minutes) 

7. Other Items (5 minutes) 

8. Adjournment 

2


Date: September 1, 2010 

Time: 10:00 am 



Place: Conference Room 309 

State Capitol 

415 South Beretania Street 




1. Call to Order 

2. Members 

a. Chair of the Task Force: Representative Marcus Oshiro- House 

Finance Chair; 

b. Vice Chair of the Task Force: Senator Donna Mercado Kim- 

Senate Ways and Means Chair; 

c. James Brese- DOE CFO; 

d. Bob Roberts- CSAO CFO; 

e. Georgina Kawamura- Budget & Finance Director; 

f. Carl Takamura- Charter School Review Panel; 


h. Alapaki Nahale-a- Hawaiì Charter School Network 

3. General Business 

a. Approval of Minutes of August 16, 2010 Meeting 

b. Approval/Changes to the Agenda 

c. Report/Update Status of Recommendations from the KALO 

Report 

d. Discussion RE: Budget Request & Appropriation: Formula v. 

Process 

3


e. Impacts of Act 180, SLH, 2010 budget proviso language and 

Act 144, SLH 2010 amendments to §302B-12 funding and 

finance 

f. Determine a Regular Schedule for all CSFTF Meetings 

g. Agenda Items for Next CSFTF Meeting 

4. New Business 

a. Other Items 

5. Next Meeting 


4


Date: September 28, 2010 

Time: 10:00 am 



Place: Conference Room 437 

State Capitol 






2. Members 












a. Approval of Minutes of September 1, 2010 Meeting 


c. CIP Funding 

d. Facilities Funding and Private Resources 

e. CSRP’s Reauthorization Process 

f. Overview of State Bond Funding 

5


g. Research on How Other States Handle Charter Schools’ 

Facilities Funding 

h. Overview of Specific Recommendations and Options 

i. Determine Date for Next CSFTF Meeting 

j. Agenda Items for Next CSFTF Meeting 





6


Date: October 26, 2010 

Time: 1:30 pm 




State Capitol 






2. Members 












a. Approval of Minutes of September 28, 2010 Meeting 


c. Presentation from Kanu o ka ‘Āina: Public-Private Partnership 

case study – Taffi Wise 

d. Presentation of other examples of Public-Private Partnerships: 

Alapaki Nahale-a 

7


e. Presentation: Public-Private Partnerships as potential solution 

to charter school facilities in Hawai‘i 

f. Determine Date for Next CSFTF Meeting 






8


Date: November 15, 2010 





State Capitol 






2. Members 












a. Approval of Minutes of October 26, 2010 Meeting 


c. General discussion regarding a timeline for developing and 

finalizing the task force's report to the Legislature, including 

logistics of drafting the report and any proposed legislation 

d. General discussion regarding proposals for an equitable 

charter school funding formula 

9


e. General discussion regarding recommendations and/or any 

proposed legislation that will be contained in the report 







10


Date: November 29, 2010 





State Capitol 






2. Members 












a. Approval of Minutes of November 15, 2010 Meeting 


c. General discussion regarding draft CSFTF report 

d. Amendments to draft CSFTF report 

e. Determine Date for Next CSFTF Meeting 

f. Agenda Items for Next CSFTF Meeting 

11






12


Date: December 13, 2010 





State Capitol 






2. Members 












a. Approval of Minutes of November 29, 2010 Meeting 


c. General discussion regarding draft CSFTF report 




13






14


Date: December 20, 2010 





State Capitol 






2. Members 







e. Kalbert Young- Budget & Finance Interim Director; 



h. Alapaki Nahale-a (Steve Hirakami in place of)- Hawaiì 

Charter School Network 


a. Approval of Minutes of December 13, 2010 Meeting 


c. Presentation of Revised Recommendations – Needs-based 

facilities formula 

d. General discussion regarding draft CSFTF report 

e. Amendments to draft CSFTF report 

15








16


Attendance: 


CHARTER SCHOOL FUNDING TASK FORCE 

MONDAY, AUGUST 16, 2010 

10:12 AM – 11:21 AM 

1390 Miller Street 

Queen Liliuokalani Building 

Fourth Floor 

Room 404 

James Brese – DOE CFO 

Bob Roberts – CSAO CFO 

Senator Donna Mercado Kim – Senate Ways and Means Chair 

Representative Marcus Oshiro – House Finance Chair 

Georgina Kawamura – Budget & Finance Director 

Carl Takamura – Charter School Review Panel 

Megan McCorriston – Ho’okako’o 

Alapaki Nahale-a – Hawaii Charter School Network 

Facilitators: 

Roger McKeague – Meeting Facilitator 

Maunalei Love – Meeting Facilitator 

Presenters: 

Kanu O Ka Aina Learning Ohana: 

Taffi Wise – Executive Director 

Katie Benioni – CFO 


The first meeting of the State of Hawaii Charter School Funding Task Force was 

called to order at 10:12 AM. 

2. Member Introductions 

The members of the Task Force introduced themselves. 

3. Task Force Organization 

a. Election of Officers: 

Senator Kim moved to nominate Representative Oshiro as Task Force 

Chair. Mr. Roberts seconded the motion. The motion passed 

unanimously. Representative Oshiro moved to nominate Senator Kim as 

17


. 

Vice Chair. Mr. Roberts seconded the motion. The motion passed 

unanimously. 

b. Schedule of Future Meetings: 

The Task Force agreed to postpone scheduling future meetings pending 

today’s discussion and/or consensus regarding the other items on the 

agenda. 

c. Discussion Regarding Task Force Meeting Protocols (facilitator, form, 

content, open to public, public input, subject to sunshine law, expectations 

of CSAO support, etc.) 

Discussion: 

Members discussed the merits of open Task Force Meetings, 

publication of agenda items prior to Meetings, the scheduling of public 

input time as a standard Meeting agenda item, the Task Force’s reliance 

on Charter Schools Administrative Office research to complement public 

input, the Task Force’s need for staffing to facilitate meetings and to 

conduct research, and the role of current budgetary restrictions in CSFTF 

recommendations. 

The Task Force determined that the CSAO’s Web portal is an 

effective venue for publication of Task Force Meeting schedules and/or 

Meeting agenda items. Task Force Meeting Minutes are to be used as a 

record of Task Force action, and will also serve to enhance the flow of 

Task Force ideas regarding the implementation of agenda items, 

legislative directives, and public input. Members of the Task Force agreed 

that Task Force meetings would be open to the public and that the Task 

Force would accept public input when agendized. 

Task Force members also discussed the need to adopt language 

that will address the intent of S.C.R. # 108. The Task Force will draft 

findings implementing that intent and provide the resulting 

recommendations to the Legislature. 

4. Presentation and Discussion of the Provisions of S.C.R. #108 – Brief History 

and Convening of Task Force 

CSAO shared with the Task Force their proposed purpose, goals, and outcomes. 

a. Purpose: 

18


The purpose of S.C.R. #108 and of the convening of the Hawaii Charter 

Schools Funding Task Force is to resolve possible discrepancies in the parity of 

per-pupil funding to charter schools and of per-pupil funding to non-charter 

public schools. 

b. Goals: 

The primary goal of the Hawaii Charter Schools Funding Task Force is to 

provide clarity to the Hawaii State Legislature and all State of Hawaii educational 

stakeholders regarding parity of per-pupil finding between charter schools and 

non-charter public schools as mandated by S.C.R. #108. 

Secondary goals include recommendations that will ensure funding parity 

between charter school pupils and non-charter school public school pupils, as well 

as an examination of all funding sources, State statutory provisions, and current 

funding formulas in achieving statewide per-pupil parity. 

c. Outcomes 

The Task Force will identify all factors impacting funding parity between 

charter school pupils and non-charter public school students, and will determine 

the extent of any funding discrepancies. After a thorough review of all pertinent 

matters, the Task Force will adopt a report of its findings and recommendations, 

including any proposed legislation, to the Legislature no later than twenty days 

prior to the convening of the 2011 Regular Session. 

5. Presentation and Discussion on Senator Takamine’s Budget Work Group 

Findings – KALO Funding Comparison Study (including HRS 302B-12, SLH 

2010). 

Presenters: 



Katie Benioni – CFO 

Ms. Benioni and Wise walked members of the committee through a Power 

Point presentation that summarized the work of the work group. This Power Point 

Presentation is a compilation of documents received from the Department of 

Education, and analyzed in a series of meetings with Senator Dwight Takamine. 

Supplementing each document included in this Presentation is a summary of 

findings and graphs comparing DOE and Charter funding for FY 2009 – 2010. 

The goals of Senator Takamine’s Budget Work Group were to clarify the 

distribution for K-12 in Hawaii; to identify any areas of inequity; to develop 

solutions that ensure equity to all public school students; and, to collaborate with 

the Department of Education to increase funding for all public schools in Hawaii. 

19


Budget Work Group analysis of HB 2200 State Budget examined the role 

of an array of State, Federal, and Department funds used in FY 2009-2010 to fund 

Hawaii public schools. These funds included, but were not limited to, schoolbased 

budgeting, SPED funds, Retirement Benefits, Debt Service Payments, SOH 

Hawaii General Funds, Federal Funds, and Trust Funds. 

A preliminary analysis resulted in a charter school per pupil funding total 

of $6,043 in general funds versus a public school per pupil funding total of $5,270 

in general funds. 

Subsequent analysis of these totals after including EDN150 SPED 

funding, Federal Funding, Non-General Funds, and Construction In Progress 

(CIP), and Debt Service in statewide per pupil funding produced a total of $7,066 

spent in non-charter school per pupil funding versus a total of $6,734 spent in 

charter school per pupil funding. 

After review of this data, the Budget Work Group concluded that equity 

was not achieved with $547 million in Federal & EDN150 funding, that a $332 

per pupil difference existed between the DOE and PCS, that Charter Schools need 

access to Impact Fees, and that Charter Schools had no mechanism to access $225 

M in facilities financing (CIP). 

The Budget Work Group recommended: 

• That a reliable system be created to allow Charter Schools to access federal 

competitive grant opportunities; 

• That services provided to Charter Schools in lieu of funding are equitable; 

• That Non-SPED funding within EDN150 be moved to EDN100; 

• That Charter Schools be established as an LEA to access federal funding; 

• That Charter Schools be given a proportionate share of facilities funding; 

• That a mechanism be created for post school that opens funding adjustments; 

• That Legislators and Budget & Finance Committees be educated on how funding 

formulas function in relation to budget appropriations; and, 

• That Legislators, Budget & Finance Committees, and Charter Schools collaborate 

with the Department of Education in advocating for adequate per pupil funding 

throughout the State of Hawaii. 

Several members of the Task Force brought up items related to the 

presentation: 

• Amounts do not take into consideration enrollment and artificial caps (Alapaki 

Nahale-a); 

• Request from Senator Kim for the presenters to look into their claim that Drivers 

Ed programs turn away charter school students; 

• Presentation is unclear about the role of debt service (Senator Kim); 

• An explanation of the next step in providing competitive funding (Representative 

Oshiro); 

• James Brese noted that the DOE is working on improving the 

relationship/communication between DOE and CSAO; and 

20


• Thoughts regarding the presentation’s reference to CIP funds access, since nonconversion 

schools do not necessarily sit on state lands (Georgina Kawamura). 

6. Agenda Items for Next CSFTF Meeting: 

• Status of Recommendations from the KALO Report (Senator Takamine Work 

Group) 

• Discussion regarding the pros and cons of future appropriations to charter schools 

being made on a formula basis or using the same process as other State 

Departments. 

• Discussion regarding the Budget Proviso language (Act 180) pertaining to charter 

schools and impacts due to that language. 

• To determine a regular schedule for all CSFTF meetings 

• Update on information requested from previous meeting 

7. Other Items: 

• The next CSFTF Meeting will be held at 10:00 a.m., September 1, 2010, at the 

State Capitol. The CSFTF Meeting Room location at the Capitol is as yet 

undetermined. 

8. Adjournment: 

The meeting was adjourned at 11:21 PM 

21


State of Hawaii 

Charter School Funding Task Force 

General Meeting 

Wednesday, September 1, 2010 

10:04 AM – 11:40 AM 


State Capitol 

Third Floor 

Conference Room 309 

Attendance: 

Chairperson Marcus Oshiro – Chair of the Task Force; House Finance Chair 

Senator Donna Mercado Kim – Vice Chair of the Task Force, Senate Ways and Means 

Chair – arrived 10:40 AM 

James Brese – Department of Education (DOE) CFO 

Bob Roberts – Charter School Administrative Office (CSAO) CFO 

Carl Takamura – Charter School Review Panel (CSRP) 



Neil Miyahira – Budget & Finance Budget Administrator (appearing for Georgina 

Kawamura – Budget & Finance Director) 

Absent: 

Georgina Kawamura – Budget & Finance Director 

Charter School Administrative Office: 

Maunalei Love – Executive Director 

I. Call To Order 

Chair Marcus Oshiro called the meeting to order at 10:04 AM 

II. General Business 

a.) Approval of the Minutes of the Charter School Task Force August 16, 

2010 Meeting 

Chair Oshiro asked if Task Force members had reviewed the proposed draft of 

the August 16 Meeting Minutes, and, if so, asked that there be a motion to 

approve the Minutes. Mr. Takamura moved; Mr. Nahale-a seconded. 

Before a vote on approval was cast, Task Force members cited an omission on 

Page 5, Item 6, Bullet No. 6. Chair Oshiro asked that this Item be adjusted to 

reflect Vice Chair Kim’s request for an answer to her question as to whether 

State and DOE funding that grants State of Hawaii students access to the 

State’s Driver’s Education Program includes non-Public School students. 

22


Chair Oshiro moved that the Charter School Funding Task Force (CSFTF) 

August 16, 2010 Meeting Minutes be approved as so adjusted. The motion 

passed unanimously. 

b) Approval / Changes to the Agenda 

No changes were made to today’s agenda. 

c) Report/Update on Status of Recommendations from the KALO Report 

Chair Oshiro announced Task Force review and discussion of the eight KALO 

Recommendations presented on Page 4 of the August 16, Meeting Minutes. 

Mr. Roberts reiterated the Recommendations, and distributed three documents 

that addressed the Recommendations. These documents were: 

1) State of Hawaii Charter School Funding Task Force Status of 

Recommendations Outlined in “Understanding Public School Funding 

Fiscal Year 2009 – 2010” (2 pages; addresses all 8 KALO 

Recommendations; hereafter referred to as “Status of 8 KALO 

Recommendations”) prepared by James Brese 

2) Status/Update on Recommendations from the Understanding Public 

School Funding Fiscal Year 2009 –2010” Report (1 page; addressed 

KALO Recommendation # 5; hereafter referred to as “Status of KALO 

#5”) prepared by Bob Roberts 

3) Status/Update on Recommendations from the Understanding Public 

School Funding Fiscal Year 2009 –2010” Report (1 page; addressed 

KALO Recommendation # 6; hereafter referred to as “Status of KALO 

#6”) prepared by Bob Roberts 

Mr. Brese identified “Status of 8 KALO Recommendations” as the DOE’s 

response to each of the 8 Recommendations. 

DISCUSSION: 

1) Mr. Roberts initiated discussion KALO Recommendation #1: “Create a 

reliable system to allow Charters access to federal competitive opportunities.” 

a) In response, Mr. Brese directed the Task Force to the text addressing 

Recommendation #1 in Status of 8 KALO Recommendations: “ … 

under US DEregulations, Charter Schools are entitled to equal access 

to federal funds and/or the benefits of those federal funds,” and that 

DOE Program Managers alert Charter Schools to all federal funding 

opportunities. 

b) Chair Oshiro asked how school eligibility for competition for federal 

grants is determined. 

c) Mr. Brese responded school eligibility is determined by the status of 

the federal grant in question, e.g., “formulaic”, or “discretionary.” 

d) Chair Oshiro asked if it is the DOE’s responsibility to determine such 

federal grant status eligibility; and, if so, it is then the DOE’s 

responsibility to alert each Charter School regarding that particular 

school’s corresponding grant eligibility. 

23


e) Mr. Roberts stated that this is the DOE’s responsibility, and that the 

Takamine Study examined the process for notifying Charter Schools 

and awarding federal grants within the DOE system. Mr. Roberts 

stated that Charter Schools have a good track record securing 

“eligibility” grants (e.g., Title I, Title II), but that if a federal grant is 

“competitive”, Charter Schools experience barriers in competition for 

federal funds. 

f) Chair Oshiro asked who notifies the Charter Schools that certain 

federal grants are available. Mr. Brese answered that DOE Program 

Managers are responsible to notify all eligible candidates, and stated 

that “there is not a good system” to inform Charter Schools about 

competitive federal grants. 

g) Task Force members mentioned other problems regarding 

Recommendation #1: 

1) The DOE has the discretion to go after federal grants, and often 

chooses not to do so. 

2) If a Charter School wishes to compete for a federal grant as a 

member within the body of the DOE, the DOE must compete 

as a Local Education Agency. 

3) Regarding Charter Schools’ access to discretionary funds, there 

is no crucial dialog between Charter Schools and the DOE 

regarding competition for the funds, and administration of 

same. 

4) DOE Program Managers tend to consider Charter Schools late 

in the grant application process, which prevents Charter 

Schools from completing timely grant applications. 

5) DOE notification of Charter Schools through Lotus Notes is 

ineffective, given that many Charter Schools do not use Lotus 

Notes. In response, Mr. Brese stated that the DOE notifies the 

Charter School Administrative Office (CSAO) through hardcopy 

communication such as FAX and/or courier service. 

h) Chair Oshiro requested further clarification regarding the process of 

Charter School notification within the DOE system for access to all 

federal funding opportunities, :”formulaic” and “competitive.” 

i) Specifically, Chair Oshiro asked whether or not DOE Program 

Managers directly contact the CSAO, and, if so, does the CSAO then 

directly contact each Charter School principal with requisite 

information regarding federal funding formats and application 

deadlines. Chair Oshiro asked if during this process, the CSAO and 

Charter School principals are specifically alerted as to whether or not 

the DOE must ‘front” their funding application to the federal 

government. 

j) Mr. Nahale-a cited the lack of communication provided to Charter 

Schools as regards the DOE “fronting” Charter School federal grant 

applications as the “real bottleneck” in the current system. Chair 

Oshiro concluded that at times the DOE chooses not to pursue certain 

24


federal grant opportunities that the Charter Schools wish the DOE to 

pursue. 

k) Other Task Force members added that DOE federal grant proposals 

can also inadvertently exclude Charter Schools from consideration 

owning to the proposal’s design. 

l) Mr. Roberts noted that these problems relate to an LEA designation. 

m) Mr. Miyahira noted that setting up an additional LEA would require 

setting up an entirely new administrative structure, and thus may 

require modification of applicable HRS Statutes. 

n) Chair Oshiro concluded the Task Force review of Recommendation 

#1, stating that while some problems with notification exist, 

notification per se is not a major problem. 

2) The Task Force moved on to discussion of KALO Recommendation #2: 

“Ensure that services provided in lieu of funding are equitable.” 

a) In response, Mr. Brese directed the Task Force to the text addressing 

Recommendation #2 in Status of 8 KALO Recommendations, and 

referenced current DOE Leadership Meetings that address service 

equity. 

b) Mr. Takamura asked why service equity between Public Schools and 

Charter Schools is still an issue since the establishment of Hawaii’s 

Charter Schools 10 years ago. Mr. Roberts confirmed that Charter 

Schools get services sometimes, sometimes not, but said he couldn’t 

cite specific locations or timelines relating to lack of service. 

c) Mr. Takamura and Mr. Nahale-a discussed the history of Charter 

School service inequity as an attitudinal lapse that categorized Charter 

Schools as an afterthought and stalled service provision. Mr. Nahale-a 

stated that currently service inequity in the Charter Schools is on a 

"case by case basis,” and doesn’t affect the Charter Schools as a 

whole. 

d) In response to Mr. Takamura’s question regarding process of official 

notification when services are not provided to Charter Schools, Mr. 

Roberts stated that in those cases, the School Superintendent should be 

notified, and that while overall some attitudinal change needs to occur, 

in most cases the services are then provided. 

e) Ms. Love clarified an additional issue relating to inequity of service 

provision: automatic access of Department schools to larger 

Department resources, and the Charter Schools’ corresponding lack of 

access to those larger Department resources. Ms. Love provided the 

example of a Charter School’s SPED funding reduced to 0 owing to 

“weight” calculations that occur when as few as 2 SPED students 

leave a Charter School. 

f) Mr. Nahale-a stated that a formula driven process dictates Charter 

School receipt of basic SPED services, a formula that is also used in 

the provision of SPED services to Public Schools. Mr. Nahale-a stated, 

however, that Charter School receipt of parallel SPED services such as 

therapy is more problematic, owing to a question as to whether or not 

25


an on-site SPED evaluation team is automatically provided to a 

Charter School, and if that evaluation team is provided, whether or not 

that team possesses the skills necessary to adequately assess the SPED 

requirements of a particular Charter School. Mr. Nahale-a noted that 

Public Schools in remote locations like Hana experience this same 

problem, and that while in the past Charter Schools may have felt that 

DOE resistance to answering their requests for funding was 

attitudinally driven, today service equity between Public and Charter 

Schools has improved significantly. Mr. Nahale-a emphasized that 

every school should have the personnel in place to do mandated 

assessments; nationally, he said, the courts have ruled that parents 

have the right to provide their child with every educational option. 

g) Chair Oshiro asked if there is not now a system in place to do an 

automatic assessment of all students in every Charter School at the 

beginning of the school year. 

h) Ms. Love responded that evaluations are conducted based on the 

timelines contained in individual program parameters. Mr. Nahale-a 

emphasized that needs are discovered in the course of instruction, and 

Charter Schools thus need SPED and SEC teams in place, on site, to 

do adequate assessments as symptoms appear. Mr. Nahale-a noted 

that, technically, Charter Schools are not now provided with SEC 

personnel. 

i) Chair Oshiro noted that in DOE schools, such assessments are prompt, 

automatic, and comprehensive. Students with no prior assessments 

who arrive in Charter Schools are thus not able to access the 

assessment process until later in the year. Task Force members noted 

that when a Charter School discovers a particular need, the School can 

then call the District Office for help and support, but that support is not 

always forthcoming. 

j) Mr. Takamura asked if this service inequity was exclusive to Charter 

Schools, or was also experienced by smaller, remote Public Schools. 

k) Mr. Nahale-a responded that this service inequity was more or less 

unique to Charter Schools. 

l) Mr. Takamura stated that if this is so, then the particular processes and 

individuals that prevent service equity should be identified. Mr. 

Roberts suggested that every Charter School Director determine 

whether or not he/she can pick up the phone and gain effective access 

to help in this situation. 

m) Senator Kim observed that exceptions exist in every option, and that at 

present, the Charter School Funding Task Force needs to look at what 

the big problems are, and that it might be best to defer questions 

regarding phone call access to later meetings. 

3) In review of KALO Recommendations # 3, #4, and #5, Mr. Brese observed 

that the DOE response as outlined in Status of 8 KALO Recommendations was 

self-explanatory, and referred Task Force members to the DOE response 

regarding KALO Recommendation #6: “The HIDOE and Charter Schools 

26


agree on the comparison of similar funding sources (general funds and EDNs 

100 – 400 included, all other methods of financing and SPED funds in EDN 

150 excluded) for inclusion in per pupil funding, with the two primary 

discussion points remaining being EDN 500 (Adult Education) and facilities 

funding. Again, both of these are policy determinations.” 

a) Mr. Brese stated that this issue was the heart of discussions regarding 

Charter School per pupil funding, and boils down to whether or not the 

Charter Schools are going to continue with a funding formula. 

4) Mr. Roberts parenthetically added that he would like to add some clarification 

to KALO Recommendations # 4, # 5, and #6, and distributed a document 

entitled “Why Charter Schools Should Be Their Own Independent LEA” 

which was prepared by the Center for Education Reform. 

a) Mr. Roberts stated that this report addressed issues arising from 

KALO Recommendation #4, “Establish Charters as an LEA to access 

federal funding.” Mr. Roberts said that this report incorporates various 

national opinions on this issue, and addresses the Charter School LEA 

background. Mr. Roberts also has a report that concentrates 

exclusively on the LEA issue as it relates to an island state, and will 

distribute this report via scan/email to interested Task Force members. 

Mr. Roberts stated that a LEA system is feasible, but that some 

changes have to be made to it before a decision is made whether or not 

to institute this structure. 

b) Mr. Roberts conducted a poll of several Charter Schools following the 

August 16, 2010 Task Force Meeting regarding the feasibility of an 

LEA, and received 7 or 8 responses to the question. Mr. Roberts 

characterized these responses as generally favorable, but said that they 

contained Charter School concerns relating to issues of “capacity.” 

Specifically: “What kinds of structures would be created to support an 

LEA for Charter Schools?” 

c) Mr. Roberts then addressed the issues covered in the two documents 

entitled in these Minutes as Status of KALO Recommendation #5 and 

Status of KALO Recommendation #6. 

1) With regard to KALO Recommendation #5 asking for a 

proportionate share of facilities funding, Mr. Roberts noted that 

there is language in the budget proviso that carves out 

$1,900,000 for Charter School facilities funding out of 

operational funds in the FY 2010-2011 Budget, as well as 

$754,000 in CIP funding apportioned for two specific Charter 

Schools. 

2) Mr. Roberts noted that as the $1,900,000 available for Charter 

Schools facilities funding is taken from Charter Schools 

operational funding for the budget year, Charter Schools 

perceive it as restrictive. As KALO Recommendation #5 does 

not specify what funding entities are to be used as a yardstick 

when measuring “a proportionate share of facilities funding,” 

Mr. Roberts directed Task Force attention to a table on this 

27


document that compares Charter School FY 2010 –2011 

facility funding allocations to various Departmental funding 

bases. Mr. Roberts concluded his review of Status of KALO 

Recommendation #5 by stating that Charter Schools facilities 

funding is a policy issue, and thus has to be resolved on many 

different levels, both legal and operational, and with respect to 

many different funding structures. 

3) With regard to KALO Recommendation #6 asking that a 

mechanism for post school opening funding be created, Mr. 

Roberts stated that a current mechanism does exist for making 

post school opening funding adjustments, that being the 

October 15 enrollment figures that are submitted by all Charter 

Schools. Operational funding for Charter Schools are thus 

adjusted based on their actual October 15 enrollments. Mr. 

Roberts noted, however, that there are two additional issues 

that should be addressed. 

A) The first issue is the “money following the child” 

concept, in that allocations change as enrollment 

changes. No mechanism currently exists to make intrayear 

funding adjustments for Charter Schools that are 

presently growing. 

1) Mr. Roberts suggested that Charter Schools 

incorporate the DOE’s methodology that 

surveys school enrollment four times during the 

school year, and adjusts funding accordingly by 

accessing a pool of funds. This pool not only 

provides increased funding to growing schools, 

but also holds declining schools “harmless” by 

not withholding funds per se. 

B) The second issue pertains to when the projected Charter 

School enrollment is exceeded by the actual Charter 

School enrollment. This situation is addressed in the 

methodology of the budget provisos that limit the per 

pupil amount that is allocated to the schools. 

Essentially, this proviso accesses operational funds and 

establishes a per pupil funding allocation of $ 5363.00. 

This amount is based on average projected enrollment 

figures of 9,668 students. If the actual enrollment 

figures are less than projected, the surplus funds are 

deposited into a Charter School account within the State 

Treasury. Since the proviso is silent regarding the 

disposition of these funds after deposit in the Charter 

School account, Mr. Roberts suggested that these 

excess funds be used to address the increased 

allocations indicated by a rise in enrollment. 

28


5) Mr. Miyahira noted that the opening of new Charter Schools must be timed 

with regards to the Legislature’s budgetary schedule, and noted that the DOE 

doesn’t open a new DOE school until the Legislature has approved and allocated 

all school funds. Mr. Miyahira suggested that these new charter startups be 

submitted to the Budget Appropriations process. 

6) Mr. Roberts noted that one of the functions of the Charter School Review 

Panel is to evaluate and approve new startups, and that this year the ruling statute 

has been modified to increase the ratio of new startups to 3-to-1. 

7) Vice Chair Kim requested that the Task Force concentrate on the status of 

recommendations as outlined on today’s agenda, and not necessarily all issues 

raised by each recommendation. 

8) Chair Oshiro asked if there were any further questions regarding the status of 

the KALO Recommendations. Regarding Charter School access to services, Vice 

Chair Kim requested clarification regarding DOE funding for the State Of Hawaii 

(SOH) Driver’s Education Program and corresponding Charter School access to 

the Program.. 

a) Mr. Brese reported that he had spoken with the Driver’s Education 

Program Manager, and that all SOH secondary school students up to age 

19 have access to the Program. They must first submit a $10 fee, and then 

are enrolled in the Program in a first-come, first-served basis. This access 

applies to Hawaii Public Schools, Hawaii private schools, Hawaii Charter 

Schools, and Hawaii home schools. 

b) Mr. Brese added that access to the funds for the Program as requested 

by Charter Schools may have to be addressed by a modification of the 

existing HRS Statute, as the Statute explicitly states that “the 

Department”(of Education) “ shall determine access” to the Program. 

d) Discussion: RE: Budget Request & Appropriations: Formula v. Process 

Chair Oshiro introduced Item (d) on the Agenda 

1) Mr. Roberts said that Budget & Finance Director Georgina Kawamura had 

added this item, and that nothing has as yet been prepared to address it. 

2) Task Force members asked why the Charter School Budget set up as its own 

program account, why it is that Charter Schools are not part of regular 

schools, and why does Charter School money go in a program ID. 

3) Mr. Roberts and Mr. Brese said that these processes had been established 

before either of them came on board. Mr. Roberts suggested that 

interdepartmental reasons may have resulted in the original applicable statutes 

mandating that the State Auditor determine Charter School appropriations; 

after this period, the DOE was allowed to determine allocations. 

29


4) In response to Mr. Takamura’s questions as to whether having a separate EDN 

was helpful to Charter Schools, Ms. Love provided the Task Force with a 

short history of the development of the Charter School EDN, which originally 

came about subsequent to Charter School request for line item privileges. 

5) Task Force members discussed the alleged mistrust between Charter Schools 

and the Department, and how this may have affected funding designations. 

6) Mr. Nahale-a stated that DOE supervision of Charter School operations were 

detrimental to the Charter Schools because the Charter Schools did not have 

the autonomy necessary to control and direct operations such as payroll and 

other vital functions. 

7) Mr. Miyahira suggested that autonomy raises difficult issues related to direct 

budget allocations to each Charter School. Mr. Miyahira added that the 

current Charter School practice of formula based allocations might yield better 

results if Charter Schools submitted a yearly budget request as recommended 

by Budget & Finance Director Georgina Kawamura. 

8) Mr. Nahale-a observed that requiring the Charter Schools to submit a yearly 

line-item request for State Budget appropriations will put the Charter Schools 

in the position of building a political base to facilitate yearly funding, a task 

that Charter Schools are not equipped to handle. 

9) Mr. Roberts observed that in order for the Charter Schools to initiate and 

pursue a line-item State Budget request, a new hierarchical structure needs to 

be added to the Charter Schools. Without such a hierarchical structure, there 

is no equality between individual Charter Schools as per their ability to assess 

individual and collective funding needs. 

10) Regarding the conflicting demands of Charter School independence and 

Department mandates, Vice Chair Kim commented that “therein lies the Task 

Force dilemma: the Task Force is trying to create new equity, but has to 

preserve differences that are essential to the Charter School identity” The 

Charter School Funding Task Force has to recognize that the Task Force 

overall aim is to ensure Charter School equity to the degree that it is possible, 

but equity cannot be held to a 100% standard because inequity is part and 

parcel of Charter School structure. 

11) Mr. Miyahira noted that in general, Charter Schools are smaller schools. He 

stated that weighted formulas have a great deal of complexity built in to them, 

which addresses this fact to a certain degree. The DOE formula appropriates 

additional weight for smaller schools; the DOE had many discussions 

regarding the best means by which to avoid penalizing both smaller public 

schools and Charter Schools. When discussing this in regard to Charter 

Schools facilities needs, Mr. Miyahira noted that this discussion is especially 

30


appropriate as facilities funding for DOE schools is contained within the 

general DOE budget. 

12) Mr. Nahale-a presented formula-based funding and process funding as two 

poles of a funding spectrum that encompasses many Island educational 

complexities, and maintained that facilities funding is a separate issue. Mr. 

Nahale-a said that it does not make sense to try to fund Charter Schools less 

than public schools , because then you cannot measure their results. Student 

performance accountability is one issue, but pitting Public Schools against 

Charter Schools is a slippery slope. 

13) Mr. Miyahira said that Act 144 has made a positive difference; whatever the 

DOE gets in per pupil funding, Charter Schools get the same amount. Federal 

funds, he said, are all program specific, so must go where they are intended to 

go. Also, he said, the DOE holds funds that it uses to address rises in student 

enrollment. 

14) Vice Chair Kim said that funding is by its nature touch-and-go, and provided 

the example of a public school with an active parent base that lobbies for 

additional funding and gets it, and a public school that does not get additional 

funding because it lacks activist parents. 

15) Mr. Takamura asked for clarification from the Task Force: is the Task Force 

function to provide a major overhaul of the existing DOE/Charter School 

structures, or is the Task Force going to make smaller, timely adjustments to 

the existing structures. Task Force members agreed that the Task Force 

function at this juncture is provide fine-tuning to the existing structures. Mr. 

Nahale-a noted that Hawaii’s “Race To The Top” award is formula driven, 

and that the procedural issues related to formulas need to be worked out. 

16) Mr. Takamura raised the EDN issue, and asked how many schools will be 

removed from pre-existing caps, and how many schools can thus be 

authorized. Mr. Takamura also wondered if the establishment of new schools 

poses a funding risk to existing schools. 

17) Vice Chair Kim observed that fiscal considerations must rule current Charter 

School decisions. The carrying capacity of Public Schools and Charter 

Schools must be determined; at this point, it isn’t possible to fund all the 

Charter Schools that we might want. 

18) Mr. Takamura stated that the CSRP is lifting a long-standing moratorium on 

Charter School applications, and thus new charters are now available. Mr. 

Miyahira observed that there are a finite number of students in the State, and 

while enrollment is steady at Public Schools, Charter School enrollment is 

growing, and deserves serious attention. 

31


19) Mr. Nahale-a stated that from a Charter School perspective, every school age 

child has the right to attend a Charter School, and that all children in the State 

are the State’s responsibility. Mr. Nahale-a also suggested that Charter 

Schools help raise the performance bar for Public Schools. 

20) Vice Chair Kim observed that the size of public schools, due to their funding 

structure, are not adversely affected by the loss of one or two students, while 

Charter Schools can lose their foundation of services and facilities with minor 

changes in enrollment. 

21) Mr. Miyahira expressed concern that an increase in Charter Schools will result 

in many smaller schools located all over the Islands, which will be difficult to 

adequately fund and staff. Unlike Public Schools, Charter Schools do not 

offer economies of scale: a Charter School may serve the same number of 

students as a Public School, but because of Charter School funding structure, 

growth in enrollment can provoke drastic increases in overhead. 

22) Acknowledging the problems that Charter School experience because they do 

not offer economies of scale, Mr. Nahale-a stated that weighted formulas can 

offer a base for Charter School improvement and expansion, and can lead to 

the development of excellent educational packages. 

23) Mr. Miyahira reiterated that Act 144 has accomplished a great deal in 

ensuring Charter School and Public School equity, and noted that no school 

can predict per pupil funding before all budget funding in the Legislature is 

completed. 

e) Impact of Act 180, SLH 2010 Budget Proviso Language and Act 144, SLH 2010 

Amendments to §302B-12 Funding and Finance. 

1) Chair Oshiro noted that the Task Force touched on Item 3(e) when Task Force 

examined the need to improve proviso language and methodology, but stated 

that the improvements in language and methodology may be moot because all 

funding proposals end up in the Legislature, where funding allocations are 

unpredictable. 

f) Determine a Regular Schedule for all CSFTF Meetings 

1) Chair Oshiro asked the Task Force what specific changes need to be made to 

funding formulas and processes. 

2) Vice Chair Kim responded that the Task Force should concentrate on the 

funding formula that the Legislature uses, because in the final analysis, the 

Legislature’s formula is the deciding funding formula. The Legislature’s 

formula is thus available for the Task Force to examine, and revise before 

enactment. In response to Mr. Roberts request for specific proposals that the 

Task Force can examine, Vice Chair Kim suggested that the Task Force 

32


should consider EDN 150 and EDN 100 as a basis for making those 

determinations. 

3) Mr. Brese stated that at the next Task Force meeting, additional funding 

considerations will parallel those decisions made by the Legislature as 

described in the text of the DOE’s response to KALO Recommendation #6 as 

presented in Status of 8 KALO Recommendations. Mr. Brese stated that 

facilities funding considerations and EDN 500 are the two biggest issues that 

the Task Force will need to consider for inclusion or exclusion. 

4) Mr. Takamura suggested that CIP funding should also be addressed at the next 

Meeting. 

a. Mr. Miyahira requested that the task force refer to this as "facilities 

funding" rather than "CIP funding". 

5) Mr. Nahale-a suggested that facilities funding should be addressed, and how 

private dollars can be brought into the funding mix. 

6) Mr. Nahale asked that access to federal and SPED funding be considered in 

relation to how those funding dollars are spent in supporting the 

administrative office effort to secure and administer funding, and whether 

federal fund proposals should be done collectively or independently by 

Charter Schools. 

7) Mr. Takamura noted that it is the Panel’s responsibility to examine fiscal 

accountability and to determine possible re-authorization of particular 

charters, and proposed that this issue be considered at the next meeting. 

8) Mr. Miyahira said that an overview of State bond funding should be examined 

in regards to its role in supporting in-state educational facilities. 

9) Mr. Takamura asked that specific recommendations and options be presented 

to the Task Force at its next meeting. The Task Force determined that this 

task would be addressed during the next meeting. 

10) Vice Chair Kim asked that a volunteer determine how other states are 

handling the facilities funding issue, and to present this at the next meeting. 

CSAO stated that they would report on this issue. 

III Next Meeting: 

Tuesday, September 28, 10 AM, State Capitol, Conference Room 437. 

IV Adjournment 

The Meeting was adjourned at 11:40 AM. 

33



Charter School Funding Task force 

General Meeting 

Tuesday, September 28, 2010 

10:15 AM – 11:39 AM 


State Capitol 

Fourth Floor 

Conference Room 437 

Attendance: 

Chairperson Marcus Oshiro – Chair of the Task Force; House Finance Chair 

Senator Donna Mercado Kim – Vice Chair of the Task Force, Senate Ways and Means 

Chair 

James Brese – DOE CFO 

Bob Roberts – CSAO CFO 

Carl Takemura – Charter School Review Panel 


Alapaki Nahale-a – Hawaii Charter School Network (arrived 10:20 AM) 

Neil Miyahira – Budget & Finance Budget Administrator ( appearing for Georginna 

Kawamura – Budget & Finance Director; arrived 10:20 AM ) 

Absent: 

Georginna Kawamura – Budget & Finance Director 

Charter School Administrative Office: 

Maunalei Love – Executive Director 

Charter School Review Panel 

Ruth Tschumy – Charter School Review Panel Chair 

Amy Vorderbruegge – CSRP Accountability Committee Chair 



1. Call To Order 

Chair Marcus Oshiro called the meeting to order at 10:15 AM 

2. Members 

Chair Oshiro determined that CSFTF Members Alapaki Nahale-a and Neil Miyahira (for 

Georginna Kawamura) would arrived at today’s meeting after the meeting began. 


34


3.a. Approval of the Minutes of the Charter School Task Force September 1, 

2010 Meeting 

Chair Oshiro asked if Task Force members had reviewed the proposed September 

1, 2010 Meeting Minutes, and asked if there was a motion to approve the 

Minutes. Mr. Brese moved to approve the Minutes; Mr. Takemura seconded. A 

vote was taken, and the motion passed unanimously. 

3.b. Approval/Changes to the Agenda 

Chair Oshiro asked if there were any proposed changes to the agenda. Mr. 

Takemura suggested that CSRP Chair Ruth Tschumy and Accountability Chair 

Amy Vorderbruegge complete their presentation regarding the CSRP’s 

Reauthorization Process, and members of the Task Force agreed. 

Agenda Item 3.g., “CSRP’s Reauthorization Process,” thereby became Agenda 

Item 3.c., with original Agenda items renumbered in succession. 

3.c. CSRP’s Reauthorization Process 

CSRP Chair Ruth Tschumy provided the Task Force with an overview of the 

CSRP Reauthorization Process, with Amy Vorderbruegge to follow and address 

specific CSRP Reauthorization procedures and Task Force questions. Ms. 

Tschumy provided the following observations: 

a. The Charter School /Review Panel is comprised of 12 members. 

CSRP members include the chair of a start-up charter school, the chair of a 

conversion charter school, a teacher from a start-up charter school and a 

teacher from a conversion charter school, members of the business 

community, and a representative from the University of Hawaii. The 

CSRP is thus constituency-based. 

b. Each CSRP member donates his or her time and does not receive 

compensation. 

c. As Charter Schools reflect the hopes and dreams of their constituency, 

the heart of the the Charter School system is a strong education program 

that is embedded in strong cultural values, which makes Hawaii’s Charter 

Schools unique in the county. 

d. Each of Hawaii’s 31 charter Schools are responsible for: 

1. Establishing strong educational goals that lead to increased 

student achievement. 

2. Using state funds wisely. 

e. By statute (HRS 302(a), the Charter School Review Panel’s 

responsibilities include, but are not limited to: 

1. Review and analysis of Charter School applicants’ 

Implementation Plans 

2. Approving amendments to Charter School applicants’ enacted 

Implementation Plans 

3. Adopting reporting requirements for Charter Schools 

Reauthorizing Charter Schools 

4. Investigating any aspect of a Charter School that may concern 

the CSRP,, and taking appropriate action, including probation and 

revocation of the school’s charter. 

35


f. In short, Hawaii’s Charter Schools are educational institutions as well 

as multi-million dollar businesses. 

g. Charter School Goals include: 

1. Prepare for undergoing accreditation, a process that focuses on 

continuous school improvement. 

2. Sound fiscal management 

A. Most Charter Schools have a solid business plan. 

B. The CSRP requires that all Charter Schools undergo an 

independent annual audit, beginning in SY 2009-2010, that 

must be completed by this coming January, 2011. Many, 

but not all, CS are already undergoing these audits. 

C. The CSRP requires that each CS submit a balanced 

annual budget using standardized financial forms which 

have been analyzed by the CSAO CFO: 

D. Current statutes do not require the rigorous practices 

outline above, but the CSRP has decided to take these 

accountability measures. 

Ms. Tschumy introduced Amy Vorderbruegge to the CSFTF. 

Ms. Vorderbruegge noted that in addition to her position as CSRP Accountability 

Chair, she is a teacher at Voyager Chatter School in Kakaako, in Honolulu. She 

then distributed the document “Reauthorization/Multi Year Review Template 

(Draft) September 2010,” hereafter referred to as “Reauthorization Review,” to 

the CSFTF. Referring to Page 2 of this document, Ms. Vorderbruegge noted that 

all CS are responsible for 4 Key Areas: 

a. The viability of their respective Foundation Charter 

b. Their Educational Viability 

c. Their Organization and Administrative Viability; and 

d. Their Financial Viability. 

Furthermore, all CS documentation must address the 4 Key Areas of viability 

listed above. Ms. Vorderbruegge than outlined the CSRP’s “Avenues for 

Accountability” that address the 4 Key Areas. These Avenues include: 

a. An annual self-evaluation as mandated by statute that is completed by 

each Charter School, reviewed by the CSRP, and returned to the school 

with appropriate feedback. 

b. A “Set of Assurances” that line up with the 4 Key Areas as outlined 

above. These Assurances include: 

1. A Pre-opening Assurance. 

2. A 1 st year Assurance that includes an on-site Assurances visit 

by the CSRP that is repeated in the following years. 

3. A Multi-Year Review by the CSRP that includes addressing 

Reauthorization issues as well as completion of a Financial 

Template, a form which is described later in the meeting by the 

CSAO CFO Bob Roberts. 

4. A CSRP Fact-Finding Committee that investigates CS concerns 

that can’t be handled by the Local School Board (LSB). 

5. The rigorous CS application process itself. 

36


6. The scoring system used by the CSRP, and contained in the 

document “Reauthorization Review” on its last page and titled, 

”Scoring the Reauthorization Multi-Year Review.” This review 

has been distributed to all qualifying CS, and is due to be 

submitted to the CSRP on October 1, 2010. 

Additionally, accountability is ensured by: 

a. A list of CS that determines their evaluation position in the 4-year 

reauthorization cycle. 

b. Documentation submitted by all CS addressing Reauthorization 

requirements and the 4 Key Areas as outlined above. 

c. Public input, open to all members of a CS community who can write to 

the CSRP in support or with concerns regarding their respective CS. 

d. A CSRP Review Team which reads and scores a CS Reauthorization 

Report, and which follows up with an on-site visit to the CS. This visit 

includes interviews with all CS stakeholders. Following this visit, the 

Review Team makes its recommendation to the CSRP. 

e. An appeal process is needed in the event that the CSRP does not 

recommend Reauthorization. Currently, there is no formal means by 

which a CS can address this issue with the CSRP. 

f. A Standardized Financial Template, as explained further in this meeting 

my CSAO /CFO Bob Roberts. 

Discussion: 

A CSFTF member asked how often CS are submitted to the 

Reauthorization process. Mr. Vorderbrugge stated that a CS must undergo 

Reauthorization every 4 years, but that since currently 27 CS are scheduled for 

Reauthorization, this schedule must be staggered to accommodate this large 

number of evaluations. 

Chair Oshiro asked if the Reauthorization scoring percentages as listed on 

the last page of the document “Reauthorization Review” are mandated by statute. 

Ms. Vorderbruegge said these percentages were not mandated by statute, and 

noted that the percentages are adjusted to meet higher educational standards as the 

school matures. 

Regarding Reauthorization appeals by CS, Chair Oshiro asked for 

clarification regarding the CSRP “Report for Reconsideration,” which is 

completed by CS and returned to the CSRP. Ms. Vorderbruegge explained that 

after the CSRP reviews a CS “Report for Reconsideration,” the CSRP either 

reauthorizes the CS or has the option to close it. 

Mr. Takemura pointed out that the CSRP also has the authority to revoke 

the CS charter, in which case the CS option is to appeal to the DOE Board of 

Education, which then places the CS on probation. Mr. Takemura stated that CS 

should have formal appeal procedures to the CSRP, otherwise a BOE decision can 

be appealed by the CS in Court. 

Ms. Tschumy noted that the CSRP is currently seeking the Attorney 

General’s opinion on this issue. 

37


Charter School – Standardized Reporting Model, Fiscal Year 2010 – 2011 

Instructions: distributed and explained by CSAO CFO Bob Roberts. 

a. The Task Force was given the Standardized Reporting Model, Fiscal 

Year 2010 – 2011 by Mr. Roberts, who explained that this document, 

hereafter refereed to as the “Standardized Reporting Model,” is the 

financial template used by all CS in their Reauthorization evaluations as 

previously noted by Mr. Vorderbruegge. 

b. Furthermore, Mr. Roberts noted that “This document is the instruction 

and forms that the CS are now required to complete for their budget and 

financial reporting” in compliance with Act 144 in the last Legislative 

session. 

c. Mr. Roberts directed the Task Force to Page 1 of this document, which 

outlined the financial reporting timeline that must be followed by all CS,, 

and whose mandated information and documentation is also in compliance 

with recent legislative Budget Provisos. 

d. Mr. Roberts noted that all financial information and documentation 

submitted using these forms must be certified by an independent financial 

authority. 

e. Mr. Roberts noted that the “Enrollment Report” deadline was 

previously on October 22, 2010, but has since been rescheduled for 

October 15, 2010. Mr. Roberts stated that CS will submit their projected 

enrollments on this form, and record their actual enrollments later. 

Discussion: 

In response to Vice-Chair Kim’s question regarding the verification of 

actual CS enrollments, and the necessity to determine those CS enrollments with 

absolute certainty, Mr. Roberts and Ms. Love stated that two State of Hawaii 

electronic enrollment mechanisms, the DOE’s VAC and the E-SYS, ensure by 

means of a unique student number that no DOE enrollments are duplicated at a 

CS. This verification is supplemented by a rigorous CS head-count conducted by 

the CSAO. 

In response to Chair Oshiro’s question regarding facilities funding as 

reported by the CS in the Standardized Reporting Model, Mr. Roberts noted that 

for 2009-2010, facilities expenses are reported in Item 400 of the Schedule of 

Functional Expenses, and that projections of facilities expenses are reported on a 

different page of the Report, and reported in both Items 400 and 500 of that page. 

In response to Mr. Nahale-a’s concern that the Standardized Reporting 

Model would lead to misleading comparisons between CS, Mr. Roberts noted that 

CS have the authority to spend their funds as they see fit, and that the CSAO does 

not analyze the Report for relative departmental expenditures, but only for 

financial viability. 

3.d. CIP Funding 

a. Mr. Roberts cited two CIP projects recently funded through the State Budget, 

the $500 k Lanikai Elementary photovoltaic system and another $274 k sewer 

project on another CS campus, 

38


b. Mr. Roberts stated that the CSAO is actively encouraging CS to submit CIP 

proposals to meet their needs, particularly their facilities funding needs. Mr. 

Roberts stated two main issues relating to CIP funding of CS: 

1. Whether the CS is located on public or private land, and thus 

disqualified from CIP funding. 

2. Whether the CIP proposal has merit. 

Discussion: 

In response to Mr. Nahale-a’s observation that CS don’t have the option of 

securing CIS funding automatically, and that the CSAO can’t always assist CS 

effectively , Mr. Roberts stated that the CSAO is advising CS to submit their CIP 

proposals on schedule, but to also vigorously lobby their respective legislators. 

Mr. Roberts further suggested that a pool of CIT funds be established which is 

available for all schools so that CS are not automatically excluded by legislative 

directives that favor DOE schools. 

Mr. Brese noted that 40% of CIT proposals that make the final legislative 

cut result from legislative priorities and not from DOE priorities. 

Chair Oshiro noted that since CIT funding is so often a result of legislative 

priorities, it is difficult to construct a rigid formula that would equitably address 

the CIT funding needs of both DOE and CS schools. 

3.e. Facilities Funding and Private Resources 

a. Mr. Nahale-a opened the presentation regarding Facilities Funding and Private 

Resources with a call for a multi-pronged funding approach that uses per-pupil or 

other fixed State funding allocations as a basis to leverage private and federal 

funding sources. Mr. Nahale-a noted that there is a “federal purse of dollars for 

State Charter School facilities if they are providing some sort of match.” Mr. 

Nahale-a also noted that using this approach, CS have applied for and been denied 

access to federal and other private funds over the years. 

b. Mr. Nahale-a stated that he feels that CS are now in a better position to 

compete for federal and private funding, and offered the successful funding 

package recently devised by CS Kanu O Ka Aina Learning Ohana as an example. 

c. Tammy Wise, Kanu O Ka Aina Learning Ohana Executive Director, stated that 

$1.1 b in direct financial support has been offered to CS by private funding 

sources from 1999 – 2010, and that CS have a default rate of only .1 %. 

d. Mr. Nahale-a stated that a stable pool of public money, such as per-pupil 

allocations, are crucial for CS to secure private and federal funding. Mr. Nahale-a 

added that this funding for CS facilities is crucial for the success of every CS, as 

education cannot proceed when school facilities are non-existent, substandard, or 

in disrepair, and that 80% of Hawaii’s CS cannot fund their own facilities. 

e. Citing the sources of per-pupil funding, CIT funds, and SOH bonds, Mr. 

Nahale-a asked that the CSFTF construct grant application language that increases 

the chances for successful CS funding. 

d. Mr. Nahale-a stated that he has investigated funding opportunities at 

Kamehameha Schools, the Bill Gates Foundation, and the Charter Movement, and 

their response, while positive, hinges on initial public funding by the SOH. 

39


Discussion: 

Ms. Love stated that the CSAO would like to get a federal CS facilities 

grant, but that the last time the CSAO applied for the grant, the grant was denied 

because at that time, CS had not received any State facilities funding portion. 

In response to Chair Oshiro’s question regarding other U.S, states that 

may possess a revolving facilities fund, Ms. Wise stated that 29 states receive 

facilities funding, and distributed a document from the National Charter Schools 

Alliance that outlined the funding sources and allocation schedules for the top 13 

charter schools that receive this funding. 

Mr. Roberts noted that he emailed a copy of this document to CSFTF 

members this morning, and then handed out an Executive Summary from this 

document to all CSFTF members. Mr. Roberts stated that this Executive 

Summary demonstrates that in 2010, states are providing a means and a schedule 

by which their CS can receive their own low-interest loans and financing for 

facilities. 

Mr. Nahale-a noted that both CS and DOE schools are short-changed 

when under-utilized DOE facilities are not freed up for public use, and that often 

new DOE construction projects can be adapted to include CS populations in their 

design. Doing so, Mr. Nahale-a said, allows participating CS to use the funding 

of a particular DOE construction project as a basis for the funding application of 

the participating CS school. 

3.f. Overview of State Bond Funding 

a. Mr. Miyahira distributed a document, “Observations of the Issue of Charter 

School Facilities Costs,” to CSFTF members. 

b. Mr. Miyahira stated that the many issues and challenges facing SOH bond 

funding for CS include: 

1. Repair and Maintenance facilities costs are already factored into DOE 

budgets and funding, but not in CS funding. 

2. Start-up CS are not on public land, and so are not on SOH-owned and 

administered properties. 

3. The DOE has a very complicated process of developing their own 

capital improvement projects. 

4. The legislative process adds another layer of complexity to funding 

bond initiatives. 

5. Bond issues are funded through General Operating funds that are taxexempt. 

The IRS stipulates that these GO initiatives must be used for 

public purposes. Non tax-exempt bond issues thus raise a host of 

problems for investors and for the SOH. 

Discussion: 

Mr. Miyahira suggested that one solution might be to give “green” start-up 

CS an initial, one-time grant of $50 - $100 k that the CS could use for facilities or 

whatever other needs the CS may have. 

Chair Oshiro raised the debt issue related to all CS funding, and stated that 

capital improvements of any kind require a sustained presence on a given 

property. 

40


Mr. Miyahira noted that CIP funding, or any funding, for capital 

improvements is very expensive, but added that should a CS direct CIP funding 

towards under-utilized DOE facilities on public lands, that the State would then 

have an interest and thus a rationale for making those capital improvements. 

Mr. Nahale-a cited the use of USDA funding to make substantial capital 

improvements in mainland CS, and noted that Kanu O Ka Aina Learning Ohana 

had successfully accessed that source of funding. 

Ms. Love stated that in a recent conversation with Randy Moore, Mr. 

Moore stated that any currently under-utilized DOE facilities cannot be accessed 

by CS because the DOE uses those facilities for its own departmental needs. 

Ms. Wise stated that the major issue that needs to be resolved with joint 

private/public CS funding partnerships is how to resolve the debt issue. 

Mr. Miyahira cited the debt issue as a rationale for pursuing rents as a 

component of CS funding, and stated that “rents are supposed to take care of the 

debt.” Mr. Miyahira added that for the State, the cheapest borrowing sources are 

General Operating bonds. 

Vice-chair Kim stated that nay funding proposal for CS must also address 

ongoing Repair and Maintenance costs. 

Mr. Miyahira noted that the SOH has currently allocated $500 m for DOE 

Repair and Maintenance costs, but that the funding breakdown shows that even 

this amount is often insufficient to meet the needs of DOE schools. 

3.g. Research on How Other States Handle Charter School Facilities 

Funding 

a. Chair Oshiro asked Ms.Wise to address this issue at the CSFTF next meeting, 

and to provide two comprehensive examples of successful CS facilities funding, 

and that Mr. Nahale-a provide CS funding schema developed by national CS 

organizations. Ms. Wise and Mr. Nahale-a agreed to do so. 

3.h. Overview of Specific Recommendations and Options 

a. Recommendations and options are pending presentations by Ms. Wise and Mr. 

Nahale-a. 

3.i. Determine Date for Next CSFTF Meeting. 

a. Chair Oshiro set the next CSFTF Meeting for Tuesday, October 26, 10:30 AM, 

at the State Capitol, Fourth Floor, Room 437. 

3.j. Agenda Items for Next CSFTF Meeting 

a. Agenda items for next CSFTF Meeting will be headed by funding 

presentations by Ms. Wise and Mr. Nahale-a. 

3.k. Adjournment 

a. Chair Oshiro adjourned the Meeting at 11:39 AM 

41




Tuesday, October 26, 2010 

1:30 pm – 3 p.m. 

State Capital Building 

415 S. Beretania Street 



Attendance 

Marcus Oshiro – Chair of the Task Force; House Finance Chair 

Donna Mercado Kim – Vice Chair of the Task Force; Senate Ways and Means Chair 

James Brese – Chief Financial Officer, Department of Education 

Bob Roberts – Chief Financial Officer, Charter School Administrative Office 

Georgina Kawamura – Director, Department of Budget and Finance 

Julie Upton for Megan McCorriston - Ho‘okako‘o Corporation 


Absent 

Carl Takamura – Charter School Review Panel 

Minutes 

I. CALL TO ORDER 

Chair Oshiro called the meeting to order at 1:35 p.m. 

II. GENERAL BUSINESS 

A. APPROVAL OF SEPTEMBER 28, 2010 MEETING MINUTES 

Mr. Breese proposed the following corrections: 

Page 5: referred is misspelled; substitute VAX for VAC 

Page 8, paragraph 5: GO bonds has an extra "s". 

Motion to accept the minutes of September 28, 2010 meeting as amended. Mr. Roberts 

moved to accept and Mr. Brese seconded. The motion passed unanimously. 

B. APPROVAL/CHANGES TO THE AGENDA 

Mr. Nahale-a proposed the following amendments to the agenda: 

1. To let Kauhale ‘Oiwi O Pu‘ukapu Charter School presentation be followed by a 

presentation by the Ke Kula ‘O Samuel M. Kamakau Laboratory Public Charter 

School. 

2. He also asked Mr. Roberts to exchange agenda order with him, so that Mr. Roberts 

would present first and Mr. Nahale-a afterwards. 

Mr. Roberts moved to approve the changes, and Ms. Kawamura seconded. The motion 

42


passed unanimously. 

C. PRESENTATIONS BY KAUHALE ‘OIWI O PU‘UKAPU (TAFFI 

WISE) AND KE KULA ‘O SAMUEL M. KAMAKAU LABORATORY 

(MARCI SARSONA) PUBLIC CHARTER SCHOOLS. 

Objective: 1) To demonstrate the efficacy of public/private partnerships for public 

charter schools. 

2) To demonstrate need and feasibility for state facilities funding. 

Kauhale ‘Oiwi O Pu‘ukapu Charter School 

Taffi Wise presented as a case study the struggles and progress of Kauhale ‘Oiwi O 

Pu‘ukapu Charter School (KOOP). She provided a handout to accompany the slide 

presentation. 

Ms. Wise said that, for the last 10 years, KOOP has been operating in an underused 

Department of Agriculture warehouse at UH Hilo. KOOP’s goal is to be housed in a 

permanent facility. 

KOOP began looking for property in 2002, and eventually received permission to use a 

30-acre property under the Department of Hawaiian Homelands (DHHL). Ms. Wise 

stated that it was a long process to obtain permits, loans, etc and that Francis Oda of 

Group 70 helped complete the community charrette process over a five-year period and is 

designing the facility plan. 

KOOP obtained a short-term loan from Bank of Hawaii, who will finance the 

construction, and a 40-year loan of $2.6 million at 3.8%. KOOP also received funding 

from a combination of public and private sources (covered briefly in the handout). The 

school is still under construction. 

When finished, the school, in addition to being an educational center for up to 500 

students, plans to offer free evening classes for kupuna, and host community family 

events on the weekends. 

While KOOP has received some private funding, it isn’t enough. Ms. Wise stated that 

KOOP has faced real challenges getting sufficient private and community support. She 

said that projected support has not met expectations, and that private donors typically 

only commit donation for classroom use and not for the facility. The crux, she says, is 

that private donors do not want to fund public schools. 

Ke Kula ‘O Samuel M. Kamakau Laboratory Public Charter School 

Marci Sarsona said that Kamakau Charter School had to move twice in the last six years. 

They’d been sharing space with other tenants, holding classes in room that were only 420 

sq. ft, and had closed the library and given up administrative offices to make more class 

43


space. Under these circumstances, Ms. Sarsona says, they were finding it impossible to 

achieve their vision and mission. 

Kamakau was happy to receive a 28-acre, 55-yr lease from DHHL next to the “Stairway 

to Heaven that will enable them to better serve the student population. The existing 

building, however, had been vandalized, was covered in graffiti, and the grounds 

overgrown and littered with mounds of trash. 

Kamakau turned to families and the community for help and, together, they spent 20 days 

cleaning up the property. They received some private funding and managed to refurbish 

the building. They currently pay no rent on the land and have a 40-year United States 

Department of Agriculture Rural Development loan for $2.5 million at 3.5%, as well as 

some private funding. However, the school has no cafeteria, gym, library, student 

parking, covered walkways, or gathering areas inside or out, due to insufficiency. 

Kamakau expects to move to the new school by the next school year, but they have 

tapped out their private funding sources. Their debt service is $138,000 annually and, 

currently, Ms. Sarsona spends 50% of her time on fund development. 

To leverage any more funding from private donors, Kamakau needs state funding, Ms. 

Sarsona says. 

D. BOB ROBERTS PRESENTATION ON FACILITIES FUNDING 

Mr. Roberts said that while private/public partnerships can pay for many upfront costs, 

they don’t pay for construction. 

The pros are that they are efficient, innovative, and generate leverage (through matching 

programs). The con is that they create obligation to service debt. 

Other sources such as private and federal grants, leases, certificates of participation, GO 

bonds, new market tax credits, and special purpose revenue bonds don’t pay for 

construction or repair and maintenance. Thus, the formula isn’t complete without state 

per pupil facilities funding, to provide for debt servicing. 

Mr. Roberts also stated that SPP/PPV partnerships reflect bond rates of 30 years ago, not 

current rates, making them a bargain. 

Q&A: 

Vice Chair. Kim: What if the school closes before the 30-year debt is paid? 

Mr. Roberts: If the school closes before 30 years, the property is used as security against 

the bonds. Nonprofit owns the property. 

Vice Chair. Kim: Would the state have interest in the property? 

44


Mr. Nahale-a: Charter service is a lease, not debt. If the loan goes bad, nonprofit is at 

risk, not state. 

Ms. Kawamura: But what assurance does the state get that the facility will exist in 

perpetuity if public monies are set aside? 

Vice Chair. Kim: When the charter schools started, they said there would be no cost to 

the state. 

Ms. Wise: Public school students at these public charter schools need appropriate 

facilities. How can we work together to create appropriate facilities for kids? 

Vice Chair. Kim: But what happens to our investment 20-30 yrs from now if they close? 

If public schools get smaller because the charter schools are operating, and then the 

charters fail, how will it affect the community and the state’s investments? 

Ms. Wise: If they don’t succeed, people won’t send their kids. With charter schools, if 

students go elsewhere, the state’s not at risk on the debt. The current system isn’t 

working either. 

Mr. Nahale-a: Long-term monitoring is needed. Checks and balances are necessary to 

hold charters accountable. 

A member: Charters are growing, enrollment increasing 5% to 10% nationally. 

Chair Oshiro: You’re asking for an expenditure of public funds. How does the state 

protect its investment? 

Ms. Wise: It’s an investment in the community and economy; it will create construction 

jobs. 

Chair Oshiro: The debt service is entered into by the private nonprofit, but if public funds 

are used … 

Mr. Nahale-a: Use of public funds needs to be monitored in all cases. Some state funds 

are already going to facilities rent, but less than for debt service. If we increase state 

support, it won’t increase risk. We looked at this issue. 

Vice Chair Kim: How can we justify giving state funding to charters without giving to 

other private schools? 

Mr. Nahale-a: We’re not private. We’re public. 

Vice Chair Kim: Whether the child goes to a private, public or charter school, we’re 

responsible for that kid. There’s not enough money to promise every kid everywhere. 

Ms. Wise: The difference is socioeconomic class. 

45


E. ALAPAKI NAHALE-A'S PRESENTATION ON THE POLITICS OF 

CHARTER SCHOOL FACILITIES FUNDING 

Mr. Nahale-a began by saying charter schools elevate success for all students. They offer 

innovative options, educate underserved populations, and create choice in public 

education. 

ChairOshiro: Is UH Lab School a charter school? 

Mr. Nahale-a: Yes. 

Mr. Nahale-a continues: 

The community can’t get the benefit of charters if the playing field isn’t level. 

What’s level? “Adequate” means equitable. Charter schools should get the same 

resources as public schools. Hawaii made that commitment in Race to the Top 2. Hold us 

accountable. 

Mr. Nahale-a stated that the State expects charters to: 

• Serve all students 

• Facilitate high academic achievement; and 

• Meet State testing requirements for collective bargaining, health and safety, and 

other compliance measures, plus provide data and info on request. 

A positive aspect of charter schools is autonomy, in hiring, curriculum, budget planning, 

and freedom from bureaucracy. But the per pupil funding is less than for public schools. 

And the federal and SPED system is weighted against small schools and charters. 

Not all schools are getting their fair share. Hawaii has committed to equity. 

Mr. Nahale-a further stated that the start-ups and conversion schools are different. 

Start-ups have no guaranteed support; they have access to state property, but struggle to 

leverage support. 

The conversions have more supports. As for per pupil funding, it’s inaccurate to say that 

charters are only $300 away. Only the charters who get all the federal and SPED support 

are that close. 

Are charter schools getting facility support this year? Yes and no. 

Yes: 

We need clarity. We need to know what will charters get, and make it stable. Per pupil 

funding is the only manageable solution. Other facility supports are enhancements only. 

Providing clear facility support will improve accountability. 

No: 

46


We’re expected to meet State’s expectations and requirements and handle our own 

facility costs. Are our students entitled to facility support or not? We need to eliminate 

confusion over whether charter students are entitled. 

Per pupil facilities funding will create an entire industry of organizations who do due 

diligence, oversight, etc. -- and that’s all they do. Not all charters should or can become 

facility developers. The organizations with the experience and desire to play this role 

need state commitment. 

Q&A 

Vice Chair Kim: There never was facilities funding. “Won’t take much” – what does that 

mean? When will charters be satisfied? 

A member: That’s just the way it was. We always wanted facilities funding, but didn’t 

have it. As far as charters coming later asking for more funding, we can’t stay static. It 

will adjust with economy. 

Mr. Nahale-a: It’ s a policy decision. We need assurance that we’re going to have what 

we need to educate kids. Many agencies will always ask for more, housing, etc. 

Vice Chair Kim: What schools would have grown if they were told no facilities funding? 

A member: They’ve grown. We were told that and they have grown. 

Mr. Nahale-a: Right now, we don’t know what the law clearly says. In most other states, 

charter schools are free from many requirements, including collective bargaining. We 

must meet all the same requirements as public schools. There has to be give and take. We 

can’t “just do more with less.” Plus, these schools are working hard in the hardest places 

to work. Part of the challenge is telling these guys what they have to work with. We don’t 

have commitment from funders, because many say, “Why should I invest in public 

facilities?” 

Ms. Kawamura: Any conditions? 

Ms. Sarsona: Not one private funder said they would build infrastructure. It has had to be 

for classrooms, the educational piece. 

Mr. Brese: As the DOE rep, I believe all students should have adequate funding. It’s a 

policy call. We would support transparency in formulas. I look at small DOE schools and 

think some of them should be closed. But if you have two underutilized schools, one 

public, one charter, what will happen if the State has committed? I’m all for competition, 

but at what point do small schools not make sense financially? 

Mr. Roberts: We have criteria for viability. Most small charter schools came about before 

there was a review panel. There is a body who is responsible. 

47


Vice Chair Kim: That’s not the point. If we close a small public school for 200 students, 

for example, and then a charter school comes in with 200 students and takes over facility. 

If we’ve closed it because it’s not financially feasible, and then fund your 200 students, 

how does that make sense? 

Mr. Nahale-a: The DOE no longer has to maintain the building. You’ll still hold the 

footprint, but we just saved you a ton of money. With small charter start-ups, make sure 

they meet your requirements. 

Mr. Roberts: The per pupil cost of running small public schools is higher than charters’ 

per pupil costs. Public schools cost $9500 per year. The charters are getting $5300. 

Mr. Nahale-a: If schools were assured they would get x%, they could use that when 

seeking funding, as leverage. 

Ms. Wise: We need to get back to main thing: All public education is underfunded, and I 

know there’s no money, but we need to create a tax or something, because it’s not been 

working for the past 40 years. How can we give more money for public education? 

Vice Chair Kim: $2.1 billion out of $5 billion budget goes to fund education. 

Ms. Wise: It goes to the unions, not the kids. 

Vice Chair Kim: Maybe we should allow charters at the bargaining table. 

Chair Oshiro announces that it’s time to end the meeting and asks to meet again to hear 

and discuss charter schools’ proposal of a formula that would include facilities funding. 

Vice Chair Kim tells the charter school representatives to be prepared to quantify how 

much is “not much.” 

Attendees agree to meet again on November 15, 2010 at 1:30 p.m., and the meeting 

adjourns. 

48





1:39 pm 


State Capitol 


Honolulu, Hawaii 

1. Call to Order: 

Task Force Chair Marcus Oshiro called the meeting to order at 1:39 PM. 

2. Members: 

a. Chair of the Task Force: Representative Marcus Oshiro- 

House Finance Chair 


Senate Ways and Means Chair 

c. James Brese- DOE CFO 

d. Bob Roberts- CSAO CFO 

e. Karen Matsunaga (for Georgina Kawamura- Budget & Finance Director) 

f. Carl Takamura- Charter School Review Panel 

g. Megan McCorriston- Ho'okako'o 


Guests: 

a. Ruth Tschumy – Chair: Charter School Review Panel 

b. Marci Wai’ale’ale Sarsona – Director: Ke Kula ‘O S. M. Kamakau 


a. Approval of Minutes of October 26, 2010 Meeting: 

1. Mr. Brese asked that the above Minutes be amended so that his last 

name is spelled with just one “e”. 

2. Mr. Roberts asked that the first full paragraph at the top of page 3 be 

amended so that the phrase “Stairway to Heaven” is enclosed with full 

quotation marks. 

3. Mr. Roberts also asked that the final paragraph on page 3 before the 

Questions and Answers Section be amended to read: “Mr. Roberts also 

stated that current debt service amounts reflect building costs of 30 years 

ago, and not current costs, making them a bargain.” 

49


. 

4. Mr. Takemura moved to approve the Minutes as amended. Mr. Brese 

seconded. Chair Oshiro asked for further discussion; no discussion 

ensued. Chair Oshiro asked to approve the Minutes as amended; the 

motion passed unanimously. 

b. Approval/Changes to the Agenda: 

No changes were made to today’s agenda. 

c. General discussion regarding a timeline for developing and finalizing the 

task force's report to the Legislature, including logistics of drafting the 

report and any proposed legislation: 

1. Chair Oshiro stated that the submission deadline for the Task Force 

Report is December 17, 2010, which gives the Task Force five weeks to 

draft and produce the Report. 

2. Mr. Roberts stated that the Report must be reviewed by all Task Force 

members before a final draft is produced. 

3. Mr. Na’hale’a stated that the final draft should be completed by 

December 13; Mr. Roberts stated that the Task Force’s final meeting 

should also be on December 13. 

4. Mr. Takemura stated that the Report’s background facts and other 

findings, including the Report’s language and terminology, should be 

finalized at today’s meeting. This will provide Task Force members with 

a basis and consensus for ongoing recommendations. 

5. Mr. Roberts proposed the following report format: 

A. Executive Summary 

B. Background 

C. Findings 

D. Recommendations 

E. Remaining/Unresolved Issues 

F Appendices. 

6. Mr. Roberts proposed that he would draft the initial Report using the 

above format, and would release sections of this draft to Task Force 

members as soon as he completes them. Chair Oshiro approved this 

process. 

7. Mr. Na’hale’a stated that a preliminary draft should be completed with 

input by all Task Force members by December 6, and recommended that a 

single version of this draft be posted online as a Google.doc so that all 

Task Force members can have simultaneous input and review of the same 

document. 

8. Chair Oshiro approved the posting of the draft as a Google.doc, and of 

December 6 as the deadline for completion of the preliminary Report. 

d. General discussion regarding proposals for an equitable charter school 

funding formula; and: 

50


e. General discussion regarding recommendations and proposed legislation 

that will be contained in the Report. 

1. Chair Oshiro requested that the Task Force begin a general discussion 

of proposals for an equitable charter school (CS) funding formula. 

2. Mr. Roberts stated that at the last Task Force meeting, it was proposed 

that CS and community partnerships, coupled with a reliable revenue 

stream from the State, would create a solution for CS facility funding. 

3. Mr. Na’hale’a stated that he hoped the Task Force supports the current 

position, which is equitable per-pupil and equitable Federal funding, and 

that formally adopting this position as a long-term policy will do much to 

reassure CS stakeholders. 

4. Mr. Brese asked if the foundation of the funding formula would be the 

same as that which is in the current statute, with the addition of CIP 

policy. 

5. In answer, Mr. Na’hale’a recalled that CS stakeholders added the term 

“General Funds” during the past Legislative session. Mr. Na’hale’a stated 

that if all education spending is in the General Fund, then there is “no 

issue.” He added that this fact should be referenced in the CSFTF Report. 

6. Mr. Brese asked if the current amendments reference the General Fund 

as well as the Fund’s purpose of providing comprehensive education 

spending. 

7. Mr. Na’hale’a replied that this is the case, and added that from “a 

charter school perspective, this meant that a lot of dollars weren’t 

included.” 

8. Expanding Mr. Na’hale’a’s point, Mr. Roberts stated that CS inclusion 

in the General Fund also excludes debt service from calculation, and that 

Mr. Na’hale’a was looking past the General Fund to the issue of equitable 

funding between the systems. 

9. Mr. Roberts then referenced facilities funding, and noted that language 

in Statute 302B-8 can be included in CS requests for facilities funding that 

“ relates back to the debt service issue.” 

10. Mr. Roberts suggested that the CSFTF consider benchmarks that can 

be used as a basis for determining an amount for per-pupil funding and for 

facilities funding. 

11. Mr. Brese agreed that to be equitable, additional funding in the form 

of CIP or other funds should balance the amounts received by the DOE 

and CS, but said that in statute language, General Funds should be 

identified as “General Funds,” and that other portions, such as trusts, 

should be left out of the “General Funds” designation. 

12. Mr. Roberts agreed, and said that apart from facilities funding, 

General Funds cover most DOE and CS expenses. 

51


13. Mr. Na’hale’a agreed that CS funding within the General Funds 

designation has brought CS significantly closer to an equitable standing 

with the DOE. 

14. Mr. Takemura asked if Task Force agreement that facilities funding 

should be included in the CS funding formula was a major finding that 

should be presented in the Task Force Report to the Legislature. 

15. Mr. Roberts suggested that including facilities funding in the CS 

funding formula should be presented as a recommendation in the Task 

Force Report. 

16. Chair Oshiro stated that the current agreement on per-pupil funding as 

expressed in Act 144 excludes adult education, special education, and 

other programs, such as after-school enrichment, but stipulates that those 

services are available. 

17. Mr. Roberts stated that the committee preceding the CSFTF worked 

with the DOE to move some specific SPED programs out of the “EDN- 

150” category and into the “EDN-100” category. 

18. Mr. Na’hale’a said that the CSFTF should reference the work of the 

preceding committee and recommend that this work is the “right path”. 

19. Mr. Roberts stated that the CSFTF should recommend that there 

should be a provision within a funding formula that stipulates that if a 

specific service is not included within that formula, amounts necessary to 

fund this service should not be automatically excluded from the formula. 

20. Mr. Takemura summarized the CSFTF position on this matter by 

saying that the CSFTF should state in the CSFTF Report to the Legislature 

that the changes made in the last legislative session helped to address 

some of the concerns facing CS, and that the CSFTF is focusing on those 

concerns that are still outstanding. 

21, Mr. Na’hale’a cautioned that the CSFTF should remember that in the 

past, identical legislative language has resulted in varying legislative 

funding allocations, depending on which legislative body was considering 

the funding request. And while recent changes have resulted in greater 

clarity regarding funding allocations, the CSFTF should recommend that 

there is a proviso for continued monitoring of the funding process. 

22. In preparation for the initial draft of the CSFTF Report, Mr. Roberts 

summarized one of the Task Force’s current findings as follows: 

• Changes that were made in the last legislative session helped 

clarify the funding formula for CS per-pupil calculations and 

operations. 

Mr. Roberts noted that the use of the term “operations” is significant, 

because “operations” funding does not include “facilities” funding. 

23. Chair Oshiro agreed, noting that “operations” do not include funding 

for leases and rentals. 

52


24. Mr. Takemura stated that this indicates that the CSFTF should now 

try to clarity the issue of facilities funding. 

25. Elaborating further, Mr. Na’hale’a noted that provisions for facilities 

funding is a component of the Federal grant process. 

26. Mr. Takemura and Mr. Na’hale’a discussed whether the issue of 

facilities funding, as a separate funding category from operations funding, 

should be presented in the CSFTF Task Force Report to the Legislature as 

a finding, a recommendation, or as a reference. 

• Mr. Na’hale’a noted that there are biases that complicate CS 

applications for Federal funding, and that these are considerations 

when deciding how to address the issues of facilities funding in the 

CSFTF Report to the Legislature. 

• Mr. Roberts observed that these biases don’t exclusively apply to 

CS, and in fact are applicable to small schools and rural schools, 

and thus are applicable generally to any educational funding 

finding. 

• Mr. Roberts then asked the Task Force if the issue of facilities 

funding as a component of Federal grant application biases should 

be included as a specific finding in the CSFTF Report to the 

Legislature. 

• Chair Oshiro agreed with Mr. Roberts’ proposal that facilities 

funding as a component of Federal grant applications should be 

included in the Task Force Report as a finding. 

• Mr. Takemura agreed with Chair Oshiro, and noted that these 

concerns should be highlighted as findings in the Report, as the 

function of the Report is to present specific concerns that should be 

addressed. 

27. Ms. Love observed that the while the CSFTF is addressing CS 

concerns, Task Force findings are applicable to the entire State of Hawaii 

educational system. 

28. Mr. Takemura requested further clarification regarding CS funding 

formulas, and asked the Task Force if there are in fact two funding 

formulas that must be addressed in the Report, one funding formula that 

covers operational funding, and one formula that covers facilities funding; 

Mr. Takemura stated that he felt that CS should have one formula that 

addresses both operational and facilities funding. 

29. Mr. Na’hale’a stated that general education funding, general Federal 

funding are in agreement, but that per-pupil funding, facilities support, 

CIP options must still be thought out. 

30. Mr. Takemura said that two separate formulas make more sense, and 

stated that he has concerns regarding facilities funding that need to be 

addressed. 

31. Mr. Na’hale’a stated that Federal funding is separated out. 

32. Chair Oshiro stated that there are two separate funding “pots”: one 

pot is “operational”; one pot is “facilities.” 

53


33. Mr. Takemura asked if maintenance costs are included in facilities 

funding. 

34. Mr. Na’hale’a asked if repair and maintenance (R & M) are in the 

facilities funding formula. 

35. Mr. Roberts answered that R & M funding is included in DAGS on 

the neighbor islands. Mr. Roberts then addressed Mr. Takemura’s 

question regarding whether or CS facility funding was addressed in 

current CS funding formulas, and stated that a specific formula for funding 

CS facilities isn’t part of the regular funding formula. 

36. Mr. Roberts asked the Task Force if the CSFTF Report to the 

Legislature should include a finding regarding the necessity of 

establishing a separate facilities funding formula for CS. 

37. Mr. Takemura stated that such a finding must include a rationale as to 

why facilities funding is being proposed as a separate funding formula, 

and Mr. Roberts agreed. 

38. Chair Oshiro observed that the facilities funding question is further 

complicated by the fact that CS include different types of schools, such as 

start-up CS and conversion CS. 

39. Chair Oshiro stated that with such pivotal definitions of CS facilities 

recipients as yet unresolved, that the CSFTF can perhaps reference these 

definitions in its Report, with the recommendation that these definitions be 

addressed in the near future. 

40. Vice-Chair Kim stated that the Legislature has been working on the 

issue of per-pupil funding for many years, and that legislative action last 

year was crucial in clarifying this issue for the first time. This gradual 

legislative process will also likely characterize the clarification of the issue 

of CS facilities funding. 

41. With this further input, Mr. Roberts summarized the CSFTF finding 

regarding facilities funding as follows: 

• Changes that were made in the last legislative session helped to 

clarify the calculation of the per-pupil funding for CS operations. 

Mr. Roberts then asked Vice-Chair Kim for additional input regarding this 

finding. 

42. Vice-Chair Kim stated that the finding should note that the 

Legislature, over a period of time and by reconciling many differing 

viewpoints, has succeeded in clarifying the process by which CS per-pupil 

funding concerns have been addressed, and will apply this same focus to 

clarifying stakeholder concerns regarding CS facilities funding. 

43. Mr. Na’hale’a added the Legislature has likewise been successful in 

clarifying the actual dollar amount of funding available, so that each CS 

has equitable funding regardless of differences in year-to-year CS 

enrollment totals. 

43. Ms. McCorriston, noting that she had not been at the CSFTF meeting 

when Mr. Roberts provided a summary of the distinctions between 

differing types of CS, asked for the definition of the different facilities 

funding formulas for start-up CS and conversion CS. 

54


44. Chair Oshiro said that from an operational standpoint, Vice-Chair 

Kim’s remarks regarding how equitable funding formulas came about 

after many years of effort by the Legislature, affirms that 2010 was a 

watershed year for clarifying funding concerns. 

45. Ms. McCorriston asked for clarification regarding the different 

facilities funding formulas for start-up CS and conversion CS. 

46. Mr. Na’hale’a asked Ms. McCorriston if she had received his emailed 

PowerPoint presentation regarding the differences between start-up CS 

and conversion CS. Ms. McCorriston had not received it, so Mr. 

Na’hale’a summarized these differences by first noting that conversion 

CS get access to facilities funding because some conversion CS on are 

State property. Other CS so not have this access. Mr. Na’hale’a stated that 

this requires the State to demonstrate its commitment to CS facilities 

funding in some way, and represents a policy decision. A consequence of 

not knowing the status of CS facilities funding will be no lobbying efforts 

by CS. Since at this point the different legal and funding definitions of CS 

prevent the outright award of facilities funding, currently the only 

equitable CS funding solution is through per-pupil funding. If the State 

provides a guaranteed pool of CS facilities funds, individual CS can access 

those funds and use those funds as leverage in securing matching funds 

from the community. Mr. Na’hale’a stated that these various aspects of 

CS facilities funding need to be discussed further. 

47. Mr. Takemura noted that funds received by conversion CS represent 

State income, while other CS do not provide this income and thus may be 

excluded by the State in certain CS funding allocations. 

48. Mr. Na’hale’a disagreed, noting that funds are invested in all State 

school facilities, but those schools are not required to repay those funds. 

49. Cbair Oshio noted that a recent change in the law ensures that State 

fiscal interest is protected when certain non-profit organizations, including 

CS, are liquidated, or when the non-profit’s interest is transferred to 

another organization. This law would apply when a CS‘s fund-raising 

efforts fail. 

50. Mr. Na’hale’a noted that this law would not apply to CS per-pupil 

funding, but might apply in CIP or facilities funding. 

51. Chair Oshiro said that the law would emphatically apply in cases of 

CS CIP and CS bond financing, and Mr. Na’hale’a agreed. 

52. Mr. Na’hale’a then advocated that CS requests for 100% equity with 

DOE schools in per-pupil and facilities funding, as well as debt service, 

should be tied to measurable CS academic performance. 

53. Mr. Roberts noted that part of the changes in the last legislative 

session was to require a reauthorization process for CS no later than every 

6 years, so the steady academic improvement advocated by Mr. Na’hale’a 

could be part of the process of re-evaluation and reauthorization of CS 

through the CSCRP. 

54. Mr. Takemura agreed, noting that data verifying CS academic 

performance and progress is a key component of CS reauthorization. 

55


55. Mr. Na’hale’a asked if equitable funding in all CS fiscal areas was 

guaranteed, would CS academic reauthorization standards likewise be 

raised. 

56. Mr. Takemura said he did not think this would occur, because 

currently CS reauthorization and academic standards are not tied to 

funding, but to statute. 

57. Mr. Na’hale’a stated that anecdotal reports from CS administrators 

indicate that CS academic progress is dependent on equitable funding. 

58. Other Task Force members noted that arguments linking academic 

performance to State funding have been under consideration for many 

years. 

59. Mr. Na’hale’a asked the Task Force if is possible to compare DOE 

academic gains with those of CS if CS do not receive the same facilities 

funding as DOE schools. 

60. Mr. Takemura stated that the first question to determine is whether or 

not CS academic gains are being made. 

61. Ms. McCorriston noted that CS administrators do not have the same 

options as their public school counterparts because CS administrators are 

constantly required to raise funds for their schools. Ms. McCorriston cited 

the example of a Maile CS that was originally an elementary school, but 

now has enrollment requiring a high school, and does not have the funds 

to construct or provide high school facilities. 

62. Mr. Takemura stated that is a CS shows growth in enrollment, then 

the question of contingent issues is raised. 

63. Ms. McCorriston noted that CS are so different in structure and 

educational philosophy that a uniform measure of academic progress 

applying to all CS is inherently unworkable. 

64. Mr. Roberts stated that the CSFTF is not currently charged with 

determining CS academic benchmarks. 

65. Mr. Na’hale’a stated that since nationally, the mission of CS is to 

improve public education overall, such improvements are not feasible 

without equitable funding. 

66. Ms. Tschumy agreed that CS funding has not been equitable. Ms. 

Tschumy noted that over the years many CS have testified that they cannot 

meet the standards mandated by the CSRP due to inadequate funding, but 

that the CSRP has consistently held otherwise. Ms. Tschumy stated that 

Linda Smith recently said that the CSRP will be judged by how many 

charters it grants, but the CSRP feels that it will be judged by how many 

quality CS it grants. 

66. Mr. Roberts asked the Task Force to determine if a there is a finding 

in the preceding discussion? 

67. Mr. Na’hale’a stated that the finding is that equitable funding for CS 

is good for all children. 

68. Chair Oshiro noted that Neil (Georginna Kawamura’s representative 

from Budget & Finance) had provided 4 points in reference to CS facilities 

funding. Those 4 points are: 

56


• DOE schools receive CIP funding, but the amount varies widely 

year to year. 

• Debt service is a transfer of an operative budget of a bond-funded 

CIP rolled out over 20 years. 

• It is challenging to develop a CIP budget for CS that would be 

equitable among the CS, due to widely varying facilities and 

situations among the CS. Some CS rent space, some own their 

facilities free and clear, and some operate rent-free, and some have 

borrowed facilities and have debt to service. 

• It would be equitable for the start-up CS to receive an annual perstudent 

allocation for facilities equal to the per-student debt service 

that is allocated to the DOE. Because the DOE debt service covers 

the conversed CS facilities and because the DOE continues to be 

responsible for the conversed CS facilities, the per-student 

allocation of facilities funds would be for start-up CS only. The 

formula Neil came up with is the DOE budget for debt service 

divided by the sum of DOE students plus the sum of all conversion 

CS students. The start-up CS could use the resulting funds for 

rent, or to save for future purchases, or for the construction of 

facilities for cash, or to pay for debt service on loans incurred in 

the construction of facilities. (Chair Oshiro directed that copies of 

the above Budget & Finance observations regarding CS be copied 

and distributed to Task Force members.) 

69. Mr. Roberts stated that the above proposal captured 90% of the CS 

facilities funding issues. 

70. Ms. Matsunaga (from Budget & Finance) observed that while Budget 

& Finance recognizes that CS need additional funding, the task at hand is 

to develop the mechanism by which those needs can be addressed. 

71. Mr. Roberts stated that the conversion CS would argue that while 

everything in the above B&F observations are true, the major omission is 

that the above provisions do not address the issue of CS facilities repair 

and maintenance (R & M) which are currently addressed by the DOE. 

Conversion CS feel that this fact puts them in a vulnerable position, and 

would like to see a mechanism in the per-pupil formula that would address 

this need. 

72. Ms. Love noted that of the per-pupil amount mentioned in the B&F 

observations, 70% would go to start-up CSs. Ms. Love stated that the 

fairest way to deal with the issue is to look at the start-up CS debt service 

amount, which would equal 70%, with 30% remaining. 

73. Chair Oshiro noted that the bulk of facilities funding is needed by 

start-up CS, which have the most acute needs. Chair Oshiro also noted 

that like per-pupil funding, the CS facilities funding proposal contained in 

the above B&F observations will not solve all facilities funding issues at 

once, but will move the process forward significantly. 

74. Mr. Roberts noted that the CSFTF also consider that hybrid 

conversion CS are now in operation, which adds another layer of 

budgetary complexity. Hybrid conversion CS, such as Kamaile, contain 

57


grade levels that include all students within an attendance area, and other 

grade levels that are “chosen to be operated by the charter school and 

include students that choose to attend. 

75. Ms. Matsunaga asked if certain aspects of education funding, such as 

collective bargaining, are different for the DOE and CS. 

76. Mr. Na’hale’a said that CS are not exempt from any collective 

bargaining constraints, which adds to the funding problems faced by CS. 

77. Chair Oshiro noted that in regards to collective bargaining constraints 

placed on CS, that CS don’t get a better deal. 

78. Mr. Na’hale’a stated that CS often end up paying more money than 

DOE schools. 

79. Ms. Love said the all of the unions negotiate a Master Agreement with 

all CS, and then negotiate a separate Supplemental Agreement with each 

CS. The union agreements with CS stipulate that CS have to meet the 

minimum requirements of DOE contracts. 

80. Both Ms. Love and Mr. Na’hale’a said most CS collective bargaining 

agreements center on “operational” issues, such as length of work day and 

grievance procedures. 

81. Marci Wai’ale’ale Sarsona, Director of Ke Kula ‘O S. M. Kamakau 

CS, related how collective bargaining at her school was challenging 

because a new supplemental agreement could not be negotiated before a 

Master Agreement with the school’s union could be finalized, resulting in 

a 2-year delay in program delivery. 

82. Vice-Chair Kim asked if CS could make changes to the Master 

Agreement, and was told the changes were not allowed, and that CS 

teachers are not always invited to vote on collective bargaining issues. 

83. Mr. Takemura stated that this year, the HSTA made an effort to 

include CS teachers and administrators in proceedings. 

84. Vice-Chair Kim suggested that the CSFTF might consider 

recommending a pilot program that would exempt CS from certain 

collective bargaining requirements. 

85. Mr. Takemura lauded Vice-Chair Kim’s suggestion, but noted that the 

CSFTF had to keep its focus narrow for the time being in regards to its 

specific considerations to the Legislature, and for that reason should 

concentrate on facilities funding, and avoid those areas that may be 

viewed as controversial. 

86. Vice-Chair Kim stated that the issue of CS facilities funding will 

probably not be resolved in the foreseeable future. Vice-Chair Kim 

observed that since this is the case, CS should examine all options that 

present cost-saving opportunities. 

87. Mr. Na’hale’a agreed that CS need to look at all options, and 

speculated that those CS that don’t adapt to current funding restrictions 

will be weeded out. Mr. Na’hale’a expressed the hope that while the issue 

of equitable CS facilities funding may not be completely resolved 

immediately, concrete steps taken by the CSFTF toward resolution, 

especially if coupled with suggestions like Vice-Chair Kim’s that present 

58


the Legislature with a “dual approach”, may reassure the CS community 

that significant progress is being made. 

88. Mr. Takemura asked if equitable CS per-pupil facilities funding is 

then a starting point for the Report’s findings. 

89. Mr. Roberts agreed that equitable CS per-pupil facilities funding is a 

starting point for the Report’s findings. 

90. Ms. Matsunaga suggested that B&F totals, especially those based on 

past-years’ estimates, may need to be adjusted. 

91. Mr. Na’hale’a observed that this may adjust B&F totals unfavorably 

upward. Mr. Na’hale’a stated that the current B&F funding formula is a 

simple formula, and so will be easily understood during Budget Session, 

whereas a more complex formula will make any facilities funding 

approval less likely. 

92. Mr. Takemura noted that any funding formula will be modified by 

legislative and State fiscal input during Budget Session, so trying to fix a 

perfect funding formula at the CSFTF recommendation level is futile. 

93. Chair Oshiro stated that equitable CS per-pupil facilities funding is 

one of the major objectives of the CSFTF. Chair Oshiro said that the B&F 

observations as presented in this meeting are a significant starting point 

towards meeting that objective. 

94. Mr. Brese asked for clarification of the B&F observations that 

addressed equitable CS per-pupil facilities funding. Specifically, Mr. 

Brese asked if this amount, the second part of the formula, the amount that 

would be available for rent and other expenses, would be restricted to 

start-up CS. In particular, Mr. Brese asked if the four or five conversion 

CS in Hawaii would not have access to this amount. 

95. Chair Oshiro said that Mr. Brese’s statement was correct. Chair 

Oshiro then asked Mr. Roberts how many start-up CS were currently 

operating, and Mr. Roberts said that 26 start-up CS are currently operating 

in the State of Hawaii. 

96. Ms. Love stated that she would like to see some B&F provision that 

would address the issue of conversion CS’ R&M expenses. 

97. Mr. Roberts observed that new hybrid CS also need to have this same 

issue addressed. 

98. Ms. Love repeated her earlier observation that if the start-up CS use 

the B&F facilities funding formula as stipulated by statute, start-up CS 

will have access to 70% of equitable facilities funding, and the remaining 

30%, as stipulated by statute, will “go to the schools that need it,” Ms. 

Love stated that this remaining 30% might be used to address conversion 

CS R&M. 

99. Mr. Na’hale’a requested clarification of the rationale for the 

percentages presented by Ms. Love. 

100. Mr. Roberts stated that the percentages presented by Ms. Love are 

written into the statute. 

101. Mr. Roberts further explained that the statute and CS policy mandate 

that this facilities funding percentage is based on a comparison of total 

start-up CS enrollment to total CS enrollment. If the total start-up CS 

59


enrollment is greater than 70%, then that percentage ---- a percentage 

number that is greater than 70% --- will be the percentage of the facilities 

funds that will go to start-up CS. If the total start-up CS enrollment is 

less than 70%, then 70% ---- which is the percentage floor for the startups 

--- will go to the start-up CS. The remaining 30% goes to all of the 

schools equally on a per-pupil basis. 

101. Ms. McCorriston requested that a definition for start-up CS and 

conversion CS be provided, and asked if there is such a thing as a hybrid 

conversion CS. Mr. Roberts said that there is no such thing as a hybrid 

conversion CS. 

102. Ms. McCorriston stated that therefore a definition of what constitutes 

a start-up CS is crucial. Ms. McCorriston stated that this definition should 

be consistent even in the case of a conversion CS that defines its CS 

program as a start-up. 

103. Mr. Roberts said that there are no current working definitions that 

distinguish a start-up CS from a hybrid CS to a conversion CS. 

104. Mr. Na’hale’a provided his observations on the distinguishing 

characteristics of conversion CS and start-up CS. In general, said Mr. 

Na’hale’a, conversion CS in Hawaii are: 

• Larger 

• Have a different structure 

• Have better access to SPED and Federal money 

• Have more external support 

Mr. Na’hale’a stated that he did not want to appear indifferent to the needs 

of conversion CS, but said that the “issue of the facilities gap for them is 

not a per-pupil, but a facilities issue, an R&M issue.” 

105. Mr. Na’hale’a said that these issues must be kept separate because a 

small rural start-up CS with no facilities, a CS with no roof over the heads 

of its students, should be the school that has receives first priority when it 

comes to per-pupil facilities funding. 

106. Ms. Love cited the example of Kamaile CS, which is a conversion 

school, but is a start-up CS in that it has added a high school program and 

has no facilities to house its high-school students. 

107. Mr. Roberts stated that increased enrollment at conversion CS occurs 

because the conversion CS are adding grade levels that are not part of part 

of their original DOE program. 

108. Mr. Brese said he wanted to amend the legislative recommendations 

and formula for facilities funding to include the neighbor island regular 

school costs that are effective in the DAGS budget, 808 and 807. This 

will allow CS to take advantage of DIP provisions, which are equitable 

funding - based. 

109. Mr. Roberts noted that R&M funding will go into the operational 

side of the CS funding formula. 

110. Ms. Love stated that she would like to see some funding allocations 

for the larger conversion CS since their R&M costs are correspondingly 

larger. 

60


111. Ms. Love, Mr. Na’hale’a, Mr. Roberts, and other Task Force 

members discussed various facilities funding and per-pupil funding 

alternatives in an attempt to address the competing demands of start-up CS 

and conversion CS, but no consensus was reached. 

112. Mr. Takemura stated that a Task Force consensus should be reached 

regarding findings and formula recommendations by the end of today’s 

meeting. 

113. Mr. Roberts summarized the history of the 70%/30% CS facilities 

funding formula for the Task Force. 

114. After further discussion of how the Task Force would phrase their 

recommendation of the CS facility funding formula, Chair Oshiro asked 

the Task Force if consensus could be reached. 

115. The Task Force agreed that it would recommend the current CS 

facilities funding formula provided that there was a caveat stipulating that 

the terms of the formula warrant further consideration, and that the 

formula may be modified in response to additional findings. 


The Task Force agreed to meet at 1:30 PM on November 29. 


Agenda items for the next CSFTF Meeting were not discussed. 


The Task Force had no new business to discuss. 


The Task Force had no other items to discuss. 


Further details of the next meeting were not discussed. 


The meeting adjourned at 3:10 PM. 

61





2:03 PM – 3:20 PM 


State Capitol 



1. Call to Order: 

Task Force Chair Marcus Oshiro called the meeting to order at 2:03 PM. 

2. Members: 

a. Chair of the Task Force: Representative Marcus Oshiro- 

House Finance Chair * 

b. James Brese- DOE CFO 

c. Bob Roberts- CSAO CFO 

d. Neil Miyahira (for Georgina Kawamura- Budget & Finance Director) 

e Ruth Tschumy – Chair, Charter School Review Panel (for Carl Takamura – 

CSRP) 

f. Megan McCorriston- Ho'okako'o Corporation 

g. Steve Hirakami – (for Alapaki Nahale-a- Hawaiì Charter School Network) 

* (Chair Oshiro’s future tenure as House Finance Chair is to be determined. Former CSFTF Vice-Chair Donna 

Mercado Kim is no longer Chair of Senate Ways & Means Committee, and has ended her service on the CSFTF.) 

Guests: 

a. Patti Conan – Chair, Halau Ku Mana Charter School 


a. Approval of Minutes of November 29, 2010 Meeting: 

Mr. Roberts said that the November 29 CSFTF Meeting did not include all Task 

Force members. Mr. Roberts said the notes from this meeting are still being 

prepared, and will be emailed along with the November 15, 2010 Meeting 

Minutes as soon as they are completed. 


Mr. Roberts moved to begin Agenda Item c., “General discussion regarding the 

draft CSFTF report”. Chair Oshiro seconded. The motion passed unanimously. 

c. General discussion regarding draft CSFTF report (Preliminary Review) 

Mr. Roberts distributed the December 13, 2010 CSFTF Report Draft of the 

Charter Schools Funding Task Force Final Report To the Hawaii State 

Legislature (hereinafter referred to as the “Report Draft”) to the Task Force 

members, and provided the following clarifications regarding specific passages in 

the Report Draft: 

62


1. Clarifications Regarding the Report Draft 

A. RE: “Executive Summary – Background –SCR 108 Creating 

the Task Force” pg. 1: 

Mr. Roberts observed that Neil Miyahira of SOH Dept. of 

Budget & Finance would be needed at today’s meeting to provide 

appropriate language to address the Dept. of Budget & Finance’s 

methodology regarding the DOE’s per-pupil calculation and 

Charter Schools (CS) per-pupil calculation. 

B. RE: “Executive Summary – Background –SCR 108 Creating 

the Task Force” pg. 2: 

Mr. Roberts said that the Report Draft erroneously lists a 

CSFTF Meeting as occurring on December 6, 2010. Mr. Roberts 

said he will delete this reference from the Report Draft. 

C. RE: “Executive Summary – Background – Issues that were 

considered by the Task Force” pp. 3 - 5: 

Mr. Roberts said that pending summaries of the November 

29 and December 13 CSFTF Meeting Minutes will be inserted at 

the end of the Report Draft’s current short summaries of CSFTF 

Minutes, pp. 3 – 5. 

In response to a request during the August 16, 2010 CSFTF 

Meeting, a status update of Senator Takamine’s Work Group 

Report (hereinafter referred to as the “ Work Group Report”) was 

provided at the September 1, 2010 CSFTF Meeting. 

The State of Hawaii Charter School Funding Task Force 

Status of Recommendations contained in “Understanding Public 

School Funding, Fiscal Year 2009 – 2010” is contained in the 

Appendix to the Report Draft. On page 4 is an additional list of 

follow-up issues arising during the September 1, 2010 CSFTF 

Meeting. 

Regarding the September 28, 2010 CSFTF Meeting that 

requested reports which presented the ways in which other states 

were addressing the issue of CS facilities funding, the 2010 

Charter Schools Facility Landscape (Local Initiatives Support 

Corporation, June, 2010) will be included in the Appendices to the 

Charter Schools Funding Task Force Final Report To the Hawaii 

State Legislature. 

63


Regarding the October 26, 2010 CSFTF Meeting, which 

discussed presentations delivered by CS stakeholders, Mr. Roberts 

will insert a summary of Mr. Nahale-a’s PowerPoint presentation 

in space currently marked by the phrase “INSERT MORE HERE”. 

Mr. Roberts will then distribute this summary to CSFTF 

members. This summary will also be included in the Appendices 

to the Charter Schools Funding Task Force Final Report To the 

Hawaii State Legislature. 

Regarding the November 15, 2010 CSFTF Meeting 

discussion of funding formulas as they affect conversion CS, Mr. 

Roberts will further summarize additional concerns raised on 

November 15 as well as those raised at today’s meeting. 

D. RE: “Executive Summary – Background – Survey of Facilities 

Funding for Charter Schools in Other States” pg. 5: 

Mr. Roberts noted that the issues summarized on pp. 4-5 

are very brief. 

E. RE: “Executive Summary – Background – History of Facilities 

Funding for Charter Schools in Hawaii” pg. 6: 

As per the two paragraphs contained in this section, Mr. 

Roberts noted that the State of Hawaii has provided direct facilities 

funding to CS in two fiscal years only: FY 2006 – 2007, and FY 

2010 – 2011, 

F. RE: “Executive Summary – Findings” pg. 6: 

Regarding the use of the word “bias” in this section’s 

second paragraph, Mr. Roberts reported that Mr. Brese suggested 

that the word “variation” be substituted for the word “bias”. Mr. 

Roberts said he agreed with Mr. Brese’s suggestion, and that the 

word “variation” will replace the word “bias” throughout this 

paragraph. 

Regarding the third paragraph on pg. 6, Mr. Roberts stated 

that this paragraph is “new from the last time we met.” Mr. 

Roberts further noted that he and Mr. Brese had discussed this 

finding at today’s meeting prior to the Call to Order, and that this 

finding had likewise been thoroughly discussed during CSFTF 

Meetings on September 1 and September 28. 

Mr. Roberts has drafted an additional Finding which does 

not appear in the Report Draft. This Finding reads as follows: 

“The Task Force finds that in the 2010 Legislative Session, Charter 

School operating funds, calculated per statutory formula, were 

redirected per Budget Proviso to provide a funding source for 

64


Charter School facilities. This had the effect of decreasing the 

Charter School operating funding by a like amount.” Mr. Roberts 

stated that he will further refine the language of this Finding, but 

that the gist of this Finding is as per his current draft. 

Mr. Roberts stated that this Finding addresses the fact that 

CS FY 2010 – 2011 facilities funding is coming out of the 

calculation of operating funds for CS FY 2010 – 2011. 

F. RE: “Executive Summary – Recommendations” pg. 7: 

As per Section (1), Mr. Roberts noted that no changes will 

be made to this Section. 

As per Section (2), Mr. Roberts stated that routine DOE 

Repair and Maintenance budget for Neighbor Island public schools 

should be part of the per-pupil funding formula for CS operations. 

Mr. Roberts stated that he will further clarify the language of this 

paragraph. 

G. RE:” Executive Summary – Remaining/Unresolved Issues” pg. 

7: 

Regarding this section, Mr. Roberts stated that most of the 

issues listed herein echo those concerns listed in the Work Group 

Report. Mr. Roberts stated that he will strike this paragraph’s 

reference to Driver’s Education Insurance Fees because “as Mr. 

Brese mentioned at an earlier meeting, charter school students do 

have access to that program.” 

F. RE: “Signatures” (pg. 8) and “Appendices” (pg. 9): 

Regarding the Appendices, Mr. Roberts stated that this 

Section will contain all the reports received by the CSFTF. 

c. General discussion regarding draft CSFTF report (Open Discussion) 

Before Mr. Roberts opened the floor to General Discussion of the Report 

Draft, Mr. Hirakami noted that CS student access to Driver’s Education 

programs is “severely limited” and that CS students are on a “long waiting 

list.” Mr. Roberts then formally opened the floor to discussion. 

In response to Ms. Tschumy’s question as to whether or not he thought 

Driver’s Education Fees should be considered further in the Report Draft, Mr. 

Hirakami stated that there is an overwhelming demand for available Driver’s 

Education slots. Mr. Hirakami cited the example of Pahoa CS, where 700 

drivers – age CS students have access to only one available slot. 

65


After further CSFTF discussion regarding the availability of CS Driver’s 

Education slots, Mr. Hirakami stated that there are “bigger issues” that 

warrant consideration. As an example, Mr. Hirakami cited the Report Draft, 

pg. 1, Item 2, which referenced the Department of Budget & Finance’s 

methodology used in calculating CS budgets. Mr. Hirakami then recapped the 

circuitous process of CS funding, beginning in the CSAO and ending in the 

Legislature. 

Mr. Hirakami stated that since the purported aim of the CSFTF is consistency 

in CS funding, he would like to see a history of Budget & Finance CS 

calculations and resulting CS funding. Mr. Hirakami asked if a report of this 

nature has been submitted to the CSFTF. Mr. Roberts stated that such a report 

has not been submitted to the CSFTF, and that he hoped that CSFTF Budget 

& Finance member Neil Miyahira would attend today’s meeting, and provide 

this additional clarification. Mr. Roberts said that if Mr. Miyahira did not 

attend today’s meeting, that he would contact Mr. Miyahira in this regard. 

Ms. Love stated that at the last CSFTF meeting, clarification of the above 

issue regarding Budget & Finance methodology regarding CS funding was 

one of two outstanding items requested by the CSFTF. 

Mr. Hirakami reiterated that CS want a consistent comprehensive formula that 

CS can use to plan their budgets. 

Regarding possible recommendations to be included in the Report Draft, Mr. 

Hirakami referenced federal funds that displace State of Hawaii general and 

operating funds. Mr. Hirakami stated that these funds should be 

“proportionate to the Department.” 

Mr. Roberts and Mr. Hirakami then discussed the fact that these federal funds 

will no longer be included in the State of Hawaii general funds. 

Chair Oshiro referenced a legislative colleague who requested clarification 

regarding the Report Draft’s recommended CS facilities funding formula. 

Chair Oshiro’s colleague stated that the use of this facilities funding formula 

will result in a State of Hawaii commitment of $7,000,000.00. 

Chair Oshiro’s colleague requested clarification regarding “conversion” CS. 

In particular, this colleague mentioned several CS, including Wailalae, 

Mamaile, Lanikai, and the U.H. Lab School. 

66


Chair Oshiro asked if these schools are “DOE facilities”, and, if so, how will 

the Report Draft’s facilities funding formula affect these schools’ facilities 

budgets. 

Mr. Roberts replied that the University of Hawaii is charging the U.H. Lab 

School to lease its facility, and said that the figure he had heard regarding the 

amount of this lease rent cost is $ 100,000.00 per year. 

In response to a question as to the reason why conversion CS budgets are 

carved out of the proposed CS facilities funding formula, Mr. Brese stated that 

conversion CS budgets are “taken care of” by the DOE. These DOE 

allocations are contained within the “EDN 400 bill to help with repairs and 

maintenance.” 

Mr. Roberts added that allocations for conversion CS are also contained 

within DOE CIP budgets. 

Ms. Love stated that she wants to include conversion CS in the last 30% of the 

statute allocations is because of conversion CS’s “substantial costs.” Ms. 

Love noted that conversion CS are generally large facilities and the DOE 

doesn’t pay for the cost of conversion CS’ grounds keeping and utilities costs. 

Ms. Love referenced the statutory provision that the 30% remaining after 70% 

of available funding is allocated to start-up CS “are to be used ‘as needed.’” 

Chair Oshiro requested clarification regarding the facilities status of the 

following CS and CS learning sites: 

Hakepuu Learning Center (at Windward Community College) 

Halau Ku Mana (in Makiki Forest and at Atherton Center) 

Hawaii Tech Academy (a “virtual school”) and a similar “virtual school” 

located on Kauai 

Myron B. Thompson Virtual School & Classroom (a “virtual school”) 

West Oahu Academy 

Halepuu Learning Center (at Windward Community College): 

Ms. Love stated that Halepuu occupies various locations. Halepuu is partially 

located on the WUCC campus as well as on other sites. Regarding the 

school’s facilities status, Ms. Love stated that Halepuu incurs facilities costs 

on all sites. Mr. Roberts provided a brief summary of the school’s eviction 

and financial history. 

Halau Ku Mana (in Makiki Forest and at Atherton Center): 

Ms. Tschumy directed Chair Oshiro’s question to CSFTF Guest Patti Conan, 

Chair of Halau Ku Mana CS. 

67


Ms.Conan described Halau Ku Mana’s current use of double-wide trailers 

with asbestos contamination, leaky roofs, and a one-year life expectancy. 

Ms. Conan stated that Halau Ku Mana is currently situated in the Makiki 

Forest on lands administered by the State of Hawaii Department of Land and 

Natural Resources. 

Ms. Conan stated that Halau Ku Mana makes a yearly $1 sublease payment 

for land use only, in addition to any rental costs for trailers that have market 

value. 

Ms. Conan stated that Halau Ku Mana’s yearly maintenance costs cannot 

currently be calculated, as those costs are tied to an ongoing search for a new 

instructional site and additional trailers. 

Hawaii Tech Academy (a “virtual school”) and a similar “virtual school” 

on Kauai: 

Mr. Roberts and Ms. Tschumy stated that while Hawaii Tech Academy is a 

“virtual school” in some respects, the school also occupies and uses 

substantial office space in downtown Kakaako, and thus incurs lease-rent 

costs. 

In regards to the Kauai “virtual school,” Mr. Roberts and Ms. Tschumy said 

that like Hawaii Tech Academy, this “virtual school” also incurs lease-rent 

costs for its classroom site. 

Myron B. Thompson Virtual School & Classroom (a “virtual school”): 

Mr. Roberts and Ms. Tschumy stated that this CS likewise incurs significant 

lease-rent costs through the school’s use of actual classroom space in 

downtown Honolulu. 

West Oahu Academy: 

Mr. Roberts and Ms. Tschumy stated that this CS likewise incurs significant 

lease-rent costs. 

Chair Oshiro asked if the preceding information has been provided to the 

CSFTF. Mr. Roberts replied that this information has been compiled, and will 

be provided shortly to all Task Force members. 

Chair Oshiro asked Mr. Roberts if Mr. Roberts has also compiled “all the 

costs” relevant to CS facilities funding issues. 

Mr. Roberts stated that he is in the process of gathering this information. Mr. 

Roberts emphasized that this information is the requested “Budget Proviso” 

information. Mr. Roberts added that a “new element” in this Budget Proviso 

68


information concerns the inclusion of CS “facilities, resources, and costs,” 

which will be the actual data from FY 2009 -2010. 

Chair Oshiro asked if any additional CS occupy state-owned lands, such as 

those CS which are situated in Makiki Forest and on the WUCC campus. Mr. 

Roberts answered that he is unaware of any other additional CS that are 

likewise situated on state-owned land. 

Chair Oshiro stated that the CSFTF and the Charter Schools Funding Task 

Force Final Report to the Hawaii State Legislature must address the 

following list of questions regarding the facilities status of each CS: 

The location of the CS’s facilities (e.g., which island, which city, street 

address, etc.) 

The owner of the land on which the CS facilities are located (e.g., federal, 

state, county, private, etc.) 

The builder responsible for the construction of the CS facilities, and the nature 

of the CS facilities (e.g., brick-and-mortar, trailer, etc.) 

The acquisition cost of the CS facility, the terms of the CS lease-rent or other 

contractual agreement, and the life expectancy of the facility. 

Chair Oshiro requested information regarding CS student access to intramural 

sports programs at non-CS or DOE schools. 

Mr. Hirakami responded that Myron B. Thompson CS does not have access to 

DOE intramural sports because this CS is not located in a school district. Mr. 

Hirakami added that CS on Neighbor Islands do not have access to all sports. 

Mr. Hirakami offered the example of Pahoa CS, which does not offer soccer, 

baseball, or football. Mr. Hirakami noted that lack of CS sports programs 

presents an obstacle to those Neighbor Island CS students whose only hope of 

attending college is through a sports scholarship. 

Ms. Love added that the CSAO has worked “for a long time” to ensure CS 

student participation in sports. The solution that has evolved is that a CS 

student must play his or her chosen sport in the DOE school located closest to 

the CS student’s school. 

Chair Oshiro asked if the above “solution” is a “rule or a law.” 

Mr. Hirakami responded that the governing law is “brief”, and relates to CS 

inclusion in a “complex area”, which refers to a geographical area 

encompassing a DOE elementary, middle and high school. 

69


Ms. Conan stated that an additional burden for CS regarding CS sports 

participation is the requirement that all CS pay for OIA Insurance yet excludes 

all CS from a share of OIA funds distributed to DOE schools. 

Chair Oshiro and other CSFTF members discussed additional difficulties 

faced by CS in regards to sports participation, but did not reach a clear 

consensus on this issue other than the decision not to pursue the issue as a 

legal challenge. 

Returning to the Budget Proviso developed in the last legislative session, and 

the resulting allocation of $197 per child, Chair Oshiro asked Mr. Roberts if 

the CSAO has developed a distribution methodology for these funds. 

Mr. Roberts replied that the CSAO has developed a policy and a procedure for 

distributing these funds. Mr. Roberts said the distribution method begins with 

the calculation of start-up CS enrollment, divided by total CS enrollment. If 

the resulting number is at least 70%, then this percentage goes to start-up CS 

in “the amount that is earned.” As an example, Mr. Roberts referred to the 

figure of $1,949,000.00, and stated that this figure assumes an enrollment of 

9,668 students. “Earnings” are calculated based on the actual October 15 CS 

enrollment figures, so if the actual October 15, 2010 enrollment is 9.026 

students, the remaining amount is put aside. A new calculation takes the 

actual October 15, 2010 CS enrollment figure of 9,026 times the $197 per 

child allocation. This results in approximately $1,735,000.00. The next 

calculation divides start-up CS enrollment by total CS enrollment, which 

results in a start-up CS share of greater than 70%. The resulting figure of 

greater than 70% goes to the start-up CS as a per-pupil amount, and the 

remaining amount “that is earned” goes to all CS on a per-pupil basis. 

Mr. Roberts added that the CSRP has approved this methodology. 

Chair Oshiro asked if the above methodology is similar to the CSFTF Report 

Draft facilities funding formula. 

Mr. Roberts answered that the CSFTF Report Draft’s recommended facilities 

funding formula does not address distribution of CS facilities funds. 

Chair Oshiro requested further clarification regarding the practicality of this 

funding formula, and indeed of all CS funding formulas, because these 

allocations are determined irrespective of actual CS funding needs. 

70


Mr. Hirakami observed that extensive FRP review is required to adequately 

assess actual CS funding needs, and that there is no administrative personnel 

available to conduct this review. 

Chair Oshiro stated that the subjectivity of standard needs-based assessment 

can be countered through the use of objective criteria such as CS facility lease 

rent costs on various sites. Mr. Roberts that these considerations might make 

CS needs-based funding more objective. 

Chair Oshiro stated that greater CS accountability can be achieved using 

needs-base assessments rather than by using arbitrarily imposed formuladriven 

allocations. 

Ms. Love and Mr. Roberts stated that CS administrators preferred the current 

70%/30% funding allocations as an objective methodology for CS allocations. 

Mr. Roberts added that the 30% funding allocation is a needs-based 

allocation. Ms. Love stated that CS administrators have long maintained that 

receipt of per-pupil funding is the basis for any other allocation system. 

Chair Oshiro noted that his legislative colleagues will likely insist the CS 

funding be apportioned on a needs basis. Chair Oshiro added that formula 

funding may create a policy that ties the hands of the CSAO when it attempts 

to fund CS on a needs basis. 

Mr. Roberts offered to include Chair Oshiro’s observations as a 

recommendation. 

Ms. Love stated that the allocation of CS funding on a needs basis can be 

reviewed by the CSRP. Mr. Roberts agreed that this could be presented as a 

recommendation, and that the methodology now is “not needs-based, but 

formula-based.” 

Mr. Miyahira observed that using the DOE budget for debt service as a 

component in the proposed CS facilities funding formula is inconsistent 

because the DOE’s debt-service budget is “not a stable number.” 

Mr. Roberts noted that the CSFTF had considered using a 5-year average of 

DOE debt service amounts as a facilities formula component. 

Mr. Miyahira reiterated that CS rent components, repair and maintenance 

costs, and other criteria are better ways of addressing CS facilities funding 

needs. 

71


Mr. Roberts asked Mr. Miyahira if he was saying that CS funding should not 

be based on a formula for appropriations, but that all allocations rather be 

“needs-driven,” 

Mr. Miyahira answered that CS costs variables can be standardized and 

projected by using general measurements of a given area’s average rent 

component, the average square footage requirements for a given educational 

facility, repair and maintenance costs which can include DAGS 808, and other 

similar measurements. Mr. Miyahira stated that these general measurements 

are estimates that can be factored into a facilities repair and maintenance 

formula. 

Mr. Hirakami stated that CS CIP needs can be derived from typical classroom 

construction costs, a given area’s lease rent costs, and the resulting yearly perpupil 

costs. 

Mr. Miyahira stated that Mr. Hirakami’s example presented a measurable 

needs-based facilities funding rationale. 

Mr. Roberts raised the issue of debt service, and bond payments. Mr. Roberts 

said bond payments represent a CS facilities costs over time. 

Mr. Miyahira and Mr. Roberts discussed bond payments as CS facility debtservice 

proxy numbers. Mr. Roberts stated that any methodology addressing 

apportionment must be completed in 4 days in time to meet the deadline for 

completion of the Charter Schools Funding Task Force Final Report To the 

Hawaii State Legislature. 

Chair Oshiro reminded the CSFTF that the new Abercrombie Administration 

is another factor to consider in submitted Task Force recommendations in the 

Charter Schools Funding Task Force Final Report to the Hawaii State 

Legislature. 

As regards Items 1 – 4 listed on Page 2 of the Report Draft which must be 

addressed in the Charter Schools Funding Task Force Final Report To the 

Hawaii State Legislature, Mr. Roberts stated that the CSFTF has reviewed 

and addressed Items 1, 3, and 4, but has not addressed Item 2. Mr. Roberts 

asked Mr. Miyahira if Mr. Miyahira can draft a response from the Department 

of Budget & Finance that addresses Department methodology for calculating 

CS per-pupil allocations, and then submitting that response in the Charter 

Schools Funding Task Force Final Report To the Hawaii State Legislature. 

72


Mr. Miyahira stated that there is not enough time available to prepare the 

requested draft. 

Mr. Hirakami said that the Department of Budget & Finance should have 

copies of past submitted CS budgets, as well as records showing how these 

budgets were calculated. 

Mr. Miyahira stated that the Department of Budget & Finance follows the 

statute in that regard. Mr. Miyahira stated that a Dept. formula component is 

official CS projected enrollments. 

Mr. Hirakami noted that there is a discrepancy between historical budgets 

provided to the CSFTF by the CSAO and budgets provided by the Department 

of Budget & Finance. 

Chair Oshiro stated that a legislative colleague requested an answer as to 

whether the CSFTF is going to make a specific recommendation “at this point 

in time.” 

Chair Oshiro noted that this colleague raised the issue of a CSFTF 

recommendation because “people are going to react to it.” 

Chair Oshiro observed that an aggressive proposal will be scrutinized and 

debated during legislative deliberations. Chair Oshiro said he could not 

predict whether such a proposal would be accepted by either House or Senate 

Education Chairs. Chair Oshiro also observed that the reaction of the 

incoming Administration, as well as that of a reconstituted Board of 

Education, is likewise difficult to predict. 

Mr. Hirakami stated that CS want “a holding place”: a comprehensive CS 

funding formula that is “sustainable.” Mr. Hirakami reminded the CSFTF that 

this year, CS have been told to get their facilities funding from CS per-pupil 

funding. Mr. Hirakami stated that the Department of Budget & Finance CS 

funding appropriations have “hurt” CS because they are administered in lieu 

of a funding formula. Mr. Hirakami referenced $3,500,000.00 in 

appropriation funds that are unavailable to CS without a funding formula. Mr. 

Hirakami stated that Budget & Finance appropriations to CS are acceptable as 

long as the CS have a predictable funding formula. 

Chair Oshiro reminded CSFTF members that he is only one of 76 legislators. 

Chair Oshiro advised the Task Force to keep CS concerns on the forefront of 

73


the legislative agenda, and that this might best be achieved by taking a lowkey 

approach. 

Ms. Tschumy reiterated Mr. Hirakami’s concerns. Ms. Tschumy stated that 

the CSRP hears from CS administrators that they cannot run their multimillion 

dollar concerns without the ability to draw up funding plans. Ms. 

Tschumy stated that any CS funding formula, even if it is flawed, is preferable 

to no funding formula at all. Ms. Tschumy said that she could not speak for 

the CSRP, but that she “has no problem at all with needs-based facilities 

funding.” 

Ms. McCorriston agreed with Ms. Tschumy regarding the necessity of a CS 

funding formula, and stated that adequate public-school and CS funding is a 

“social justice issue.” 

Chair Oshiro stated that all politics are local, and observed that those 

legislators who have CS in their districts are more likely to champion CS 

concerns. 

Mr. Roberts reminded the CSFTF that the bulk of the Charter Schools 

Funding Task Force Final Report to the Hawaii State Legislature must be 

completed at the end of today’s meeting. 

Chair Oshiro stated that report deadlines notwithstanding, it would be best if 

the Charter Schools Funding Task Force Final Report to the Hawaii State 

Legislature did not “overreach” its legislative audience. Chair Oshiro stated 

that he would like to have more time to adequately review the language of the 

Charter Schools Funding Task Force Final Report to the Hawaii State 

Legislature before it is submitted, and put the document in the context of who 

will be sitting at the legislative bargaining table. 

Mr. Hirakami reiterated that CS need a “holding place’ in the current 

depressed economic climate. 

Ms. Love agreed that the Charter Schools Funding Task Force Final Report 

to the Hawaii State Legislature is a recommendation, and that the real battle 

for CS funding is in the recommendation’s passage through the legislature. 

Ms. Love asked Chair Oshiro if there currently is “pushback” against such 

recommendations, and asked if different language or a different perspective 

used in the document might create a more favorable reception. 

Ms. Love stated that regardless, the Charter Schools Funding Task Force 

Final Report to the Hawaii State Legislature must be submitted to the 

legislature on schedule. Ms. Love asked Chair Oshiro the best way to frame 

74


the document, and the most advantageous way to submit the document’s 

requested information to the Legislature. 

Chair Oshiro stated that the Charter Schools Funding Task Force Final 

Report To the Hawaii State Legislature “shall be include, but not be limited 

to, detailed information” relating to actual CS facilities-related expenditures 

for the last considered Report Year, and the method of funding. 

Mr. Roberts stated that this information was contained in the Budget Proviso. 

After further discussion by the CSFTF regarding pending recommendations, 

Chair Oshiro said that he envisions the document as a spreadsheet itemizing 

CS costs, CS district locations, CS expenditures, CS lease-rent costs, and 

other payments. 

Mr. Roberts confirmed that this information is just what the CSFTF is doing. 

Mr. Roberts said that he has no other choice but to leave the recommendations 

as it is now formulated in the Report Draft. Mr. Roberts asked Chair Oshiro is 

the Charter Schools Funding Task Force Final Report to the Hawaii State 

Legislature should contain a CSFTF signature page. Chair Oshiro answered 

that a signature page was not indicated. 

Chair Oshiro stated that the Charter Schools Funding Task Force Final 

Report to the Hawaii State Legislature should be completed in “another 

week,” and requested that the CSFTF meet again in one week’s time. 

Mr. Roberts scheduled the next meeting of the CSFTF for December 20 th , 

2010, at 1:30 PM, in Room 437 of the Hawaii State Capitol. 


No amendments were proposed. 


The next CSFTF Meeting is scheduled for December 20, 2010, at 1:30 PM, in 

Room 437 of the Hawaii State Capitol. 


No Agenda Items were proposed for the Next CSFTF Meeting. 

g. New Business 

No New Business was introduced. 


No Other Items were considered. 

75


h. Next Meeting 

The next CSFTF Meeting is scheduled for December 20, 2010, at 1:30 PM, in 

Room 437 of the Hawaii State Capitol. 

i. Adjournment 

The Meeting adjourned at 3:20 PM 

76





1:38 PM – 2:24 PM 


State Capitol 

415 Beretania Street 



Task Force Chair Representative Marcus Oshiro called the meeting to order at 1:38 

PM. 

2. Members: 

a. Chair of the Task Force: Representative Marcus Oshiro – House Finance 

Chair 

b. James Brese – DOE CFO 

c. Bob Roberts – CSAO CFO 

d. Neil Miyahira (in place of Kalbert Young) – Budget and Finance 

e. Carl Takamura – Charter School Review Panel 

f. Steve Hirakami (in place of Alapaki Nahale-a) – Hawai’i Charter School 

Network 


a. Approval of Minutes from December 13, 2010 Meeting 

Page 4 – Change the school name to Pahoa High School instead of Pahoa 

Charter School 

Strike the reference to the number of students at Pahoa High School – 

There are a TOTAL of 700 students, and one SLOT per semester out of 

about 20 available slots. 

Page 6 –The Charter School named Hakipu’u is misspelled several three 

times on page 6 (see Halepu’u and Hakepu’u). 

Mr. Roberts made a motion to accept the minutes with the revisions. 

Mr. Takamura seconded the motion 


Representative Oshiro went over the following Agenda: 

Presentation 

General Discussion 

Amendments to draft 

Determine Date 

Agenda Items 

77


c. Presentation of Revised Recommendations – Needs-Based facilities formula 

Mr. Hirakami presented his research, which can be found on the sheet titled, 

“Average Cost per Student.” 

Mr. Hirakami stated that he conducted research off of the Internet and has 

used national averages to come up with a starting point. 

In his research he could not find statistics for square foot per student in the 

State of Hawai’i. 

Mr. Hirakami found the most statistics for Elementary School and Secondary 

School. 

In regards to the spreadsheet titled “Average Cost per Student” 

Mr. Hirakami used seven different samples from his research. 

Mr. Hirakami used the lowest square footage statistics to illustrate the 

average cost per student (73 square feet for Elementary Schools and 

95 square feet for Secondary Schools). 

Mr. Hirakami also estimated the rental rates for rural and urban areas 

($1.50 and $2.00 per square foot per month, respectively). 

This is how he estimated the annual rate per student over 10 months 

($1,095.00 for rural students and $1425.00 for urban students). 

Also gave the statistics for HAAS: 16,200 square feet with the current 

rate of $1.15 (note that HAAS’s lease for their land is for 12 months 

instead of 10 months). 

However, if you use the average given of $1.50 for rural land the 

annual cost is noted at the end of the spreadsheet. 

Mr. Hirakami also noted that he compared the statistics with another Charter 

School on Maui and the annual cost per student was $1,200 per year for 

120 students. 

This is an alternative formula – more needs based. The calculation would 

need to be done for each charter school. There would be to be some kind of 

standard square footage – someone would determine the baseline. Each 

Charter School would have a net unfunded square footage and then present 

that number. 

In the last meeting – looked at a proposed formula (composition formula for 

non-charter school facilities divided by the number of students). Mr. Roberts 

described DOE budget which is a debt service driven formula. The new 

formula takes it more to a needs based approach – trying to standardize where 

they can. The new formula is looking at how many square feet are needed for 

the students and using average square footage rates. How many square feet do 

they need at the particular school? Make adjustments if the state is already 

providing money for square feet at that school. 

The floor was open for discussion: 

Summary: 

78


The discussion was based around the new formula presented by Mr. Hirakami 

and how it could be used by the Charter Schools. There were questions brought 

up about how the formula would work for virtual schools and how this would 

impact the smaller schools. There was also the issue of figuring out the square 

footage – it was suggested to ask Randy Moore for those numbers. It was decided 

that they should describe their concerns and then the Charter School Review 

Panel could take those into account. Then leave it up to the Charter School 

Review Panel to deal with the specific resources. Then the Charter School and 

the Charter School Review Panel with the other stakeholders would make a 

decision. Mr. Roberts drafted wording to be used in the report that everyone 

agreed on. The discussion also covered whether or not this should be taken to the 

Legislature, a topic that has been part of previous discussions. It was reiterated 

that no departments are guaranteed money in the budget, however it was agreed 

that this is a good start for the 2011 session. 

Verbatim: 

Mr. Miyahira brought up the question of how virtual schools will be handled 

with the new formula 

Mr. Roberts responded that both Myron B. Thompson and Hawaii Technology 

Academy are hybrid types of schools. Both are leasing square footage 

including classroom space. 

Mr. Hirakami also explained that the formula could be adjusted for those 

particular schools. 

Mr. Miyahira responded that the students needs to be taken into account with the 

square footage to get some kind of rate. 

Mr. Roberts said that they would need to apply some kind of factor for the 

schools that have virtual classrooms. 

Mr. Miyahira asked about how conversion schools would be handled? 

Mr. Roberts explained that the needs based formula would still be used and then 

a net square footage would be calculated based on the facilities provided by 

the State of Hawai’i. 

Mr. Takamura thought that there were standards for square footage and 

classroom development, standards for facilities. 

Mr. Miyahira agreed that there are standards for classroom size. 

Mr. Hirakami also agreed that there are standards for square footage; he just was 

unable to find them during his research. 

Ms. Love recommended that they ask Randy Moore for those numbers. 

Mr. Hirakami wanted to make sure that the square footage is not just for the 

classroom size and should include other facilities like the gymnasium. 

Mr. Roberts also mentioned that this is more complicated than the previous 

formula because it takes into account the size of the school. 

Mr. Takamura wanted to make sure that reflecting from the last meeting that this 

proposal addresses the needs based formula. 

Representative Oshiro agreed that it addressed the physical plant and square 

footage. He suggested that the Charter School Administrative Office with the 

Review Panel should come up with an appropriate number. 

79


Mr. Takamura agreed that the review panel should come up with standards to 

give to the schools. 

Mr. Hirakami wanted everyone to keep in mind that there are 26 different types 

of schools and the funding for those different types of schools could be 

different depending on how the schools are set up. (ie. Virtual schools). 

Mr. Miyahira brought up the small school ratio again, saying that all this is going 

to do is add to the cost of Charter Schools. He also brought up the point that 

people are going to look at this and say that the DOE is closing schools of the 

same size as the Charter Schools. 

Mr. Roberts explained that the smaller Charter Schools are funded by the same 

formula as the larger Charter Schools and the DOE schools. The smaller DOE 

schools are being closed because their margin is higher. 

Mr. Takamura commented that this happens to both big and small DOE schools. 

Mr. Roberts also remarked that the cost of administration is the same at DOE 

schools no matter the size of the school. 

Mr. Takamura explained that the funding has to fit the need. The problem that 

the DOE is facing is that the small schools are in bigger facilities. 

Mr. Miyahira asked if a formula like this be enough to set the budget? 

Mr. Hirakami agreed that more research would need to be done on this issue, 

however this could be comprehensive and accountable enough. 

Mr. Miyahira added and from this we could make a decision on whether or not 

to lease. 

Representative Oshiro stated that some discretion has to be given to the Charter 

Schools. 

Mr. Takamura asked if they could describe their concerns and then the Charter 

School Review Panel could take those into account. Then leave it up to the 

Charter School Review Panel to deal with the specific resources. Then the 

Charter School and the Charter School Review Panel with the other 

stakeholders would make a decision. He also commented that this gives a 

good starting point instead of just talking about the different concepts. 

Mr. Hirakami also remarked that they could actually do a report to the 

Legislature. 

Mr. Roberts drafted the following for the report: “The Charter School 

Administrative Office and the Charter School Review Panel in consultation 

with other stakeholders will develop a needs based methodology. Describe 

the formula that refers to this process as the appropriation methodology. The 

Charter School Administrative Office and the Charter School Review Panel 

will decide how the funds will be distributed.” 

There was agreement from all on the wording. 

Mr. Hirakami brought up the issue of legislation again. 

Mr. Roberts asked Representative Oshiro if there could be some kind of 

legislation drafted. 

Representative Oshiro stated that there had been no previous discussion about 

any kind of language. 

Mr. Hirakami asked even with a formula would the funding be a reality? He is 

afraid that the Legislature will not fund the Charter Schools. He asked if it 

could be part of the financing formula or made part of the budget. 

80


Representative Oshiro reminded everyone that no department is guaranteed any 

kind of budget, even the Department of Health. Just trying to be realistic 

and move this thing forward. Everyone would want better facilities; there 

is just no guarantee. 

Mr. Hirakami explained that health and safety is the reason that the Charter 

Schools want to get money, he told the story of how tents had to be put up 

at one school to teach the students. He also referred to Article 10, which 

says that schools should be supported adequately. 

Mr. Takamura said that if the law says “shall” then the Legislature only has to 

give back what they have. If there is not enough money, then it is not 

going to happen. Give out the formula. 

Mr. Hirakami asked if this would be enough to go into the Governor’s budget? 

Representative Oshiro replied that Mr. Miyahira said that they are a new 

administration so they are starting the budget new. This is no the end all, 

be all, this is a pretty good place to start for the 2011 session. He suggested 

that they come up with a strict formula so that no money is wasted. 

d. General Discussion regarding draft CSFTF Report 

There was agreement that it needs to be drafted by next week Tuesday, 

December 28, 2010. 

Mr. Miyahira remarked that is there is a lot of ambiguity; they will have a hard 

time. 

Mr. Roberts suggested leaving the concepts in the report. 

Representative Oshiro agreed to use broad language to get it in. 

Ms. Love asked for Budget and Finance’s way of coming up with formulas. 

She asked that they send the committee members the way that they came 

up the figures last year. 

Mr. Miyahira agreed to send out the spreadsheet with the numbers from last 

year. 

e. Amendments to draft CSFTF report 

Mr. Roberts will circulate the final draft by December 28, 2010 


None; This is the last CSFTF Meeting 




81


None 




The meeting was adjourned at 2:24 pm by Representative Oshiro. 

82

Understanding Public 

School Funding 

Fiscal Year 2009-2010 

FINAL 

Information collected in a series of 

meetings led by Senator Dwight Takamine 

12/16/09 – 5/3/10

This presentation is a compilation of 

documents received from the Department of 

Education and analyzed in a series of 

meetings with Senator Dwight Takamine. 

Only a portion of the original documents are 

presented here, copies in their entirety are 

available upon request. 

After each document is a summary of 

findings and graph comparing DOE and 

Charter funding for fiscal year 2009-10. 

2

Charter School Facts: 

Public schools including charters cannot charge tuition 

Charters are bound by collective bargaining 

Charters are subject to NCLB and all State testing 

requirements 

Charters operate like a small business 

Charters must abide by state “health and safety standards” 

Principals are accountable for SPED/IDEA compliance yet 

have no authority over the distribution of resources 

Charter School Review Panel mandated to issue charters 

by the Attorney General, despite funding 

3

GOALS 

Clarify the distribution of funding for K-12 

education in Hawaii 

Identify any areas of inequity 

Develop solutions to ensure equity to all 

public school students 

Collaborate with the DOE to increase funding 

for all public schools in Hawaii 

4

HB 2200 State Budget 

EDN100 – School Based Budgeting 

EDN150 – Student Support Services (SPED) 

EDN200 – Instructional Support 

EDN300 – State & Complex Area Admin 

EDN400 – School Support 

EDN500 – School Community Services 

EDN600 – Charter Schools 

BUF745 – Retirement Benefits 

BUF765 - Health Premium Payments 

BUF725 – Debt Service Payments 

5 

Data from FY 2009-10 

Budget used in this report 

A – General Funds 

N – Federal Funds 

B - Special Funds 

W – Revolving Funds 

T – Trust Funds 

U – Interdepartmental 

V – ARRA Federal Funds

Per Pupil Base Comparison of all EDN General funds (A) 

8,000 

6,000 

4,000 

2,000 

- 

$5,270 

$6,043 

DOE Charter 

6 

Funding Categories we Explored: 

- EDN150 SPED 

- Federal Funds 

- Non General Funds 

- CIP & Debt Service 

State Allocation of General Funds in 

EDN 100,200,300,400,500,600 

Official Enrollment Counts on 

DOE 8/10/09 Charters 10/15/09 

Includes Furlough Savings Adjustments 

Actual Charter Per Pupil distributed $5753.18

Findings from EDN150 SPED Analysis 

Alloc To Prog ID Program Description FTE Appropriation 

Cent. Services 16204 Home/Hospital Instruction 1,266,792 

Cent. Services 47284 Families Helping Students 100,000 

State Offices 15497 Athletics Administration 4 305,447 

Complex Area 15673 CSSS Resource Teachers 40 2,590,395 

Complex Area 16764 Primary Prevention/Intervention 7 511,842 

School 25040 School Health Aides 270.8 6,399,603 

State Offices 25045 Student Support Services – Group Admin 3 365,191 

State Offices 25237 Student Support Section 9 657,445 

Of the $437 million in EDN150 funding 

$12 million was identified as Non SPED 

$41 million with inconsistent access to 

SPED programs by PCS students 

State Offices 28177 CSSS Support System 272,857 

Complex Area 46794 PCNC District Coordinators 7 273,994 

Cent. Services 15620 Social Workers 69 3,818,412 

Cent. Services 15686 School Based Behavioral Health 496 35,400,725 

Cent. Services 15698 School Based Mental Health Services 30 2,588,277 

State Offices 28178 Section 504 Implementation 1 421,899 

7 

Total Non SPED Funding Identified 12,743,566 

SPED programs with inconsistent access by PCS students 41,229,313 

Total Funding Identified 53,972,879

Amount 

Per Pupil Comparison 

8,000 

6,000 

4,000 

2,000 

Adding EDN150 – Identified “Non SPED” $ only 

$5,344 

$6,043 

DOE Charter 

8 

EDN 150 - Non Sped 

State allocation EDN 

100,200,300,400,500, 

600 

According to the DOE - 

Efforts are underway to 

provide PCS students 

with equality of access 

to these program funds

Findings from Federal Funding Analysis (not including SFSF) 

-Indirect cost rates: 2.1% to the SEA on Federal Formula Funding 

13.3% to the SEA on Discretionary Grants 

Grant No Grant Title Grant Period Grant Award Grant Type 

650045 NCLB Teacher and Principal Training Recruiting Fund (Title IIA) Teacher 

Quality State Grants 

7/1/09-9/30/10 13.622,554 Formula 

650111 NCLB Enhancing Education through Technology (Title II-D) 7/1/09-9/30/10 1,305,643 Formula 

ARRA Ed Tech Grant 2/17/09-9/30/10 3,209,375 Formula 

280000 NCLB Safe and Drug Free Schools and Communities (Title IV-A) State and 

Local Programs 

Of $208 million in Federal funding 

7/1/09-9/30/10 1,138,678 Formula 

Impact Aid Received - BFY 09 55,515,943 Application 

$ 72 million is for “eligible” students 

$ 64 million is for ALL students 

$ 63 million is EDN150 SPED 

$ 8 million is School Specific 

Department of Defense Received - BFY 10 3,135,473 Application 

Federal Funding for ALL students: 64,486,005 

20000 NCLB Title I Grants to LEAs (Title I-A) 7/1/09-9/30/10 43,230,443 Formula 

510000 NCLB Even Start-State Grants (Title I-B) 7/1/09-9/30/10 305,688 Formula 

550200 NCLB Migrant Education (Title I-C) Basic 7/1/09-9/30/10 957,584 Formula 

NCLB Migrant Education (Title I-C) Coordination Program 7/1/09-9/30/10 153,846 Formula 

No consistent system in place to 

distribute formula funds to charters or 

notify them of competitive grants. 

110100 Carl Perkins Vocational Ed. (WIA Title I-C) Basic 7/1/09-6/30/10 2,562,592 Formula 

Carl Perkins Vocational Ed. (WIA Title I-C) State Leadership 7/1/09-6/30/10 160,000 Formula 

Career Pathway System Development 7/1/09-9/30/10 41,586 Formula 

40000 NCLB Neglect & Delinquent Children (Title I-D) 7/1/09-9/30/10 289,304 Formula 

650901 ARRA- Title I Grants 2/17/09-9/30/10 16,585,937 Formula 

650048 NCLB English Language Acquisition, Enhancement, Achievement (Title III-A) 7/1/09-9/30/10 266,216 Formula 

09KSPHI001 Learn and Serve America 7/1/09-6/30/12 57,146 Formula 

09KSHI002 Stewards of the Islands 9/28/09-9/27/12 900,000 Application 

Federal Funding for “eligible” students: 71,943,471


Amount 

8,000 

6,000 

4,000 

2,000 

- 

Adding Federal Funds identified 

for ALL students only 

$5,722 

$6,391 

DOE Charter 

10 

Federal Funding 



100,200,300,400,500, 

600

Findings from Non General Fund Analysis 

Name of Fund EDN MOF Amount Source 

Driver Education Fund 100 U 3,401,667 Insurance Fee 

Federal Grants Search, 

Development, and Application 

Revolving Fund 

Hawaii School-Level Minor R&M 

Special Fund 

Non General Funds eligible for Charters: 6,939,522 

100 W 3,316,774 Federal Indirect Overhead 

400 B 221,081 State Individual Tax Returns 

Donations & Gifts 100 T 5,583,215 Impact Fees 

No system in place to 

access programs or funding 

11 

How can Impact Fees be 

made available to charters 

when their student populations 

are affected by developments?


Amount 

8,000 

6,000 

4,000 

2,000 

- 

Adding Non General Funds Identified 

$5,762 

$6,391 

DOE Charter 

12 

Special, Trust, Inter-Dep, 

Revolving Funds 




100,200,300,400,500,600

Construction in Progress (CIP) Detail & Debt Service 

3/15/09 –Discussion with: 

Legislature 

Dwight Takamine 

DOE 

Randy Moore 

CSAO 

Maunalei Love 

Bob Roberts 

KALO 

Taffi Wise 

Katie Benioni 

HCSN 

Steve Hirakami 

DOE Appropriations FY09-10 

CIP $225 million 

Debt Service $194 million

Amount 


8,000 

6,000 

4,000 

2,000 

- 

Adding Facilities Funding 

$7,066 

$6,734 

DOE Charter 

14 

Charters need a 

mechanism to 

access CIP funds 

Debt Service 

Charter portion = conversion schools 





General Funds EDN 

100,200,300,400,500,600 

Graph does not include CIP

Amount 

DOE & Charter Funding Comparison – FY 2009-10 

8,000 

6,000 

4,000 

2,000 

- 

$7,066 

Final Summary 

$6,734 

DOE Charter 

15 

Debt Service 

Total Per Pupil 

difference of $332 

Charter portion = conversion schools 





General Funds EDN 

100,200,300,400,500,600 

SPED & Federal Funding for 

“eligible” students not included- 

Services provided in lieu of funding. 

CIP also not included.

Table of Findings for FY 2009-10 

DOE Enrollment 170,830 

Charter Enrollment 8,098 

Appropriation Per Pupil 

EDN (General Funds excluding ARRA $) DOE Charter DOE Charter 

100 School Based 753,950,947 4,413 0 

200 Instructional Support 29,037,169 170 0 

300 State/Complex Admin 51,432,191 301 0 

400 School Support 184,814,106 1,082 0 

500 School Community Services 8,674,528 51 0 

600 Charter Schools 52,732,012 6,512 

Furlough Savings (127,702,886) (3,791,952) -748 -468 

Subtotal 900,206,055 48,940,060 5,270 6,043 

150 NonSped included in EDN150 12,743,566 75 0 

(N) Federal Funding to all students 64,486,005 2,812,141 377 347 

(B,T,U,W,) Special, Trust, Inter-dep, Rev. Funds 6,939,522 41 0 

CIP/Debt Service 222,786,956 2,783,044 1,304 344 

TOTAL FUNDING 1,207,162,104 54,535,245 7,066 6,734 

EDN150 – services provided in lieu of funding 404,000,994 

(N)Federal Funds – services provided in lieu of funding 138,983,703 

(B,T,U,W) Special, Trust, Inter-dep, Revolving Funds 79,884,812 

16

Summary of Fact Finding Effort 

Equity was not achieved with $547 million in 

Federal & EDN150 funding. Access to services 

& grant notification inconsistencies were 

identified. 

A $332 per pupil difference existed between 

the DOE and PCS. 

Charters need access to Impact Fees. 

Charters had no mechanism to access 

$225 million in facilities financing (CIP). 

17

How much is adequate per pupil funding? 

Amount 

16,000 

14,000 

12,000 

10,000 

8,000 

6,000 

4,000 

2,000 

- 

$16,338 NAIS Stats of Hawaii Independent Schools, 2010 

$10,117 Grant Thornton DOE Adequacy Study, 2005 

$7,066 $6,734 

DOE Charter 

18

Recommendations 

Create a reliable system to allow Charters access to federal 

competitive grant opportunities. 

Ensure that services provided in lieu of funding are equitable. 

Move Non-SPED funding within EDN150 to EDN100. 

Establish Charters as an LEA to access federal funding. 

Give Charters a proportionate share of facilities funding. 

Create a mechanism for post school opening funding 

adjustments. 

Educate Legislators and B&F on how the funding formula 

functions in relation to the budget appropriation. 

Collaborate with the DOE in advocating for adequate per 

pupil funding. 

19

Acknowledgements 

Mahalo to the following for their support in this effort: 

Senator Dwight Takamine and staff 

Department of Education 

Charter School Administrative Office 

Hawaii Charter Schools Network 

Charter School Review Panel 

Kamehameha Schools Ho’olako Like 

Office of Hawaiian Affairs

Charter Schools Funding Task Force APPENDIX 4 

Status Reports RE: Recommendations of the Work Group 

Status of Recommendations Provided by James Brese, CFO, DOE: 



Status of Recommendations Contained in “Understanding Public School 

Funding Fiscal Year 2009-2010” 

No. Recommendation Status 

1. Create a reliable system to allow Charters 

access to federal competitive grant 

opportunities. 

2. 

Ensure that services provided in lieu of 

funding are equitable. 

The Hawaii Department of Education (HIDOE) 

recently developed curriculum and implemented 

program manager training. We specifically 

determined to raise awareness of access to federal 

competitive grant opportunities with the program 

managers and DOE leadership. The program 

manager guidance materials include the following 

paragraph in the section on "Federal Programs - 

Special Considerations": Public Charter Schools 

Access to federal funds: IMPORTANT NOTE: 

Under USDOE regulations, charter schools 

are entitled to equal access to federal funds 

and/or the benefits of those federal funds. If 

schools are eligible to compete for a grant or 

other funding, be sure to send a hard copy of 

the invitation memo to the Public Charter 

School Administrative Office and all 

appropriate charter school principals (many 

of whom do not get Lotus Notes Memos & 

Notices). Training was held on June 23 and 

August 18 for program managers and DOE 

leadership. 

The superintendent, the CFO, and the assistant 

superintendent for OCISS have emphasized to the 

DOE complex area superintendents, district 

educational specialists (DES), and state-level special 

education (SPED) personnel that they have a 

responsibility to ensure that special education 

services are provided to the Charter Schools in their 

complex areas equitably in lieu of funding.



3. 

4. 

Move Non-SPED funding within EDN 150 

to EDN 100. 

Establish Charters as an LEA to access 

federal funding. 

5. Give Charters a proportionate share of 

facilities funding. 

6. Create a mechanism for post school 

opening funding adjustments. 

Agreement has been reached within OCISS, OFS- 

Budget Branch, and superintendent’s office to 

transfer non-SPED program IDs/funding within EDN 

150 to EDN 100 in order to allow these program 

IDs/funds to be considered in Charter School perpupil 

funding formula. These program IDs will be 

permanently transferred in the biennium budget 

process, and will be considered in any formula 

calculations for distribution of funds in the current 

fiscal year to ensure that Charter Schools have 

equitable access to these non-SPED funds. 

This recommendation has both pros and cons. 

Unofficial HIDOE discussions with USDOE officials 

have resulted in statements of caution before 

proceeding to ensure that all federal government 

requirements can be met by the Charter School 

Administrative Office as expected of an LEA. 

This is a policy determination that must be decided 

by the Legislature. One consideration is should 

Charter Schools be held to the same size/capacity 

standards as the HIDOE to ensure there is not a 

proliferation of small, non-fiscally viable schools. 

The interim superintendent of the HIDOE supports 

the implementation of weighted student formula 

and the principle of “Funding follows the child.” The 

HIDOE is willing to work with the Charter Schools and 

Legislature on a funding mechanism that grants 

equitable funding to both HIDOE and Charter 

Schools, if this is the decision of the Legislature. The 

HIDOE and Charter Schools agree on the comparison 

of similar funding sources (general funds and EDNs 

100-400 included, all other methods of financing and 

SPED funds in EDN 150 excluded) for inclusion in per 

pupil funding, with the two primary discussion points 

remaining being EDN 500 (Adult Education) and 

facilities funding. Again, both of these are policy 

determinations. 

Another significant issue of post school opening 

funding adjustments to be discussed is the 

accuracy/validation of statewide (both charter and 

non-charter school) student attendance/enrollment 

information and the timing of such enrollment 

counts, which will have a substantial impact on 

“funding follows the child.” This is the challenge of 

having separate information systems as well as the 

inconsistency of some of the data. 

7. Educate Legislators and B&F on how the This recommendation is being accomplished through



funding formula functions in relation to 

the budget appropriation. 

8. Collaborate with the DOE in advocating 

for adequate per pupil funding. 

Status of Recommendations Provided by Bob Roberts, CFO, CSAO: 

participation of educational stakeholders in the 

Charter School Funding Task Force. In addition, a 

meeting was held on the Big Island of Hawaii on 

August 23, hosted by Senator Dwight Takamine and 

attended by the interim superintendent of HIDOE, to 

inform Big Island legislators who have the highest 

concentration of Charter Schools in their districts 

about the results/recommendations contained in the 

“Understanding Public School Funding Fiscal Year 

2009-2010” 

The HIDOE is more than willing to collaborate with 

the Charter Schools in advocating at the Legislature 

for adequate per pupil funding for all students in 

Hawaii public schools. We have a common vision of 

student achievement and producing graduates that 

are career and/or college ready. 

Status Update on Recommendations from the “Understanding Public School Funding Fiscal Year 2009- 

10” Report 

The fifth recommendation of this report (page 23) is – “Give Charters a proportionate share of facilities 

funding.” 

The update to this recommendation is that in the Budget Act (Act 180, SLH 2010) Budget Proviso 39.1 

did provide appropriations for facilities funding for charter schools. Both formula based funding and CIP 

funding was appropriated. The total amount of the formula based appropriation is $1,909,049. This 

amount was calculated by multiplying the projected charter school enrollment (9,668) by the amount of 

facilities funding per pupil established in the proviso of $197. Note that the math on this calculation 

does not total exactly to the amount of the appropriation. 

Language in this proviso also establishes that the amount (of the appropriation) that exceeds $197 

multiplied by the actual October 15 enrollment shall lapse to the charter schools account within the 

state treasury. This proviso also contains language that the funds be distributed to the charter schools 

based on methodology developed by the CSAO and that the charter schools prepare a report that shall 

include a detailed breakout of actual facilities related expenditures for the last completed fiscal year and 

the method of funding. This report is required to be submitted by the CSAO to the legislature no later 

than twenty days prior to the start of the 2011 regular legislative session. 

An important note to this update is the amount of this appropriation ($1,909,049) was carved out of the 

operating funding appropriation calculation using the statutory formula for charter school operating 

funds. The formula used excluded DOE Debt Service and DOE CIP. The impact of this is that the carve out 

for charter school facilities came from a calculation that provided comparable funding for operations



between the two systems. By carving out $1.9M of operating funds for charter school facilities the 

amount of operating funds to charter schools was reduced. 

In addition, Act 180 included funding for two charter school CIP projects: One for a photovoltaic system 

for Lanikai Elementary School ($500,000) and one for a sewer system upgrade for Kawaikini Charter 

School ($274,000). These are the first CIP projects ever funded for charter schools. 

The wording of the recommendation is vague in that it does not specify what the proportionate share of 

funding should be based upon. Referring to the details of the report the base could be reasonably 

interpreted to be either CIP or Debt Service appropriations to the DOE. This would continue the concept 

of “equitable” state funding of both systems. A sample formula for calculating a proportionate amount 

for charter schools using either CIP or debt service as the base follows: 

Using CIP as the base: 

2010-11 CIP Appropriations – DOE: $127,112,000 

2009-10 Enrollment – DOE 170,830 

Per Pupil Amount for CIP $744.08 

Projected Charter Schools Enrollment (May 15 Revise) 9,298 

Amount available for Charter school CIP Projects $6,918,400 

2010-11 Charter School CIP Appropriations $754,000 

Using Debt Service as the base: 

2010-11 Debt Service Appropriations – DOE: $194,855,477 

2009-10 Enrollment – DOE 170,830 

Per Pupil Amount for Debt Service $1,140.63 

Projected Charter Schools Enrollment (May 15 Revise) 9,298 

Amount available for Charter School Facilities $10,605,500 

Ultimately the question of providing facilities funding for charter schools is a policy decision. Certain 

questions exist that remain unresolved: 

1) Should equitable funding be defined to include funding for the cost of charter school facilities? 

2) If the answer to this question is yes, then how is this issue resolved: 

a) Facilities funding appropriated to charter schools on a per pupil basis using debt service as a 

measure of state support for DOE facilities? Or… 

b) Facilities funding appropriated to charter schools based on CIP projects requested by charter 

schools? And if this is the preferred method…



i) How to address the issue of CIP projects for charter schools occupying non-public property? 

3) Also, how should the State address the issue of inequality of facilities for charter schools stemming 

from conversion charters having state funded facilities while, in general, start-up charters do not 

have state funded facilities? 

4) Should the state provide funding for facilities costs of charter schools regardless of the size of the 

school or the nature of the program (i.e. e-school) in the same manner as a “bricks and mortar” 

charter school? 

Status Update on Recommendations from the “Understanding Public School Funding Fiscal Year 2009- 

10” Report 

The sixth recommendation from this report (page 23) is “Create a mechanism for post school opening 

funding adjustments.” 

The current process of distributing per pupil, and facilities funds, to charter schools does adjust the 

funding for charter schools based on October 15 th enrollment numbers. Technically this is a post start of 

school funding adjustment mechanism. However, I believe this recommendation relates to two 

circumstances: 

1. The current process of distributing charter school operating funding is based on a single 

measure of enrollment – as of October 15 th of each year. In place of this a mechanism to 

provide a process that insures that as enrollments at charter schools change during the year 

that the amount of funding is also adjusted (money following the child concept). 

2. The lack of a process to adjust the overall annual funding for charter schools when the total 

charter school enrollment differs from the projected enrollment used during the budget 

development process. 

Inter-school Adjustments 

If it is the intent of this recommendation that “funding follow the child,” between schools to reflect 

changing enrollments at charter schools during the school year, then changes in statute are necessary. 

Specifically, the language of 302B-12 (d) which determines the process for the distribution of per pupil 

funding to charter schools is based on projected enrollments in May and actual enrollments in October. 

In practice this has resulted in the per pupil funding for charter schools is based on a single measure of 

enrollment (October 15 th ). 

A possible solution for the charter schools could be to use a model similar to the DOE model that bases 

funding distributions to charter schools using multiple enrollment dates during the year. For example, a 

preliminary funding amount could be based on May projected enrollments for a July distribution date 

(25% of annual per pupil). A second distribution could be made by September 30, based on the 

enrollment of each school on the tenth day of school (25% of annual per pupil). A third allocation by 

December 31, based on October 15 enrollments and a fourth distribution based on enrollments in



January paid no later than March could also be part of this funding distribution process. Each 

distribution would stand on its own with no adjustment, or “truing up” based on the latest enrollment 

data. In order for this process to work a “pool” of funds sufficient to address likely increases in 

enrollment at some schools, while not reducing funding at other schools, would be necessary. A 

potential source for this “pool” of funds is discussed below. 

Overall or Systemic Adjustments 

A mechanism for adjusting the total appropriation available for charter schools in years when the total 

enrollments of all charter schools exceeds the projected enrollment used in the state-wide budget 

development process should also be part of this solution. In some ways a partial solution to this issue 

has been created through new budget proviso language in Act 180: 

SECTION 39: Provided that of the general fund appropriation for charter schools (EDN 600), the 

sum of $52,732,012 or so much thereof as may be necessary for fiscal year 2009-2010 and the 

sum of $51,852,459 or so much thereof as may be necessary for fiscal year 2010-2011 shall be 

expended by charter schools to fund their educational programs; provided further that the 

funds shall not be expended for any other purpose; provided further that for fiscal year 2010- 

2011, any general fund amount that exceeds the product derived from multiplying: 

(1) The actual charter school enrollment count on October 15, 2010, as 

reviewed and verified by the charter school administrative office by November 

15, 2010; and 

2) The sum of $5,363; 

shall lapse to the charter schools account within the state treasury; 

Clearly this language addresses the situation when charter school enrollments are less than the 

estimates used in the budget development process. It is silent regarding the opposite situation, when 

actual enrollments exceed the estimates used during budget development. If language were added to 

this proviso to allow for the use of lapsed funds per this proviso for fully funding the operating per pupil 

amount in years when the total actual enrollment exceeds the projected enrollment used in budget 

development then a pool of funds would be available to address this issue. Further, these funds could 

also be used to fill in the gaps when adjustments are made under the “money following the child 

concept.”

Local Initiatives Support Corporation 

2010 Charter School 

Facility Finance Landscape 

June 2010

2010 Charter 

SChool FaCility 

FinanCe landSCape 

Written By 

Elise Balboni, Project Director 

Reena Bhatia, Vice President, Education Programs 

Kathy Olsen, Deputy Director 

Sara McCuistion, Program Officer 

Jeffrey Meyers, Program Officer 

June 2010 

puBliShed By 

The Educational Facilities Financing Center 

of Local Initiatives Support Corporation 

www.lisc.org/effc 

This publication and related resources are available at 

http://www.lisc.org/effc/2010Landscape 

Cover photo by Kristoffer Tripplaar

loCal initiativeS Support Corporation 

Local Initiatives Support Corporation (LISC) is dedicated to helping 

community residents transform distressed neighborhoods into healthy 

and sustainable communities of choice and opportunity—good places 

to work, do business and raise children. LISC mobilizes corporate, 

government and philanthropic support to provide local community-based 

organizations with: 

• 

• 

• 

loans, grants and equity investments 

local, statewide and national policy support 

technical and management assistance 

LISC is a national organization with a community focus. Our program 

staff are based in every city and many of the rural areas where LISCsupported 

community development takes shape. In collaboration with 

local community groups, LISC staff help identify priorities and challenges, 

delivering the most appropriate support to meet local needs. 

LISC is Building Sustainable Communities by achieving five goals: 

• 

• 

• 

• 

• 

Expanding Investment in Housing and Other Real Estate 

Increasing Family Income and Wealth 

Stimulating Economic Development 

Improving Access to Quality Education 

Supporting Healthy Environments and Lifestyles 

Since 1980, LISC has marshaled $9.7 billion from 3,000 investors, 

lenders and donors. In urban and rural communities nationwide, LISC 

has helped to finance the construction or rehabilitation of 271,000 

affordable homes and 40 million square feet of retail, community and 

educational space—totaling $31.3 billion in development. 

For more information about LISC, visit www.lisc.org. 

eduCational FaCilitieS FinanCing Center 

The Educational Facilities Financing Center (EFFC) at LISC supports 

quality public charter and alternative schools in distressed neighborhoods. 

LISC founded the EFFC in 2003 to intensify its national effort in 

educational facilities financing. The EFFC pools low-interest loan and 

grant funds and leverages them for investment in charter school facilities 

in order to create new or renovated school facilities for underserved 

children, families and neighborhoods nationally. Since making its first 

charter school grant in 1997, LISC has provided $98 million in grants, 

loans or guarantees for 130 schools across the country. The EFFC is 

supported by the Bill & Melinda Gates Foundation, Prudential Financial, 

the U.S. Department of Education and the Walton Family Foundation. 

The EFFC assembled a National Advisory Board to provide oversight and 

leadership of its strategic mission, resource development, public policy 

activity and other issues relevant to the attainment of its mission. The 

Advisory Board is comprised of members representing the community 

development, education, finance and philanthropic communities. 

eFFC’S adviSory Board 

JiM griFFin 

President 

Colorado League of Charter Schools (Chairman) 

Kathleen delaSKi 

Senior Program Officer 

Walton Family Foundation (ex-officio) 

John Kinghorn 

Vice President 

Prudential Social Investments 

CarMen Maldonado 

Director of Real Estate 

KIPP: Knowledge is Power Program 

SaMir K. patel 

Managing Director 

Tremblant Capital Group 

MiChael ruBinger 

President & CEO 

LISC 

todd ZieBarth 

Vice President, State Advocacy and Support 

National Alliance for Public Charter Schools

aCKnoWledgeMentS 

We want to acknowledge the many people who contributed directly or 

indirectly to this study. Approximately 200 individuals generously gave 

their time to provide us with data and information during the course 

of our research, patiently answering follow-up questions and referring 

us to other individuals knowledgeable in the area we were exploring. 

We would like to extend special thanks to the Bill & Melinda Gates 

Foundation and the Walton Family Foundation for their support for 

this research, but acknowledge that the findings and conclusions 

presented in this report are those of the authors alone and do not 

necessarily reflect the opinions of either foundation or the individuals 

acknowledged below. 

We would like to express our gratitude to the following individuals 

for their comments and contributions to the Landscape. 

private nonproFit organiZationS 

Christa Velasquez, The Annie E. Casey Foundation; Marc Johnson, 

Bill & Melinda Gates Foundation; Barb Danbom and Doug Elliott, 

Daniels Fund; Eli Kennedy and Erica Lepping, The Eli and Edythe Broad 

Foundation; Robert Litan, Ewing Marion Kauffman Foundation; Nisha 

Aidasani, Prudential Social Investments; Kathleen deLaski, Walton 

Family Foundation; Kristin Klingenberg, Bridgeway Capital; Tom Porter, 

Building Hope; Ward Huseth and Brian Kates, Charter School Growth 

Fund; Michelle Liberati, Charter Schools Development Corporation; 

Katelyn Bednarski and Colleen Schwarz, Community Reinvestment 

Fund, USA; Anita Landecker, Excellent Education Development, Inc.; 

Mary Tingerthall, Housing Partnership Network; Joe Neri and Tanya 

Vartivarian, IFF; Deborah Doordan and Becky Van Pelt, Innovative 

Schools Development Corporation; Carolyn Choy, KIPP Foundation; 

Brian Prater and Leslie Swift Bernal, Low Income Investment Fund; 

Annie Donovan and Scott Sporte, NCB Capital Impact; Jen Bredehoft, 

New Jersey Community Capital; Norah McVeigh and Jen Talansky, 

Nonprofit Finance Fund; Kate Barr, Nonprofits Assistance Fund; David 

Steele, Partners Advancing Values in Education; Laura Kozel, Raza 

Development Fund, Inc.; Jane Ellis, Self-Help; Sara Vernon Sterman 

and Bridget Wiedeman, The Reinvestment Fund, Inc.; Rachel Bluestein 

and Gwen Shufro, Civic Builders; and Scott Thomas, Pacific Charter 

School Development. 

tax-exeMpt Bond MarKet 

Wendy Berry, Brighter Choice Foundation; Vincent DeLany and Susan 

McMillian, Standard & Poor’s; Douglas Kilcommons, Fitch Ratings; 

Robyn Rosenblatt, Moody’s Investor Services; William Wildman, RBC 

Capital Markets; and Mike Zezas, Morgan Stanley. 

Federal initiativeS 

Ann Margaret Galiatsos, Office of Innovation and Improvement, 

U.S. Department of Education; Dwight Berg, Public Economics, Inc.; 

Dan Spieldenner, Rural Development, U.S. Department of Agriculture; 

Larry Maloney, Aspire Consulting, LLC; and the numerous allocatees 

that provided information regarding their New Markets Tax Credit utiliza- 

tion for charter schools, including: Tonja Adams and Michelle Militello, 

Bank of America Merrill Lynch; Marie Mann Bibbs, City First Bank of DC; 

Melissa De Motte, Clearinghouse CDFI; Tom De Simone, Genesis LA; 

Matt Gautieri, Boston Community Capital & Affiliates; Kevin Goldsmith, 

JPMorgan Chase; Clare Higgins, U.S. Bancorp Community Development 

Corporation; Christopher Jansen and Ursula Eatmon Prioleau, Wells 

Fargo & Company; Amy Merritt, PNC Bank; Robert Poznanski, National 

Equity Fund, Inc.; and Tony Smith, S.B. Friedman & Company. 

State initiativeS 

Eddy Jeans and Paul Prussing, Alaska Department of Education & Early 

Development; Sam Kito, Division of Education Support Services, Alaska 

Department of Education & Early Development; Michele Diamond, 

Arizona Charter Schools Association; Steven Race and Richard Valdivia, 

Arizona Department of Education; Cindy Hedrick, Arkansas Department 

of Education; Charles Stein, Division of Public School Academic 

Facilities & Transportation, Arkansas Department of Education; Angela 

Duvane, California Department of Education; Katrina Johantgen, 

California School Finance Authority; James Hamill, California Statewide 

Communities Development Authority; Parker Hudnut, Innovation and 

Charter Schools Division, Los Angeles Unified School District; Adam 

Miller, California Charter Schools Association; John Stoecker, California 

Municipal Finance Authority; Scott Newell, Division of Public School 

Capital Construction Assistance, Colorado Department of Education; 

Kristin Lortie, Colorado Department of Education; Jim Griffin, Colorado 

League of Charter Schools; Robert Kelly, Bureau of Choice Programs, 

Connecticut State Department of Education; Michael Morris, Connecticut 

Health and Educational Facilities Authority; Stephanie Scola, Delaware 

Department of Education; Cindy Greiwe and William Fontaine, Office 

of Educational Facilities, Florida Department of Education; Adam 

Miller, Office of Independent Education and Parental Choice, Florida 

Department of Education; Andrew Broy, Charter Schools, Office of Policy 

& External Affairs, Georgia Department of Education; Laura Hasse, 

Facilities Services, Office of Finance and Business Operations, Georgia 

Department of Education; Corinna Cornejo, Maunalei Love and Roger 

McKeague, Charter School Administrative Office, State of Hawaii; Tim 

Hill and Michelle Clement Taylor, Idaho State Department of Education; 

Lou Ferratier, School Business and Support Services Division, Illinois 

State Board of Education; Richard Loman, Charter Schools, Illinois 

State Board of Education; Jimmy Prichard, Debt Management Unit, 

Governor’s Office of Management and Budget, State of Illinois; Melissa 

Ambre, Office of School Finance, Indiana Department of Education; Beth 

Bray, Charter Schools Office, Office of the Mayor, City of Indianapolis; 

Kimb Stewart, Indiana Department of Education; Del Hoover, Charter 

Schools, Iowa Department of Education; Rebecca Floyd, Kansas 

Development Finance Authority; Brad Neuenswander, School Finance, 

Kansas State Department of Education; Kenneth Campbell and Bill 

Tindall, Louisiana Department of Education; Tricia Dubroc, Louisiana 

Public Facilities Authority; Kathleen Padian, New Orleans School Facility 

Project; Barbara J. Bice, Maryland State Department of Education; 

Ed Golas, Maryland Health and Higher Education Facilities Authority;

Jim Henry, Maryland Industrial Development Financing Authority; 

Jeff Wilke, Maryland Economic Development Corporation; Eric Hunter 

and Rebecca Sullivan, Massachusetts Development Finance Agency; 

Kenneth Wissman, Massachusetts School Building Authority; Jeffrey 

Wulfson, Massachusetts Department of Education; Andy DeYoung, 

Michigan Department of Education; Janet Liesman and Kathy O’Keefe, 

Michigan Public Educational Facilities Authority; Greg Hein, Bill Kiesow 

and Chris Kubesh, Division of Program Finance, Minnesota Department 

of Education; Roger Dorson and Jocelyn Strand, Missouri Department 

of Elementary and Secondary Education; Toni Wilcox, Missouri Health 

& Educational Facilities Authority; Tom McCormack and James Wells, 

Nevada Department of Education; Dave Bliss, New Hampshire Health 

and Education Facilities Authority; Eileen Liponis, New Hampshire 

Public Charter School Association; Edward Murdough, Bureau of 

School Approval & Facility Management, New Hampshire Department 

of Education; Sheila St. Germain, New Hampshire Municipal Bond 

Bank; Len Colner and Bernie Piaia, Office of School Facilities, New 

Jersey Department of Education; Zach Dillenback, New Mexico Finance 

Authority; Antonio Ortiz, Capital Outlay Bureau, New Mexico Public 

Education Department; Wendy Berry, Brighter Choice Foundation; Erica 

Cervine, New York State Education Department; David Hruby, Charter 

Schools Institute, The State University of New York; Debra Kurshan, 

New York City Department of Education; Robert McLaughlin, Hodgson 

Russ, LLP; Carl Thurnau, Office of Facilities Planning, New York State 

Education Department; Jack Moyer, Office of Charter Schools, North 

Carolina Department of Public Instruction; Sonja Hunter, Office of 

Finance Program Services, Ohio Department of Education; Susan 

Moss, Center for School Options and Finance, Ohio Department of 

Education; Glenn Rowell, Ohio School Facilities Commission; Vonna 

Anderson, Steve Huff and Lu Norman, Oklahoma State Department of 

Education; Barbara Weber, Oklahoma Development Finance Authority; 

Gwendolyn Griffith, Oregon Facilities Authority; Donna Newback, Office 

of Educational Improvement and Innovation, Oregon Department of 

Education; Cheryl Harmon, Pennsylvania Department of Education; 

Robert Donovan, Rhode Island Health and Educational Building 

Corporation; Claudia Miller, South Carolina Jobs-Economic Development 

Authority; Alex James and Len Richardson, Office of School Facilities, 

South Carolina Department of Education; Joel Medley, South Carolina 

Department of Education; Matt Candler, Center for Charter School 

Excellence in Tennessee; Mary-Margaret Collier, Tennessee Comptroller 

of the Treasury; Matt Throckmorton, Tennessee Charter Schools 

Association; Karen Weidemann, Tennessee Department of Education; 

Dwight Burns and Paula Hatfield, Texas Public Finance Authority; Tom 

Sage, Vinson & Elkins LLP; David Damschen, Utah State Treasurer’s 

Office; Cathy Dudley, School Finance & Statistics, Utah State Office 

of Education; Cory Kanth, Charter Schools Section, Utah State Office 

of Education; Anna Mackley Cobb, Virginia Small Business Financing 

Authority; Stefan Huh and Zita Rostas, Office of Public Charter School 

Financing and Support, D.C. Office of the State Superintendent of 

Education; William Liggins, Office of the Deputy Mayor for Planning 

and Economic Development, District of Columbia; Margaret McMurray, 

Wisconsin Department of Public Instruction; Dennis Reilly, Wisconsin 

Health & Educational Facilities Authority; Natalie Rew, School Financial 

Services, Wisconsin Department of Public Instruction; Fred Hansen, 

Bruce Hayes and Samantha Mills, Wyoming Department of Education; 

and Jeff Marsh, Wyoming School Facilities Commission.

2010 Charter SChool 

FaCility FinanCe landSCape 

taBle oF ContentS 

ExEcutivE Summary ......................................................................................................................................................................................................................................2 

PrivatE NoNProfit orgaNizatioNS ...........................................................................................................................................................................................................7 

Foundations ........................................................................................................................................................................................................................................................7 

Financing Organizations ..................................................................................................................................................................................................................................9 

Real Estate Developers ..................................................................................................................................................................................................................................17 

tax-ExEmPt BoNd markEt .........................................................................................................................................................................................................................18 

fEdEraL iNitiativES ......................................................................................................................................................................................................................................24 

StatE iNitiativES ..........................................................................................................................................................................................................................................31 

aPPENdix a: Summary Data for Nonprofit Financing Organizations ...................................................................................................................................................52 

aPPENdix B: Rated Charter School Bond Issuance .................................................................................................................................................................................55 

aPPENdix c: Municipal Bond Rating Scales .............................................................................................................................................................................................64 

Table of Contents 

1


2 

exeCutive SuMMary 

Since 2005, the Educational Facilities Financing Center of the Local Initiatives 

Support Corporation has provided periodic updates on the state of the charter 

school facility financing landscape. While charter schools have flourished since 

the last edition in 2007, securing adequate and affordable facilities remains a 

central challenge, hindering the growth of some of the country’s highest performing 

schools. The $4.35 billion competitive federal “Race to the Top” grant fund 

has given far greater visibility to charter schools as part of broader education 

reform efforts and prompted the removal or loosening of state caps on charter 

growth. However, equitable public facilities funding remains an elusive goal. At 

the same time, the economic downturn and tightening of the credit markets have 

slowed charter school access to private sector financing. This 2010 edition of the 

Landscape provides an updated snapshot of the charter school facility financing 

sector, including federal policies supportive of charter school facilities and state 

policies in all 40 jurisdictions with a charter law. Also included are descriptions of 

private philanthropies and nonprofit organizations active in the sector and, for the 

first time, information on charter school access to the tax-exempt bond market. 

There are almost 5,000 public schools operating under charters, educating 

approximately 1.5 million children nationally. Lack of access to 

appropriate public facilities or to public funding for facilities continues 

to be a major obstacle for these school operators. Unlike traditional 

school districts, charter schools do not have taxing authority and must 

rely on limited public capital funds and operating revenues to pay for 

their facilities. Of the 40 jurisdictions with a charter law, only 11 provide 

additional per pupil funding specifically for facilities, with only three 

providing more than $1,000 on a per pupil basis. This lack of public 

support has forced charter school operators to turn to the private sector 

for their facilities needs. 

The charter school facility financing sector has expanded significantly 

in the past two decades, developed in its early phases by nonprofit 

community development organizations with support from the philanthropic 

community and the U.S. Department of Education (ED). Today, 

over two dozen private nonprofit organizations provide financing for 

charter school facilities, collectively providing $1.1 billion in direct

financial support and another $369 million in New Markets Tax Credit 

(NMTC) allocation. Because this financing is supported in part by ED’s 

Credit Enhancement for Charter School Facilities Program, these nonprofit 

organizations have tended to serve the “riskier” schools—those 

earlier in the charter school life cycle or those with little surplus cash 

flow or limited collateral. Despite this higher risk profile, the default 

rate for charter school financing provided by these organizations is 

1% measured as a percentage of originated financing, with realized 

losses of only 0.3%. 

Private capital from traditional lenders and the tax-exempt bond market 

had also become increasingly available until recently. Several national 

financial institutions invested significantly in the sector, and other 

regional commercial lenders participated on a smaller scale to finance 

schools in their geographic markets. In addition, older charter schools 

and schools with larger enrollments were able to access the tax-exempt 

bond market, roughly half with some form of credit enhancement. 

Between 1999 and 2009, $2.4 billion in rated tax-exempt debt was 

issued to finance charter school facilities. As would be expected with 

the higher credit quality necessary for the tax-exempt market, the 

default rate for this debt is lower than that of the nonprofit financing 

organizations. The default rate is 0.1% in terms of defaults that impacted 

bondholders and 0.4% when taking into account additional cases 

where the charter school missed debt service payments, but bondholders 

were kept whole due to credit enhancement built into the issuance. 

Despite these successes in gaining greater access to capital and 

establishing a strong track record of performance, forward momentum 

was slowed with the global credit crisis in 2008. The downturn in the 

economy and tightening of credit as a result of the sub-prime mortgage 

crisis affected every private source of charter school facility financing. 

Facing heavy losses associated with their housing investments, many 

commercial lenders scaled back their community development lending 

departments and tightened their underwriting criteria. The collapse of 

the municipal bond insurers, combined with investors’ aversion to all 

but the highest rated credits, stalled charter school access to the taxexempt 

bond market for a period, with issuance in 2008 plummeting 

to a third of the level experienced only a year before. Facing their own 

liquidity pressures as their funding sources pulled back, many of the 

nonprofit organizations also slowed their loan origination across all program 

areas, including charter schools. 

While private financing sources rebounded partially in 2009, the question 

remains whether the educational future of the expanding charter 

school population should be held captive to the vagaries of the global 

economy, as they were in the most recent economic downturn. With 

the heightened focus on the growth of high-quality charter schools in 

the nation’s education reform efforts, it is time for the public sector to 

address this fundamental inequity and end the separate and unequal 

system of financing the nation’s public charter schools. 


In the private sector, there are 29 nonprofit organizations that provide 

significant facilities assistance to charter schools in the form of grants, 

loans, guarantees, real estate development and technical assistance. 

Seven foundations have committed to facilities financing on more than 

a localized basis, providing grants and program-related investments 

(PRIs) to help finance charter school facilities. Twenty nonprofit organizations 

provide financing for charter school facilities as part of their 

community development or charter support missions. Three organizations 

provide real estate development services, including one developer 

that also provides credit enhancement and loan financing for charters. 

Thirteen of these 29 organizations have received support totaling $180 

million from ED’s credit enhancement program, and 11 have been 

awarded a total of $2.6 billion in NMTC allocation by the Community 

Development Financial Institutions Fund (CDFI Fund) of 

the U.S. Department of the Treasury (Treasury Department). 

These private nonprofits have collectively provided $1.1 billion in direct 

financial support to charter schools for their facilities needs. Of this 

total, $343 million, or 31%, has been repaid in full. Financing provided 

by these organizations demonstrates a low default rate, notable given 

the fact that they generally serve the most risky school credits, whether 

because of their age, size or the limited collateral associated with their 

financings. According to data reported by the organizations, in the 

aggregate, charter schools have defaulted on 13 loans or guarantees, 

meaning that the school was no longer able to make debt service payments 

and the lender had to litigate or foreclose for repayment. These 

13 defaults represent $11 million in originated financing, or 1% of the 

$1.1 billion in total financing and 1.5% of the total number of financings. 

Of these defaults, only nine have resulted in actual losses to lenders 

of $3.7 million, the majority resulting from financing provided to a 

single school in which a number of the organizations participated. These 

losses represent 0.3% of the $1.1 billion in total financing and 1% of 

the total number of financings. 

In addition to direct loan, guaranty and grant financing, 11 organizations 

have utilized $369 million, or 14%, of their NMTC allocations on behalf 

of charter school facilities. Collectively, these 11 organizations represent 

64% of the total $573 million reported as utilized in charter school 

facility projects by 40 NMTC allocatees polled by the EFFC. Appendix 

A includes summary data regarding capital provision, portfolio performance 

and financing terms for the nonprofit financing organizations 

that have originated financing to date. 


3


4 

private nonproFit organiZationS ($ in Millions) 

Direct NMTC 

Organization Financing Utilization 

foundations 1 

The Annie E. Casey Foundation (AECF) — — 

Bill & Melinda Gates Foundation (BMGF) — — 

Daniels Fund — — 

The Eli and Edythe Broad Foundation — — 

Ewing Marion Kauffman Foundation — — 

The Prudential Foundation — — 

The Walton Family Foundation (WFF) — — 

financing organizations 

Bridgeway Capital $3.9 — 

Building Hope 69.4 — 

Charter School Growth Fund (CSGF) — — 

Charter Schools Development Corporation (CSDC) 33.5 40.0 

Community Reinvestment Fund, USA (CRF) 9.0 9.0 

Excellent Education Development, Inc. (ExED) 1.4 71.0 

Housing Partnership Network (HPN) — — 

IFF 47.7 0.4 

Innovative Schools Development Corporation (ISDC) 9.0 — 

KIPP Foundation 2.6 — 

Local Initiatives Support Corporation (LISC) 97.6 29.9 

Low Income Investment Fund (LIIF) 64.2 26.5 

NCB Capital Impact 387.5 86.8 

New Jersey Community Capital (NJCC) 38.3 6.0 

Nonprofits Assistance Fund 4.9 — 

Nonprofit Finance Fund (NFF) 14.5 7.5 

Partners Advancing Values in Education (PAVE) 3.3 — 

Raza Development Fund, Inc. (RDF) 52.8 — 

Self-Help 106.5 62.6 

The Reinvestment Fund, Inc. (TRF) 165.3 29.4 

real Estate developers 

Charter Schools Development Corporation See above See Above 

Civic Builders — — 

Pacific Charter School Development (PCSD) — — 

total $1,111.4 $369.2 

Source: EFFC 

1 The seven foundations included here provide a significant portion of their facilities 

support indirectly through the nonprofit financing organizations; thus, their support 

is not included in the tally of direct financial support. See “Private Nonprofit 

Organizations-Foundations” for descriptions of financing provided by these 

foundations. 


As of year-end 2009, 176 charter school facility bond issuances totaling 

$2.4 billion have been rated by the three major rating agencies: Fitch 

Ratings (Fitch), Moody’s Investor Services (Moody’s) and Standard & 

Poor’s (S&P). Approximately half of these issues included some form 

of credit enhancement, primarily bond insurance. Rated charter school 

bond issuance peaked in 2007 with 37 issues totaling $676 million. 

However, the collapse of the municipal bond insurance companies in 

2008, as a result of the sub-prime mortgage crisis, dampened investor 

appetite for municipal bonds generally and stalled charter school 

access. While activity rebounded somewhat in 2009, lack of viable 

enhancement options has meant that charter schools must access the 

market on the strength of their own credit rating, generally in the low 

investment grade category. In a market environment in which lower 

rated issues are paying interest rate premiums, such unenhanced 

access is often costly for charter schools. 

Despite the decline in issuance activity since 2007, the financial performance 

of charter schools that have accessed the tax-exempt bond market 

has been strong. Among the 176 rated charter school bond issues, 

there has been one payment default that resulted in a loss to bondholders, 

a default rate of 0.1% in terms of the total par amount issued or 

0.6% in terms of the total number of issues. There were also two other 

cases in which schools missed payments under their loan agreements, 

but there was no loss to bondholders due to credit enhancement built 

into the issuance. These two issues bring the adjusted default rate of 

underlying school performance to 0.4% of the total par issued or 1.7% 

of the number of issues. See Appendix B for specific data for these 176 

rated bond offerings. 


Seven federal programs provide varying types of assistance to, or on 

behalf of, charter schools for their facilities. The U.S. Department of 

Education provides grant funds through two programs administered 

by the Office of Innovation and Improvement: the credit Enhancement 

for charter School facilities Program and the State charter School 

facilities incentive grants Program. ED has made credit enhancement 

grant awards to 19 public and nonprofit entities totaling $214 million 

that have helped leverage $1.3 billion in capital on behalf of 278 charter 

schools. In order to spur states to share in the public funding of charter 

school facilities, ED has also provided state incentive grant awards to 

four states totaling $78 million and continues to fund a second cohort 

of two states with annual awards totaling $13 million. 

The U.S. Department of the Treasury allocates authority for three federal 

tax credit programs for which charter schools are eligible, including 

the Qualified School construction Bond (QScB) Program, the Qualified 

zone academy Bond (QzaB) Program and the New markets tax credit 

Program. The QSCB Program is a new addition to the charter landscape, 

created by the American Recovery and Reinvestment Act of 2009 

(Recovery Act), to support the acquisition, construction, rehabilitation or 

repair of public school facilities, including charter schools. To date, two

charter schools in New Jersey and Texas have issued $22 million out of 

an estimated $2.7 billion in QSCB issuance. 

The QZAB Program has been in existence for over a decade and helps 

eligible public schools raise funds to rehabilitate and repair facilities, 

excluding new construction and land acquisition. QZABs have been 

employed on behalf of charter schools in several jurisdictions, including 

Arizona, California, Louisiana, Massachusetts, Michigan, Missouri, Texas, 

Wisconsin and Washington, D.C. 

Designed to stimulate private investment and economic growth in 

low-income communities, the NMTC Program is also a familiar feature 

of the charter landscape. In this iteration of the study, the EFFC polled 

40 NMTC allocatees that included charter schools specifically or community 

facilities generally as one of the proposed uses of their tax 

credits to determine actual utilization for charter school facilities projects. 

Reported NMTC allocation employed on behalf of charter school 

facilities projects for these 40 organizations equals $573 million, representing 

10% of the total $5.6 billion in closed and committed funds for 

these allocatees to date, 7% of their total $8.76 billion allocation awards 

and 2% of the $26 billion awarded more broadly. 

In addition, there are two other federal programs administered by federal 

agencies that charter schools can access for their facilities needs, 

including community Programs administered by the Department of 

Agriculture and the Public assistance grant Program administered 

by the Federal Emergency Management Agency. 


This study also updates the state-level funding and financing programs 

currently authorized throughout the country, which have not changed 

significantly since the 2007 Landscape. Of the 40 jurisdictions with a 

charter law, slightly less than half have authorized a grant, loan and/or 

credit enhancement program for charter school facilities, with program 

size and magnitude of support varying widely across jurisdictions. Also 

included are brief descriptions of charter school access to tax-exempt 

financing through conduit issuers and eligibility for participation in the 

QSCB and QZAB programs (Q-Bond Programs). 

• 

• 

Eleven jurisdictions—Arizona, California, Colorado, Florida, 

Massachusetts, Minnesota, New Mexico, Pennsylvania, Tennessee, 

Utah and Washington, D.C.—offer a per pupil funding stream of varying 

magnitude specifically for facilities. Of these 11 jurisdictions, 

three provide funding of over $1,000 per pupil, four provide funding 

of between $250 and $500 per pupil and four provide funding of 

under $250 per pupil. 

Eight jurisdictions—California, Colorado, Georgia, New Mexico, New 

York, Oklahoma, Rhode Island and Washington, D.C.—are currently 

appropriating funds for some other form of grant funding for charter 

school facilities. Two states—Connecticut and Utah—have authorized 

grant programs which are not currently funded. 

• 

• 

• 

• 

• 

Three jurisdictions—Colorado, Florida and New Mexico—allow charter 

schools to tap into local taxing authority through mill levy provisions. 

Five jurisdictions—California, Illinois, Louisiana, Utah and Washington, 

D.C.—have authorized, active publicly-funded loan programs. 

Six jurisdictions—Colorado, Indiana, Massachusetts, Michigan, 

Texas and Washington, D.C.—offer some form of credit enhancement 

program, including moral obligation provisions in Colorado 

and Indiana and a statewide credit enhancement program in Texas. 

Massachusetts and Michigan have been included as states providing 

credit enhancement because their programs are either partially 

funded or administered by public entities. 

34 of the 40 jurisdictions allow charter schools to access tax-exempt 

debt through conduit issuers. However, actual utilization varies significantly 

by jurisdiction. 

31 jurisdictions technically allow charter schools to participate in 

both their QScB and QzaB programs, and four jurisdictions allow 

charter schools to participate in one of their Q-Bond Programs. In 

practice, however, numerous states have prioritization criteria that 

effectively preclude charter schools, and others have not specifically 

addressed charter school eligibility although they do not prohibit it. 

The chart on page 6 summarizes funding and financing assistance to 

charter schools for their facilities in the 40 jurisdictions with a charter 

law and includes as a reference point the number of charter schools 

operating within the jurisdiction as of April 2010. 

Wherever possible, we have provided statutory and government program 

references and have sought to provide links to online, publicly available, 

free resources. Many of the online references are not “official” in a legal 

sense or may not have been updated recently. Accordingly, readers 

should use these references as a starting point for their research and 

should not solely rely on the links provided. 


5


6 

SuMMary oF State Charter SChool FaCility Funding and FinanCing prograMS 

40 JuriSdiCtionS With Charter SChool legiSlation 1 

operating Per Pupil other Loan credit conduit QzaB QScB 

Jurisdiction charter Schools funding grant funding Program Enhancement 2 issuer Eligibility Eligibility 

Alaska 24 • • 3 • 3 

Arizona 503 • • • • 

Arkansas 29 • 4 • 

California 815 • • • • • • 

Colorado 157 • • • • • 3 • 

Connecticut 18 • 5 • • • 

Delaware 21 • • • 

Florida 410 • • • 

Georgia 139 • • • 6 • 6 

Hawaii 31 • 

Idaho 40 • • • 

Illinois 39 • • • 3 

Indiana 54 • • • • 

Iowa 7 

Kansas 35 • • 3 • 3 

Louisiana 77 • • • • 

Maryland 42 • • 7 • 7 

Massachusetts 62 • • • • • 

Michigan 240 • • • • 

Minnesota 152 • • • • 

Mississippi 1 

Missouri 33 • • • 

Nevada 28 • 3 • 3 

New Hampshire 13 • • 4 • 4 

New Jersey 67 • • • 

New Mexico 72 • • • • 3 • 3 

New York 140 • • • • 

North Carolina 96 • 

Ohio 323 • 8 • 8 

Oklahoma 18 • • 

Oregon 103 • • 3 • 3 

Pennsylvania 135 • • 

Rhode Island 14 • • • • 

South Carolina 37 • • 3 • 3 

Tennessee 22 • • • 3 • 3 

Texas 278 • • • • 

Utah 72 • • 9 • • • • 

Virginia 3 • • 

Washington, D.C. 57 • • • • • • • 

Wisconsin 206 • • 3 • 3 

Wyoming 3 

total 4,616 11 10 5 6 34 34 32 

Source: EFFC 

1 The following 11 jurisdictions do not currently have charter school legislation: Alabama, Kentucky, Maine, Mississippi, Montana, Nebraska, North Dakota, South Dakota, Vermont, 

Washington and West Virginia. Mississippi’s charter legislation expired in 2009; however, it has one operating charter school. 

2 Credit enhancement includes moral obligation provisions in Colorado and Indiana, a statewide credit enhancement program for open-enrollment charter schools in Texas and 

other loan guaranty programs in Massachusetts, Michigan, Texas and Washington, D.C., which are partially funded and/or administered by state entities. 

3 Charter schools may apply via the school district. 

4 Charter school eligibility has not been specifically addressed to date; however, charter schools are not expressly prohibited from participating in the jurisdiction’s QZAB or QSCB 

program, as applicable. 

5 Connecticut’s General Assembly authorized a new round of funding for the Facility Grant program in 2007; however, funds have not yet been distributed to schools. Connecticut’s 

Charter School Construction Grant Program was a pilot program that served one school. 

6 Eligibility is restricted to conversion charter schools. 

7 Eligibility is restricted to charter schools located in district facilities. 

8 Local government may issue Q-Bonds on behalf of a charter school. 

9 Funding for Utah’s grant program was eliminated in 2009.


FoundationS 

While a number of foundations provide facilities financing assistance 

within select geographic markets, the following seven provide geographically 

diverse assistance. 

The Annie E. Casey Foundation (AECF) 

Website: http://www.aecf.org 

market: Nationwide 

Civic Sites: Atlanta, Baltimore and New Haven 

Making Connections Cities: Denver, Des Moines, Hartford, Indianapolis, Louisville, 

Milwaukee, Oakland, Providence, San Antonio and Seattle 

The Annie E. Casey Foundation is a private charitable organization, 

dedicated to helping build better futures for disadvantaged children in 

the United States. It was established in 1948 by Jim Casey, one of the 

founders of UPS, and his siblings, who named the foundation in honor 

of their mother. AECF’s primary mission is to foster public policies, 

human service reforms and community supports that more effectively 

meet the needs of vulnerable children nationwide. With assets of more 

than $3 billion, AECF provides approximately $190 million in grants 

each year, with numerous grants targeted by invitation to partners in 

AECF’s Civic Sites and Making Connection Cities. Civic Sites are those 

in which AECF has close hometown ties, and Making Connection Cities 

were those identified for a ten-year investment in 1999. 

Education is a key component of AECF’s strategy, and the organization 

has supported a variety of efforts to create new schools and improve 

existing ones. In 1998, AECF began providing operational grant support 

to charter schools and authorized program-related investments for community 

development, including charter school facilities. AECF played a 

leading role in the development of, and provided a $1 million guaranty 

to, the Indianapolis Charter Schools Facilities Fund, a facilities loan program 

for mayor-sponsored charter schools in Indianapolis that operated 

between 2005 and 2009. In April 2006, AECF also made a $1 million 

subordinate PRI in the $35 million Fund for Schools and Communities, 

which provided financing for charter schools in low-income communities 

in California. 

Bill & Melinda Gates Foundation (BMGF) 

Website: http://www.gatesfoundation.org 


Guided by the belief that every life has equal value, the Bill & Melinda 

Gates Foundation works to help all people lead healthy, productive lives. 

In developing countries, BMGF focuses on improving people’s health and 

giving them the chance to lift themselves out of hunger and extreme 

poverty. In the United States, BMGF seeks to ensure that all people, 

especially those with the fewest resources, have access to the opportunities 

they need to succeed in school and life. Based in Seattle, the 

foundation is led by CEO Jeff Raikes and co-chair William H. Gates Sr., 

under the direction of Bill and Melinda Gates and Warren Buffett. 

BMGF has provided significant operating grant support to charter 

schools for a decade. In 2009, it made a $60 million grant commitment 

to a coalition of five California charter management organizations 

(CMOs) to improve teacher effectiveness. The coalition, known as The 

College-Ready Promise, consists of the Alliance for College-Ready 

Public Schools, Aspire Public Schools, Green Dot Public Schools, ICEF 

Public Schools and Partnerships to Uplift Communities Schools, which 

collectively operate 85 charter schools and enroll 28,000 students, primarily 

in Los Angeles County. 

In 2009, BMGF closed on its first investment in charter school facilities, 

a $30 million credit support agreement to help secure $300 million in 

tax-exempt bond issuance to expand high-quality CMOs in Houston, 

including KIPP Houston and YES Prep Public Schools. The first financing 

through the program was a $67 million issue that enabled KIPP 

Houston to access the bond market at favorable terms. The $30 million 

charter school facility investment was the foundation’s first U.S. investment 

as part of an initiative announced earlier in 2009 that committed 

a total of $400 million in PRIs over a two-year period. In April 2010, 

BMGF closed on another $8 million guaranty for a $93 million bond 

issue for Aspire Schools in California. These investments, in the form of 

low-interest loans, loan guarantees and equity investments, will leverage 

BMGF’s balance sheet to secure financing for organizations and programs 

that fall within its core focus areas: global development, global 

health and U.S. program, which includes education. 

Daniels Fund 

Website: http://www.danielsfund.org 

market: colorado, New mexico, utah and Wyoming (programs with a 

national impact by invitation only) 

Bill Daniels established the Daniels Fund in 1997 to operate the Daniels 

Scholarship Program and the Daniels Grants Program in Colorado, New 

Mexico, Utah and Wyoming. His estate transferred to the Daniels Fund 

when he passed away in 2000, making it one of the largest foundations 

in the Rocky Mountain Region. In addition to its scholarship funding, 

the Daniels Fund supports nonprofit organizations in seven program 

areas, including education. The Daniels Fund supports education reform 

initiatives, such as charter schools and voucher programs, which provide 

greater educational opportunities for all students. It also supports 

programs that enhance teacher quality and student achievement. In 

the area of charter school facilities, the Daniels Fund provided a $3 

million grant to CSDC’s Building Block Fund for use as collateral in the 

Mountain West Charter Schools Fund, which in turn provides shortterm/mini-permanent 

facilities loans to charter schools in Colorado, 

New Mexico and Utah. 

Private NonProfit Organizations 

7

Private Nonprofit Organizations 

8 

The Eli and Edythe Broad Foundation 

(The Broad Foundation) 

Website: http://www.broadfoundation.org/home.html 


Founded in 1999, The Eli and Edythe Broad Foundation is a national 

entrepreneurial philanthropy that seeks to transform urban public education 

within the United States so that all children receive the skills and 

knowledge necessary to succeed in college, careers and life. Since its 

founding, The Broad Foundation has invested $400 million to improve 

student achievement in urban areas by creating and supporting effective 

leadership, efficient organizations, healthy competition, teacher quality 

and best practices. The foundation’s flagship initiatives include The 

Broad Superintendents Academy and The Broad Residency in Urban 

Education, which recruit, train, place and support executive leaders 

and management talent from across the country to be urban school 

district leaders. The foundation also created The Broad Prize for Urban 

Education, which annually awards $2 million in scholarships to urban 

school districts that demonstrate the greatest overall performance and 

improvement in student achievement. 

The Broad Foundation has invested in dozens of large cities where 

school districts are transforming their operations and instruction into 

efficient and effective outcome-based and student-centered organizations. 

In addition, the foundation has invested in innovative organizations 

working in urban communities to improve student achievement. 

For example, the foundation provided $6 million to support a triage of 

organizations working to improve teaching and learning for New Orleans 

students after Hurricane Katrina: New Schools for New Orleans, Teach 

for America and New Leaders for New Schools. 

The Broad Foundation has awarded $90 million to support high-quality 

public charter schools, CMOs, charter incubation organizations, such as 

the NewSchools Venture Fund, and charter facility financing efforts. The 

foundation is one of the largest national funders of the KIPP network 

of schools as well as seven other high-performing CMOs operating in 

California and New York City. In the area of facilities financing, the foundation 

made two grants totaling $3.75 million to support ExED’s New 

Markets Tax Credit financing programs for the creation of charter school 

facilities in low-income Los Angeles communities. The foundation has 

also provided $13 million in grants and program-related investments to 

Pacific Charter School Development, a nonprofit real estate development 

organization that develops, owns and leases facilities to high-quality 

charter schools in California, and $1 million to Civic Builders, a nonprofit 

real estate developer that serves charter schools in New York City and 

Newark. The Broad Foundation has also provided a $2.5 million PRI to 

the Charter School Growth Fund for its cohort members’ facilities needs. 

Ewing Marion Kauffman Foundation 

(Kauffman Foundation) 

Website: http://www.kauffman.org 

market: kansas city 

The Ewing Marion Kauffman Foundation was established in 1966 by the 

late entrepreneur and philanthropist Ewing Marion Kauffman. Based in 

Kansas City, Missouri, the Kauffman Foundation works with partners to 

advance entrepreneurship in America and improve the education of children 

and youth. In addition to grants for KIPP, the Kauffman Foundation 

provided a $5 million PRI to CSDC’s Building Block Fund, a $30 million 

revolving credit enhancement fund that provides partial guarantees for 

charter school facility lease and loan payment obligations. The Kauffman 

Foundation also authored a 2005 study of the real estate risks of charter 

schools for lenders and landlords titled, “Debunking the Real Estate 

Risk of Charter Schools.” The foundation is currently considering the 

formation of its own charter school in Kansas City. 

The Prudential Foundation 

Website: http://www.prudential.com/view/page/public/12848 

market: chicago, dallas, dubuque, Hartford, Houston, Jacksonville, Los 

angeles, minneapolis, New orleans, New york, Newark, Philadelphia, 

Phoenix, Scranton and San francisco 

The Prudential Foundation works to transform underserved communities 

into safe, inclusive and sustainable places to live with quality housing, 

excellent schools, employment opportunities and a vibrant cultural, 

civic and economic environment. In order to promote sustainable communities 

and improve social outcomes for community residents, the 

Prudential Foundation focuses its strategy in education, economic development, 

and arts and civic infrastructure. 

The Prudential Charter School Lending Program was created in 1997 

to provide below-market rate loans to support the start-up, early operations 

and facilities needs of charter schools. The program is a component 

of Prudential Social Investments, which originates and manages 

investments for The Prudential Foundation and Prudential Financial, 

Inc. Social Investments has invested $1.3 billion in equity and debt in 

nonprofit and for-profit ventures in 600 cities and 45 states. As part 

of its economic development financing, Social Investments supports 

affordable housing preservation, community revitalization and minority 

entrepreneurship. In addition to financing charter schools, the program’s 

education efforts include support for other quality education initiatives. 

The Prudential Charter School Lending Program has approved 110 

loans, totaling $142 million, varying widely in size and structure. It 

has provided loans directly to charter schools in Atlanta, Los Angeles, 

New York City, Philadelphia and statewide in New Jersey. In addition, 

it has provided funding to schools through national nonprofit financial 

intermediaries and CMOs, as well as statewide loan funds in California 

and Texas.

The Walton Family Foundation (WFF) 

Website: http://www.wffhome.com 

market: Nationwide, with specific interest in arkansas and 17 

urban districts 

The Walton Family Foundation was established as the culmination 

of the philanthropic interests of the family of Sam M. and Helen R. 

Walton. WFF’s Systemic K-12 Reform Focus Area invests in improving 

the academic performance of U.S. elementary and secondary students, 

especially in low-income communities, by supporting efforts that will 

shift decision-making power concerning a child’s schooling to his or her 

family. WFF launched its Public Charter School Initiative in 1997 and 

currently invests in multiple strategies to increase the number of children 

who have access to high-quality public charter schools, including 

support for groups that are: 

• 

• 

• 

• 

Starting public charter schools that show potential for dramatically 

raising student achievement; 

Developing state and national associations that serve, protect and 

cultivate the public charter school movement; 

Recruiting and training leaders and teachers for public charter 

schools; and 

Addressing the need of public charter schools for facilities. 

WFF was one of the first foundations to address facilities issues at 

scale. It provides facilities assistance to charter schools by working 

through financial intermediaries and real estate developers that support 

the facilities needs of multiple schools, with a focus in its seven 

demonstration cities: Albany, Denver, Los Angeles, Milwaukee, New 

Orleans, Newark and Washington, D.C. WFF has made grant and PRI 

commitments totaling approximately $100 million to nine organizations, 

including the Brighter Choice Foundation, Building Hope, Charter School 

Financing Partnership, CSGF, ExED, IFF, LISC, PCSD and Southern 

Financial Partners. This support has helped 150 charter schools across 

the country complete facilities projects with total costs of $900 million. 

The foundation does not provide facilities funding directly to individual 

charter schools. While much of WFF’s strategy has been to help finance 

private supply to jump-start charter sectors in key cities, the foundation 

recognizes and is responding to the more sustainable goal of seeking 

equitable public funding and access to excess school facility capacity in 

traditional districts. 

FinanCing organiZationS 

The 20 organizations described below are community development 

financial institutions (CDFIs) and other nonprofit financing organizations 

that provide various forms of funding and financial support to charter 

schools for their facilities needs. Appendix A includes summary data for 

18 of these organizations which have originated financing to date. 

A downloadable spreadsheet is also available on the EFFC’s website 

http://www.lisc.org/effc/2010Landscape. 

Bridgeway Capital (Formerly CL Fund) 

Website: http://www.bridgewaycapital.org 

market: Western Pennsylvania 

Bridgeway Capital provides capital and education opportunities to 

entrepreneurs and small businesses in order to create employment and 

foster economic growth across western Pennsylvania. Founded in 1990 

as a housing and social service lender, Bridgeway Capital broadened 

its economic impact by focusing on small business lending beginning 

in 1994 and making its first charter school loan in 1998. In 2008, the 

organization changed its name from CL Fund to Bridgeway Capital to 

better reflect its focus on catalyzing economic growth through business 

and job creation. To date, it has made 620 loans totaling $66 million to 

entrepreneurs, small businesses and nonprofit organizations in western 

Pennsylvania, in turn leveraging $240 million in investment. Bridgeway 

Capital has provided $8.4 million in operating and capital financing 

for 14 charter schools, including $4 million in facilities financing for 

eight charter school projects. Bridgeway Capital’s investors and funders 

include PNC Bank, Citizens Bank of Pennsylvania, Fifth Third Bank, 

First National Bank, First Commonwealth Bank, the CDFI Fund, the 

Pennsylvania Community Development Bank, the Richard King Mellon 

Foundation and the Heinz Endowments. 

Building Hope 

Website: http://www.buildinghope.org 

market: florida and Washington, d.c. for loan, equity, real estate 

development and business services programs; nationwide credit 

enhancement program 

ED Credit Enhancement Award Total: $5 million—Fiscal Year 2001 (America’s 

Charter School Finance Corporation) 

Building Hope is a private foundation established in 2003 that provides 

technical and financial assistance related to the planning, acquisition, 

renovation, construction and maintenance of school facilities. Building 

Hope was initially capitalized with $28 million from The Sallie Mae 

Fund and a $2 million federal appropriation. In 2007, Building Hope 

received a $9 million PRI and a $1 million grant from the Walton Family 

Foundation to expand its program in the District of Columbia. Building 

Hope invests directly in real estate projects and also acts as project 

developer, leasing build-to-suit facilities with a purchase option. Building 

Hope generally contributes 10% to 20% of project financing in the 

form of subordinate debt, with loan terms of three to five years, 25-year 

amortization periods and below-market interest rates ranging between 

4% and 6%. 

In 2006, Building Hope merged with America’s Charter School Finance 

Corporation. Building Hope administers its credit enhancement program 

through this affiliate. Funded with a $5 million ED grant award and an 

additional $2 million in credit enhancement monies from The Sallie 

Mae Fund, the program provides loan and lease guarantees for facilities 

financing and leases for public charter schools nationwide. Guarantees 


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are reduced over a three- to five-year term. They have an average size 

of $500,000, an up-front commitment fee of 1% and an ongoing annual 

fee of 1%. Since its inception, Building Hope has invested $62 million 

in direct loans and $7 million in credit enhancement monies for charter 

school facilities projects with total costs of $430 million. These projects 

have developed two million square feet of school space and created 

seats for 23,000 students. 

In 2006, Building Hope forged a partnership with the District of 

Columbia’s Office of the State Superintendent of Education (OSSE) to 

develop transitional, or incubator, facilities for charter schools in their 

first five years of operation. This public-private partnership, the Charter 

School Incubator Initiative, combines Building Hope’s experience in 

developing charter school facilities and $9 million in funding from OSSE, 

including a $5 million ED credit enhancement grant. Currently, Building 

Hope manages six incubator sites, totaling 185,000 square feet with 

capacity to serve 1,100 students. 

Building Hope also provides back office services to charter schools in 

Washington D.C. and Florida. Business services include: 1) finance and 

accounting; 2) information technology; 3) e-rate services; 4) facilities 

maintenance and repairs; and 4) human resources. 

Charter School Growth Fund (CSGF) 

Website: http://www.chartergrowthfund.org 

market: Nationwide for cSgf portfolio members 

The Charter School Growth Fund is a nonprofit venture capital fund 

founded in 2005 to transform K-12 education by investing in outstanding 

entrepreneurs. CSGF’s mission is to invest philanthropic venture 

capital in the nation’s highest performing charter school operators to 

expand their impact on underserved students. CSGF provides financing, 

business planning support, coaching and other resources required 

to build networks of high-performing schools. CSGF is supported by 

leading foundations in the education sector and has received significant 

contributions from the Lynde & Harry Bradley Foundation, the Bill & 

Melinda Gates Foundation, the Michael & Susan Dell Foundation, the 

Doris & Donald Fisher Foundation, the Kern Family Foundation and the 

Walton Family Foundation. 

CSGF provides multi-year grant and loan financing packages to charter 

school operators selected through a rigorous screening and due diligence 

process. CSGF structures each investment with a set of financial 

and non-monetary supports and employs performance milestones for 

annual disbursements. Since its inception, CSGF has invested in 20 

organizations, selected from among 350 applicants, at an average 

commitment of $3 million per investment. CSGF’s portfolio members 

primarily operate schools in large urban districts with a history of poor 

performance and are on track to create 105,000 new seats during the 

life of CSGF’s investment. 

CSGF also provides start-up grant funds and short-term, low-cost facilities 

loans to members of its portfolio. CSGF has secured commitments 

from The Broad Foundation, the Lynde & Harry Bradley Foundation and 

WFF to create a facilities loan fund, the CSGF Facilities Fund, which 

will enable its portfolio members to secure financing for construction, 

renovation and leasehold improvement projects critical for them to meet 

their growing facilities needs. This fund will provide loan guarantees, 

other forms of credit enhancement, substitute equity and short-term 

bridge loans for a variety of financing structures, including NMTC 

financings, QSCBs, tax-exempt bonds and commercial loans. CSGF 

intends to leverage the fund by recycling monies in each transaction, 

thus maximizing the impact for both school operators and its philanthropic 

investors. 

Charter Schools Development Corporation (CSDC) 

Website: http://www.csdc.org 


ED Credit Enhancement Award Total: $21.6 million—Fiscal Years 2001, 

2004 and 2006 

NMTC Allocation Total: $40 million—Second Round (2003-2004) 

Established in 1997 and recently certified as a CDFI, the Charter 

Schools Development Corporation’s mission is to increase learning 

opportunities, school choice and competition in K-12 education, especially 

for disadvantaged and at-risk students, by identifying and funding 

quality public charter schools. CSDC pursues its mission by developing 

financing mechanisms that create access to capital using several real 

estate and financial advisory programs. 

CSDC’s Building Block Fund (BBF) provides partial guarantees for 

charter school facility loan payment obligations in the form of first-loss 

debt service reserves and substitute equity for leasehold improvement, 

acquisition, renovation and construction loans, as well as lease guarantees. 

This $29.6 million national revolving credit enhancement fund 

was capitalized with $21.6 million in ED grant funding, a $5 million PRI 

from the Kauffman Foundation and a $3 million grant from the Daniels 

Fund. The Daniels Fund portion of BBF is being used as collateral for 

the Mountain West Charter Schools Fund (MWCSF) described below. 

Through BBF, CSDC has provided $33 million in credit enhancement 

that has leveraged $237 million in financing to acquire, develop or lease 

2.4 million square feet of educational space. These projects helped 78 

charter schools serve 21,000 students in 22 states. 

Through its Turnkey Facilities Program, CSDC takes on the role of property 

owner, landlord and property manager and provides growing-enrollment 

charter schools with facilities at market or below-market rates as 

lease-to-purchase options. CSDC designs and builds facilities to suit 

the unique needs of each school’s educational model, student population 

and budget. CSDC offers an up-front, fixed-price purchase option, 

which schools can exercise once finances and enrollment are able to 

support ownership. Through this program, CSDC has developed and 

leased 635,000 square feet of educational space on behalf of 16 charter 

schools in Indianapolis, South Bend, West Gary and East Chicago,

Indiana; Minneapolis and St. Paul, Minnesota; Cleveland and Columbus, 

Ohio; and Washington, D.C., with projects underway in Pennsylvania and 

North Carolina. Four schools have exercised their purchase options and 

now own their buildings. 

CSDC also provides direct loans for charter school facility acquisition, 

renovation, construction and leasehold improvement through its 

Mountain West Charter Schools Fund. This $18 million loan fund serves 

schools in Colorado, New Mexico and Utah and represents a four-way 

partnership between Vectra Bank, Raza Development Fund, the Daniels 

Fund and CSDC. MWCSF offers three-year term loans, with an option 

to extend an additional two years, an interest-only period during construction 

and up to 25-year amortization periods. CSDC’s wholly-owned 

subsidiary and financial advisory arm, Charter FS, has also advised and 

assisted 122 client charter schools in procuring $214 million in working 

capital loans and long-term financing for facilities and capital improvements 

via the tax-exempt bond market. CSDC has used all of its $40 

million NMTC allocation for charter school projects. 

Community Reinvestment Fund, USA (CRF) 

Website: http://www.crfusa.com 


NMTC Allocation Total: $598 million—First Round (2002), Second Round (2003- 

2004), Third Round (2005), Sixth Round (2008) and Seventh Round (2009) 

Established in 1988, CRF promotes development in economically distressed 

communities by supplying capital to community development 

lenders. CRF purchases economic development and affordable housing 

loans from community development lenders and pools them into assetbacked 

debt securities and New Markets Tax Credit investment funds, 

which are then privately placed with institutional investors. CRF does not 

directly originate loans for charter schools; however, it has purchased 

five charter school loans totaling $9 million. 

Excellent Education Development, Inc. (ExED) 

Website: http://www.exed.net 

market: Los angeles, orange and San diego counties, california 

NMTC Allocation Total: $121 million—First Round (2002), Fifth Round (2007) and 

Seventh Round (2009) 

ExED was founded in 1998 to improve the quality of public education 

by creating access to K-12 schools with high student achievement in 

low-income neighborhoods through the vehicle of community-based 

charter schools. ExED utilized its first $36 million NMTC allocation for 

the creation of the Los Angeles Charter School New Markets Loan Fund 

(LACSNM) to provide construction and mini-permanent facilities loans 

to schools in low-income Los Angeles County communities. LACSNM 

was the first NMTC fund designed specifically and solely for charter 

schools and has been fully allocated to five charter school projects 

serving seven charter schools. The fund was structured up-front with 

$11 million in equity and $25 million in debt provided by Citigroup, City 

National, LIIF, LISC, Prudential Financial and Wells Fargo. LIIF served as 

underwriter and provided $1.3 million in ED grant funds to serve as a 

first-loss reserve, and The Broad Foundation made a $2 million grant to 

subsidize interest expense for participating schools. 

ExED employed its second $35 million NMTC allocation to finance four 

charter school projects that created 2,340 new charter school seats in 

low-income Los Angeles neighborhoods, including $21 million for two 

high schools operated by Green Dot Public Schools, $11 million for a 

middle and high school developed by the Alliance for College-Ready 

Public Schools and $2.75 million for KIPP LA Prep. Each transaction 

was structured as a separate leveraged debt transaction, and U.S. 

Bancorp Community Development Corporation served as the equity 

investor in all four projects. NCB Capital Impact served as underwriter 

and provided the majority of the debt, with LISC, LIIF and NFF providing 

supplemental debt monies for two of the projects. The Broad Foundation 

committed a grant of $400,000 to each of the four projects, payable to 

the respective CMOs over a two- to three-year period. 

In 2009, ExED received a third, $50 million, NMTC allocation for investment 

in charter school facilities in Los Angeles, San Diego and Orange 

counties in Southern California. The Walton Family Foundation also provided 

ExED with a $3 million PRI to lower the cost of its NMTC financing 

for charter school facilities in the Los Angeles market. Additionally, WFF 

provided $1.5 million in PRI funds for predevelopment lending to charter 

schools in Los Angeles. 

Housing Partnership Network (HPN) 

Website: http://www.housingpartnership.net 


ED Credit Enhancement Award Total: $15 million—Fiscal Year 2007 

The Housing Partnership Network is a business collaborative of 97 of 

the nation’s leading housing and community development nonprofits. By 

sharing entrepreneurial practices and pooling resources, HPN achieves 

greater impact in building sustainable homes and communities. Network 

members are on-the-ground practitioners that develop partnerships, 

obtain capital and create strategies and cooperative ventures that 

respond to changing regulatory, policy and economic environments. 

In 2007, HPN was awarded a $15 million ED credit enhancement grant 

on behalf of a consortium of community development charter school 

lenders to provide $90 million in long-term tax-exempt bond financing 

for charter school facilities. Following receipt of the award, the consortium 

formed the Charter School Financing Partnership (CSFP), a limited 

liability company owned and managed by its members, including the 

Low Income Investment Fund, NCB Capital Impact, The Reinvestment 

Fund, Raza Development Fund, Community Reinvestment Fund and 

HPN. CSFP contracts with HPN to manage the company. 


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Through CSFP, an established charter school seeking permanent facilities 

financing will work with one of CSFP’s members and an investment 

banking firm to underwrite the transaction and issue the bonds. CSFP 

will use its ED grant and a PRI from the Walton Family Foundation to 

provide a pooled supplemental credit reserve that will help individual 

charter schools obtain investment grade credit ratings and correspondingly 

lower interest rates than would otherwise be available. By creating 

a standard process and pooling its reserves, CSFP will provide schools 

with an affordable way to access the tax-exempt bond market, which 

may be costly for a school with a smaller offering. Each charter school 

that obtains financing through CSFP will maintain a relationship with the 

originating member for the life of the financing. The member will retain 

a small piece of the financing as an investment and will act as servicer. 

Schools interested in the CSFP program may contact one of the individual 

members or HPN directly. 

IFF (formerly Illinois Facilities Fund) 

Website: http://www.iff.org 

market: illinois, indiana, iowa, missouri and Wisconsin 

ED Credit Enhancement Award Total: $18 million—Fiscal Years 2005 and 2007 

NMTC Allocation Total: $10 million—First Round (2002) 

IFF was established in 1988 as the Illinois Facilities Fund to offer 

financial and real estate services to nonprofit organizations in Illinois. 

IFF assisted the first Chicago charter schools in establishing their 

operations and locating or rehabilitating their facilities. In 2008, the 

Illinois Facilities Fund changed its name to IFF and adopted a five-year 

strategic plan expanding its lending and real estate services to four 

additional states in the Midwest. IFF serves the nonprofit sector in the 

Midwest by providing capital and real estate consulting services to 

help nonprofit organizations acquire or improve their facilities and by 

conducting research for targeted sectors, such as charter schools, early 

care and education. 

IFF provides financing for charter school facilities through its Charter 

Schools Capital Program (CSCP). CSCP provides ancillary real estate 

services, including project feasibility, site selection and project management 

as well as financing for charter school facilities projects. CSCP 

serves schools with facilities projects under $1.5 million through a 

loan program capitalized with a $2 million grant from Chicago Public 

Schools and additional funds from The Chicago Community Trust, 

Circle of Service Foundation, the Walton Family Foundation and various 

other financial institutions. IFF has made below-market loans to 

charter schools totaling $40 million through this program. Eligible uses 

include predevelopment, acquisition, construction, renovation, leasehold 

improvements and equipment and vehicle purchases, with loans ranging 

in size from $10,000 to $1.5 million and terms of up to 15 years. 

In addition, with $18 million in grant funds from ED, CSCP includes a 

credit enhancement program for tax-exempt bonds and other structured 

debt packages for charter schools with facilities projects of over $1.5 

million for both leased and owned facilities. Through this program, IFF 

provides additional security for long-term, tax-exempt bond issuances 

with terms of up to 30 years. In August 2006, IFF provided 10% credit 

enhancement on an $18.7 million bond offering for the Noble Network 

of Charter Schools and UNO (United Neighborhood Organization) Charter 

School Network to renovate four new campuses and refinance debt on 

two existing campuses. In 2009, IFF provided credit enhancement and 

direct loans for several facilities projects, including a NMTC financing, 

a private placement bond project with a local bank and a bank loan. 

These projects totaled $38.2 million for three schools. To date, IFF’s 

CSCP program has helped leverage $202 million in financing for 46 

charter schools in four states. 

Innovative Schools Development Corporation (ISDC) 

Website: http://www.innovativeschools.org 

market: delaware 

In 2002, The Rodel Charitable Foundation of Delaware founded and 

provided start-up support to the Innovative Schools Development 

Corporation. Originally designed to operate a charter school loan guaranty 

fund and leverage capital financing, ISDC has expanded into a 

resource center for Delaware public schools, providing 23 traditional and 

charter public schools with start-up, academic and administrative support 

in addition to financing. 

ISDC provides services in the areas of new school development, professional 

development, back office services and facilities financing. ISDC 

provides guarantees for facilities loans for new construction, renovations 

and major capital improvements. ISDC has provided $9 million in credit 

enhancement leveraging $25 million in financing for seven charter 

schools through 2009. In addition to The Rodel Charitable Foundation 

of Delaware, ISDC’s Loan Guaranty Fund is supported by the MBNA 

Foundation (now Bank of America), The Longwood Foundation and The 

Welfare Foundation. 

KIPP Foundation 

Website: http://www.kipp.org 

market: Nationwide, kiPP and partner schools 

ED Credit Enhancement Award Total: $6.8 million—Fiscal Year 2006 

The KIPP (Knowledge Is Power Program) Foundation is a nonprofit 

organization that supports a nationwide network of 82 college preparatory 

charter schools. The KIPP Foundation recruits, trains and supports 

leaders to open locally-run KIPP schools in high-need communities. The 

KIPP Foundation does not manage KIPP schools, but is responsible for 

managing the growth of the KIPP network, supporting excellence and 

sustainability across the network and coordinating national innovation 

efforts. Each KIPP school is run by a KIPP-trained school leader and 

governed by a local board of directors. KIPP schools are located in 

under-resourced communities throughout the United States and currently 

serve 21,000 students. Nationally, 80% of KIPP students come 

from low-income families and 90% are African-American or Latino. 

To date, 85% of KIPP alumni have matriculated to college.

The KIPP Foundation has used its ED grant award, together with a 10% 

match from its own funds, to create the KIPP Credit Enhancement 

Program (KCEP), which seeks to leverage up to $40 million in affordable 

facility financing and leases. KCEP consists of three programs 

that support charter schools within the KIPP network, as well as those 

of select partner schools led by school leaders who have completed 

the KIPP School Leadership Program. KCEP Power to Leverage is a 

$4.2 million guaranty program that directly employs ED grant funds to 

expand access to and/or improve terms for facility financing or leases. 

KCEP Mortgage is a $15 million mini-permanent fund for acquisition 

and construction take-out loans for owned properties that is secured 

with $1.8 million in ED grant funds. It is capitalized with $10 million 

from Prudential Social Investments, $3 million from LISC and $2 million 

from Building Hope. KCEP Leasehold Improvement and Construction is 

a $10 million program for construction financing for leased or owned 

properties and mini-permanent or permanent leasehold improvement 

loans. It is capitalized with $10 million from NCB Capital Impact and 

secured with $1.5 million in ED grant funds. Through 2009, KCEP has 

employed $2.6 million in credit enhancement to help nine KIPP schools 

secure a total of $11.4 million in financing and $23.9 million in leases 

to meet their facilities needs. 

Local Initiatives Support Corporation (LISC) 

Educational Facilities Financing Center (EFFC) 

Website: http://www.lisc.org/effc 


ED Credit Enhancement Award Total: $26.5 million—Fiscal Years 2003, 2004, 

2006 and 2009 

NMTC Allocation Total: $623 million—First Round (2002), Third Round (2005), 

Fourth Round (2006), Fifth Round (2007), Sixth Round (2008) and Seventh 

Round (2009) 

Local Initiatives Support Corporation is dedicated to helping nonprofit 

community-based organizations transform distressed neighborhoods 

into healthy and sustainable communities of choice and opportunity. 

Since 1980, LISC has mobilized $9.7 billion in corporate, government 

and philanthropic support to provide local organizations with the capital, 

policy support and technical assistance necessary to build or rehabilitate 

271,000 affordable homes and 40 million square feet of retail, 

community and educational space with total development costs 

of $31.3 billion. 

LISC supports quality public charter schools in low-income neighborhoods 

by providing on-the-ground assistance to individual charter 

schools through LISC’s network of 30 local offices and by developing 

educational funds that finance multiple schools in specific markets 

through its Educational Facilities Financing Center. Since making its 

first charter school grant in 1997, LISC has closed $98 million in 

grants, loans or guarantees for 130 individual schools across the country. 

LISC offers technical assistance to charter schools through its local 

offices. 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. LISC has 

provided $44 million in direct financing for charter schools through its 

local offices. 

LISC founded the EFFC in 2003 to intensify its support of quality public 

charter schools through the development of local facilities funds and 

nonprofit charter school networks. LISC has raised over $70 million in 

grants and loans for this initiative, including $23 million from the Walton 

Family Foundation, $20 million from Prudential Financial, $27 million 

from ED and $950,000 from the Bill & Melinda Gates Foundation. The 

BMGF grant to LISC was made in concert with a $30 million programrelated 

investment BMGF made in a bond credit enhancement fund for 

high-quality CMOs in the Houston market. 

With its first $10 million ED grant, the EFFC created a $35 million 

National Education Loan Fund which has been fully committed. In 2006, 

the EFFC received $8.2 million from ED to capitalize a National Credit 

Enhancement Fund that it employs for the creation of additional local 

funds, and in 2009, the EFFC received an $8.3 million award from ED to 

credit enhance bond issuances and commercial loans for charter school 

facilities. The EFFC also provides predevelopment recoverable grants 

for charter school facility projects through a $4.1 million Educational 

Seed Grant Fund. To date, the EFFC has closed $52 million in loan and 

guaranty investments in 15 local funds, together with $1.2 million in 

companion grants that have helped leverage $367 million in financing 

for 66 schools. LISC has also employed $30 million of its NMTC allocation 

on behalf of charter schools and served as leveraged lender on 

other NMTC transactions. 

Low Income Investment Fund (LIIF) 

Website: http://www.liifund.org 

market: california, massachusetts, New Jersey, New york, Pennsylvania, 

Washington, d.c. and case-by-case nationally 


NMTC Allocation Total: $139 million—Fifth Round (2007), Sixth Round (2008) and 

Seventh Round (2009) 

Established in 1984, LIIF provides capital and technical assistance in 

low-income communities to finance facilities for housing, child care, 

education and other community revitalization activity. To date, LIIF 

has provided $825 million in capital to 26 states, with a focus on the 

California and New York markets, leveraging $5.2 billion in investments. 

In 1999, LIIF began financing charter schools in response to growing 

demand in low-income neighborhoods. Since then, LIIF has provided 

loans to 60 charter schools totaling $147 million (including $56 million 

of its own loan monies and $91 million from other lenders) for the 

acquisition, construction and renovation of both leased and owned facilities. 

LIIF has also provided approximately $43 million of working capital 

loans to 75 charter schools. 


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LIIF employed its first $3 million ED grant as a loan loss reserve for 

two pooled loan funds, which together leveraged $71 million in private 

capital from a variety of lenders, offering terms of up to seven years and 

amortization periods of up to 25 years. LIIF provided $1.3 million in ED 

grant funds to secure lenders to the Los Angeles Charter School New 

Markets Fund, which financed construction and mini-permanent facilities 

loans for five charter school projects in Los Angeles. LIIF used $1.7 

million in ED grant funds to secure lenders participating in the Fund 

for Schools and Communities, a $35 million loan fund that provided 

construction and mini-permanent financing for charter schools in lowincome 

communities in California. 

LIIF used its second $5 million ED grant to credit enhance two master 

lines of credit totaling $40 million—a $25 million construction line of 

credit and a $15 million acquisition line of credit—and a stand-alone 

loan of $4 million. To date, these financings have supported facilities for 

four charter schools and helped create 1,900 student seats in California. 

LIIF has also used $26.5 million of its NMTC allocation for charter 

school projects. 

NCB Capital Impact Corporation 

(Formerly NCB Development) 

Website: http://www.ncbcapitalimpact.org 


ED Credit Enhancement Award Total: $28 million—Fiscal Years 2001, 2003, 

2004 and 2005 ($10 million in Fiscal Year 2001 and 2004 grants were jointly 

awarded to NCB Capital Impact, The Reinvestment Fund, Inc. and FOUNDATIONS, 

Inc.; $10 million Fiscal Year 2005 grant was jointly awarded to NCB Capital 

Impact and the California Charter Schools Association) 

NMTC Allocation Total: $409 million—Second Round (2003-2004), Fourth Round 

(2006), Fifth Round (2007), Sixth Round (2008) and Seventh Round (2009) 

NCB Capital Impact provides technical assistance and access to 

capital for low- and moderate-income communities. Since 1995, NCB 

Capital Impact has originated $400 million in facilities financing to 150 

charter schools in 12 states and the District of Columbia. It provides 

loan monies for the acquisition, renovation, construction and leasehold 

improvement of charter school facilities, as well as technical assistance 

to charter school developers. NCB Capital Impact has also utilized $87 

million in NMTCs for charter school facilities. 

In 2002, NCB Capital Impact partnered with The Reinvestment Fund, 

Inc. and FOUNDATIONS, Inc. to create the Charter School Capital Access 

Program (CCAP), which financed facilities for charter schools in the 

Mid-Atlantic region, including Washington, D.C., New York, New Jersey, 

Pennsylvania and Delaware. NCB Capital Impact utilized $6.4 million in 

ED grant funds to serve as a loan loss reserve for this $45 million local 

fund, which provided fixed-rate loans ranging between $500,000 and 

$4.5 million. This program is no longer originating new transactions, 

and unallocated credit enhancement dollars are used for other charter 

schools transactions in the same geographic footprint. NCB Capital 

Impact and TRF are using the remaining $3.6 million of this grant to 

support on-balance sheet construction lending to charter schools. 

In 2005, NCB Capital Impact used $6 million of an $8 million ED grant 

to establish The Enhancement Fund (TEF), in partnership with a major 

pension fund. This $60 million fund is providing capital to charter school 

facilities projects in Florida, Georgia, Michigan, Minnesota, Ohio and 

Wisconsin. TEF offers loans of up to $8 million with terms and amortizations 

of up to 25 years and fixed or variable interest rates. These 

loans may be used for acquisition, renovation, construction or leasehold 

improvement projects. The balance of the grant is used to provide credit 

enhancement to construction, leasehold improvement and NMTC transactions 

in the same geographic area. 

NCB Capital Impact is using its joint $10 million 2005 ED grant award 

with the California Charter Schools Association for the California 

Charter Building Fund (CCBF). CCBF finances leasehold improvements, 

acquisition, construction and renovation projects for charter schools in 

California through partnerships with multiple investors. It has primarily 

been used to enhance NMTC transactions to date. 

New Jersey Community Capital 

Website: http://www.newjerseycommunitycapital.org 

market: New Jersey primarily and case-by-case nationally 


NMTC Allocation Total: $50 million—First Round (2002) and Sixth Round (2008) 

New Jersey Community Capital is the trade name used by Community 

Loan Fund of New Jersey, Inc. and its affiliated entities for its financial 

and consulting products and services. Since its founding in 1987, New 

Jersey Community Capital has committed financing for 680 projects 

totaling $260 million in the housing, community services and small 

business sectors. Since 2004, New Jersey Community Capital has provided 

$26 million in financing for 12 charter schools and 18 campuses, 

primarily located in New Jersey. New Jersey Community Capital also 

utilized $6 million of its NMTC allocation for three of these projects— 

North Star Academy, TEAM Academy and the Marion P. Thomas Charter 

School—and intends to use a significant portion of its most recent $35 

million 2008 allocation for charter school facilities. 

New Jersey Community Capital is utilizing its ED grant to credit 

enhance leases, acquisition and construction loans and permanent 

mortgage financing for charter schools located in New Jersey communities 

where the public schools have been identified as in need 

of improvement, corrective action or restructuring under Title I of the 

Elementary and Secondary Education Act. It is also using a portion of 

its grant award to enhance permanent mortgages for charter schools 

operating nationally and has partnered with Prudential Financial, PNC 

Bank, Sun National Bank, Bank of America, RSF Social Finance, NCB 

Capital Impact, CRF, TRF, LIIF, Boston Community Capital and others in

the community finance industry for this facet of the grant. To date, New 

Jersey Community Capital has employed its federal grant to leverage 

$77 million in public, philanthropic and private sector financing from an 

array of sources, including the State of New Jersey, foundations, banks, 

CDFIs, insurance companies and pension funds. 

Nonprofits Assistance Fund 

Website: http://www.nonprofitsassistancefund.org 

market: minnesota 

The Nonprofits Assistance Fund provides financing, financial training 

and consulting services for nonprofits in Minnesota and its adjacent 

communities. Since 1980, Nonprofits Assistance Fund has provided 

1,800 loans totaling $73 million to strengthen the operation and mission 

of nonprofits, including charter schools. Financing of up to $500,000 is 

available for bridge loans, working capital, program expansion, equipment 

purchases, leasehold improvements and facility projects. 

The organization began financing charter schools in 2000 and has since 

provided $12.5 million to 52 schools, including $5 million for 19 facilities 

projects. Five of these financings were for acquisitions and 14 were 

for leasehold improvements. The Nonprofits Assistance Fund provides 

working capital loans and lines of credit to stabilize a school’s cash flow 

and offers terms of three to five years and interest rates of 5.5% to 9%, 

depending on the type, amount and term of the loan. 

Nonprofit Finance Fund (NFF) 

Website: http://www.nonprofitfinancefund.org 

market: Northeast, midwest, mid-atlantic, West coast 

NMTC Allocation Total: $130 million—Fourth Round (2006), Sixth Round (2008) 

and Seventh Round (2009) 

Nonprofit Finance Fund works to create a strong, well-capitalized and 

durable nonprofit sector by providing financing, consulting and advocacy 

services to nonprofit organizations and funders. Since its founding in 

1980, NFF has worked with thousands of nonprofits and provided 

$200 million in loans and $60 million in NMTC financing, leveraging 

$1 billion of capital investment on behalf of its nonprofit clients. 

NFF works with nonprofit organizations across many sectors with one 

of its focus areas being children and youth services, including education. 

Since 2002, NFF has provided $14.5 million in financing to 38 

charter schools in Massachusetts, New Jersey, New York, California 

and Washington, D.C. NFF’s loans range in size from $100,000 to $2.5 

million, with terms of up to seven years and amortizations of up to 15 

years, and potentially longer on a case-by-case basis. Eligible uses 

include acquisition, new construction, renovation, leasehold improvement 

and working capital. In addition to providing loan monies, NFF has 

utilized its $130 million NMTC allocation to finance nonprofit facility 

projects across the country, including arts, human service and charter 

school projects. As of December 2009, NFF has deployed $7.5 million 

of its NMTC allocation for one charter school project in Detroit and provided 

leveraged loans to other NMTC projects. 

Through NFF Capital Partners, NFF provides technical assistance and 

advisory services to nonprofits pursuing significant growth strategies. 

NFF Capital Partners has worked with ten clients on comprehensive 

engagements to draft business plans and prospectuses to secure $92 

million in growth capital, 40% for youth and education organizations. 

In addition, in 2009, NFF established a $1.6 million loan pool dedicated 

to providing low-cost predevelopment loans for nonprofit real estate or 

program expansion. 

Partners Advancing Values in Education (PAVE) 

Website: http://www.pave.org 

market: milwaukee, Wisconsin 

PAVE seeks to provide educational opportunity for low-income families 

in Milwaukee. Founded in 1992, PAVE originally fulfilled this mission 

through the provision of scholarships to low-income families. The organization 

has invested $27 million in scholarships for 17,000 families to 

date. In 2001, PAVE became certified as a CDFI, and with a $20 million, 

five-year matching grant from the Lynde & Harry Bradley Foundation, 

launched its Capital Investments Program to expand the capacity of 

high-performing urban schools in Milwaukee. Since 2001, PAVE has 

invested $16 million in school expansion projects, leveraging $60 

million in private investment for the development of high-performing 

urban schools. In 2009, PAVE unveiled a new strategic plan that seeks 

to increase the number of schools that can demonstrate excellence in 

educating children from low-income families in Milwaukee, and in 2010, 

PAVE will work with three “excellent” schools to expand their services 

and five to seven schools with the “potential for excellence” to improve 

their programs. 

In addition to other schools of choice, PAVE has supported expansion 

projects for eight high-quality charter schools, including Milwaukee 

College Preparatory School. PAVE has directly invested $3.3 million 

and leveraged $9 million in financing from Lincoln State Bank, North 

Milwaukee State Bank, Park Bank and IFF on behalf of these schools. 

PAVE restricts eligibility for capital funding to schools that have a demonstrated 

record of successfully educating children from low-income 

families and limits its facilities financing activity to four or five projects 

at any given time. The program’s capital projects are typically in the $4 

million range, with PAVE providing 5% to 10% of the project cost in 

direct assistance. PAVE also provides consulting services in the areas of 

facilities development, business and strategic planning, program development 

and leadership development for schools serving low-income 

students in Milwaukee. 


15


16 

Raza Development Fund, Inc. (RDF) 

Website: http://www.razafund.org 

market: Nationwide, markets with low-income and disadvantaged student 

populations 


2004 and 2006 

Raza Development Fund, Inc., a support corporation of the National 

Council of La Raza (NCLR), was established in 1998 as the community 

development lending arm for the NCLR. RDF’s mission is to invest capital 

and create financing solutions to increase opportunities for the Latino 

community and low-income families in the areas of quality educational 

opportunities, affordable housing and access to quality primary health 

care. To date, RDF has provided capital to 200 organizations, funding 

loans totaling $139 million. This financing has leveraged $800 million in 

private capital for projects serving low-income families and individuals. 

RDF provides predevelopment, leasehold improvement, acquisition, construction 

and mini-permanent loans to charter schools, along with technical 

assistance for business, growth and facility planning. In addition, 

RDF employs its $14.6 million in ED grant funds to provide guarantees 

for both leases and loans to charter school landlords and lenders. Since 

its inception, RDF has approved $53 million in direct financing for 55 

charter schools, CMOs and nonprofit real estate developers to acquire 

or construct facilities in 18 states, resulting in the creation of 28,200 

new student seats. This financing has supported facilities projects with 

total costs of $170 million, leveraging additional support and financing 

from traditional lenders, including Bank of America, Wells Fargo Bank, 

Citibank, JPMorgan Chase Bank, Prudential Social Investments and 

State Farm Insurance Company. 

Self-Help (Center for Community Self-Help) 

Website: http://www.self-help.org/business-and-nonprofit-loans/who-welend-to-1/charter-schools 



2004 and 2006 

NMTC Allocation Total: $220 million—First Round (2002), Third Round (2005) and 

Sixth Round (2008) 

Self-Help and its financing affiliates Self-Help Credit Union, Self-Help 

Federal Credit Union and Self-Help Ventures Fund provide financing, 

technical support and advocacy to those left out of the economic mainstream. 

Since its founding in 1980, Self-Help has invested $5.6 billion 

in financing on behalf of 62,300 families, individuals and organizations. 

Self-Help entered the charter sector in 1997 and has since provided 

$106 million in facilities financing to 43 charter schools in 11 states 

and Washington, D.C. Self-Help loans are available to charter school 

operators and/or affiliates and landlords that provide real estate or man- 

agement services to charter schools. Self-Help offers acquisition, renovation, 

leasehold improvement, construction and mini-permanent loans 

for facilities projects, including the purchase or leasing of modulars. 

There is no cap on loan size, and priority is given to charter schools 

serving low-income and at-risk students. Self-Help offers interest-only, 

variable-rate construction loans and fixed-rate permanent loans with 

15- to 20-year amortizations and five- to 20-year terms. Interest rates 

are generally at market, although charter schools serving at-risk students 

may qualify for lower rates. 

Self-Help is utilizing $10.2 million in ED grant funds as credit enhancement 

to make higher risk loans, provide more favorable terms to charter 

schools and expand its geographic focus. To date, the grant funds have 

leveraged $83 million and assisted 35 schools in financing their facilities. 

Self-Help has committed half of its $220 million NMTC allocation to 

charter school projects and has closed $62 million in low-interest NMTC 

loans to 25 charter schools. 

The Reinvestment Fund, Inc. (TRF) 

Website: http://www.trfund.com 

market: mid-atlantic region (delaware, maryland, New Jersey, 

Pennsylvania and Washington, d.c.) 

ED Credit Enhancement Award Total: $20 million—Fiscal Years 2001, 2004 and 

2005 ($10 million in Fiscal Year 2001 and 2004 grants were jointly awarded to 

The Reinvestment Fund, Inc., NCB Capital Impact and FOUNDATIONS, Inc.) 

NMTC Allocation Total: $279 million—Second Round (2003-2004), Fourth Round 

(2006), Sixth Round (2008) and Seventh Round (2009) 

The Reinvestment Fund builds wealth and opportunity for low-wealth 

people and places through the promotion of socially and environmentally 

responsible development. Founded in 1985 as a community development 

organization working in Greater Philadelphia, TRF now serves the 

Mid-Atlantic region, working with a diverse network of investors and 

business partners to galvanize private initiative and capital for investment 

in homes, schools, businesses and a clean energy future. TRF has 

provided $900 million in capital to 2,500 housing, economic development, 

business and educational ventures. 

TRF began financing charter schools in 1997 and has since provided 

$165 million in facilities financing to 45 charter schools. In addition, it 

has provided $11 million in cash flow financing to 18 charter schools. 

Together, these schools educate 29,700 students, the majority of which 

qualify for the free and reduced-price lunch program. Facility loan funds 

are available for predevelopment, acquisition, renovation, construction, 

leasehold improvements and energy efficient enhancements of charter 

school facilities in TRF’s footprint. In addition to financing, TRF provides 

ancillary services, such as guidance in planning energy efficient 

upgrades and reducing energy costs, as well as technical assistance 

regarding project feasibility.

In addition to its Core Loan Fund, TRF established two facilities loan 

funds for charter schools with its ED grants that allow TRF to make 

loans with higher risk profiles. In 2001, TRF partnered with NCB Capital 

Impact and FOUNDATIONS, Inc. to create the Charter School Capital 

Access Program. This $45 million loan fund, administered by NCB 

Capital Impact, was credit enhanced with $6.4 million in ED grant 

funds. In 2006, TRF established a second loan program totaling $60 

million, supported by $10 million in grant funds from ED, which provides 

subordinate debt, leasehold financing and NMTC mortgages. TRF utilizes 

its NMTC allocation for charter school facility financing, offering larger 

loans with favorable terms. TRF has provided $29.4 million in NMTC 

financing for four charter schools. TRF Energy also finances and offers 

incentives for energy efficient building systems. 

real eState developerS 

Nonprofit developers provide design, construction, project management 

and turnkey development services to charter schools. They then engage 

in either the lease or sale of the facilities to charter schools. Developers 

may additionally secure financing for development. 

Charter Schools Development Corporation 

Website: http://www.csdc.org 

See “Charter Schools Development Corporation” under “Financing 

Organizations.” 

Civic Builders (Civic) 

Website: http://www.civicbuilders.org 

market: New york city, Newark 


Civic Builders was founded in 2002 as a nonprofit facilities developer 

for charter schools in New York City. Civic has developed or is in the 

process of developing, 620,000 square feet of educational space for 

11 charter school projects with total costs of approximately $340 million. 

These facilities will serve 5,600 students in Harlem, the Bronx and 

Brooklyn. In 2008, Civic Builders expanded its services into the Newark, 

New Jersey charter school market with the launch of a new development 

for North Star Academy College Preparatory High School, 

a member of the Uncommon Schools network of charter schools. 

By assuming ownership of a school’s facility, Civic Builders becomes a 

steward of the real estate asset, ensuring that the building will continue 

to be occupied by a charter school should the school’s charter not be 

renewed. Civic’s leases include academic standards, enabling Civic to 

terminate the lease of a chronically underperforming charter school. 

Civic’s projects are funded from a variety of sources, including private 

philanthropy, the New York City Department of Education, commercial 

lenders, community development lenders and other city, state and federal 

government subsidies. Civic has raised $20 million in philanthropic 

support, including grants from the Michael & Susan Dell Foundation and 

The Broad Foundation. Civic has also been a primary partner in Mayor 

Bloomberg’s support for charter school facilities in New York City, which 

included an appropriation of $250 million in the city’s Fiscal Year 2005- 

2009 capital plan and a $210 million appropriation in the city’s Fiscal 

Year 2010-2014 capital plan. To date, Civic Builders has accessed over 

$200 million in city capital. 

Pacific Charter School Development (PCSD) 

Website: http://www.pacificcharter.org 

market: california 

Pacific Charter School Development was founded in 2003 and incubated 

by the NewSchools Venture Fund to serve as a nonprofit developer 

and landlord for high-quality charter schools. PCSD focuses its efforts 

on neighborhoods with schools that are chronically overcrowded, large 

and academically low-performing and that have high concentrations of 

low-income and at-risk students. PCSD locates, acquires, finances and 

builds facilities and then leases them to charter schools with proven 

track records. PCSD works with schools so that they eventually own the 

facilities, which allows it to recycle equity for the development of future 

schools. To date, PCSD has built and/or renovated 33 schools on 23 

campuses serving 12,300 students. It plans to develop 18 additional 

campuses for 22 schools that will serve 11,100 students over the next 

three years, for a total of 23,000 new student seats by 2012. 

PCSD’s current clients include six high-performing CMOs in California: 

Alliance for College-Ready Public Schools, Aspire Public Schools, Green 

Dot Public Schools, ICEF Public Schools, KIPP LA and Partnerships to 

Uplift Communities Schools. It also provides construction management 

and facilities consulting services to other schools and school reform 

leaders. 

PCSD has received $38.6 million in grants and PRIs to serve as equity 

in its projects and an additional $2.4 million in grants for operational 

support. The Walton Family Foundation, The Broad Foundation and the 

Bill & Melinda Gates Foundation have contributed $16.7 million, $13.5 

million and $6.9 million, respectively. Additional support has been provided 

by NewSchools Venture Fund, The Ahmanson Foundation, Pisces 

Foundation, LISC and the Weingart Foundation. 


17

Tax-Exempt Bond Market 

18 


The tax-exempt bond market is an attractive source of financing for 

charter school facilities. Interest rates on these bonds are lower than 

traditional commercial loans due to their tax-exemption, and schools 

can fix these lower rates over a longer, fully amortizing term, generally 

up to 35 years. Longer repayment terms allow charter schools to grow 

enrollment and revenues to full capacity without incurring large annual 

debt service expenses that can drain program resources. 

Tax-exempt bonds are broadly classified as either general obligation 

(GO) bonds or revenue bonds. GO bonds are secured by the full faith 

and taxing power of the issuing government and are considered the 

strongest of all tax-supported debt structures. Revenue bonds are 

secured by a defined revenue stream, such as municipal utility fees, gas 

taxes, tolls or, in the case of charter schools, per pupil revenues. Charter 

schools have primarily financed their facilities with revenue bonds that 

have been issued through a conduit agency authorized by the state in 

which the school operates. 

In order to achieve higher credit ratings and lower interest rates, many 

charter schools utilize credit enhancement to further secure their bond 

offerings. Credit enhancement can involve the substitution of a stronger 

third-party’s credit, as in the case of bond insurance and letters of 

credit, or it can involve specific collateral pledged for repayment of 

the bonds, as in the case of additional debt service reserves or partial 

guarantees. Such enhancement reduces repayment risk and thus lowers 

interest rates. Two states, Colorado and Indiana, allow the use of a 

moral obligation (MO) pledge, a form of credit enhancement, in connection 

with charter school revenue bonds. With this pledge, the state 

rated Charter SChool Bond iSSuanCe 1 

or municipality is legally authorized, although not required, to make an 

appropriation out of general revenues to replenish a debt service reserve 

fund that has been drawn upon to meet debt service payments to bondholders 

in the event a charter school is unable to make its scheduled 

payments. This MO pledge effectively substitutes the credit strength 

of the state or municipality for that of the charter school, resulting in 

significant interest savings. 

As of year-end 2009, a total of 176 charter school facility bond issuances 

totaling $2.4 billion have been rated by the three major rating 

agencies: Fitch Ratings, Moody’s Investor Services and Standard & 

Poor’s. Unrated charter school bond issuances, estimated to number 

between 150 and 200 over the same period, are outside the scope of 

this study and will be addressed in future EFFC publications. 

MarKet overvieW 

The municipal bond market is primarily an investment grade market. 

Historically, many borrowers of tax-exempt debt purchased insurance 

or some other form of credit enhancement to obtain higher ratings and 

lower interest rates, and several bond insurance companies collectively 

had a substantial presence in the market. However, as the bond insurers’ 

losses on collateralized debt obligations and other structured financial 

products mounted in early 2008, their ratings began to deteriorate. 

Over the past two years, every municipal bond insurer active in the 

tax-exempt market in 2007 was downgraded, in some cases multiple 

times. These downgrades dampened investor appetite for municipal 

bonds generally, for both insured and uninsured issues, with interest 

rates increasing and issues rated “A” or below paying historically large 

premiums. 

1 These 176 issues represent all rated charter school issues identified utilizing the Municipal Security Rulemaking Board’s EMMA (Electronic Municipal Market Access), 

Bloomberg L.P., information provided by the individual rating agencies and data collected and shared with the EFFC by the Foundation for Education Reform & 

Accountability and RBC Capital Markets.

Higher-credit quality charter schools had been increasingly able to 

access the tax-exempt market on attractive terms through 2007, with 

roughly half utilizing some form of credit enhancement. However, the 

collapse of the insurers had a disproportionately negative effect on 

charter school issuance. With investors wary of all but the highest-rated 

securities and the three most active charter school bond insurers—ACA 

Financial, CIFG Assurance and XL Capital Assurance—either downgraded 

to junk bond status or no longer rated, charter schools were unable 

to access the tax-exempt market at any price during parts of 2008. 

Between 2007 and 2009, the use of tax-exempt financing, both rated 

and unrated, for charter schools declined dramatically. Dollar volume 

of rated bond issuance fell from a high of $676 million in 2007 to less 

than a third of that amount in 2008, and remained well below 2007 

levels in 2009. The number of transactions showed a similar decline, 

from 37 in 2007 to 17 in 2008 and 16 in 2009. Over this same period, 

interest rates steadily rose, with interest rates peaking at over 9% for 

some charter school borrowers in the early part of 2009. The chart 

above depicts annual rated issuance activity in terms of both the number 

of issues and the total par amount issued for the period between 

1999 and 2009. 

Bond iSSue ratingS 

The graphs below illustrate the initial and current ratings for all 176 

bond issues, including both those that were rated with criteria based 

only on the charter school’s credit (unenhanced) and those which 

obtained higher ratings based on the strength of additional credit 

enhancement (enhanced). See Appendix C for the municipal bond rating 

scales employed by the three rating agencies. 

BBB/Baa 

(70) 

40% 

BB/Ba 

(27) 

15% 

at iSSuanCe 

AAA/Aaa 

(28) 

16% 

For the purposes of this study, an “enhanced” rating is one stemming 

from any security pledge—often that of a third party—in addition to 

revenues from the charter school itself. An “unenhanced” rating is an 

underlying rating of the charter school, excluding any other security 

which may be part of the bond issue. For example, many Colorado 

issuances have three ratings: an enhanced rating provided by the credit 

strength of a bond insurance company; an underlying rating for the 

issue provided by the state’s moral obligation pledge; and an underlying 

rating for the individual school. Any discussion of “unenhanced” or 

“underlying” ratings in this study refers to the third category, the rating 

for the school. Appendix B to this study includes specific data for these 

176 rated bond offerings, including the data below: 

• State 

• Issuer 

• School 

• 

Dated date 

Charter SChool Bond iSSue ratingS 1 

(Including enhanced ratings, where applicable) 

A 

(34) 

19% 

AA/Aa 

(17) 

10% 

Par amount 

Credit enhancement, if any 

Rating agency 

Enhanced rating at time of issuance, if applicable 

Unenhanced rating at time of issuance 

Current enhanced rating, if applicable 

Current unenhanced rating 

A downloadable spreadsheet is also available on the EFFC’s 

website http://www.lisc.org/effc/2010Landscape. 

B 

(1) 

1% 

BBB/Baa 

(65) 

36% 

BB/Ba 

(25) 

14% 

Current 

1 Current ratings are those as of March 12, 2010, and issuances with ratings from more than one 

agency are shown using the lower of the ratings, where applicable. 

Withdrawn 

(38) 

22% 

A 

(38) 

22% 

AA/Aa 

(9) 

5% 


19


20 

BreaKdoWn oF enhanCed and unenhanCed 

Bond iSSuanCe 

Eighty, or 45%, of all rated charter school bond offerings have been 

issued with some form of credit enhancement, including bond insurance, 

a moral obligation pledge from a state, a letter of credit, a general 

obligation pledge from a school district, other third-party guarantees or 

some combination of the above. These 80 enhanced issues also account 

for 45% of the total par amount of rated charter school bond issuance, 

approximately $1.1 billion. Thirty-six bond offerings had both enhanced 

and underlying ratings, while 44 were issued with no underlying rating. 

rating ChangeS For Bond iSSueS With 

Credit enhanCeMent 

The disruption in the credit markets in 2008 and subsequent downgrade 

of the bond insurance companies significantly affected the ratings and 

subsequent secondary market pricing of the 80 enhanced issues. As 

can be seen in the chart below, all 80 issues were initially issued with 

investment grade ratings; however, only 19% maintained their original 

ratings, with 81% experiencing downgrades or withdrawals, including 

every offering issued with bond insurance. 

Forty-seven, or 59%, of the enhanced issues experienced downgrades, 

generally because of the deteriorating credit strength of their enhancement 

vehicle. Twenty-three of the 28 issues initially rated triple-A were 

Colorado issuances that were enhanced both with insurance and the 

state’s moral obligation program. When CIFG Assurance North America 

Inc. and XL Capital Assurance Inc. (now Syncora Guarantee Inc.), the 

two primary insurers for Colorado’s program, lost their triple-A rat- 

BreaKdoWn oF 176 rated Charter 

SChool Bond iSSueS 

Unenhanced 

(96) 

55% 

80 enhanCed Charter SChool Bond iSSueS 

CoMpariSon oF ratingS at iSSuanCe and Current 

Letter of Credit 

(21) 

12% 

Insurance 

(25) 

14% 

Insurance/ 

MO Pledge 

(23) 

13% 

MO Pledge 

(6) 

3% 

Other 

(5) 

3% 

ings, these issues were downgraded to the program’s “A” rating. The 

five other triple-A rated issues were insured by MBIA Insurance Corp. 

(now National Public Finance Guaranty Corp.) and had their ratings 

downgraded to “A” for S&P-rated issues and to “Baa1” for Moody’srated 

issues when the insurance company was downgraded. The banks 

providing letters of credit generally experienced less drastic deteriorations 

in their credit ratings. Of the 21 banks providing letters of credit, 

15 were originally rated within the double-A category. Of these 15, five 

maintained their ratings, two were downgraded within the double-A cat-

egory and six were downgraded to the “A” category. Eight of the issues 

with an underlying rating that were originally rated “A” due to credit 

enhancement from ACA Financial were downgraded to the school’s 

underlying credit rating, including three issues that were downgraded 

to non-investment grade. 

Eighteen enhanced issues, or 22%, had their ratings withdrawn 

because there was no underlying rating for the school at the time the 

bond insurer was downgraded. Thirteen of the withdrawn ratings had 

an “A” rating at issuance due to credit enhancement from ACA 

Financial, which is no longer rated by any of the three rating agencies. 

Of the remaining issues with withdrawn ratings, two were withdrawn 

because the bonds were refinanced, and one was withdrawn when the 

letter of credit provider accelerated the maturity and purchased the 

bonds after the school failed to make payments under the reimbursement 

agreement. These rating downgrades and withdrawals prompted 

significant changes in pricing, with prices falling and yields rising 

dramatically for many issuances. 

ChangeS For underlying Charter SChool ratingS 

The distribution of ratings for the 132 issues that had unenhanced or 

underlying school ratings has remained generally unchanged. These 

132 issues include 96 that were issued only with the school’s underlying 

rating and 36 that were issued with both enhanced and unenhanced 

ratings. The analysis here pertains to the underlying charter school 

ratings. At the time of issuance, 76% of the underlying ratings were 

investment grade, mostly in the triple-B category. Of the 132 issues, 92, 

or 70%, have experienced no change in rating since issuance. Nine of 

the credits, or 7%, were upgraded, including two that were upgraded 

from below investment grade to investment grade. Five, or 4%, were 

downgraded, including three that were downgraded from investment 

grade to non-investment grade. 

The remaining 26, or 20%, of the underlying school ratings were withdrawn 

for a variety of reasons, primarily because the bond issuance 

was refinanced. Fifteen of the 26 withdrawn ratings are for refunded 

issues, including 11 refundings through Colorado’s moral obligation 

program. An additional five withdrawals are for outstanding Colorado 

moral obligation charter school issuances. Although these issuances 

remain outstanding, program administrators chose not to incur the cost 

of maintaining lower underlying school ratings and now maintain only 

the higher enhanced rating for the program. The remaining six ratings 

were withdrawn for a variety of reasons, including poor performance in 

the case of one school that lost its charter in 2007 and subsequently 

defaulted on payments to bondholders. The chart below illustrates 

the initial and current underlying ratings for the 132 bond issues. The 

gradations between the major rating categories are shown here, unlike 

previous graphs, due to the high number of issues in the lowest investment 

grade rating, “BBB-/Baa3.” 

132 unenhanCed/underlying Charter SChool ratingS 

CoMpariSon oF ratingS at iSSuanCe and Current 


21


22 

ratingS By agenCy 

The three rating agencies provided underlying school ratings for 132 

of the rated bond issuances, six of which had ratings from multiple 

agencies. The graph above illustrates the breakdown of these 138 ratings, 

with S&P providing 102, Moody’s 29 and Fitch seven. Several of 

the schools undertook multiple bond issues. Since ratings at issuance 

occasionally varied over time for the same school, they are tabulated for 

each issuance. 

rated Charter SChool Bond iSSuanCeS By State 

Due in part to its moral obligation program for charter schools, Colorado 

has the most rated issuances at 50. More than half of these bond 

offerings, 29, were issued through the MO program, many of which refinanced 

prior bond offerings at the lower interest rates available because 

of the credit enhancement. Other states with a high number of rated 

issuances include Arizona, Texas and Michigan. The accompanying 

table lists the number of rated charter school issuances and the total 

par amount of such issuances by state. 

repayMent perForManCe 

According to Bloomberg L.P., among the 176 rated charter school bond 

issues detailed, there has been one payment default that resulted in a 

loss to bondholders—a default rate of 0.6% in terms of number of issuances. 

In terms of the dollar amount of the debt originated, the default 

rate is 0.1%. In 2000, Sankofa Shule, a Michigan public school academy 

or charter school, issued $2.5 million in Certificates of Participation 

that were rated “Ba1” by Moody’s. After a period of enrollment declines 

unenhanCed Charter SChool ratingS at iSSuanCe 

By rating agenCy 

rated Charter SChool Bond iSSuanCe By State 

Issuances Par Amount 

State Number % $ Millions % 

CO 50 28.41 $554 22.85 

AZ 21 11.93 338 13.94 

TX 20 11.36 339 13.98 

MI 17 9.66 207 8.53 

FL 13 7.39 213 8.80 

PA 10 5.68 133 5.48 

IL 7 3.98 129 5.30 

ID 7 3.98 36 1.49 

DC 5 2.84 108 4.44 

MA 5 2.84 91 3.75 

CA 3 1.70 58 2.39 

IN 3 1.70 43 1.75 

NC 3 1.70 31 1.29 

MN 2 1.14 28 1.17 

UT 2 1.14 24 1.01 

Various 1 8 4.55 93 3.83 

Total 176 100.00 $2,425 100.00 

1 Eight states had a single rated issue, including: DE, GA, MO, NJ, NY, RI, SC and WI. 

and management turnover, the school lost its charter in 2007. While 

debt service reserve funds were employed to maintain payments to 

bondholders for a period after the school’s closure, it was not anticipated 

that the land and building assets, valued at $1.8 million at the 

time, would be sufficient to make bondholders whole.

While there is no single verifiable data source, there appear to be only 

two cases of missed payments under the accompanying loan agreements 

for the other 175 issues. However, in each case there was no 

loss to bondholders because of credit enhancement built into the issue 

structure. These two issues bring the adjusted default rate of underlying 

school performance to 1.7% in terms of the number of issuances and 

0.4% in terms of the debt originated. 

The first charter school that missed payments under its loan agreement 

was Arizona Montessori, a participant in the $29 million 2000 Maricopa 

County Industrial Development Authority pooled issue for seven charter 

school borrowers. The school was unable to make payments on its $1.7 

million in outstanding debt, and in 2006, the school closed and its facility 

was sold close to the amount of the outstanding debt, at a sale price 

of $1.36 million. Bondholders were kept whole by drawing on reserves 

that had been built into the pool structure. The $29 million issue had 

originally been rated “Baa3” by Moody’s and was downgraded to “Ba3.” 

Subsequently, other schools in the pool experienced deteriorating financial 

performance, with one school, Omega Academy, filing for bankruptcy 

in 2007. Omega Academy is still operational and current on its 

payments; however, it faces litigation. The issue is currently rated “B1” 

by Moody’s and was placed on “Watchlist” for a possible downgrade in 

January 2010. 

The second school that missed payments under its reimbursement 

agreement was Hidden Springs Charter School in Idaho. There was 

no underlying school rating at the time of issuance, only a rating 

of “Aa1” for the letter of credit provider, Bank of America. In 2007, 

Hidden Springs Charter School issued $5.8 million in bonds through 

the Idaho Housing and Finance Association. The school experienced a 

decrease in enrollment for the 2007-2008 school year, resulting in a 

state funding reduction of $250,000. The school was unable to make 

its payments, and the letter of credit provider accelerated the maturity 

and purchased the bonds in March 2009. The school tried to recover 

the state funds in a lawsuit against the state by arguing that the Idaho 

state law that allows public schools to use a previous year’s attendance 

to offset declines in enrollment should also apply to charter schools. The 

state disagreed, and in June 2009, a judge ruled against the school. 

Bondholders experienced no losses due to the credit enhancement. 

outlooK 

More widespread understanding of charter school default rates should 

place charter schools within the context of the relatively safe municipal 

market. The long-standing municipal rating scales used by the major 

rating agencies are currently being reassessed in light of heightened 

federal oversight resulting from the credit crisis. This reassessment is 

not a reflection of a change in credit quality of municipal issuers, but 

rather represents adjustments to how municipal credits compare to corporate 

borrowers. Studies have consistently shown that given the same 

rating, U.S. municipal bonds have had significantly lower default rates 

than corporate bonds, even prior to the global economic crisis. 

In April 2010, Moody’s Investors Services and Fitch Ratings recalibrated 

their U.S. municipal rating scales, resulting in upgrades of many state 

and municipal bond issuers. Moody’s has stated that it will eventually 

move about 70,000 municipal ratings to its new Global Rating Scale, 

while Fitch has changed tens of thousands of municipal ratings as 

part of its transition to a single rating scale. In 2008, Standard & Poor’s 

revised its criteria for various municipal bond sectors, which resulted in 

the upgrading of numerous municipal issuers. Charter schools, however, 

are not included in the municipal sectors that the rating agencies are 

reviewing, and their ratings will not be affected in the near term. As 

charter schools continue to demonstrate default rates comparable to 

other tax-exempt sectors, the benefit of the recalibration experienced 

in other areas of the municipal sector should extend to charter school 

issuances. 

Until such a recalibration, charter schools that choose to access the 

tax-exempt market for their facilities will most likely only be able to do 

so with low investment grade ratings. Those schools which issue on an 

unrated basis will pay a premium as investors still demonstrate a preference 

for rated securities. With bond insurance no longer a viable option, 

government and private philanthropic funds are being used to provide 

the credit enhancement for charter school bonds that is necessary 

but lacking in the current market. Federal credit enhancement grant 

funds are being utilized by the Charter School Financing Partnership, 

in concert with a program-related investment from the Walton Family 

Foundation, to provide credit enhancement for bond issuance for highquality 

smaller schools and stand-alone schools across the country. The 

Bill & Melinda Gates Foundation has provided a $30 million guaranty 

for bond financing for high-quality charter management organizations in 

the Houston market and an $8 million guaranty for a bond offering for 

Aspire Public Schools in California. Both of these issuances also included 

support from the ED credit enhancement program via LISC and NCB 

Capital Impact, respectively, with the Aspire offering also enhanced with 

an $8 million guaranty from the Charles and Helen Schwab Foundation. 

These charter school specific enhancement vehicles are bridging a 

particularly turbulent time in the credit markets and enabling the charter 

sector to further develop its successful track record of performance. 


23

Federal Initiatives 

24 


The U.S. Department of Education offers federal grant funds for charter 

school facilities through two programs administered by the Office of 

Innovation and Improvement, ED’s entrepreneurial arm that makes 

strategic investments in innovative educational practices. The U.S. 

Department of the Treasury allocates authority for three federal tax 

credit programs for which charter schools are eligible. In addition, there 

are two other federal programs that can be accessed for charter school 

facilities financing. 

u.S. departMent oF eduCation 

ED’s Office of Innovation and Improvement administers two charter 

school facilities grant programs—the Credit Enhancement for Charter 

School Facilities Program (Credit Enhancement Program) and the State 

Charter School Facilities Incentive Grants Program (State Incentive 

Grants Program). The Credit Enhancement Program was funded via a 

separate line-item in the federal budget through Fiscal Year 2007. The 

State Incentive Grants Program is funded in two ways: 1) through direct 

appropriation; or 2) from overflow from the Public Charter Schools 

Program (PCSP). Under the authorizing statute, when the appropriation 

for the PCSP exceeds $200 million but totals less than $300 million, 

funds that exceed $200 million are allocated to the State Incentive 

Grants Program. If funds in excess of $300 million are appropriated, 

50% of the excess must be used for the State Incentive Grants 

Program. Beginning in Fiscal Year 2008, funding for the PCSP, the 

Credit Enhancement Program and the State Incentive Grants Program 

has been consolidated into a single line-item. In Fiscal Years 2008 and 

2009, the appropriation acts permitted the Secretary of Education to 

use amounts in excess of $190 million and $195 million, respectively, 

for the two federal facilities programs, resulting in approximately $21 

million in combined funding in each of the two years. Historical federal 

funding over the last five years for the three charter school programs is 

summarized below. 

For Fiscal Year 2010, the federal charter school programs received 

$256 million in a single line-item together with language permitting the 

Secretary of Education to use up to $23 million for the two facilities 

programs, up to $50 million to make multiple awards to nonprofit CMOs 

and other nonprofit entities to expand or replicate successful charter 

school models, and $10 million to develop a sound support infrastructure 

for high-quality charter schools, including grants for the provision 

of technical assistance to public chartering agencies. The balance is 

available to fund the PCSP. 

Credit Enhancement for Charter School Facilities 

Program 

Website: http://www.ed.gov/programs/charterfacilities/index.html 

Statutory reference: http://bit.ly/bk3yJd 

This federal program provides grant funds on a competitive basis to 

public and nonprofit entities to develop innovative credit enhancement 

models that assist charter schools in leveraging capital from the private 

sector. Program funds may not be used for the direct purchase, lease, 

renovation or construction of facilities. Instead, funds must be used to 

attract other financing for such purposes. Examples include guaranteeing 

and insuring debt for charter school facilities; guaranteeing and 

insuring leases for personal and real property; assisting facilities financ- 

hiStoriCal Federal Charter SChool appropriationS and expenditureS ($ in Thousands) 

2005 2006 2007 2008 2009 

Appropriations 

Charter School Programs 1 $216,952 $214,782 $214,782 $211,031 $216,031 

Credit Enhancement Program 36,981 36,611 36,611 - - 

Total Charter School Programs 253,933 251,393 251,393 211,031 216,031 

Expenditures 

PCSP Start-up Grants 200,000 200,000 200,000 190,000 195,000 

Facilities Programs 

Credit Enhancement Program 36,981 36,611 36,611 8,300 8,300 

State Incentive Grants Program 16,952 14,782 14,782 12,731 12,731 

Sub-Total Facilities Programs 53,933 51,393 51,393 21,031 21,031 

Total Charter School Programs $253,933 $251,393 $251,393 $211,031 $216,031 

Source: EFFC 

1 For Fiscal Years 2005 through 2007, this line-item funded both PCSP and the State Incentive Grants Program. Beginning in Fiscal Year 2008, this line-item funded PCSP, the 

State Incentive Grants Program and the Credit Enhancement Program.

Credit enhanCeMent For Charter SChool FaCilitieS prograM reCipientS ($ in Millions) 

Recipient 2001 2003 2004 2005 2006 2007 2008 2009 Total 

America’s Charter School Finance Corp./ $4.96 $— $— $— $— $— $— $— $4.96 

Building Hope 

California Charter Schools Association/ — — — 10.00 — — — — 10.00 

NCB Capital Impact 

Charter Schools Development Corporation 6.40 — 8.60 — 6.60 — — — 21.60 

Civic Builders — — — — — — 8.30 — 8.30 

New Jersey Community Capital 1 — — — — 8.15 — — — 8.15 

Dept. of Banking & Financial Institutions 2 — — 5.08 — — — — — 5.08 

Housing Partnership Network, Inc. — — — — — 15.00 — — 15.00 

IFF — — — 8.00 — 10.00 — — 18.00 

Indianapolis Local Public Improvement Bond Bank — — — 2.00 — — — — 2.00 

KIPP Foundation — — — — 6.80 — — — 6.80 

Local Initiatives Support Corporation — 6.00 4.00 — 8.20 — — 8.26 26.46 

Low Income Investment Fund 3.00 — — — — 5.00 — — 8.00 

Massachusetts Development Finance Agency — 6.00 4.03 — — — — — 10.03 

Michigan Public Educational Facilities Authority — — — — — 6.53 — — 6.53 

NCB Capital Impact/The Reinvestment Fund, Inc. 6.40 — 3.60 — — — — — 10.00 

NCB Capital Impact — 6.00 2.00 — — — — — 8.00 

Raza Development Fund, Inc. 4.20 — 8.75 — 1.60 — — — 14.55 

Self-Help — 6.77 1.23 — 2.20 — — — 10.20 

The Reinvestment Fund, Inc. — — — 10.00 — — — — 10.00 

Texas Public Finance Authority — — — 6.94 3.06 — — — 10.00 

Total $24.96 $24.77 $37.29 $36.94 $36.61 $36.53 $8.30 $8.26 $213.66 

Source: EFFC, U.S. Department of Education 

1 New Jersey Community Capital is the registered trade name of Community Loan Fund of New Jersey, the award recipient. 

2 The program funded with this award, the Charter School Incubator Initiative, is a public-private partnership between the D.C. Office of the State Superintendent of Education and 

Building Hope. 

ing by identifying potential lending sources; encouraging private lending 

and other similar activities; and establishing charter school facility 

“incubator” housing that new charter schools may use until they can 

acquire their own facility. 

To date, the Credit Enhancement Program (including its predecessor, 

the Charter School Facility Financing Demonstration Grant Program) 

has made 35 awards to 19 public and nonprofit entities totaling approximately 

$214 million in eight competitive rounds. 

As of September 30, 2008, grantees had provided 278 charter schools 

with access to financing to help them acquire, build or renovate school 

facilities, leveraging $1.27 billion on behalf of these schools. As can be 

seen from the accompanying table, because of the program’s structure, 

the financing leveraged does not necessarily occur in the year in which 

the award is made. Thus, loan volume continues to expand although 

appropriation levels remain fairly flat, with loan volume in 2008 roughly 

nine times greater than that in 2003. 

Of the 278 charter schools that have received credit enhancement 

through the program, five, or 1.80%, have gone into either actual or 

technical default. However, to date, only two of these defaults have 

resulted in an actual loss in funds of $335,000, representing 0.16% 

of the $214 million in grant funds awarded and 0.03% of the $1.27 

billion in financing leveraged. 

Credit enhanCeMent prograM ($ in Millions) 

Federal Number of 

Fiscal ED Grant Financing Charter 

Year Awards Leveraged Schools 

2001 $24.96 $0.00 0 

2002 0.00 0.00 0 

2003 24.77 56.38 21 

2004 37.29 71.78 29 

2005 36.94 109.69 36 

2006 36.61 168.37 46 

2007 36.53 342.72 64 

2008 8.30 520.48 82 

2009 1 8.26 Na Na 

Total $213.66 $1,269.42 278 

Source: U.S. Department of Education 

1 “Na” means data not yet available. 


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26 

State Charter School Facilities Incentive 

Grants Program 

Website: http://www.ed.gov/programs/statecharter/index.html 

Statutory reference: http://bit.ly/baxtzt 

Created under section 5205(b) of the Elementary and Secondary 

Education Act (ESEA), as amended by the No Child Left Behind Act of 

2001 (NCLB), this federal program provides federal funds on a declining 

matching basis to select states with per pupil facilities aid programs 

for charter schools. The program is designed to encourage states to 

develop and expand per pupil facilities aid programs and to share in the 

costs associated with charter school facilities funding. To be eligible, a 

state’s program must be specified in state law and provide annual funding 

on a per pupil basis for charter school facilities. ED provides grants 

with a maximum term of five years, and the maximum federal share of 

the cost of establishing, or expanding, and administering the program 

decreases each year as follows: 

• 

• 

• 

• 

• 

State Charter SChool FaCilitieS inCentive grantS prograM reCipientS ($ in Millions) 

Cohort 1 Grantees 2004 2005 2006 2007 2008 Total 

California School Finance Authority $9.85 $9.85 $9.85 $9.85 $9.85 $49.25 

Minnesota Department of Education 5.00 4.00 2.21 2.00 1.00 14.21 

Utah State Office of Education 2.79 2.38 1.66 1.28 0.80 8.90 

District of Columbia Public Schools 1.06 0.72 1.06 1.65 1.08 5.57 

Total $18.70 $16.95 $14.78 $14.78 $12.73 $77.95 

Cohort 2 Grantees 2009 2010 2011 2012 2013 Total 

California School Finance Authority $7.72 $8.70 $9.70 $10.00 $10.00 $46.12 

Indiana Department of Education 5.00 4.00 3.00 2.00 1.00 15.00 

Total $12.72 $12.70 $12.70 $12.00 $11.00 $61.12 

Source: EFFC, U.S. Department of Education 

90% in the first year 

80% in the second year 

60% in the third year 

40% in the fourth year 

20% in the fifth year 

States may reserve up to 5% of grant funds for administrative expenses, 

including indirect costs, to carry out evaluations, provide technical 

assistance and disseminate information. Priority is given to states with 

charter authorizers that conduct a periodic review and evaluation of 

charter schools at least once every five years, as well as perform all of 

the following: demonstrate progress in increasing the number of highquality 

charter schools; provide for a charter authorizer that is not a 

local educational agency (LEA), or, if LEAs are the only authorized public 

chartering agencies, allow for an appeals process; and ensure that 

charter schools have a high degree of autonomy over their budgets and 

expenditures. In addition, states receive priority based on the capacity of 

charter schools to offer public school choice to communities most 

in need of educational options with the following factors considered: 

1) the extent to which the applicant would target services to geographic 

areas in which a large proportion or number of public schools have been 

identified for improvement, corrective action or restructuring under Title 

I of ESEA, as amended; 2) the extent to which the applicant would target 

services to geographic areas in which a large proportion of students 

perform poorly on state academic assessments; and 3) the extent to 

which the applicant would target services to communities with large 

proportions of low-income students. Lastly, in the 2009 competition, 

priority went to states that had not previously received a grant under 

the program. 

In Fiscal Year 2004, the program awarded $18.7 million in first-year 

funding for the first cohort of grantees, including California, Minnesota, 

Utah and the District of Columbia. Ongoing annual awards were made 

to these four grantees through Fiscal Year 2008, with aggregate awards 

totaling $78 million over the five-year period. In Fiscal Year 2009, the 

program awarded $12.7 million in first-year funding for a second cohort 

of grantees, including California and Indiana. Ongoing annual awards 

will be made to these two grantees through Fiscal Year 2013, bringing 

the program’s award totals to $139 million. 

ED measures the efficiency of this facilities program by examining the 

leverage ratio of federal dollars, defined as the total funds available, 

including the federal grant and the state match, divided by the federal 

grant for a specific year. 

State Charter SChool FaCilitieS inCentive 

grantS leverage 

Federal Fiscal Year Leverage Ratio 

2004 6.9 

2005 17.0 

2006 5.3 

2007 5.8 

2008 44.9 

Source: U.S. Department of Education

u.S. departMent oF the treaSury 

The Treasury Department allocates tax credit authority on behalf of 

three federal programs that charter schools can access for facilities 

financing: the Qualified School Construction Bond Program, the 

Qualified Zone Academy Bond Program and the New Markets Tax 

Credit Program. 

Qualified School Construction Bond Program 

Website: http://www2.ed.gov/policy/gen/guid/secletter/090529.html 

https://www.treasurydirect.gov/govt/apps/slgs/slgs_irstax.htm 

Statutory reference: http://bit.ly/azpdEH 

Qualified School Construction Bonds support the construction, rehabilitation 

or repair of public school facilities, the acquisition of land on which 

such facilities will be constructed and furniture and equipment for the 

facilities. Projects financed with QSCBs must comply with federal wage 

rate requirements and labor standards. State and local governments 

may issue up to $22 billion of QSCBs, including $11 billion allocated in 

2009 and another $11 billion in 2010. Indian tribal governments may 

issue an additional $200 million annually in 2009 and 2010. 

• 

• 

• 

• 

• 

LegisLation, RuLes & aLLocations 

Created by the Recovery Act, which added Section 54F to 

the Internal Revenue Code. 

In April 2009, the Internal Revenue Service issued Notice 

2009-35, which provided guidance and the 2009 allocations. 

In March 2010, Notice 2010-17 was issued, which 

provided allocations for 2010. 

The Hiring Incentives to Restore Employment Act (HIRE Act) of 

2010 authorized QSCBs to be issued as direct payment bonds. 

In April 2010, Notice 2010-35 was issued, providing guidance 

on the HIRE Act bond provisions. 

The federal government uses a statutory formula to allocate the authority 

to issue QSCBs to states and large local educational agencies. 

Forty percent of the allocation is distributed to the 100 LEAs with the 

largest populations of school-age students in poverty plus up to 25 

LEAs determined to be in-need by the U.S. Secretary of Education. The 

remaining 60% of the allocation goes to states based on their proportion 

of the prior year’s Title I grant funding for disadvantaged students 

under NCLB, with the amount allocated to any state reduced by the 

aggregate amount of allocations to the LEAs within the state. Individual 

states determine which portion of their allocations, if any, may be used 

by charter schools. 

QSCBs are tax credit bonds for which the federal government provides 

a tax credit in lieu of interest payable on the bonds, lowering interest 

expenses for the borrower. The bondholder receives all or a portion of 

its return on investment as a federal tax credit against its federal tax 

liability. The maximum maturity and the rate of the federal tax credit 

is set daily by the Treasury Department, but is fixed for the life of the 

bonds at issuance. QSCBs are generally structured as bullet term bonds, 

with a single principal payment at maturity; however, borrowers may 

create voluntary sinking funds subject to certain requirements. 

While it was anticipated that QSCBs would be zero-interest, investors 

have typically required a supplemental coupon payment that, together 

with the tax credit, meets their required return. Bond issuers and investors 

also anticipated having the ability to strip the tax credits and sell 

them separately, but the market has been reluctant to do so prior to 

issuance of formal guidance from the Treasury Department, which is 

anticipated by July 2010. 

In March 2010, the HIRE Act was signed into law, authorizing QSCBs 

and QZABs to be issued as direct payment bonds for which an issuer 

irrevocably elects to receive cash subsidy payments from the Treasury 

Department in lieu of tax credits that could otherwise be claimed. The 

amount of the cash subsidy paid directly to issuers on each interest 

payment date is equal to the amount of tax credit that would have been 

available on each quarterly date based on the tax credit rate set by the 

Treasury Department. 

To date, approximately $2.7 billion in QSCBs have been issued, virtually 

all on behalf of traditional district schools. Uncommon Schools’ North 

Star Academy in Newark completed a $16.5 million QSCB transaction 

in December 2009, with a supplemental interest rate of 2%. YES Prep 

Public Schools in Houston combined $5.5 million in QSCBs with $16 

million in QZABs, with a net interest rate of under 1%. Several other 

charter school QSCB transactions are in progress in New Jersey, Texas 

and Washington, D.C. 

Qualified Zone Academy Bond Program 

Website: http://www.ed.gov/programs/qualifiedzone/index.html 

https://www.treasurydirect.gov/govt/apps/slgs/slgs_irstax.htm 

Statutory reference: http://bit.ly/cdazeP (Section 313) 

The Qualified Zone Academy Bond Program helps eligible public schools 

raise funds to rehabilitate and repair facilities, purchase equipment, 

develop course materials and train teachers and other school personnel. 

QZAB proceeds may not be used for new construction or land acquisition. 

QZABs were capped at $400 million annually from 1998 to 2008; 

the Recovery Act increased the cap to $1.4 billion annually for 2009 

and 2010. 

The federal government allocates the authority to issue QZABs to states 

based on their proportion of the United States population living below 

the poverty line, and the Internal Revenue Service publishes state allocations 

for each year. Individual states determine which portion of their 

allocations, if any, may be used by charter schools. 

To be eligible for the QZAB Program, a public school must be located in 

an Empowerment Zone or Enterprise Community or have a student body 

in which at least 35% of students are eligible for the federal free 


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28 

• 

• 

• 

• 

• 

• 

• 

• 

LegisLation, RuLes & aLLocations 

Created by the Federal Taxpayer Relief Act of 1997, which 

added Section 1397E to the Internal Revenue Code. 

The Alternative Minimum Tax and Extenders Tax Relief Act 

of 2008 amended Section 54A of the Internal Revenue Code 

to include QZABs as qualified tax credit bonds subject to 

the requirements of Section 54A. 

The above-referenced act also added Section 54E, which 

provides revised program provisions for obligations issued 

after October 3, 2008. 

The Recovery Act increased the national cap to $1.4 billion 

annually for 2009 and 2010. 

In April 2009, the Internal Revenue Service issued Notice 

2009-30, which provided allocations for 2008 and 2009. 

In February 2010, Notice 2010-22 was issued, which 

provides for $1.4 billion in allocation authority for 2010. 

The HIRE Act authorized QZABs to be issued as 

direct payment bonds. 

In April 2010, Notice 2010-35 was issued, providing 

guidance on the HIRE Act bond provisions. 

and reduced-price lunch program. In addition, the school must develop 

a partnership with a business or other private entity that makes a 

contribution to the school worth at least 10% of the principal amount 

borrowed. Schools are also required to have a comprehensive education 

plan approved by their local school district and in which students are 

subject to the same standards and assessments as other students in 

the district. 

Like QSCBs, QZABs are tax credit bonds for which the federal government 

provides a tax credit in lieu of interest payable, thus lowering 

borrowing costs. The maximum maturity and the rate of the federal tax 

credit is set daily by the Treasury Department, but is fixed for the life 

of the bonds at issuance. QZABs are generally structured as bullet term 

bonds, with a single principal payment at maturity; however, sinking 

funds are allowable subject to certain restrictions. 

The HIRE Act, signed into law in March 2010, authorized QZABs and 

QSCBs to be issued as direct payment bonds for which an issuer 

irrevocably elects to receive cash subsidy payments from the Treasury 

Department in lieu of tax credits that could otherwise be claimed. 

As in the case of QSCBs, investors typically require a supplemental 

coupon payment that, together with the tax credit, meets their 

required return. QZABs have been employed on behalf of 

charter schools in several jurisdictions, including Arizona, California, 

Louisiana, Massachusetts, Michigan, Missouri, Texas, Wisconsin and 

Washington, D.C. 

New Markets Tax Credit Program 

Website: http://www.cdfifund.gov/what_we_do/programs_ 

id.asp?programid=5 

Statutory reference: http://bit.ly/9xmkgE (Latest version available 

through the u.S. government Printing office) 

Congress created the New Markets Tax Credit Program in 2000 to 

stimulate private investment and economic growth in low-income 

communities. A federal tax credit of 39% is provided over seven years 

for Qualified Equity Investments (QEIs) made through designated 

Community Development Entities (CDEs). Substantially all of the QEI 

must in turn be used by CDEs to make loans to or investments in 

businesses and projects in low-income communities. In June 2006, 

the NMTC Program broadened its scope by allowing CDEs to invest in 

businesses located outside of low-income areas provided the businesses 

are owned by, hire significant numbers of, or predominately serve lowincome 

persons. In addition, the program serves persons who have suffered 

as a result of Hurricane Katrina. 

• 

• 

• 

• 

• 

LEgiSLatioN, ruLES & aLLocatioNS 

The Community Renewal Tax Relief Act of 2000 originally 

authorized $15 billion in NMTC authority through 2007. 

The Gulf Opportunity Zone Act of 2005 provided an additional 

$1 billion in allocation authority for communities in federallydesignated 

“Gulf Opportunity Zones” devastated by Hurricane 

Katrina. 

In December 2006, Congress passed the Tax Relief and 

Health Care Act, which extended the program through 2008 

with an additional $3.5 billion in allocation authority. 

In July 2008, the Housing and Economic Recovery Act 

extended the program through 2009 with an additional 

$3.5 billion in authority. 

In February 2009, the Recovery Act provided an additional 

$3 billion in NMTC authority and increased the allocation of 

credits to $5 billion annually for 2008 and 2009. 

NMTCs may be utilized in a wide range of qualified business activities, 

from small business lending to financial counseling to real estate 

development. Eligible real estate development projects encompass 

community facilities, including those for charter schools. With NMTC 

financing, CDEs can make equity investments in or, more commonly, 

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

census tracts. Benefits can include reduced interest rates, seven-year 

terms, longer amortization periods or no principal amortization, and debt 

cancellation. To date, $26 billion of tax credit allocation authority has 

been awarded in seven rounds through a competitive process administered 

by the CDFI Fund. According to the CDFI Fund, these allocations 

have resulted in investments in distressed communities totaling $12 

billion through 2008.

A number of NMTC allocatees have included charter schools specifically 

or community facilities generally as one of the proposed uses of their 

tax credits. The table below lists the controlling entity for these allocatees 

and summarizes data on their NMTC awards and utilization for 

charter schools. Several entities have established multiple CDEs that are 

listed in the aggregate according to the controlling entity; the controlling 

entity listed represents the entity at the time of the award, prior to any 

subsequent mergers. The 40 organizations listed below have received 

nMtC utiliZation For Charter SChoolS ($ in Millions) 

119 NMTC awards totaling $8.76 billion. Approximately $5.6 billion of 

this total has been invested or committed to projects as of February 

1, 2010, with $3.15 billion remaining available for investment. NMTC 

allocation employed on behalf of charter school facilities projects as 

reported by allocatees in an EFFC poll totals $573 million. This utilization 

represents 10% of the closed and committed funds employed by 

these allocatees to date, 7% of their total allocation awards, and 2% of 

the $26 billion awarded more broadly. 

Number of 2009 Total Charter Remaining 

Controlling Entity Awards Allocation Allocation Utilization 1 Available 2 

Alaska Growth Capital BIDCO, Inc. 3 $50.0 $90.0 Na $56.1 

Bank of America, N.A. 5 70.0 578.0 $10.0 194.6 

Boston Community Capital, Inc. 4 85.0 300.0 15.8 170.0 

Capital One Community Renewal Fund, LLC 3 — 250.0 Na 104.8 

CBO Financial, Inc. 5 10.0 130.0 Na 10.0 

Center for Community Self-Help 3 — 220.0 62.6 50.0 

CFBanc Corporation 3 — 230.0 21.0 50.8 

Charter Schools Development Corporation 1 — 40.0 40.0 — 

Citigroup Inc. 3 90.0 221.3 Na 121.3 

City of Chicago 2 55.0 155.0 36.5 86.2 

Clearinghouse CDFI 5 100.0 358.0 — 90.0 

Community Reinvestment Fund, Inc. 5 75.0 597.5 9.0 154.3 

Enterprise Community Partners, Inc. 6 — 610.0 Na 58.5 

Excellent Education Development, Inc. 3 50.0 121.0 71.0 50.0 

Fifth Third Bancorp 1 — 100.0 Na 92.0 

Genesis LA Economic Growth Corporation 3 40.0 170.0 — 55.0 

IFF 1 — 10.0 0.4 — 

Johnson Financial Group, Inc. 4 50.0 182.0 Na 52.0 

JPMorgan Chase & Co. 5 40.0 310.0 19.6 133.6 

Kansas City, MO 2 35.0 75.0 — 75.0 

Local Initiatives Support Corporation 6 115.0 623.0 29.9 188.7 

Low Income Investment Fund 3 45.0 139.0 26.5 99.2 

Massachusetts Development Finance Agency 3 55.0 155.0 — 80.0 

Memphis Div. of Housing & Community Development 1 30.0 30.0 — 30.0 

Merrill Lynch Bank USA 2 — 205.0 34.3 91.6 

National City CDC 2 — 200.0 8.1 94.8 

NCB Capital Impact 5 90.0 409.0 86.8 177.3 

New Jersey Community Capital 3 2 — 50.0 6.0 35.0 

Nonprofit Finance Fund 3 60.0 130.0 7.5 61.0 

Park National Bank 1 50.0 50.0 — 50.0 

PNC Bank, N.A. 1 — 75.0 — 27.0 

Prudential Insurance Company of America 1 — 50.0 — 50.0 

RBC Capital Markets Corporation 2 10.0 65.0 — 51.0 

Revolution Ventures, LLC 1 — 35.0 35.0 — 

Rose Capital, LLC 1 20.0 20.0 — 20.0 

The Reinvestment Fund, Inc. 4 90.0 278.5 29.4 99.4 

Trammell Crow Company 4 80.0 390.0 Na 105.5 

U.S. Bank, N.A. 4 95.0 435.0 16.0 108.0 

Wachovia Corporation 4 — 488.0 7.2 27.2 

Wells Fargo Community Development Corp. 2 90.0 180.0 — 154.6 

Sub-Total Allocatees 119 $1,580.0 $8,755.3 $572.6 $3,154.4 

Total NMTC Allocation $5,000.0 $26,000.0 

Source: EFFC, CDFI Fund 

1 Amount employed for charters as reported by allocatees in EFFC survey; “Na” means not available. 

2 Per CDFI Fund’s 2/1/2010 “NMTC Qualified Equity Investment Report.” 

3 New Jersey Community Capital is the registered trade name of Community Loan Fund of New Jersey. 


29


30 

other Federal prograMS 

United States Department of Agriculture (USDA) Rural 

Development Community Facilities Programs 

Website: http://www.rurdev.usda.gov/rhs/cf/cp.htm 

Statutory reference: http://bit.ly/daxB69 (Latest version available 

through the u.S. government Printing office) 

Authorized by Section 306 of the Consolidated Farm and Rural 

Development Act of 1972, as amended (7 U.S.C. 1926), the USDA Rural 

Development’s Community Facilities Programs provide loans, guarantees 

and grants for essential community facilities in rural areas and towns of 

up to 20,000 in population. These facilities include libraries, hospitals, 

assisted living facilities, fire and rescue stations, community centers 

and schools, including charter schools. Program funds are available for 

public entities and nonprofit organizations. Applicants must have the 

legal authority to borrow and repay loans, pledge security for loans, and 

construct, operate and maintain the facilities. Loan repayment must be 

based on tax assessments, revenues, fees or other sources of funds 

sufficient for operation and maintenance, reserves and debt retirement. 

The program provides guarantees of up to 90% for traditional lenders, 

such as commercial banks, savings and loans and certain regulated 

insurance companies. The program also makes direct loans to applicants 

that are unable to obtain affordable financing, with interest 

rates set according to the median household income of the area and 

repayment terms of up to 40 years. Interest rates are designed to be 

affordable, ranging from 4.5% for areas of high poverty to market rate. 

Both guaranteed and direct loan funds may be used for construction, 

renovation and improvement of facilities as well as refinancing under 

certain conditions. The program’s grant funding is typically used to fund 

projects under special initiatives, such as Native American community 

development efforts and federally-designated Enterprise and Champion 

Communities. Highest priority for these grants is given to projects serving 

communities with populations of 5,000 or less and with median 

household incomes below the higher of the poverty line or 60% of the 

state non-metropolitan median household income. To date, the program 

has provided loans, guarantees and grants totaling approximately 

$197.4 million for charter school projects in 13 states. 

Federal Emergency Management Agency (FEMA) 

Public Assistance (PA) Grant Program 

Website: http://www.fema.gov/government/grant/pa/index.shtm 

Statutory reference: http://bit.ly/94piJo (title 44, chapter i, Subchapter 

d disaster assistance => Part 206 federal disaster assistance => 

Subpart g to Subpart i) and http://bit.ly/asgJzu 

In June 2006, charter schools became eligible for funding through 

the Federal Emergency Management Agency’s Public Assistance 

Grant Program, which provides assistance to states, local governments 

and certain nonprofit organizations to alleviate suffering and hardship 

resulting from major disasters or emergencies declared by the 

President. Through the PA Grant Program, FEMA provides supplemental 

federal disaster grant assistance that reimburses eligible entities for 

costs associated with the repair, replacement or restoration of disasterdamaged, 

publicly owned facilities and the facilities of certain private 

nonprofit organizations. The federal share of assistance is not less 

than 75% of the eligible cost for emergency measures and permanent 

restoration. State and local governments typically share the costs that 

FEMA does not fund; however, charter schools traditionally cover these 

costs themselves. 

Program funds are authorized by FEMA based on applicant cost 

estimates and are distributed to states. For large projects (defined to 

be $54,100 or more), funds are paid to applicants, including charter 

schools, on a cost reimbursement basis. For smaller projects, the state 

transfers funds to applicants, including charter schools, as soon as the 

federal funds are obligated to the state. The state share of funding, 

when applicable, is paid to applicants upon project completion. 

Eligible projects are those that fall within the following categories: 

debris removal; emergency protective measures; road systems and 

bridges; water control facilities; buildings, contents and equipment; utilities; 

and other public facilities, such as parks and recreational facilities. 

From the audit data available, two charter schools in New Orleans have 

received funds through the FEMA PA Grant Program totaling approximately 

$450,000. 

uSda rural developMent CoMMunity FaCilitieS prograMS Charter SChool FinanCing SuMMary 

($ in Millions) 

Loans Guarantees Grants Total 

Year Number Amount Number Amount Number Amount Number Amount 

2001 1 $0.60 3 $6.82 — $— 4 $7.42 

2002 4 4.40 7 8.63 — — 11 13.03 

2003 4 3.85 8 11.50 — — 12 15.35 

2004 3 4.53 9 14.10 1 0.15 13 18.78 

2005 12 24.50 5 8.39 — — 17 32.89 

2006 9 9.42 2 5.60 — — 11 15.02 

2007 4 9.40 4 3.90 1 0.25 9 13.56 

2008 13 22.60 9 31.51 1 0.02 23 54.13 

2009 4 8.16 5 18.91 2 0.13 11 27.2 

Total 54 $87.46 52 $109.38 5 $0.54 111 $197.38 

Source: EFFC, USDA Rural Development


The following jurisdictions have charter legislation, with a limited 

number authorizing publicly funded per pupil allocations, grants, loans 

or some form of credit enhancement for charter school facilities. In 

addition, numerous states allow charter schools to issue tax-exempt 

debt through public or quasi-public conduit issuers or to access their 

Qualified School Construction Bond and Qualified Zone Academy 

Bond programs. Unless otherwise stated, ongoing funding programs 

are subject to periodic appropriation (normally annually or bi-annually) 

by the relevant appropriating body. 

Alaska 

alaska municipal Bond Bank authority (amBBa) conduit financing 

Website: http://www.revenue.state.ak.us/treasury/programs/programs/ 

index.aspx?60000 

Statutory reference: http://bit.ly/9kacm1 

Alaska charter schools are eligible through their local municipalities 

to access tax-exempt financing through the Alaska Municipal Bond 

Bank Authority. AMBBA is a public corporation that was established in 

1975 to assist Alaska municipalities in financing capital improvement 

projects such as schools, water and sewer systems, public buildings, 

harbors and docks. To date, no charter schools have accessed financing 

through AMBBA. 

Q-Bond Programs 

Charter schools are eligible to participate in Alaska’s Q-Bond Programs 

through their school districts. No charter schools have applied to date. 

Arizona 

Per Pupil allocation 

Statutory reference: http://bit.ly/coyg7r (Section (B)(4)) 

Charter schools in Arizona receive a per pupil allocation called 

“equalization assistance,” which consists of a base support level and 

“additional assistance.” State legislation stipulates that “equalization 

assistance” is provided as a single amount based on student population 

without categorical distinctions between maintenance and operations 

or capital. Therefore, grant monies can be used for any educational 

expenditure, ranging from teacher salaries to transportation to facility 

construction. The amount of the “additional assistance” component 

is currently $1,588 per pupil in grades K-8 and $1,851 per pupil in 

grades 9-12. 

industrial development authority conduit financing 

Statutory reference: http://bit.ly/b04J3w (Sections 35-701 to 35-761) 

Charter schools may apply for bond financing through various city 

and county industrial development authorities in Arizona, which act 

as intermediaries between charter school borrowers and bondholders. 


Charter schools are eligible to access financing through Arizona’s 

Q-Bond Programs, which are administered by the Arizona Department 

of Education’s School Finance Unit. To date, $1.5 million in QZABs have 

been issued on behalf of three charter schools. No QSCBs have been 

issued for charter schools. 

Arkansas 

With regard to charter school facilities, Arkansas makes a distinction 

between conversion charter schools and open-enrollment charter 

schools. Conversion charter schools may apply for the same forms 

of state financial assistance for facilities as traditional public schools 

because they remain part of a school district. Open-enrollment charter 

schools do not receive state financial aid for facilities. 


In 2009, one open-enrollment charter school received a QSCB allocation 

totaling $6.6 million. Open-enrollment charter schools are not prohibited 

from participating in the state’s QZAB Program. 

California 

State Charter School Facilities Incentive Grant Award Total: $57 million—Fiscal 

Years 2004 through 2009 

charter School facility grant Program (SB 740) 

Website: http://www.cde.ca.gov/sp/cs/as/facgrntoc.asp 

Statutory reference: http://bit.ly/cWSvyu (Section 47614.5) 

Established in 2001, this program provides an annual appropriated 

reimbursement of up to $750 per pupil for up to 75% of actual facilities 

rental and lease costs. A charter school is eligible only if it operates a 

classroom-based instructional program and is located in an elementary 

school attendance area or has a student population of which at least 

70% is eligible for the federal free and reduced-price lunch program. 

Historically, the program was used to reimburse eligible charter schools 

for prior year expenses. Commencing in Fiscal Year 2010, the program 

will allocate grants to eligible charter schools on a current year basis; 

however, funding appropriated for Fiscal Year 2010 will first be used to 

reimburse eligible charter schools for Fiscal Year 2009 facilities costs. 

charter Schools facilities Program (cSfP) 

Website: http://www.opsc.dgs.ca.gov/Programs/SfProgams/cSf.htm 

Statutory reference: http://bit.ly/93xdvP 

In 2002, California created the Charter Schools Facilities Program, 

which authorizes the State Allocation Board (SAB) to provide per 

pupil facilities grant funding for 50% of the total project cost for new 

construction of charter school facilities. The CSFP was expanded in 

2006 to allow grant funding to be used for rehabilitation of existing, 

district-owned facilities that are at least 15 years old for use by charter 

State Initiatives 

31


32 

schools. CSFP funding is only available to charter schools that provide 

site-based instruction for at least 80% of the time and are determined 

to be financially sound by the California School Finance Authority. 

In addition, the grant funding requires a 50% local match. The state 

provides a lease option whereby a school can borrow from the state in 

lieu of raising matching funds. Grant awards are made in the form of 

preliminary apportionments (i.e., reservation of funds), which must be 

converted within a four-year period to adjusted grant apportionments. 

The CSFP has received $900 million in bond funding through three different 

propositions. To date, 64 projects have received apportionments 

for the full amount. 

• 

• 

• 

Proposition 47 provided $100 million in November 2002 that was 

awarded to six applicants in July 2003. 

Proposition 55 provided $300 million in March 2004 that was 

awarded to 28 applicants in February 2005. 

Proposition 1D provided $500 million in November 2006 that was 

preliminarily apportioned to 24 applicants in 2008 and one applicant 

in 2009. 

In May 2009, the SAB approved a new round of CSFP funding that 

included approximately $51 million in recycled CSFP funds. However, 

as a result of California’s recent budget crisis, the state has not fully 

funded all Proposition 1D awards that it preliminarily apportioned, and 

the program is frozen indefinitely. 

Lease/loan payments for the 2003 awardees were estimated by the 

California School Finance Authority using a 3% interest rate and a 

30-year term, while those for the 2005 awardees were estimated using 

a 4.5% interest rate and a 30-year term. Most Proposition 1D apportionments 

were based on interest rate estimates of 5.5%. 

charter School revolving Loan fund (cSrLf) 

Website: http://www.cde.ca.gov/sp/cs/as/csrevloantoc.asp 

Statutory reference: http://bit.ly/azmkuo (Sections 41365 to 41367) 

California charter schools can apply directly or jointly with their charter 

authorizing entities to the California Department of Education for lowinterest 

loans from the state’s Charter School Revolving Loan Fund for 

purposes established in their charters. The CSRLF was established in 

1996 and is available to non-conversion charter schools that have not 

yet had their charters renewed and are not more than five years old. 

Priority is given to new charter schools using the loans for start-up 

expenses. A charter school may receive multiple loans as long as the 

total amount does not exceed $250,000, and loans must be repaid 

within five years. Funds may be used for, but are not limited to, leasing 

and renovating facilities. Loans carry a fixed interest rate that is generally 

several percentage points below rates provided by private lenders. 

Funds not used in any given year are carried over to the next fiscal year. 

For Fiscal Year 2009, of the $17 million available through the CSRLF, 

$9.5 million was disbursed. Thus far for Fiscal Year 2010, of the $10 

million available through this program, $2.8 million has been disbursed. 

Proposition 39 

Statutory reference: http://bit.ly/cWSvyu (Section 47614) 

This California mandate, which passed in the November 2000 general 

election, stipulates that students who attend a charter school in their 

district have facilities that are “sufficient” and “reasonably equivalent” to 

other schools in the district. 

Public School choice initiative 

Website: http://notebook.lausd.net/portal/page?_pageid=33,1129253&_dad=ptl&_schema=PtL_EP 

In 2009, the School Board of the Los Angeles Unified School District 

(LAUSD) embarked on a new effort to expand the number of highquality 

school options available to families and students by issuing a 

Request for Proposals (RFP) for eligible groups to operate schools in 

excess LAUSD facilities. LAUSD’s Superintendent invited charter school 

operators, nonprofits and district-based teams with proven track records 

of success to propose plans to operate chronically underperforming 

schools and open newly constructed schools. In February 2010, the 

operation of 36 schools was granted to a variety of stakeholders, including 

four charter school operators—Aspire Public Schools, Camino Nuevo 

Charter Academy, Magnolia Schools and Para Los Niños. All charter 

schools selected in the first round will operate in new facilities and must 

develop a new charter petition to open the school. Additional RFPs will 

be issued annually going forward. 

california municipal finance authority (cmfa) conduit financing 

Website: http://www.cmfa-ca.com 

Statutory reference: http://bit.ly/aExEBg and http://bit.ly/9iLaHc 

The California Municipal Finance Authority is a joint powers authority 

created to support economic development, job creation and social 

programs throughout the state. CMFA shares 25% of the issuance fees 

on a transaction with the sponsoring municipality and provides a grant 

equal to another 25% of the issuance fees to the California Foundation 

for Stronger Communities to fund charities located within the sponsoring 

community. Charter schools in California are eligible to access taxexempt 

financing through CMFA for their facilities projects. CMFA has 

closed on $68.4 million in tax-exempt bond financing for four charter 

organizations: a $25.5 million 2006 bond issue for American Heritage 

Education Foundation, the parent company of Escondido Charter High 

School and Heritage K-8 Charter School; a $23.5 million 2008 bond 

issue for High Tech High; a $10.5 million 2008 bond issue for Orange 

County Educational Arts Academy; and an $8.9 million 2009 bond issue 

for King-Chavez Public Schools.

california Statewide communities development authority 

(california communities) conduit financing 

Website: http://www.cacommunities.org 

Statutory reference: http://bit.ly/aExEBg and http://bit.ly/9iLaHc 

Charter schools in California also have access to tax-exempt bond 

financing for their facilities needs through the California Statewide 

Communities Development Authority, which is a joint powers authority 

sponsored by the California State Association of Counties and the 

League of California Cities. California Communities was created to 

provide local governments and private nonprofit entities access to 

tax-exempt financing for projects that create jobs, help communities 

prosper and improve the quality of life in California. To date, California 

Communities has completed four charter school facilities financings, 

including three for Aspire Public Schools totaling $123.3 million and 

one for Natomas Charter School in Sacramento for $1.8 million. 

california School finance authority (cSfa) conduit financing 

Website: http://www.treasurer.ca.gov/csfa/ 

Statutory reference: http://bit.ly/9rfzy7 

The California School Finance Authority was created in 1985 to finance 

educational facilities and provide school districts and community college 

districts access to working capital. Since its inception, CSFA has developed 

a number of school facilities financing programs and has recently 

focused on assisting charter schools to meet their facility needs. CSFA 

administers the Charter School Facilities Program, the State Charter 

School Facilities Incentive Grants Program, the Qualified School 

Construction Bond Program and also serves as a conduit for charter 

schools seeking to issue tax-exempt debt. 


Charter schools are eligible to participate in California’s Q-Bond 

Programs. Charter schools may apply for a QZAB allocation directly or 

through the districts in which they are located. Since 2006, five charter 

school QZAB applications have been approved; however, only one charter 

school has closed a QZAB financing. For Fiscal Year 2009, $73 million 

of the state’s $773 million QSCB allocation was reserved for charter 

schools; however, none of the $73 million has been issued to date. 

Colorado 

charter Schools capital construction funding 

Website: http://www.cde.state.co.us/cdefinance/capconstcharterScls.htm 

Statutory reference: http://bit.ly/ddukaW (colorado revised Statutes 

=> title 22 Education => article 54 Public School finance act of 

1994 => Section 22-54-124) 

Pursuant to Colorado’s Public School Finance Act, charter schools are 

entitled to per pupil facilities aid from the state education fund for 

capital construction. All charter schools with capital construction needs 

are eligible for funding; however, a charter school located in a district 

facility will receive only half its allocated amount. Eligible uses include 

the construction, demolition, renovation, financing and purchase or lease 

of facilities for charter schools. Current legislation stipulates that $5 

million in state education fund monies will be appropriated for this per 

pupil facilities program through Fiscal Year 2010, with the exception of 

Fiscal Year 2007, when $7.8 million was appropriated. As the number 

of students in Colorado charter schools has increased, this funding has 

declined on a per pupil basis from a high of $327 per pupil in Fiscal 

Year 2003 to a low of $98 per pupil in Fiscal Year 2010. This funding 

is appropriated to the Colorado Department of Education’s Public School 

Finance Unit, which makes lump sum payments to eligible school 

districts and institute charter schools (charters authorized by the State 

Charter School Institute). School districts are responsible for distributing 

funding to charter schools. 

Building Excellent Schools today (BESt) grant Program 

Website: http://www.cde.state.co.us/cdefinance/capconstBESt.htm 


=> title 22 Education => financial Policies and Procedures => 

article 43.7 capital construction assistance => Part 1 School district 

capital construction assistance Program) 

In 2008, the Colorado Legislature established Building Excellent Schools 

Today, a competitive grant program administered by the Division of 

Public School Capital Construction Assistance that provides funding for 

new construction and the renovation of existing school facility systems 

and structures. Funding for the program is subject to annual appropriation 

from revenues from the state’s School Trust Lands, which are 

properties the federal government granted to Colorado upon statehood 

for the benefit of its school children. Grants must be matched with 

local funding at a percentage determined by the Public School Capital 

Construction Assistance Board after consideration of the applicant’s 

financial capacity. Eligible applicants include school districts, charter 

schools and institute charter schools that have been in operation for at 

least five years, BOCES (Boards of Cooperative Educational Services) 

and the Colorado School for the Deaf and Blind. Charter school applicants 

must notify their authorizer three months in advance of applying 

for BEST funds. The program is anticipated to fund up to $500 million in 

capital projects. Priority is given as follows: projects that address safety 

hazards and health concerns; projects that relieve overcrowding; projects 

that incorporate technology into the educational environment; and 

all other projects. In Fiscal Year 2009, eight grant awards were made 

totaling $132 million, including grants to six charter schools totaling 

$16 million. 

School district Bond Election inclusion & mill Levy Provisions 


=> title 22 Education => School districts => article 30.5 charter 

Schools => Part 4 charter School capital facilities financing act => 

Sections 22-30.5-404 and 405) 

The Colorado Charter School Capital Facilities Financing Act of 2002 

encourages each school district considering submitting a bond approval 

request to district voters to voluntarily include a charter school’s capital 


33


34 

construction funding needs in its request; otherwise, a charter school 

may request to be included. A school district, on a charter school’s 

behalf, may also submit a ballot question for approval of a special 

mill levy solely for the charter school’s facilities. Although the original 

law prohibited charter school capital construction financed with bond 

revenues to be encumbered with any additional debt, it was amended in 

2009 to permit additional debt with district approval. 

The 2009 amendment instituted several other changes, including 

requiring school districts to include charter school representatives on 

long-range planning committees or any committee established by the 

school district to assess or prioritize the district’s capital construction 

needs. The amended law also encourages school districts and charter 

schools to agree to an alternative financial plan that addresses a charter 

school’s facilities needs, including retiring financial obligations or bonds 

previously issued for the benefit of the charter school. The revised statute 

prohibits charter schools authorized in the last five years or those on 

probation to participate in bond issues. Additionally, the 2009 amendment 

allows ownership of a charter school facility to revert to a school 

district if the charter school closes for any reason. 

A charter school must submit a capital construction plan to the board 

of education of its school district to determine the priority of the charter 

school’s needs in relation to the capital construction needs of the entire 

district. The 2009 amended statute requires charter school capital 

needs to be placed on districts’ priority lists, ranked by health and 

safety, overcrowding and technology upgrades. If a board determines 

that a charter school has established capital construction needs, a need 

to incur bonded indebtedness or obtain revenues from a special mill 

levy and a viable plan, the board may either include it in the district’s 

bond approval request to district voters or submit a separate special 

mill levy question to voters. If the board determines otherwise, it may 

still submit a special mill levy ballot question to voters upon a charter 

school’s request solely for the charter school. If district voters approve 

the mill levy, which may not exceed 1 mill or 10 years in duration, taxes 

will be levied, and the charter school will receive the revenues generated 

from the levy. Six school districts have included charter school requests 

in their ballot questions, resulting in funding of several charter school 

projects. In addition, four ballot questions have been placed in front of 

the voters exclusively on behalf of charter schools; however, none were 

successful. 

moral obligation Program 

Website: http://www.colorado.gov/cs/Satellite/treasury/ 

tr/1190277266181 




Sections 22-30.5-407 and 22-30.5-408) 

In May 2002, the Colorado Legislature passed the School Finance Act, 

which, among other features, included a moral obligation clause. This 

clause allows any Colorado charter school that carries an investment 

grade rating to attach the state’s moral obligation pledge to its debt. 

With this pledge, the state agrees to seek an appropriation to pay 

debt service in the event that a charter school defaults, thus providing 

significant additional security to the end lender or bondholder. The state 

appropriated $1 million for a reserve fund to cover potential defaults 

that, if tapped, would be replaced by future charter school appropriations. 

If a charter school chooses to use the moral obligation pledge, it 

must place a portion of the debt service savings (from the lower interest 

rate due to this enhancement) into a common reserve fund, which provides 

liquidity to fend against defaults. There have been no draws on the 

moral obligation reserve fund since the program was established. 

charter School intercept Program 

Website: http://www.colorado.gov/cs/Satellite/treasury/ 

tr/1190277266181 




Sections 22-30.5-406) 

Through the Charter School Intercept Program, a charter school that 

is entitled to receive monies from the state public school fund may 

request that the State Treasurer make direct payments of principal 

and interest on the bonds on behalf of the charter school. The State 

Treasurer withholds the amount of any direct payments made on behalf 

of the charter school, plus administrative costs, from the payments to 

the chartering school district, and the chartering district reduces the 

amount of funding it provides to the charter school by such amounts. 

This intercept mechanism does not require the state to continue the 

payment of state assistance or prohibit the state from repealing or 

amending any law relating to the amount or timing of the payment of 

such assistance. As of September 30, 2009, 46 charter schools have 

participated in this program. 

colorado Educational and cultural facilities authority (cEcfa) 

conduit financing 

Website: http://www.cecfa.org 


=> title 23 Higher Education and vocational training => State 

universities and colleges => general and administrative => article 15 

colorado Educational and cultural facilities authority) 

In Colorado, tax-exempt bond financing may be issued for charter 

schools through the Colorado Educational and Cultural Facilities 

Authority. CECFA provides financing for non-institute charter schools, 

colleges, universities, certain secondary schools and other educational 

institutions, as well as cultural entities. CECFA has issued more than 

$700 million in bonds to support 50 charter school facilities in Colorado. 

CECFA typically issues on behalf of schools that have been in existence 

for at least three years and have a minimum of 300 students.


Charter schools are eligible to participate directly in Colorado’s QSCB 

Program and can participate in the QZAB Program through their LEAs. 

No QSCBs have been issued for charter schools to date. One charter 

school received a $3 million QZAB allocation; however, the financing 

has not closed. 

Connecticut 

facility grant 

Statutory reference: http://bit.ly/c3zJNj (Sections 10-66hh and 10-66jj) 

In 2001, Connecticut enacted legislation and appropriated funds for 

Fiscal Years 2002 and 2003 for a program to assist charter schools 

with capital expenses. The program, which is administered by the 

Connecticut Department of Education, initially provided one-time facilities 

grants of up to $500,000 to charter schools that received charter 

renewals in the preceding fiscal year. Eligible uses include renovation, 

construction, purchase, extension, replacement or major alteration, 

general school building improvements and repayment of debt from prior 

school building projects. 

The Connecticut General Assembly renewed the program in 2005 for 

Fiscal Years 2006 and 2007 and made several modifications to the 

enabling legislation. The language limiting charter schools to a single 

grant capped at $500,000 was eliminated and the eligibility restriction 

to schools with charter renewals in the preceding year was removed. 

The renewed statute requires that preference be given to applications 

that include matching funds from non-state sources. To fund the program, 

the State Bond Commission was given the power to authorize the 

issuance of up to $10 million. Of this total, $5 million was authorized 

for 11 charter school facilities projects in 2006. An additional $5 million 

was authorized for ten charter school facilities projects in 2007. During 

its 2007 special session, the Connecticut General Assembly authorized 

an additional $10 million for the program; however, the State Bond 

Commission has not yet authorized bonding with these funds. 

charter School construction grant Program 

Statutory reference: http://bit.ly/atBSmo 

In 2006, Connecticut created a pilot program for the development of a 

facility for use by a charter school. The authorizing statute stipulated 

that the amount of the grant shall be equal to the net eligible expenditures 

multiplied by the school construction reimbursement rate for the 

town in which the facility is located. Eligible applicants included charter 

schools that had been in operation for at least five years and that had 

their charters renewed. Schools were assessed on academic performance, 

student attendance, student program completion and parental 

involvement. In 2006, the Commissioner of Education awarded Amistad 

Academy in New Haven a $25 million grant to purchase and renovate a 

facility to expand its program to grades K-12. It is not anticipated that 

additional charter school facilities projects will be funded through this 

program in the future. 

connecticut Health and Educational facilities authority (cHEfa) 


Website: http://www.chefa.com 

Statutory reference: http://bit.ly/cmryzc 

The Connecticut Health and Educational Facilities Authority was 

created in 1965 to serve as a conduit issuer of tax-exempt debt for 

eligible health, educational and cultural nonprofit organizations in 

Connecticut. In the past, charter schools have accessed loans for 

their facilities needs through CHEFA’s Charter School Loan Program. 

With funding from its reserves, CHEFA provided $1.7 million in loans 

to 12 charter schools from 1997 to 2003. These loans had an interest 

rate of 5.9% and a maximum term of five years. CHEFA’s reserve funds 

are now depleted, and it does not anticipate making additional loans in 

the future. 


Charter schools are eligible for Connecticut’s Q-Bond Programs; 

however, no charter schools have accessed financing through either 

program to date. 

Delaware 

delaware Economic development authority (dEda) conduit 

financing 

Website: http://dedo.delaware.gov/taxExempt.shtml 

Statutory reference: http://bit.ly/dcNhgf 

Charter schools in Delaware are eligible to access tax-exempt bond 

financing through the Delaware Economic Development Authority, which 

provides statewide financial assistance to new or expanding businesses, 

governmental units and certain organizations that are exempt from federal 

income tax. However, two charter schools which sought issuance 

through DEDA eventually issued bonds through other conduit issuers. 

county conduit financing 

Statutory reference: 

kent county: http://bit.ly/9rJgkm (chapter 30 Economic and maritime 

development, office of) 

New castle county: http://bit.ly/cnozcQ (chapter 14 finance and 

taxation => article 8 financing through revenue Bonds => Sections 

14.08.201 to 14.08.215) 

Sussex county: http://bit.ly/9ojvba (Section 7002(t)) 

As nonprofit entities, Delaware charter schools have access to the taxexempt 

bond market through the county in which they reside, which 

functions as the conduit issuer. To date, at least two charter schools 

have successfully issued tax-exempt bonds at the county level, including 

Newark Charter School, which issued $15 million in bonds through 

New Castle County, and Providence Creek Academy, which issued $13.1 

million of debt though Kent County. 


35


36 


Charter schools may participate in Delaware’s Q-Bond Programs; however, 

none have applied for either program to date. 

Florida 

charter School capital outlay funding 

Website: http://www.fldoe.org/edfacil/oef/chartsub.asp 

Statutory reference: http://bit.ly/cdv2y7 

In Florida, eligible charter schools have been provided with an appropriated 

per pupil facilities allocation of Charter School Capital Outlay funding 

since 1998. To be eligible, a charter school must meet the following 

criteria: 

• 

• 

• 

• 

• 

have been in operation for at least three years, be an expanded 

feeder chain of a charter school within the same school district 

that is currently receiving funding, or have been accredited by the 

Commission on Schools of the Southern Association of Colleges and 

Schools; 

have financial stability for future operation as a charter school; 

have satisfactory student achievement based on state accountability 

standards; 

have received final approval from its sponsor for operation during 

that fiscal year; and 

serve students in facilities that are not provided by the charter 

school’s sponsor. 

Funds may be used for the purchase of real property; construction; 

purchase, lease-purchase or lease of permanent or relocatable school 

facilities; purchase of vehicles for student transportation; and renovation, 

repair and maintenance of school facilities that the charter school 

owns or is purchasing through a lease-purchase or lease of five years 

or longer. The statute was amended in 2009 to expand eligible uses 

to include capital equipment; administrative and school reporting software; 

motor vehicles used by the school; and property and casualty 

insurance premiums. 

Depending on actual appropriations, the program has been funded at 

a percentage of charter school projected student enrollment multiplied 

by 1/15th of the cost per student station as specified in Florida Statute 

1013.64(6)(b) for an elementary, middle or high school student, with 

the percentage determined by the amount appropriated. In 2006, the 

Florida Legislature established priorities for capital outlay funding 

whereby schools awarded funding in Fiscal Year 2005-2006 receive 

first priority for the lesser of their current enrollment or their enrollment 

in Fiscal Year 2005-2006. Excess funds are allocated to all other 

schools and to cover enrollment increases for schools funded in Fiscal 

Year 2005-2006. 

The Office of Educational Facilities at the Florida Department of 

Education distributes funds on a monthly basis to school districts, which 

must remit funds to charter schools within ten days. Program appropriations 

over the past five years totaled approximately $246 million: 

• 

• 

• 

• 

• 

$27.7 million in Fiscal Year 2005-2006 allocated to 210 

charter schools 







$56.1 million in Fiscal Year 2009-2010 allocated to 304 


For Fiscal Year 2009-2010, the average per-student allocation was 

$491, $555 and $732 per elementary, middle and high school student, 

respectively. 

mill tax Levy 

Statutory reference: http://bit.ly/9SEadr 

At its discretion, Florida school boards may levy up to 1.5 mills for district 

schools, including charter schools, for the construction, renovation, 

remodeling, maintenance and repair or lease of educational facilities; 

equipment; and administrative and school reporting software. To meet 

critical district fixed capital outlay needs, school boards may levy up to 

an additional 0.25 mills, not to exceed 1.75 mills, for fixed capital outlay 

in lieu of an equivalent amount of the discretionary mills for operations. 

An additional 0.25 mill levy for critical outlay needs may be authorized 

by a super majority vote of a school board, not to exceed 2 mills. This 

additional levy must also be approved by district voters in the next general 

election. Funds raised via a mill levy are administered by the school 

district in which they are raised. 

Educational impact fees 

Statutory reference: http://bit.ly/dvgzyy (Section (18)(f)) 

To the extent that charter school facilities are specifically created to 

mitigate the educational impact created by the development of new 

residential dwelling units, some or all of the educational impact fees 

required to be paid in connection with the new residential dwellings may 

be designated instead for the construction of charter school facilities. 

municipal conduit financing 

Statutory reference: http://bit.ly/9Wnp3f 

The Florida Industrial Development Financing Act of the Florida Statutes 

authorizes any county or municipality to issue tax-exempt industrial 

development revenue bonds to finance the cost of eligible projects, 

including facilities owned and operated by charter schools.


Charter schools are eligible to participate in Florida’s QSCB Program, 

which is administered by the Office of Educational Facilities at the 

Florida Department of Education. Charter schools are not eligible to 

receive financing through the state’s QZAB Program. 

Georgia 

facilities fund for charter Schools 

Statutory reference: http://bit.ly/bmcgkm (title 20 Education => 

chapter 2 Elementary and Secondary Education => article 31 charter 

Schools act of 1998 => 20-2-2068.2) 

In 2004 amendments to the Charter Schools Act of 1998, the Georgia 

General Assembly directed the State Board of Education to establish a 

need-based, per pupil facilities grant program by creating a facilities 

fund for charter schools. Eligible uses include: the purchase of real 

property; construction of school facilities; purchase, lease-purchase 

or lease of permanent or relocatable school facilities; purchase of 

transportation vehicles; and renovation, repair and maintenance of 

school facilities that are owned by the charter school or are being 

purchased through a lease-purchase or long-term lease of five years or 

longer. No funds were appropriated for Fiscal Year 2005; however, the 

Georgia General Assembly appropriated $500,000 in Fiscal Year 2006, 

$950,000 annually in Fiscal Years 2007 and 2008, and $2.5 million 

annually in Fiscal Years 2009 and 2010. The Charter Schools Office 

of the Georgia Department of Education administers this competitive 

program. All charter schools are eligible to apply and awards are based 

on a variety of factors, including demonstrated need, quality of application, 

student success and evidence of facility ownership or a path to 

ownership. Approximately 23 charter schools receive funding through 

this program annually. 

county development authority conduit financing 

Statutory reference: http://bit.ly/bmcgkm (title 36 Local government 

=> Provisions applicable to counties and municipal corporations => 

chapter 62 development authorities) 

Charter schools in Georgia have access to tax-exempt financing through 

county development authorities. 


Conversion charter schools are eligible to access financing through 

Georgia’s Q-Bond Programs, which are administered by the Office of 

Finance & Business Operations at the Georgia Department of Education. 

Hawaii 

Per Pupil allocation 

Statutory reference: http://bit.ly/cxStrH (Section 302B-12(b)) 

For Fiscal Year 2006-2007, the supplemental budget act included 

an appropriation of $3.2 million for a per pupil facilities allowance for 

non-conversion charter schools in Hawaii. This appropriation provided 

$686 per pupil to 27 charter schools. Funds were used for the following 

expenses: lease, rent and/or building improvements; utilities, emergency 

generators, maintenance or minor facility repairs; major renovations 

or improvements that added to the useful life of the facility; and 

improvements that added capacity to the school’s infrastructure for the 

purpose of improving a virtual education program. The program has not 

received an appropriation since Fiscal Year 2006-2007. 


Hawaii charter schools are eligible to participate in the state’s QZAB 

Program; however, no charter schools have applied to date. 

Idaho 

idaho Housing and finance association (iHfa) conduit financing 

Website: http://www.ihfa.org 

Statutory reference: http://bit.ly/cbck6H (title 67 State government and 

State affairs => chapter 62 idaho Housing and finance association) 

As nonprofit organizations, charter schools are eligible for tax-exempt 

facilities financing utilizing Nonprofit Facilities Revenue Bonds issued by 

the Idaho Housing and Finance Association. IHFA has closed 12 offerings 

for charter schools, ranging in size from $750,000 to $11.7 million 

and totaling $38.3 million. 


Charter schools are eligible to participate in Idaho’s Q-Bond Programs; 

however, no charter schools have accessed financing through either 

program to date. 

Illinois 

charter Schools revolving Loan fund 

Statutory reference: http://bit.ly/9assSg (Section 27a-11.5(3)) 

The Accountability Division at the Illinois State Board of Education 

administers the Charter Schools Revolving Loan Fund, which provides 

interest-free loans to charter schools for acquiring and remodeling 

facilities and for start-up costs of acquiring educational materials and 

supplies, textbooks, furniture and other equipment. A charter school 

may apply for a loan once it is certified by the State Board of Education, 

and all charter schools are eligible to participate in the loan program 

within their initial term. Loans are limited to one per charter school and 

may not exceed $250 per student. Full loan repayment is required by 

the end of the initial charter term, which is usually five years, and loan 

repayments are deposited back into the fund for future use by other 

charter schools. The fund received an allocation of $2 million in Fiscal 

Year 2004 and has received a $20,000 annual allocation since then. 

Approximately 17 charter schools have received loans through this program, 

including one in 2008 and one in 2009. Currently, the fund has 

$30,000 in loans outstanding for three charter schools. 


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38 

illinois finance authority (ifa) conduit financing 

Website: http://www.idfa.com/ 

Statutory reference: http://bit.ly/9laB0i 

The Illinois Finance Authority is a self-financed state authority principally 

engaged in issuing taxable and tax-exempt bonds, making loans and 

investing capital for businesses, nonprofit corporations, agriculture and 

local government units. IFA was created in January 2004 through the 

consolidation of seven statewide authorities. Charter schools in Illinois 

can access tax-exempt revenue bond and lease financing for capital 

projects through IFA. 


The Governor’s Office of Management and Budget administers the 

state’s QSCB Program. None of the state’s allocation was made available 

for charter schools. Charter schools in Illinois are eligible to participate 

in the state’s QZAB Program; however, they must apply through 

their sponsoring school district. 

Indiana 

State Charter School Facilities Incentive Grant Award Total: $5 million—Fiscal Year 

2009 

conduit financing & moral obligation Pledge 

indiana Bond Bank 

Website: http://www.in.gov/bond 

indianapolis Local Public improvement Bond Bank 

Website: http://www.indy.gov/egov/city/BondBank 

Statutory reference: http://bit.ly/9k6Jaz (indiana Bond Bank) and 

http://bit.ly/9uiksk (Local Public improvement Bond Banks) 

ED Credit Enhancement Award Total: $2 million—Fiscal Year 2005 

In 2002, the Indiana Legislature authorized mayor-sponsored charter 

schools in Indianapolis to obtain financing through the Indianapolis 

Local Public Improvement Bond Bank and all other charter schools to 

obtain financing through the Indiana Bond Bank. In addition to having 

access to these public authorities as conduit issuers, charter schools 

can benefit from the moral obligation pledge of the city or state, respectively, 

to debt issued through these authorities. This enhancement gives 

additional security to investors purchasing and holding these bonds. The 

Indianapolis Local Public Improvement Bond Bank received $2 million in 

ED credit enhancement grant funds, which it originally used in conjunction 

with the moral obligation pledge to support the Indianapolis Charter 

Schools Facilities Fund; however, this fund is no longer operating. The 

city is currently deciding how to redeploy its ED grant funds to support 

the facilities needs of charter schools going forward. 


Charter schools are eligible to participate in Indiana’s Q-Bond Programs, 

which are administered by the Indiana Department of Education’s Office 

of School Finance. Six charter schools received $27 million of the 

state’s 2009 QSCB allocation; however, no QSCB financings have closed 

to date. No charter schools have applied to the QZAB Program. 

Iowa 

charter School facilities 

Statutory reference: http://bit.ly/9HE6m2 

A charter school in Iowa may be established by creating a new school 

within an existing public school or by converting an existing public school 

to charter status. A charter school is established with a contract between 

the board of a school district and the State Board of Education whereby 

the school district runs the charter school. As such, charter schools 

generally share facilities with traditional public schools in the district. 

Kansas 

kansas development finance authority (kdfa) conduit financing 

Website: http://www.kdfa.org 

Statutory reference: http://bit.ly/9iofxs (chapter 74 State Boards, 

commissions and authorities => article 89 development finance 

authority) 

Charter schools in Kansas are eligible to access tax-exempt financing 

through the Kansas Development Finance Authority, which was created 

in 1987 to promote economic development for the state. KDFA facilitates 

long-term financing for capital projects and programs through the 

issuance of taxable and tax-exempt bonds or other securities and has 

broad authorization to issue bonds for public and private educational 

facilities. KDFA has completed financings for educational facilities such 

as residence halls, recreation facilities, student unions, research facilities, 

classrooms, auditoriums, stadiums and arenas. To date, no charter 

schools have accessed such financing. 


Charter schools in Kansas are eligible to participate in the state’s 

Q-Bond Programs through their school districts; however, no charter 

schools have applied to either program to date. 

Louisiana 

In Louisiana, there are five types of charter schools: 

Type 1: A new school chartered between a nonprofit corporation created 

to operate the school and a local school board. 

Type 2: A new school chartered or a preexisting public school converted 

by a charter between a nonprofit corporation and the State Board of 

Elementary and Secondary Education (BESE). 

Type 3: A preexisting public school converted by a charter between a 

nonprofit corporation and a local school board.

Type 4: A preexisting public school converted by a charter between a 

local school board and BESE. 

Type 5: A preexisting public school transferred to the Recovery 

School District and chartered between a nonprofit corporation and 

BESE, or between a nonprofit corporation and a city, parish or other 

local school board. 

Louisiana charter School Start-up Loan fund 

Statutory reference: http://bit.ly/8yEqgr 

The Louisiana Charter School Start-Up Loan Fund provides zero-interest 

loans, which may be used for start-up expenses for both new and existing 

Types 1, 2 and 3 charter schools and for administration and legal 

costs associated with the charter school program. The fund provides 

loans of up to $100,000 with terms of up to three years. Loans may 

be used to purchase tangible items, including equipment, instructional 

materials and technology as well as for facility acquisition, upgrade and 

repairs. The program is administered by BESE and is subject to annual 

appropriation by the state Legislature. 

Program eligibility is dependent on charter type. A Type 2 charter school 

automatically receives this funding if the budget within its charter proposal 

includes a request for loan funding that complies with program 

requirements. A Type 1 or Type 3 charter school approved by a local 

school board must apply to BESE for funding. Types 4 and 5 charter 

schools, which constitute approximately 68% of Louisiana charter 

schools, are not eligible. The fund has received allocations totaling 

approximately $7.8 million over the past seven years: 

• 

• 

• 

• 

• 

• 

• 

$2.2 million in Fiscal Year 2004 


$715,000 in Fiscal Year 2006 




$537,000 in Fiscal Year 2010 

Louisiana Public facilities authority (LPfa) conduit financing 

Website: http://www.lpfa.com 

Statutory reference: http://bit.ly/car121 

Charter schools in Louisiana are eligible to access tax-exempt financing 

through the Louisiana Public Facilities Authority, a financing authority 

created in 1974 as a public trust of which the State of Louisiana is the 

beneficiary. The primary mission of LPFA is to further education, healthcare, 

economic development and job creation in Louisiana. 

Louisiana community development authority (Lcda) conduit 

financing 

Website: http://www.louisianacda.com 

Statutory reference: http://bit.ly/9enupc (Sections 4548.1 to 4548.15) 

Charter schools in Louisiana are eligible to access tax-exempt financing 

through LCDA, a public financing authority created in 1991 to provide 

local governments with financial services information and serve as a 

conduit for municipalities, parishes, school boards and special districts. 

LCDA has issued the state’s only charter school QZAB to date. 


Charter schools are eligible to participate in Louisiana’s Q-Bond 

Programs. The Louisiana Community Development Authority issued a 

$500,000 QZAB on behalf of one charter school. No QSCBs have been 

issued for charter schools to date. 

Maryland 

maryland Economic development corporation (mEdco) conduit 

financing 

Website: http://www.medco-corp.com 

Statutory reference: http://bit.ly/9optod (maryland code => Economic 

development => title 10 Statewide development resources and 

revenue authorities => Subtitle 1 maryland Economic development 

corporation) 

The Maryland Economic Development Corporation was founded in 1984 

to promote employment, business activity and economic development in 

the state. MEDCO issues debt on behalf of business incubators, tourism 

projects, manufacturing projects, higher education projects and nonprofit 

organizations, including charter schools. 

maryland Health and Higher Educational facilities authority 

(mHHEfa) conduit financing 

Website: http://www.mhhefa.org 


development => title 10 Statewide development resources and 

revenue Sources => Subtitle 3 maryland Health and Higher Educational 

facilities authority) 

The Maryland Health and Higher Educational Facilities Authority 

issues tax-exempt debt for facilities projects on behalf of educational 

and health care institutions. MHHEFA issued its first $13.7 million 

charter school bond in March 2010 for Patterson Park Public Charter 

School in Baltimore. 


39


40 

maryland industrial development financing authority 


Website: http://www.choosemaryland.org/businessresources/ 

Pages/midfa.aspx 


development => title 5 Economic development and financial 

assistance Programs => Subtitle 4 maryland industrial development 

financing authority) 

Charter schools are also eligible to access tax-exempt financing 

through the Maryland Industrial Development Financing Authority, 

which serves as a conduit issuer for nonprofit organizations, including 


Local development authorities conduit financing 


development => title 12 Local development authorities and resources 

=> Subtitle 1 Economic development revenue Bond act) 

Charter schools may apply for bond financing through various county 

and city industrial development authorities in Maryland. 


A charter school is eligible to participate in Maryland’s Q-Bond 

Programs if it is located in a building owned by a local board of 

education. No charter schools have received financing through 

either program to date. 

Massachusetts 

Per Pupil facilities allocation 

Statutory reference: http://bit.ly/cg66vc (Section (nn)) 

Subject to legislative appropriation, Massachusetts charter schools 

receive a per pupil capital needs allowance as part of their per pupil 

tuition revenue. The per pupil capital needs component for each year 

is calculated by the Massachusetts Department of Elementary & 

Secondary Education based on the statewide per pupil average expenditure 

from state and local sources for capital costs associated with 

payments, including interest and principal payments, for the construction, 

renovation, acquisition or improvement of school buildings and land 

for the most recent year district expenditures were reported. For Fiscal 

Years 2006, 2007 and 2008, the per pupil capital needs component 

was $776, $811 and $849, respectively. For Fiscal Years 2009 and 

2010, the per pupil capital needs component was $893. 

massachusetts development finance agency (massdevelopment) 

conduit financing & guarantee Program 

Website: http://www.massdevelopment.com 


In Massachusetts, charter schools may access tax-exempt bond financing 

for capital projects through the Massachusetts Development Finance 

Agency, a quasi-public state authority responsible for economic development 

lending. Since 1995, MassDevelopment has closed on $368 

million in financing on behalf of 59 charter schools, including $51.4 

million in QZAB issuance for ten charter schools. 

In addition, MassDevelopment has received $10 million in ED 

credit enhancement grant funds, which it has used to create the 

Massachusetts Charter School Loan Guarantee Fund. Created in partnership 

with and supported by the Massachusetts Charter Public School 

Association, the Massachusetts Department of Elementary & Secondary 

Education’s Charter School Office, The Boston Foundation and LISC, the 

fund guarantees debt for the acquisition, construction, renovation and 

leasehold improvement of charter school facilities. The federal grant 

monies are matched by $1 million from MassDevelopment, $2.5 million 

from The Boston Foundation and $1 million from LISC. To date, the fund 

has provided $15.5 million in credit enhancement that has leveraged 

$112.5 million in financing for 14 schools. 


Charter schools in Massachusetts are eligible to participate in the 

state’s Q-Bond Programs. To date, $51.4 million in QZABs has been 

issued on behalf of ten charter schools. The Massachusetts School 

Building Authority has reserved $8.8 million of the state’s QSCB allocation 

for charter schools. 

Michigan 

tax authority 

Statutory reference: http://bit.ly/cQz7mv (Section 380.503a) 

Revenue from taxes levied or bonds issued by a school district may be 

used to support the operation or facilities of a public school academy 

(PSA or charter school) operated by the school district. 

michigan Public Educational facilities authority (mPEfa) conduit 

financing & credit Enhancement Program 

Website: www.michigan.gov/mpefa 

Statutory reference: http://bit.ly/b1NP01 


Created in 2002, the Michigan Public Educational Facilities Authority 

provides tax-exempt financing and technical assistance for qualified 

public educational facilities and public school academies. MPEFA offers 

a Long-Term Facilities Financing Program for PSAs. Funds from the 

program may be used to finance land, facilities, equipment and energy 

conservation improvements or to refinance existing debt. In 2003 and 

2004, two PSAs obtained bond financing totaling $6.4 million through 

the program. In 2005, MPEFA issued $21.8 million in bonds on behalf 

of three PSAs, and in 2006, MPEFA issued another $15.1 million for 

three PSAs. Effective January 1, 2007, MPEFA adopted a new fee 

schedule for its Long-Term Facilities Financing Program whereby it no 

longer charges application or issuance fees (fees are instead paid from 

reserve fund interest earnings) and it reduced ongoing annual fees from 

0.125% to 0.05% of the financing’s outstanding balance. Also in 2007, 

MPEFA received a $6.5 million ED credit enhancement grant to fund 

debt service reserves for bond issuances, thereby lowering borrowing

costs for participating charter schools. Since 2007, MPEFA has issued 

$97.1 million in bond financing for 11 PSAs: 

• 

• 

• 

• 

$48.4 million for five PSAs in 2007 

$15.6 million for three PSAs in 2008 

$10.7 million for one PSA in 2009 

$22.4 million for two PSAs in 2010 


Michigan PSAs are eligible to participate in the state’s Q-Bond 

Programs. Several PSAs have accessed financing through the state’s 

QZAB Program to date. 

Minnesota 

State Charter School Facilities Incentive Grant Award Total: $14.2 million—Fiscal 


Per Pupil Building Lease aid Program 

Statutory reference: http://bit.ly/akfftk (Section 124d.11 revenue for a 

charter School => Subdivision 4) 

A charter school that leases its facility can apply to the Minnesota 

Department of Education (MDE) for lease aid on an annual basis. This 

program evaluates charter schools based on: the reasonableness of the 

price of the lease based on current market values; the extent to which 

the lease conforms to applicable state laws; and the appropriateness of 

the lease in the context of the school’s needs and finances. For schools 

approved for opening in 2003 and subsequent years, the program offers 

aid totaling 90% of the actual cost of leasing at a maximum of $1,200 

per pupil. Schools with earlier established leases and bond payment 

schedules may receive up to $1,500 per pupil. The minimum 10% balance 

that charter schools pay is designed to ensure that schools lease 

appropriate and reasonable facilities. These funds may not be used for 

custodial, maintenance service, utility or other operating costs. Program 

appropriations over the past six years totaled $161.6 million; the 

program has received a preliminary appropriation of $42.4 million 

for Fiscal Year 2010. 

• 

• 

• 

• 

• 

• 








Statutory reference: http://bit.ly/dyNJzc (Sections 469.109 to 469.123) 

In Minnesota, there is no statewide conduit issuer of tax-exempt bond 

financing that charter schools can access for their facility needs. 

Charter schools have access, however, at the county and city levels 

through conduit issuers, such as the Housing and Redevelopment 

Authority of St. Paul. 


Charter schools are eligible to participate in Minnesota’s Q-Bond 

Programs; however, no charter schools have accessed financing through 


Mississippi 

charter School Legislation 

Statutory reference: http://bit.ly/9qScPq (House Bill 36) 

Mississippi’s charter school law expired in July 2009. In March 2010, 

the state Legislature passed a bill renewing legislation; however, it 

has not yet been signed into law. As in the previous legislation, the 

bill limits the establishment of charter schools to those converted from 

existing public schools. Currently, there is one operating charter school 

in Mississippi. 

Missouri 

School district indebtedness Provision 

Statutory reference: http://bit.ly/cxjrvz (Section 160.415(11)) 

A school district may incur bonded indebtedness or take other measures 

to provide for physical facilities and other capital items for charter 

schools it sponsors or with which it contracts. 

missouri Health & Educational facilities authority (moHEfa) 


Website: http://www.mohefa.org 

Statutory reference: http://bit.ly/cHxlPa 

The Missouri Health & Educational Facilities Authority was created by 

the state General Assembly as a conduit issuer for public and private 

nonprofit health and educational institutions. MOHEFA has issued bonds 

for two charter schools: a $6.1 million 2002 bond issue for the St. 

Louis Charter School and a $2.6 million 2003 bond issue for Academie 

Lafayette in Kansas City. 


Statutory reference: http://bit.ly/axg8P6 (Sections 100.010 to 100.200) 

Charter schools may apply for bond financing through various county 

and city industrial development authorities in Missouri, such as the St. 

Louis Industrial Development Authority, which issued $23.7 million in 

debt on behalf of Confluence Academy in 2007. 


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42 


Charter schools are eligible for financing through Missouri’s Q-Bond 

Programs. To date, one charter school has utilized $1.5 million of QZAB 

allocation to help finance its facilities. 

Nevada 


Charter schools in Nevada are permitted to apply for QZAB and QSCB 

financing through their local school district. No charter schools have 

received such financing to date. 

New Hampshire 

New Hampshire Health and Education facilities authority (NHHEfa) 


Website: http://www.nhhefa.com 

Statutory reference: http://bit.ly/byr9hN 

Charter schools in New Hampshire are eligible to access tax-exempt 

financing through the New Hampshire Health and Education Facilities 

Authority. NHHEFA provides several facilities financing options, including 

privately placed bonds, public bond offerings and a capital loan program 

through which it provides a participation loan or guarantees part of 

a bank loan for the purchase of capital equipment or the refinancing 

of existing debt. Loans through the capital loan program range from 

$50,000 to $600,000 and have five-year terms and interest rates equal 

to half of the participating bank’s loan. Although eligible, charter schools 

have not received financing through NHHEFA to date. 

New Hampshire municipal Bond Bank (NHmBB) conduit financing 

Website: http://www.nhmbb.org 

Statutory reference: http://bit.ly/cxtc3b 

The New Hampshire Municipal Bond Bank, which was created in 1977 

by the New Hampshire Legislature, is an instrumentality of the state that 

issues bonds to provide loans to counties, cities, towns, school districts 

or other districts within the state. In 1982, the Legislature enacted the 

New Hampshire Municipal Bond Bank Educational Institutions Bond 

Financing Act, which established the Educational Institutions Division 

within NHMBB to finance the construction and improvement of certain 

educational facilities, including those for charter schools. Although eligible, 

charter schools have not received such financing to date. 


Charter schools are eligible to participate in New Hampshire’s Q-Bond 

Programs, which are administered by the Office of School Building Aid 

of the New Hampshire Department of Education’s Division of Program 

Support. However, no charter schools have accessed financing through 


New Jersey 

New Jersey Economic development authority (NJEda) conduit 

financing 

Website: http://www.njeda.com 

Statutory reference: http://bit.ly/bcwB2y (Sections 34:1B-1 to 34:1B- 

21.36) 

The New Jersey Economic Development Authority is an independent, 

self-supporting state entity with a mission of stimulating business 

development, creating jobs and revitalizing communities throughout the 

state. The NJEDA is available as a conduit tax-exempt bond issuer for 

charter schools under its program for nonprofit organizations. Charter 

schools may also benefit from the NJEDA’s guaranty and subordinate 

loan programs, as well as small recoverable planning grants for early 

stage projects. To date, the NJEDA has provided financial assistance 

to charter schools through a combination of tax-exempt bond issuance 

and the NJEDA’s guaranty and subordinate loan programs. 


Charter schools are eligible to participate in New Jersey’s Q-Bond 

Programs. To date, no charter schools have applied for QZAB allocation. 

Two charter schools have received allocations totaling $27.5 million 

from the QSCB Program, which is administered by the NJEDA. One of 

the schools, Uncommon Schools’ North Star Academy, closed on project 

financing in late 2009 utilizing $16.5 million in QSCBs. 

New Mexico 

Public School capital outlay fund 

Statutory reference: http://bit.ly/aimxd8 (2009 NmSa 1978 => 

Statutory chapters in New mexico Statutes annotated 1978 => chapter 

22 Public Schools => article 24 Public School capital outlay) and 

(2009 NmSa 1978 => Statutory chapters in New mexico Statutes 

annotated 1978 => chapter 22 Public Schools => article 8B charter 

Schools => Section 22-8B-4(H)) 

The Public School Capital Outlay Act was passed in 1978 to address 

critical school district capital outlay needs. The Public School Capital 

Outlay Council (PSCOC), through the Public School Facilities Authority, 

manages the allocation of state funding to public school facilities as 

part of the Public School Capital Outlay Fund. Grants from the fund are 

determined by formula and may be used only for capital expenditures 

deemed necessary by the PSCOC for an adequate educational program. 

Charter schools can access public school capital outlay funds in the 

same manner as other public schools in New Mexico. Through the fund, 

the PSCOC provides grants to schools using a standards-based process 

as well as grants for specific program initiatives, such as the lease payment 

assistance program. To date, four charter schools have received 

standards-based grants totaling $3.1 million, including three in Fiscal 

Year 2009 and one in Fiscal Year 2010. In Fiscal Year 2010, the PSCOC 

provided $172.3 million in funding for facilities projects throughout New 

Mexico. Charter schools received a portion of this funding through the 

fund’s lease payment assistance program described below.

Lease Payment assistance Program 

Website: http://www.nmschoolbuildings.org (Lease Payment assistance) 



22 Public Schools => article 24 Public School capital outlay => 

Section 22-24-4(i)) 

The PSCOC, through the Public School Capital Outlay Fund, is authorized 

to provide grants to school districts to cover lease payments for 

classroom facilities, including facilities leased by charter schools. This 

grant program was created by the state Legislature in 2004. The per 

pupil amount has increased steadily each year from $300 in Fiscal Year 

2005 to $725 in Fiscal Year 2010. In subsequent years, the per pupil 

amount will be adjusted according to the percentage increase of the 

consumer price index for the United States between the penultimate 

calendar year and the immediately preceding calendar year. Grant 

awards may not exceed the annual lease payments of schools. School 

districts apply to the PSCOC for funding and may apply on behalf of a 

charter school. If a school district fails to make an application on behalf 

of a charter school, the charter school may submit its own application. 

To date, the PSCOC has awarded $33.1 million through the lease 

assistance program of which approximately $32 million was granted to 


New mexico Public Education department’s capital outlay Bureau 

Website: http://www.ped.state.nm.us/div/fin/capital/index.html 

The Capital Outlay Bureau at the New Mexico Public Education 

Department administers the following three programs that offer facilities 

financing resources to charter schools in New Mexico, in addition to the 

state’s Q-Bond Programs. 

Direct Legislative Appropriations 

Website: http://www.ped.state.nm.us/div/fin/capital/reports.html 



7 taxation => article 27 Severance tax Bonding act) 

Specific projects within a school district may receive capital outlay 

funding through direct legislative appropriations. Charter schools may 

request an appropriation directly from their state legislators. These 

allocations are funded by the general fund or from the proceeds of the 

sale of severance bonds and have declined significantly in the past few 

years from a high of $56.1 million in 2007 to a low of $1.8 million in 

2009. In 2010, the state Legislature did not make new appropriations, 

but reauthorized two awards, one of which totaled $100,000 for one 

charter school. 

By June 1 of each year, a school district must determine whether to 

accept or reject any legislative appropriations made directly to the 

school district or to charter schools within the school district. A school 

district’s share of public capital outlay funds will be offset by a percentage 

of the total legislative appropriations accepted by a school district. 

Between 2006 and 2008, direct legislative appropriations for seven 

charter schools have been rejected; however, one of those rejected 

in 2007 was reauthorized as a new project and uncontested in 2008. 

Public School Capital Improvements Act (SB 9) 



22 Public Schools => article 25 Public School capital improvements) 

The Public School Capital Improvements Act is a funding mechanism 

that allows school districts to ask local voters to approve a property 

levy of up to two mills for a maximum of six years. Historically, school 

districts were not mandated to provide charter schools with an equitable 

share of SB 9 funds and a charter school had to negotiate with a district 

to receive its share. Effective July 1, 2009, school districts are required 

to include charter school capital improvements in the resolution submitted 

to electors provided that a charter school submits the necessary 

information on its capital improvements to the school district in a timely 

manner. Funds generated through this program can be used to: erect, 

remodel, make additions to, provide equipment for or furnish public 

school buildings; purchase or improve school grounds; maintain public 

school buildings or public school grounds; purchase activity vehicles for 

transporting students to extracurricular activities; and purchase computer 

software and hardware for student use in public school classrooms. 

SB 9 contains provisions that provide a school district with a minimum 

level of funding or program guaranty, which is approximately $75 per 

mill for Fiscal Year 2010. If the local revenue generated by SB 9 is less 

than the program guaranty, the state provides matching funds, which 

are subject to certain restrictions, to make up the difference. For Fiscal 

Year 2010, the minimum state matching requirement is $5.80 per mill 

and every charter school in a district receiving SB 9 funding will receive 

state matching funds. From Fiscal Year 2007 to Fiscal Year 2009, 

school districts raised $271 million and state matching funds totaled 

$55 million. 

• 

• 

• 

In Fiscal Year 2007, 85 school districts raised $83 million, and 

state matching funds totaling $18 million were provided to 53 of 

those districts. 








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44 

Public School Buildings Act (HB 33) 



22 Public Schools => article 26 Public School Buildings) 

The Public School Buildings Act allows school districts to impose a tax 

not to exceed ten mills for a maximum of six years on the net taxable 

value of property upon approval of qualified voters. These funds may 

be used to erect, remodel, make additions to, provide equipment for 

or refurbish public school buildings, or to purchase or improve public 

school grounds. School districts were not mandated to provide charter 

schools with an equitable share of HB 33 funds until July 1, 2007. The 

law was amended to require that school districts include charter school 

capital improvements in the resolution submitted to electors provided 

that a charter school submits the necessary information on its capital 

improvements to the school district in a timely manner. A charter 

school’s capital improvements must also be included in the district’s 

five-year plan, or in its own five-year plan in the case of state-chartered 

schools, to be eligible for inclusion in the resolution. In Fiscal Year 

2010, Albuquerque Public Schools included several charter schools in 

its HB 33 request, all of which will receive funding. 

New mexico finance authority (Nmfa) conduit financing 

Website: http://www.nmfa.net/Nmfainternet/Nmfa_Web. 

aspx?contentid=141 



6 Public finances => article 21 finance authority) 

Charter schools in New Mexico are eligible to access tax-exempt 

financing through the New Mexico Finance Authority’s Public Project 

Revolving Loan Fund (PPRF), which finances public projects. NMFA’s 

authorizing statute was amended in 2009 to include charter schools as 

eligible borrowers. NMFA has not yet closed a charter school financing as 

it currently is establishing policies and procedures for such financings. 

county conduit financing 



4 counties => article 59 county industrial revenue Bonds) 

In New Mexico, counties can issue tax-exempt debt on behalf of nonprofit 

corporations, including charter schools. 


In New Mexico, charter schools may receive QSCB and QZAB allocations 

through a school district’s application. To date, only two school districts 

have applied for QZAB financing, neither of which applied on behalf of a 

charter school. 

New York 

charter Schools Stimulus fund 

Website: http://www.emsc.nysed.gov/funding/2010charter/home.html 

http://www.newyorkcharters.org/schoolsgrantopps.htm 

Statutory reference: http://bit.ly/b9e0bh (consolidated Laws => Stf 

— State finance => article 6 funds of the State => 97-SSS charter 

Schools Stimulus fund) 

The Charter Schools Stimulus Fund was established in 1998 as part 

of the state’s charter statute to provide discretionary financial support 

to charter schools for start-up costs and for costs associated 

with the acquisition, renovation and construction of school facilities. 

From the 2002-2003 school year through the 2007-2008 school year, 

$3.9 million was appropriated annually for these purposes. Additional 

appropriations of $3.7 million and $3.5 million were made for the 2008- 

2009 and 2009-2010 school years, respectively. Funds are allocated 

by formula to the State University of New York (SUNY) and the New 

York State Board of Regents (Regents) and then awarded to charter 

schools through a competitive process. The New York State Education 

Department administers the Regents portion of the program. SUNY 

distributes its share of funds to charter schools it authorizes as well as 

to those authorized by the Chancellor of the New York City Department 

of Education and the Buffalo City Board of Education. Grants awarded by 

the Regents are capped at $100,000, and those awarded by SUNY are 

capped at $235,000. To date, SUNY has awarded 70 grants, and the 

Regents have awarded 29. 

New york city charter facilities matching grant Program 

Website: http://source.nycsca.org/pdf/rfq_charter_facilities_matching_program.pdf 

In the Fiscal Year 2005-2009 capital outlay budget for New York City’s 

Department of Education, Mayor Bloomberg included $250 million to 

create the Charter Facilities Matching Grant Program. The Fiscal Year 

2010-2014 capital plan includes another $210 million for this program. 

Through this matching-grant program, the city contributes a portion 

of the costs for charter school facilities development, with the charter 

school contributing a portion through philanthropic or equity sources. 

The facilities are owned by the New York City School Construction 

Authority and leased to charter schools for a term dependent upon 

the charter school’s financial contribution. Charter schools providing 

a match of at least a third of the project cost receive a 99-year lease 

term and priority through the program. Charter schools may provide a 

smaller contribution, but they do not receive program priority and lease 

terms are reduced accordingly. 

To date, seven projects have received financing through the program, 

serving the following nine charter schools: Achievement First Crown 

Heights High School, Achievement First Endeavor Charter School, Bronx 

Lighthouse Charter School, Carl C. Icahn Charter School, Carl C. Icahn 

Charter School Bronx North, Excellence Boys Charter School of Bedford- 

Stuyvesant, KIPP Academy Elementary, KIPP NYC College Prep High 

School and Uncommon Charter High School.


Statutory reference: 

industrial development agencies: http://bit.ly/b9e0bh (consolidated Laws 

=> gmu — general municipal => article 18-a industrial development 

=> title 1 agencies, organization and Powers) 

Local development corporations: http://bit.ly/b9e0bh (consolidated Laws 

=> NPc — Not-for-Profit corporation => article 14 Special Not-for- 

Profit corporations => Section 1411 Local development corporations) 

Prior to January 2008 when the authorization expired, charter schools 

in New York State were able to access tax-exempt bond financing 

through various local industrial development agencies. Alternatively, as 

nonprofit organizations, charter schools are eligible to apply for taxexempt 

financing through various municipal economic development 

corporations. 


Charter schools are eligible to participate in New York’s Q-Bond 

Programs; however, no charter schools have accessed financing through 


North Carolina 

North carolina capital facilities finance agency (Nccffa) conduit 

financing 

Website: http://www.treasurer.state.nc.us/dsthome/StateandLocalgov 

Statutory reference: http://bit.ly/cckfWe 

Charter schools in North Carolina are eligible for tax-exempt bond 

financing through the North Carolina Capital Facilities Finance Agency. 

NCCFFA’s business is conducted by the Capital Facilities Finance 

Section of the Department of the State Treasurer’s State and Local 

Government Finance Division. To date, NCCFFA has completed nine 

charter school bond offerings totaling approximately $66 million. 


Charter schools are not eligible to participate in North Carolina’s QSCB 

or QZAB programs. 

Ohio 

charter School revolving Loan Program 

Statutory reference: http://bit.ly/cvoLSQ (Section 3314.30 community 

School revolving Loan fund) 

This loan program was established in 2003 with passage of Substitute 

House Bill 364; however, it has not been implemented. It was intended 

to assist start-up charter schools, known as community schools in 

Ohio, and to serve as a vehicle for federal funds allocated to Ohio for 

the development and operation of charter schools. Loans were to be for 

terms of up to five years and to be repaid with automatic deductions 

from state revenues. While schools were allowed to receive multiple 

loans, each school was cumulatively capped at $250,000. Priority was 

meant to be given to new schools to pay for start-up costs. 

community Schools classroom facilities guaranteed Loan Program 

Statutory reference: http://bit.ly/cBfrQx (Section 3318.52 community 

School classroom facilities Loan guarantee fund and Section 3318.50 

community School classroom facilities Loan guarantee Program) 

The Community Schools Classroom Facilities Guaranteed Loan program, 

established in 2001 and administered by the Ohio School Facilities 

Commission (OSFC), assisted charter schools in acquiring, improving 

or replacing classroom facilities by lease, purchase, remodeling or new 

construction. Through the program, charter schools could apply for a 

state guaranty with a maximum term of 15 years that covered up to 

85% of the sum of the principal and interest for facilities loans. The 

program received a $10 million appropriation, and guarantees were 

capped at $1 million for the purchase or renovation of an owned facility 

and $500,000 for leasehold improvements. The OSFC completed three 

rounds of funding and provided 15 guarantees that leveraged $8.5 million 

in facilities assistance for charter schools. The OSFC is currently 

monitoring four outstanding guarantees; however, it has fully obligated 

its capital for this program and is no longer accepting applications. 


Charter schools are not eligible to directly participate in Ohio’s Q-Bond 

Programs; however, a local government may issue QSCBs and QZABs 

on behalf of a charter school. To date, no charter schools have accessed 

such financing. 

Oklahoma 

charter Schools incentive fund 

Statutory reference: http://bit.ly/bkSNfv (oklahoma Statutes & 

constitution => oklahoma Statutes — titles 1-85 => title 70 Schools 

=> Section 70-3-144) 

In 1999, the Oklahoma Legislature created the Charter Schools 

Incentive Fund in the state Treasury to provide financial support to charter 

school applicants and charter schools for start-up costs and costs 

associated with renovating or remodeling existing facilities. Charter 

schools may apply for one-time grants of up to $50,000. The fund was 

established as a continuing fund that is not subject to fiscal year limitations 

and consists of all monies appropriated by the Legislature and 

gifts, grants and donations from any public or private source. The fund 

is administered by the Oklahoma Department of Education and was initially 

funded with a $1 million appropriation. Since Fiscal Year 2005, the 

fund has received additional appropriations totaling $500,000. However, 

one-third of the total $1.5 million appropriated has been subsequently 

diverted to educational purposes unrelated to charter schools. 


45


46 

oklahoma development finance authority (odfa) conduit financing 

Website: http://www.okcommerce.gov/commerce/about/rc/development- 

Bonds 

Statutory reference: http://bit.ly/bkSNfv (oklahoma Statutes & 

constitution => oklahoma Statutes — titles 1-85 => title 74 State 

government => Sections 74-5062.1 to 74-5062.22) 

Oklahoma charter schools are eligible to access tax-exempt bond 

financing through the Oklahoma Development Finance Authority, which 

was created by the state Legislature in 1987. ODFA is a statewide trust 

authority that provides qualified entities with an avenue to issue taxexempt 

or taxable revenue bonds. ODFA also administers the Oklahoma 

Credit Enhancement Reserve Fund, which provides guarantees for small 

companies, manufacturing facilities and communities in need of funds 

for expansion projects and infrastructure loans. To date, no charter 

schools have accessed ODFA’s financing programs for their facilities. 


Charter schools in Oklahoma are not eligible to receive financing 

through the state’s QSCB or QZAB programs. 

Oregon 

oregon facilities authority (ofa) conduit financing 

Website: http://www.ost.state.or.us/divisions/dmd/ofa 

Statutory reference: http://bit.ly/cffdcf 

The Oregon Facilities Authority is a public entity created by the Oregon 

Legislature in 1989 to assist with the assembling and financing of 

facilities for organizations involved in health care, low-income housing, 

cultural programs and education, including public and nonprofit schools. 

No charter schools have issued bonds through OFA to date. 


In Oregon, individual public schools cannot incur debt as entities separate 

from the school district of which they are a part. Charter schools 

in Oregon cannot access QZAB or QSCB financing directly; however, 

a sponsoring school district can access such financing on a charter 

school’s behalf. No charter schools have accessed financing through 


Pennsylvania 

charter School Lease reimbursement Program 

Website: http://www.education.state.pa.us/portal/server.pt/community/ 

charter_school_facility_leases/14834 

Statutory reference: http://bit.ly/caomjQ (Section 31) 

In 2001, the Pennsylvania Public School Code was amended to 

include this program, which provides charter schools that lease buildings 

or portions of buildings for educational use with an annual lease 

reimbursement. Lease rental costs for land, trailers or modulars are not 

eligible for reimbursement. A charter school receives the lesser of its 

annual lease payment or $160 per pupil for elementary schools, $220 

per pupil for secondary schools and $270 per pupil for area vocationaltechnical 

schools. 

State Public School Building authority (SPSBa) conduit financing 

Website: http://www.spsba.org/spsbamain.htm 

Statutory reference: State Public School Building authority act of 1947 

(24 P.S. Section 791.1 et seq.) 

Pennsylvania’s State Public School Building Authority finances the 

construction and improvement of public school facilities through the 

issuance of bonds. Charter schools may apply for tax-exempt financing 

through SPSBA; however, no schools have applied to date. 


Charter schools may apply for bond financing through local industrial 

development authorities, such as the Philadelphia Authority for Industrial 

Development. 


Charter schools are not eligible to participate directly in Pennsylvania’s 

QSCB or QZAB programs. 

Rhode Island 

facilities cost reimbursement 

Statutory reference: http://bit.ly/cs962t 

The General Assembly enacted legislation in 1999 allowing districtsponsored 

charter schools to obtain access to state aid for reimbursement 

of “school housing” (facilities) costs though their public school 

district or districts. The program is designed to ensure adequate facilities 

for all public school children in the state and prevent the cost of 

facilities from interfering with effective school operation. Charter schools 

that are not sponsored by a district may apply for 30% reimbursement 

of facilities costs on the basis of demonstrated need. 

rhode island Health and Educational Building corporation (riHEBc) 


Website: http://www.rihebc.com 

Statutory reference: http://bit.ly/cxhSaS 

Charter schools in Rhode Island are eligible for tax-exempt bond 

financing through the Rhode Island Health and Educational Building 

Corporation, the state’s designated conduit issuer for nonprofit educational 

and healthcare institutions. Since its first charter school bond 

offering in 2002, RIHEBC has completed six additional offerings totaling 

$37.9 million for charter school facilities.


Charter schools are eligible to participate in Rhode Island’s Q-Bond 

Programs; however, no charter schools have applied to either program 

to date. 

South Carolina 

South carolina Jobs-Economic development authority (JEda) 


Website: http://www.scjeda.net 

Statutory reference: http://bit.ly/aojNsh 

Charter schools are eligible for tax-exempt financing through the South 

Carolina Jobs-Economic Development Authority, a state agency that can 

issue tax-exempt bonds for nonprofit organizations. In July 2008, JEDA 

issued $8.4 million in financing on behalf of Brashier Middle College 

Charter High School in Greenville. Most recently, in October 2009, JEDA 

closed on a $2.7 million financing for East Cooper Montessori Charter 

School for the construction of a new facility in Mt. Pleasant. 


Charter schools are eligible to receive financing through South Carolina’s 

Q-Bond Programs via their school district; however, no charter schools 

have applied for financing through either program to date. 

Tennessee 


Statutory reference: http://bit.ly/9SQzdN (tennessee code => title 

49 Education => chapter 13 tennessee Public charter Schools act of 

2002 => 49-13-112 funding => Section 112(c)) 

State law requires the Tennessee Department of Education (TDOE) to 

calculate the amount of state funding required under the basic education 

program (BEP) for capital outlay as a non-classroom component to 

be received in a fiscal year for each LEA in which charter schools operate. 

For each LEA, TDOE reserves the portion of the BEP due to charter 

schools and distributes directly to each charter school its share of these 

funds on a per pupil basis based on prior year enrollment. First-year 

charter schools receive funding based on the anticipated enrollment 

specified in their charter agreement. Matching funds are provided by 

LEAs at varying amounts. The annual state component of the per pupil 

facilities funding totals approximately $100 per student. Charter schools 

may use this facilities aid for rent, construction, renovation of an existing 

school facility, leasehold improvements, or debt service on a school 

facility or purchase of a building or land. Funds may be used for the 

purchase of land only if the charter school has immediate plans to construct 

a building on the land. 

tennessee Local development authority (tLda) conduit financing 

Website: http://www.comptroller.state.tn.us/bf/bftlda.htm 

Statutory reference: http://bit.ly/9SQzdN (tennessee code => title 4 

State government => chapter 31 Local development authority => 

Part 1 general Provisions) 

Charter schools in Tennessee that have the support of their local taxing 

authority are eligible to access tax-exempt financing through the 

Tennessee Local Development Authority. Created in 1978, TLDA is 

responsible for issuing bonds and notes to make loans for a wide 

range of public improvement projects. No charter schools have 

accessed financing through TLDA to date. 


A charter school that has the support of its LEA is eligible to participate 

in Tennessee’s Q-Bond Programs; however, no charter schools have 

accessed financing through either program to date. 

Texas 

open-Enrollment charter School facilities credit 

Enhancement Program 

Website: http://www.tea.state.tx.us/index4.aspx?id=6675 

Statutory reference: http://bit.ly/cf5Boc 

In June 2009, the 81st Texas Legislature passed and the Governor 

signed into law House Bill 3646, an act relating to public school finance 

and programs. The act amended numerous provisions of the Education 

Code and created two new credit enhancement programs. These programs 

are intended to assist school districts and charter schools by 

providing credit enhancement for debt issued by these entities for their 

instructional facilities. Rulemaking authority for both programs lies with 

the Commissioner of Education. 

The statute authorizes the Commissioner of Education to establish a 

credit enhancement program to assist open-enrollment charter schools 

in obtaining financing for the purchase, repair or renovation of real 

property, including improvements to real property, for their facilities. The 

program requires a one-to-one match in private funds for at least the 

first ten years of the term of the financing which is being guaranteed, 

with the state portion funded by an allocation of no more than 1% of 

the amount appropriated for the Foundation School Program (FSP), 

the primary program through which the state distributes funds to local 

school districts. The Commissioner may limit program participation to 

charter schools that meet certain financial, academic and administrative 

requirements and may require schools to fund a debt service reserve to 

additionally secure the borrowing. 


47


48 

texas Public finance authority (tPfa) 

charter School finance corporation (cSfc) 

conduit financing & credit Enhancement Program 

Website: http://www.tpfa.state.tx.us 

Statutory reference: http://bit.ly/8zNh2y 


The Texas Public Finance Authority is a state agency that was created 

in 1984 to provide capital financing for certain state agencies and 

institutions of higher education. Pursuant to Section 53.351 of the Texas 

Education Code, in 2003, TPFA established a nonprofit corporation, the 

Charter School Finance Corporation, to issue revenue bonds on behalf of 

authorized open-enrollment charter schools for the acquisition, construction, 

repair or renovation of educational facilities. TPFA provides administrative 

and staff support for the CSFC. CSFC has issued $133 million in 

charter school facilities debt to date, including $9 million for the School of 

Excellence in Education in 2004; $35 million for KIPP, Inc. and $9 million 

for the Burnham Wood Charter School in 2006; and $30 million for the 

Cosmos Foundation, $40 million for IDEA Public Schools and $10 million 

for Uplift Education in 2007. 

In addition, the CSFC has entered into a consortium agreement with 

the Texas Education Agency (TEA) and the Resource Center for Charter 

Schools to operate the Texas Credit Enhancement Program (TCEP). 

Utilizing a $10 million ED grant and a $100,000 contribution from TEA, 

TCEP provides credit enhancement for municipal bonds that provide 

financing for the acquisition, construction, repair or renovation of Texas 

charter school facilities, including certain refinancing of facilities debt, by 

funding a debt service reserve fund for such issuances. The debt service 

reserve funds are held in the state Treasury solely to provide security for 

repayment of the bonds. A total of $13 million in credit enhancement has 

been awarded in four rounds to date: 

• 

• 

• 

• 

$8.8 million for bond issuance totaling $144 million for 14 charter 

schools in March 2007 

$2 million for bond issuance totaling $66 million for two charter 

schools in January 2008 

$1.8 million for bond issuance totaling $57 million for two charter 

schools in January 2009 

$600,000 for one charter school bond issuance in February 2010 

A fifth round of credit enhancement grant applications may be issued 

in the fall of 2010. To be eligible, schools need an academic rating of 

acceptable or higher for two consecutive years and must be determined 

to be fiscally sound by a satisfactory rating under the Financial Integrity 

Rating System of Texas, as adapted for charter schools. 

Higher Education finance corporation conduit financing 

statutory Reference: http://bit.ly/9osbfv 

Under the Higher Education Facility Authority for Public Schools Act, charter 

schools in Texas have access to tax-exempt bond financing through 

higher education conduit issuers, such as La Vernia Higher Education 

Finance Corporation, throughout the state. 


Charter schools in Texas may access financing through the state’s 

Q-Bond Programs. In April 2010, YES Prep Public Schools closed on a 

financing that included $16 million in QZABs and $5.5 million in QSCBs. 

Utah 




Statutory reference: http://bit.ly/agk83g (Sections 53a-1a-513(4)(d) and 

(e)) 

In 2003, Utah created the Local Revenue Replacement Program, which 

provides an additional annual per pupil appropriation for charter schools 

to replace some of the local property tax revenue that traditionally covers 

maintenance and operation, capital projects and debt service. Funding 

may be used for: the purchase, construction, renovation or lease of 

a facility; leasehold improvements; debt service; or land acquisition. 

Utah law requires that 10% of the grant monies provided by the annual 

appropriation be expended for facilities, and the state utilized $8.9 million 

in funding from ED’s State Charter School Facilities Incentive Grants 

Program to augment the program. In 2008, the state Legislature established 

a minimum funding threshold of $1,427 per student, translating 

into a minimum facilities allowance of $143 per student for 2009 and 

subsequent years. This revenue stream has resulted in the following per 

pupil facilities allowance: 

• 

• 

• 

• 

• 

• 

• 

$101 in Fiscal Year 2005 





$144 in Fiscal Year 2010 


Local discretionary Block grant Program 

Statutory reference: http://bit.ly/api5hw 

Charter schools receive funding through the Local Discretionary Block 

Grant Program for maintenance and operation costs, capital outlay and 

debt service. These grant funds are distributed by the State Board of 

Education to school districts and charter schools by formula with 8% of 

the appropriation divided equally among all school districts, with charter 

schools collectively considered one district. The charter school portion is 

divided equally among all charter schools, except those which were once 

district schools. The remaining 92% is divided among school districts and 

charter schools based primarily upon their total weighted pupil units. In 

2009, the state Legislature eliminated funding for the program. Prior to 

elimination, appropriations totaled $21.8 million.

charter School Building revolving Loan fund 

Statutory reference: http://bit.ly/asb7eL (Section 53a-21-401(5) to (9)) 

With an appropriation of $2 million, Utah established the Charter School 

Building Revolving Loan Fund in 2003 to provide loans for the construction, 

renovation and purchase of facilities. Charter schools operating in 

facilities owned by a school district or other governmental entity are not 

eligible unless they pay reasonable rent for their facility. The maximum 

loan amount is $300,000, and loans may not exceed 75% of total 

project costs. Interest on loans is comparable to the state’s five-year, 

AAA-rated general obligation bond rate. Loans must be repaid within 

five years, beginning one year from the loan approval date. Priority is 

given to schools in their first year of operation for start-up facilities and 

renovation costs and to projects that are necessary to address student 

health and safety issues. To date, the program has provided $5.2 million 

in loans for 38 charter school projects serving 30 charter schools. 

State charter School finance authority conduit financing 

Statutory reference: http://bit.ly/dyrzvp 

In March 2007, Utah established the State Charter School Finance 

Authority, a conduit issuer created specifically to provide financing for 

charter school facilities. To date, the authority has issued $105 million 

in financing for 12 charter schools. 


Statutory reference: http://bit.ly/9Nnmm6 

Under the Utah Industrial Facilities and Development Act, charter 

schools in Utah have access to tax-exempt bond financing through 

issuers at the county and municipal levels. 


Charter schools are eligible to participate in Utah’s Q-Bond Programs. 

To date, one charter school has received a QSCB allocation totaling $9 

million; however, it has not yet closed on its financing. 

Virginia 

virginia Small Business financing authority (vSBfa) conduit 

financing 

Website: http://www.dba.virginia.gov/financing_business.shtml 

Statutory reference: http://bit.ly/9gvhfB (Sections 2.2-2279 to 

2.2-2314) 

The Virginia Small Business Financing Authority may act as a conduit 

issuer for nonprofit organizations, including charter schools or related 

organizations. 


Charter schools are eligible for financing through Virginia’s QZAB 

Program; however, no QZABs have been issued for charter schools to 

date. Charter schools were not eligible to participate in the state’s QSCB 

Program in 2009. 

Washington, D.C. 



facilities allowance for Public charter Schools 

Statutory reference: http://bit.ly/bu88a1 (title 38 Educational 

institutions => Subtitle x School funding => chapter 29 uniform 

Per Student funding formula => Subchapter i general => Section 

38-2908) 

In 1998, the D.C. Council passed the Uniform Per Student Funding 

Formula for Public Schools and Public Charter Schools Act, providing 

charter schools in the District with an annual per pupil allocation as 

well as an annual facilities allowance. Historically, the Charter Schools 

Facilities Allowance was calculated as a rolling average of District 

of Columbia Public Schools (DCPS) per pupil facilities expenditures 

over the previous five years. In Fiscal Year 2009, the Charter Schools 

Facilities Allowance was decoupled from DCPS per pupil expenditures, 

and the allowance was set at $3,109 per pupil. The allowance was 

decreased to $2,800 for Fiscal Year 2010. 

State charter School facilities incentive grants Program 

Website: http://www.ed.gov/programs/statecharter/awards.html 

The District of Columbia is one of four jurisdictions selected as part 

of the first cohort of grantees to receive funding from ED’s State 

Charter School Facilities Incentive Grants Program, receiving $5.6 million 

between Fiscal Year 2004 and Fiscal Year 2008. The competitive 

grant program is administered by the Office of Public Charter School 

Financing and Support within the Office of the State Superintendent 

of Education. The program is structured to provide funding under two 

components: 

• 

• 

General Facilities Allowance (Component 1)—provides a per pupil 

facilities allowance to eligible charter schools based on estimated 

or actual student enrollment for Fiscal Year 2010. To be eligible, a 

charter school must provide evidence that 65% of its student population 

is eligible for the free and reduced-price lunch program. 

School Choice (Component 2)—provides an additional per pupil facilities 

allowance to eligible charter schools also based on estimated or 

actual Fiscal Year 2010 enrollment. Eligible applicants are charter 

schools that meet the criteria for the General Facilities Allowance 

that can also show that 25% of their student population resides in 

areas where schools are identified as in need of improvement, corrective 

action or restructuring under the NCLB. 


49


50 

revenue Bond Program 

Website: http://dcbiz.dc.gov/dmped/cwp/view,a,1365,q,569383,dmpedNa 

v,|33026||33028|.asp#dcrbp 

Statutory reference: http://bit.ly/bu88a1 (title 1 government 

organization => chapter 2 district of columbia Home rule => 

Subchapter iv the district charter => Part E Borrowing => Subpart 

5 tax Exemptions; Legal investment; Water Pollution; reservoirs; metro 

contributions; and revenue Bonds => Section 1-204.90) 

The Balanced Budget Act of 1997 granted the District of Columbia 

authority to issue tax-exempt revenue bonds to finance the acquisition, 

construction and renovation of eligible capital projects owned by nonprofit 

institutions, including charter schools. The Revenue Bond Program 

provides below-market interest rate loans to qualified organizations from 

the issuance and sale of tax-exempt municipal revenue bonds, notes 

or other obligations. Loan funds may be used to finance, refinance or 

reimburse the costs of acquiring, constructing, restoring, rehabilitating, 

expanding, improving, equipping and furnishing real property and 

related facilities. Through the first quarter of 2010, 27 charter school 

transactions totaling $240 million have closed, including seven QZAB 

issuances. 

office of Public charter School financing and Support (oPcSfS), 

district of columbia office of the State Superintendent of Education 

(oSSE) 

Website: http://seo.dc.gov/seo/cwp/view,a,1224,q,556412,seoNav,|311 

93|.asp 


The OPCSFS administers five programs that offer facilities financing 

resources to charter schools in the District of Columbia. 

City Build Public Charter School Initiative 

Website: http://seo.dc.gov/seo/cwp/view,a,1224,q,562411.asp 

The City Build Public Charter School Initiative, established in 2004, is 

a congressionally funded joint education and neighborhood development 

initiative that promotes community revitalization with a particular 

emphasis on strengthening public education through charter schools. 

The program focuses on encouraging community development, promoting 

strategic neighborhoods, attracting and retaining residents and 

creating partnerships between public charter schools and community 

organizations. Although funds from this program may be used for a variety 

of purposes, most of the grants awarded to date have been allocated 

for facilities and expansion projects. The program has awarded $20 

million in funding for 29 charter school projects. 

Public Facility Grant 

The Public Facility Grant, established in 2007, is a federally funded 

initiative that provides grants for improving the quality of district-owned 

educational facilities occupied by charter schools. Grant funds may 

be used for new construction, renovations, system upgrades, predevelopment 

soft costs and the addition of non-classroom space, such 

as resource rooms, labs and athletic rooms. The following applicants 

receive priority through the program: 1) new applicants; 2) applicants in 

district-owned facilities occupied for the first time by a charter school; 

3) those that have exceeded district averages in terms of academic 

performance; 4) high schools and early education charter schools with 

proven track records or those that are new and promising; 5) applicants 

that leverage other funding from private, governmental or philanthropic 

sources; 6) those with a long-term strategic plan and vision; 7) applicants 

with environmentally friendly projects; and 8) those with projects 

that are in the implementation phase at the time of submission. Since 

inception, the program has awarded 16 grants totaling $6.5 million. 

Direct Loan Fund for Public Charter School Improvement 


Statutory reference: http://bit.ly/bu88a1 (title 38 Educational 

institutions => Subtitle iv Public Education—charter Schools => 

chapter 18a miscellaneous Public charter School Provisions => 

Subchapter ii Public charter School financing and Support => Section 

38-1833.02) 

The District of Columbia’s Direct Loan Fund for Public Charter School 

Improvement was established in 2003 to provide flexible loan capital 

for the construction, purchase, renovation and maintenance of charter 

school facilities. Loans are capped at $2 million per school, with interest 

rates and terms varying by project. These loans are frequently used 

in conjunction with senior debt in larger projects and may function as 

gap financing in transactions where little equity is available. To date, 

the fund has provided $24.1 million in loans to 19 charter schools. 

Approximately $4.5 million in federal appropriations have been earmarked 

for this initiative for Fiscal Year 2010. 

Public Charter School Credit Enhancement Revolving Fund 


Statutory reference: http://bit.ly/aqWuBu (Sections 1155(e)(2)(B) and 

1155(e)(3)) 

This program was established by the Fiscal Year 2000 District of 

Columbia Appropriations Act to provide credit enhancement for the 

purchase, construction and renovation of facilities for public charter 

schools. The program offers guarantees or collateral pledges of up to 

$3 million for two to five years, enabling charter schools with little cash 

or collateral to obtain affordable financing for their facilities projects. To 

date, 19 schools have been awarded $16.9 million in credit enhancement 

monies for leasehold improvement loans, conventional mortgages, 

bond financings and small direct loans.

Charter School Incubator Initiative (CSII) 


The Charter School Incubator Initiative, a public-private partnership 

between OSSE and Building Hope, is a program dedicated to securing 

and financing facilities for new charter schools serving communities and 

schools in need where at least 50% of students are eligible for the free 

and reduced-price lunch program. CSII is funded through a $4 million 

federal appropriation sub-granted to Building Hope and a $5.1 million 

ED credit enhancement grant. Building Hope is responsible for identifying, 

acquiring, renovating and managing financed incubator sites, which 

new charter schools are able to lease as incubator space for one- to 

three-year periods. Building Hope and OSSE created a separate 501(c) 

(3) entity for this initiative, which has secured six incubator sites and 

served 12 schools since inception. 


Charter schools are eligible to participate in the District of Columbia’s 

Q-Bond Programs. Through the first quarter of 2010, seven QZAB issuances 

totaling $4.6 million have closed on behalf of six charter schools. 

Three charter schools received QSCB allocations totaling $33.9 million, 

the full amount of the District of Columbia’s 2009 allocation. 

Wisconsin 

Wisconsin Health and Educational facilities authority (WHEfa) 


Website: http://www.whefa.com 

Statutory reference: http://bit.ly/b09rou 

The Wisconsin Health and Educational Facilities Authority assists eligible 

Wisconsin health care and educational institutions obtain tax-exempt 

financing, including charter schools that are accredited by WHEFA. 

city redevelopment authority conduit financing 

Statutory reference: http://bit.ly/9e0u1H (Section 66.1333(5r)) 

Charter schools also have access to tax-exempt financing through various 

city redevelopment authorities, which act as conduit issuers. 


Charter schools are able to access Wisconsin’s Q-Bond Programs 

through their local school districts. In Fiscal Year 2006, Milwaukee 

Public Schools issued $2 million in QZABs for renovations and remodeling 

for a charter school and a shared high school campus including four 

schools, one of which is a charter school. 

Wyoming 

Wyoming School facilities commission major Building & facility 

repair & replacement Program 

Website: http://sfc.state.wy.us/ 

Statutory reference: http://bit.ly/d1tp1B (Section 21-15-109) 

The Wyoming School Facilities Commission administers funds from the 

Major Building and Facility Repair and Replacement Program, which 

was established in 2002. The funds are distributed based upon square 

footage computations for each school district. A school building or facility 

that is owned by a school district and used for operating a charter 

school qualifies to receive its proportionate share of the district’s funding 

under this program. 


51

Appendix A 

52 

appendix a 

SuMMary data For nonproFit FinanCing organiZationS aS oF 12/31/09 

Nonprofit Provider Bridgeway BH CSDC CRF ExED IFF ISDC KIPP LISC 

CAPITAL PROVISION 

Nationwide 

Nationwide, KIPP and 

partner schools 

IL, IN, IA, MO, WI DE 

Los Angeles, Orange and 

San Diego counties, CA 

Nationwide Nationwide 

DC, FL (Loans); Nationwide 

(Enhancement) 

Geographic Market Western PA 

Year Began Financing Charters 1998 1993 2003 2005 2004 1996 2003 2007 1997 

Total Historical Financing1 $3,909,300 $69,366,000 $33,513,688 $9,023,311 $1,370,000 $47,722,431 $8,993,000 $2,565,500 $97,554,516 

Number of Schools Supported2 8 54 78 5 3 46 7 9 130 

ED Credit Enhancement Award3 $0 $4,960,000 $21,600,000 $0 $0 $18,000,000 $0 $6,800,000 $26,460,000 

NMTC Allocation Award4 $0 $0 $40,000,000 $597,500,000 $121,000,000 $10,000,000 $0 $0 $623,000,000 

NMTC Allocation Employed for Charter Facilities4 Na Na $40,000,000 $9,023,311 $71,000,000 $440,000 Na Na $29,900,000 

2009 Financing $0 $27,716,000 $7,288,195 $1,800,000 $1,370,000 $15,742,208 $0 $1,301,000 $16,691,932 

2009 Number of Schools Supported2 0 24 16 1 3 14 0 5 30 

PORTFOLIO PERFORMANCE 

$ Amount of Loans Repaid/Refinanced5 $800,000 $24,434,000 $10,638,323 $0 $0 $5,043,169 $5,059,000 $1,554,500 $19,040,856 

Total Number of Financings6 6 77 80 5 3 65 11 7 105 

Originated $ Amount of Defaulted Loans7 $0 $0 $894,000 $0 $0 $631,015 $0 $0 $3,275,000 

Default Rate as % of Total $ Originated 0.00% 0.00% 2.67% 0.00% 0.00% 1.32% 0.00% 0.00% 3.36% 

Number of Defaulted Financings8 0 0 2 0 0 4 0 0 2 

Default Rate as % of Total Number Originated 0.00% 0.00% 2.50% 0.00% 0.00% 6.15% 0.00% 0.00% 1.90% 

$ Amount of Write-offs $0 $0 $494,000 $0 $0 $236,970 $0 $0 $1,235,040 

Write-off Rate as % of Total $ Originated 0.00% 0.00% 1.47% 0.00% 0.00% 0.50% 0.00% 0.00% 1.27% 

Number of Write-offs8 0 0 2 0 0 4 0 0 2 

Write-off Rate as % of Total Number Originated 0.00% 0.00% 2.50% 0.00% 0.00% 6.15% 0.00% 0.00% 1.90% 

FINANCING TERMS 

Varies $2,000,000 

Up to 30% of 

loan or lease 

$5,500,000/ 

$500,0009 $500,000 $10,000,000 None $1,500,000 

Maximum Amount $665,000 

Maximum Term (years) 10 5 7 7 7 30 Varies Varies 7 

Maximum Amortization (years) 25 25 Na 20 25 30 20 Varies 20 

Technical Assistance Yes Yes Yes No Yes Yes Yes Yes Yes 

Grants Yes No No No No No No No Yes 

Recoverable Grants No No No No Yes No No No Yes 

Construction Loans Yes Yes No No Yes Yes No Yes Yes 

Mini-Perm Loans Yes Yes No No Yes Yes No Yes Yes 

Leasehold Improvement Loans Yes Yes No No Yes Yes No Yes Yes 

Guarantees/Credit Enhancement Yes Yes Yes No Yes Yes Yes Yes Yes


Nonprofit Provider LIIF NCBCI NJCC NAF NFF PAVE RDF Self-Help TRF Total/Average 

CAPITAL PROVISION 

DE, MD, NJ, PA 

& DC 

MN Nationwide Milwaukee, WI Nationwide Nationwide 

NJ, case-by-case 

nationally 

Nationwide 

CA, MA, NJ, NY, PA, 

DC and case-by-case 

nationally 

Geographic Market 

Year Began Financing Charters 1999 1995 2004 2000 2002 2001 1999 1997 1997 

Total Historical Financing1 $64,203,161 $387,517,332 $38,283,221 $4,943,000 $14,521,925 $3,275,000 $52,827,528 $106,523,013 $165,264,892 $1,111,376,818 

Number of Schools Supported2 46 148 12 19 38 8 55 43 45 

ED Credit Enhancement Award3 $8,000,000 $28,000,000 $8,150,000 $0 $0 $0 $14,550,000 $10,200,000 $20,000,000 $156,720,000 

NMTC Allocation Award4 $139,000,000 $409,000,000 $50,000,000 $0 $130,000,000 $0 $0 $220,000,000 $278,500,000 $2,618,000,000 

NMTC Allocation Employed for Charter Facilities4 $26,500,000 $86,837,000 $6,020,000 Na $7,500,000 Na Na $62,593,835 $29,399,000 $369,213,146 

2009 Financing $12,177,764 $102,278,471 $8,700,000 $0 $6,834,730 $0 $14,270,000 $167,000 $11,659,000 $227,996,300 

2009 Number of Schools Supported2 7 32 5 0 29 0 6 1 3 

PORTFOLIO PERFORMANCE 

$ Amount of Loans Repaid/Refinanced5 $35,662,613 $90,837,332 $5,740,360 $1,117,000 $4,556,650 $950,000 $11,286,650 $42,325,330 $83,794,536 $342,840,319 

Total Number of Financings6 46 227 12 19 21 8 56 72 57 875 

Originated $ Amount of Defaulted Loans7 $4,310,000 $770,000 $200,000 $0 $0 $0 $750,000 $0 $0 $10,830,015 

Default Rate as % of Total $ Originated 6.71% 0.20% 0.52% 0.00% 0.00% 0.00% 1.42% 0.00% 0.00% 0.97% 

Number of Defaulted Financings8 2 3 1 0 0 0 1 0 0 13 

Default Rate as % of Total Number Originated 4.35% 1.32% 8.33% 0.00% 0.00% 0.00% 1.79% 0.00% 0.00% 1.49% 

$ Amount of Write-offs $697,412 $440,000 $0 $0 $0 $0 $558,011 $0 $0 $3,661,433 

Write-off Rate as % of Total $ Originated 1.09% 0.11% 0.00% 0.00% 0.00% 0.00% 1.06% 0.00% 0.00% 0.33% 

Number of Write-offs8 1 1 0 0 0 0 1 0 0 9 

Write-off Rate as % of Total Number Originated 2.17% 0.44% 0.00% 0.00% 0.00% 0.00% 1.79% 0.00% 0.00% 1.03% 

FINANCING TERMS 

Maximum Amount $3,500,000 $15,000,000 $4,300,000 $500,000 $2,500,000 $1,000,000 $6,500,000 No Max $4,500,000 

Maximum Term (years) 7 25 7 5 7 5 7 No Max 10 

Maximum Amortization (years) 20-25 25 25 20 15 20 20 20 25 

Technical Assistance Yes No Yes Yes Yes Yes Yes Yes Yes 

Grants No No No No No No Yes No No 

Recoverable Grants No No No No No No Yes No No 

Construction Loans Yes Yes Yes Yes Yes Yes Yes Yes Yes 

Mini-Perm Loans Yes Yes Yes Yes Yes Yes Yes Yes Yes 

Leasehold Improvement Loans Yes Yes Yes Yes Yes No Yes Yes Yes 

Guarantees/Credit Enhancement Yes Yes Yes No No No Yes Yes No 

Appendix A 

53

Appendix A 

54 


A downloadable spreadsheet is available at http://www.lisc.org/effc/2010Landscape. 

Notes 

1 Financing defined as grants, recoverable grants, loans and guarantees. 

2 No total number of schools due to repeat schools across organizations. 

3 “ED” is the U.S. Department of Education. Total does not add across columns due to $10 million joint award to NCBCI and TRF that is included in each organization’s number. 

4 “NMTC” is New Markets Tax Credit. Seven of the organizations have not received a NMTC allocation to date; thus their utilization is listed as not applicable, “Na.” 

5 Includes full repayments only; does not include partial amortizations or restructurings. 

6 Includes only those financings with a repayment obligation; it excludes grants. Total does not add across columns due to participation loans. 

7 A defaulted loan is defined as one in which the school can no longer make debt service payments and the lender must litigate or foreclose for repayment. This figure represents 

the loan amount at origination; not the amount outstanding at default. 

8 Total does not add across columns due to a single partication loan to one school in Inglewood, CA in which three of the nonprofit lenders participated. 

provider Key 

9 Maximum for loans is $5,500,000, and maximum for credit enhancement is $500,000. 

Organization In Table 

Bridgeway Capital Bridgeway 

Building Hope BH 

Charter Schools Development Corporation CSDC 

Community Reinvestment Fund, USA CRF 

Excellent Education Development, Inc. ExED 

IFF IFF 

Innovative Schools Development Corporation ISDC 

KIPP Foundation KIPP 

Local Initiatives Support Corporation LISC 

Low Income Investment Fund LIIF 

NCB Capital Impact NCBCI 

New Jersey Community Capital NJCC 

Nonprofits Assistance Fund NAF 

Nonprofit Finance Fund NFF 

Partners Advancing Values in Education PAVE 

Raza Development Fund, Inc. RDF 

Self-Help Self-Help 

The Reinvestment Fund, Inc. TRF

appendix B 

rated Charter SChool Bond iSSuanCe through 12/31/09 

Rating Rating at Issuance Current Rating 

Agency Enhanced Unenhanced Enhanced Unenhanced 

Credit 

Enhancement 

$ Par 

Millions 

Dated 

Date State Issuer School 

1 12/23/09 AZ Phoenix, AZ Industrial Development Authority Career Success Schools 11.255 Unenhanced S&P Na BBB- Na BBB- 

2 12/22/09 IN Indiana State Finance Authority Thea Bowman Leadership Academy 19.355 Unenhanced S&P Na BBB- Na BBB- 

29.625 Unenhanced S&P Na BBB Na BBB 

IDEA Public Schools 

(Donna, Frontier, Quest, Mission, 

San Benito, San Juan, Alamo, Pharr) 

3 12/10/09 TX Pharr, TX Higher Education Finance Authority 

NR 

NR 

BBB 

BBB 

NR 

NR 

BBB 

BBB 

4 11/19/09 TX La Vernia Higher Education Finance Corporation KIPP Inc. (Houston) 66.865 Third-party Guaranty1 Fitch 

S&P 

5 10/01/09 CO Colorado Educational and Cultural Facilities Authority Crowne Point Academy of Westminster 7.755 Moral Obligation Fitch A NR A NR 

Oak Cliff Academy, 

6 08/31/09 TX Tarrant County Cultural Education Facilities Finance Corporation 

4.880 Unenhanced S&P Na BBB- Na BBBdba 

Trinity Basic Preparatory 

7 07/08/09 ID Idaho Housing and Finance Association Victory Charter School, Inc. 0.855 Unenhanced S&P Na BBB- Na BBB- 

8 07/01/09 IN Indiana State Finance Authority Irvington Community School 7.750 Unenhanced S&P Na BBB- Na BBB- 

9 06/30/09 MA Massachusetts Development Finance Agency SABIS International Charter School 33.755 Unenhanced S&P Na BBB Na BBB 

10 06/09/09 MI Michigan Public Educational Facilities Authority Bradford Academy 10.720 Unenhanced S&P Na BBB- Na BBB- 

11 05/13/09 CA California Municipal Finance Authority King-Chavez Academies 8.895 Unenhanced S&P Na BBB- Na BBB- 

NR 

NR 

Aa3 

AAA- 

NR 

NR 

Aa2 

AAA 

MDY 

S&P 

Assured Guaranty/ 

School District 

General Obligation2 12 03/19/09 GA Greene County Development Authority Lake Oconee Academy 17.205 

13 03/10/09 ID Idaho Housing and Finance Association North Star Charter School, Inc. 11.775 Unenhanced S&P Na BB Na BB 

14 02/19/09 TX La Vernia Higher Education Finance Corporation Winfree Academy Charter School 8.305 Unenhanced S&P Na BBB- Na BBB- 

25.200 Unenhanced S&P Na BBB- Na BBB- 

Tejano Center Community Concerns 

(Raul Yzaguirre School) 

15 02/15/09 TX Clifton Higher Education Finance Corporation 

Lighthouse Academies, Inc. 

16 02/11/09 IN Indiana State Finance Authority 

15.435 Harris NA S&P A+ NR A+ NR 

(Monument, Gary, West Gary) 

17 11/18/08 CO Colorado Educational and Cultural Facilities Authority Twin Peaks Charter Academy 14.235 Moral Obligation S&P A BBB- A BBB- 

18 10/30/08 CO Colorado Educational and Cultural Facilities Authority The Classical Academy 14.025 Moral Obligation S&P A BBB A BBB 

19 09/30/08 FL Florida Development Finance Corporation Sculptor Charter School 4.960 Unenhanced S&P Na BBB- Na BBB- 

20 09/18/08 IL Illinois Finance Authority Prairie Crossing Charter School 9.440 Marshall & Ilsley MDY Aa3 NR A1 NR 

21 08/27/08 AZ Pima County Industrial Development Authority Delaware Military Academy 12.200 PNC Bank NA S&P AA NR A+ NR 

22 08/26/08 CO Colorado Educational and Cultural Facilities Authority Academy of Charter School 6.145 Moral Obligation S&P A NR A NR 

23 08/01/08 MI Michigan Public Educational Facilities Authority Chandler Park Academy 8.465 Unenhanced S&P Na BBB Na BBB 

24 07/23/08 ID Idaho Housing and Finance Association Victory Charter School, Inc. 3.965 Unenhanced S&P Na BBB Na BBB- 

25 07/17/08 MI Michigan Public Educational Facilities Authority Michigan Technical Academy 3.885 Fifth Third Bank S&P AA- BB BBB+ BB 

26 07/10/08 SC South Carolina Jobs-Economic Development Authority Brashier Charter LLC 8.410 SunTrust Bank MDY Aa2 NR A2 NR 

AppendixB 

55

Appendix B 

56 




Credit 

Enhancement 

$ Par 

Millions 

Dated 


27 06/19/08 MA Massachusetts Development Finance Agency Abby Kelley Foster Charter Public School 35.000 TD Banknorth NA MDY Aa2 NR Aa2 NR 

28 05/29/08 ID Idaho Housing and Finance Association Liberty Charter School, Inc. 4.005 Unenhanced S&P Na BBB Na BBB 

29 05/16/08 NC North Carolina Capital Facilities Finance Agency Lake Norman Charter School 20.000 Wachovia Bank S&P AA NR AA NR 

30 04/29/08 CA California Municipal Finance Authority High Tech High (Chula Vista and Media Arts) 23.515 Unenhanced Fitch Na BB+ Na BB+ 

31 03/27/08 AZ Pima County Industrial Development Authority Valley Academy 5.860 Unenhanced MDY Na Baa3 Na Baa3 

32 02/26/08 ID Idaho Housing and Finance Association Idaho Arts Charter School, Inc. 7.320 Unenhanced S&P Na BB+ Na BB+ 

33 01/01/08 TX Danbury Higher Education Authority, Inc. Golden Rule Charter School 8.100 Unenhanced S&P Na BB+ Na BB+ 

34 12/28/07 PA Chester County Industrial Development Authority Avon Grove Charter School 20.900 Unenhanced S&P Na BB+ Na BB+ 

35 12/27/07 CO Colorado Educational and Cultural Facilities Authority Cheyenne Mountain Charter Academy 10.605 Moral Obligation S&P A BBB- A BBB- 

36 12/13/07 UT Utah State Charter School Finance Authority Summit Academy 17.900 Unenhanced S&P Na BBB- Na BBB- 

American Charter Schools Foundation 

37 10/25/07 AZ Pima County Industrial Development Authority 

82.185 Unenhanced Fitch Na BBB Na BBB 

(Alta Vista High School) 

38 09/28/07 CO Colorado Educational and Cultural Facilities Authority Monument Academy Charter School 12.270 Unenhanced S&P Na BB Na BB 

39 09/27/07 FL Florida Development Finance Corporation Palm Bay Academy Charter School 6.260 Unenhanced S&P Na BB- Na BB- 

40 09/27/07 PA Philadelphia Authority for Industrial Development Independence Charter School 18.000 Unenhanced S&P Na BBB- Na BBB- 

41 09/20/07 RI Rhode Island Health and Educational Building Corporation CVS Highlander Charter School 7.000 Citizens Bank S&P AA- NR A- NR 

First Philadelphia Charter School 

42 09/05/07 PA Philadelphia Authority for Industrial Development 

17.000 Unenhanced S&P Na BBB- Na BBBfor 

Literacy 

43 08/30/07 FL Florida Development Finance Corporation Learning Gate Community School 7.475 Unenhanced S&P Na BBB- Na BBB- 

NR 

NR 

WDN (5/08) 

A 

NR 

NR 

Aaa 

AAA 

MDY 

S&P 

CIFG NA/ 

Moral Obligation 

44 08/23/07 CO Colorado Educational and Cultural Facilities Authority Challenge to Excellence Charter School 7.545 

45 08/23/07 NC North Carolina Capital Facilities Finance Agency Union Academy 6.175 Wachovia Bank S&P AA NR AA NR 

Baa3 

BBB- 

Na 

Baa3 

BBB- 

Na 

MDY 

S&P 

46 08/01/07 TX Texas Public Finance Authority, Charter School Finance Corporation Uplift Education (Peak Preparatory) 10.380 Unenhanced 

NR 

WDN (7/08) 3 

(AAA) 

16.000 ACA Financial S&P A NR 

UNO Charter School Network 

(Officer Donald J. Marquez Charter School) 

47 07/18/07 IL Illinois Finance Authority 

48 07/18/07 NC North Carolina Capital Facilities Finance Agency Magellan Charter School 5.000 Wachovia Bank S&P AA NR AA NR 

49 07/18/07 PA Philadelphia Authority for Industrial Development Russell Byers Charter School 7.810 Unenhanced S&P Na BBB- Na BBB- 

50 07/12/07 AZ Pima County Industrial Development Authority Center for Academic Success 9.000 Unenhanced S&P Na BBB- Na BBB- 

51 07/05/07 CO Colorado Educational and Cultural Facilities Authority Windsor Charter Academy 6.905 Unenhanced S&P Na BB+ Na BB+ 

S&P AAA NR A NR 

CIFG NA/ 


52 07/02/07 CO Colorado Educational and Cultural Facilities Authority James Irwin Educational Foundation 20.900 

S&P AAA NR A NR 

CIFG NA/ 


53 06/14/07 CO Colorado Educational and Cultural Facilities Authority Belle Creek Charter School 9.300

ated Charter SChool Bond iSSuanCe through 12/31/09 



Credit 

Enhancement 

$ Par 

Millions 

Dated 


54 06/12/07 MI Michigan Public Educational Facilities Authority Richfield Public School Academy 6.435 Unenhanced S&P Na BBB- Na BBB- 

55 05/31/07 IL Illinois Finance Authority Noble Network (Golder College Prep) 13.885 ACA Financial S&P A NR WDN (1/08) NR 

56 05/25/07 FL Hillsborough County Industrial Development Authority Terrace Community Middle School 6.215 Unenhanced S&P Na BBB- Na BBB- 

25.000 ACA Financial S&P A BB+ BB+ 4 BB+ 

Community Academy 

Public Charter School 

57 05/24/07 DC District of Columbia 

29.995 Unenhanced S&P Na BB+ Na WDN (4/08) 

Cosmos Foundation (Harmony-Houston, 

Dallas, College Station, San Antonio) 

58 05/01/07 TX Texas Public Finance Authority, Charter School Finance Corporation 

37.095 ACA Financial S&P A BBB- BBB 4 BBB 

IDEA Public Schools 

(Donna, Quest, Frontier, Rio Grande Middle, 

Rio Grande Upper) 

59 05/01/07 TX Texas Public Finance Authority, Charter School Finance Corporation 

S&P AAA BBB- A BBB- 

CIFG NA/ 


60 04/24/07 CO Colorado Educational and Cultural Facilities Authority Cesar Chavez Academy 15.570 

61 04/15/07 PA Bucks County Industrial Development Authority School Lane Charter School 11.300 Unenhanced S&P Na BBB Na BBB 

Lee Charter Foundation 

62 04/03/07 FL Lee County Industrial Development Authority 

82.165 Unenhanced S&P Na BB Na BB 

(Gateway Charter School) 

63 03/30/07 NY City of Albany Industrial Development Agency Brighter Choice Charter Schools 18.490 Unenhanced Fitch Na BBB- Na BBB- 

64 03/21/07 AZ Pima County Industrial Development Authority Tucson Country Day School 6.220 Unenhanced S&P Na BBB- Na BBB- 

65 03/13/07 MI Grand Traverse Academy Grand Traverse Academy 16.200 Unenhanced S&P Na BBB- Na BBB- 

66 03/08/07 ID Idaho Housing and Finance Association Hidden Springs Charter School, Inc. 5.805 Bank of America MDY Aa1 NR WDN (4/09) NR 

49.475 Unenhanced S&P Na BBB Na BBB 

Chicago Charter School Foundation 

(Chicago International Charter 

School Northtown Academy) 

67 02/08/07 IL Illinois Finance Authority 

MDY Aaa NR A2 NR 

National/School 

District Lease 

Obligation5 68 01/31/07 FL St. Lucie County School Board Treasure Coast University Charter School 21.865 

69 01/24/07 MI Conner Creek Academy East Connor Creek Academy East 16.215 Unenhanced S&P Na BB+ Na BB+ 

Pima County IDA Pool (Series O&P) 


14.995 Unenhanced MDY Na Baa3 Na Baa3 

(Kingman Academy of Learning) 

71 12/28/06 DC District of Columbia Friendship Public Charter School, Inc. 15.000 ACA Financial S&P A BBB BBB4 BBB 

72 12/21/06 UT West Valley City, Utah Monticello Academy 6.500 KeyBank National S&P A NR WDN (5/07) NR 

S&P AAA BBB A BBB 

CIFG NA/ 


73 12/19/06 CO Colorado Educational and Cultural Facilities Authority Littleton Academy Charter School 5.235 

74 12/14/06 PA Philadelphia Authority for Industrial Development Franklin Towne Charter High School 11.525 Unenhanced S&P Na BBB Na WDN (1/09) 

NR 

BBB- 

WDN (5/08) 

A 

NR 

BBB- 

Aaa 

AAA 

MDY 

S&P 

CIFG NA/ 


75 11/28/06 CO Colorado Educational and Cultural Facilities Authority Stargate Charter School 9.805 

76 11/28/06 MN Housing and Redevelopment Authority of St. Paul, MN Community of Peace Academy 17.245 Unenhanced S&P Na BBB- Na BBB- 

77 11/01/06 TX La Vernia Higher Education Finance Corporation Southwest Winners Foundation, Inc. 9.470 ACA Financial S&P A NR WDN (1/08) NR 

Appendix B 

57

Appendix B 

58 


Rating at Issuance Current Rating 

Rating 


Credit 

Enhancement 

$ Par 

Millions 

Dated 


78 10/31/06 DE New Castle County, DE Newark Charter School, Inc. 14.905 Unenhanced S&P Na BBB- Na BBB+ 

NR 

BBB- 

WDN (5/08) 

A 

NR 

BBB- 

Aaa 

AAA 

MDY 

S&P 

CIFG NA/ 


79 10/04/06 CO Colorado Educational and Cultural Facilities Authority Frontier Academy 17.750 

80 09/28/06 FL Florida Development Finance Corporation Palm Bay Academy Charter School 5.920 Unenhanced S&P Na BB- Na BB- 

S&P AAA BBB- A BBB- 

CIFG NA/ 


81 09/27/06 CO Colorado Educational and Cultural Facilities Authority Cheyenne Mountain Charter Academy 11.670 

82 09/12/06 CO Colorado Educational and Cultural Facilities Authority Academy Charter School 7.985 Moral Obligation S&P A BBB A BBB 

Noble Network, UNO Network 

83 08/30/06 IL Illinois Finance Authority 

18.745 ACA Financial S&P A NR WDN (1/08) NR 

(Rauner College Prep, Pritzker) 

84 08/01/06 TX Danbury Higher Education Authority, Inc. A.W. Brown Fellowship Charter School 5.140 ACA Financial S&P A BBB- WDN (2/10) WDN (2/10) 

85 08/01/06 TX Texas Public Finance Authority, Charter School Finance Corporation KIPP Inc. (Houston) 35.415 ACA Financial S&P A BBB- BBB 4 BBB 

86 07/05/06 MA Massachusetts Development Finance Agency Academy of the Pacific Rim 11.775 ACA Financial S&P A NR WDN (1/08) NR 

87 07/01/06 TX City of Cameron Education Corporation Faith Family Academy Charter School 16.640 ACA Financial S&P A BBB- BBB- 4 BBB- 

American Heritage Education Foundation 

88 06/08/06 CA California Municipal Finance Authority 


(Escondido, Heritage) 

89 06/01/06 TX Orchard Higher Education Finance Corporation NYOS Charter School 5.080 ACA Financial S&P A NR WDN (1/08) NR 

90 05/23/06 AZ Pima County Industrial Development Authority Paradise Education Center 5.515 Unenhanced S&P Na BB+ Na BB 

91 04/15/06 PA Philadelphia Authority for Industrial Development Richard Allen Preparatory School 5.790 Unenhanced S&P Na BB+ Na BBB- 

92 02/14/06 MI Michigan Public Educational Facilities Authority Michigan Technical Academy 6.950 Unenhanced S&P Na BB Na BB+ 

93 12/20/05 MI Summit Academy Summit Academy 6.855 Unenhanced S&P Na BB+ Na BB+ 

94 12/14/05 FL Palm Beach County, FL G Star School of the Arts 4.455 Unenhanced S&P Na BB Na BB 

95 12/13/05 MI Michigan Public Educational Facilities Authority Old Redford Academy 11.110 Unenhanced S&P Na BBB- Na BBB- 

95 12/06/05 MI Plymouth Educational Center Charter School Plymouth Educational Center Charter School 13.850 Unenhanced S&P Na BBB- Na BBB- 

Baa3 

NR 

NR 

WDN (1/08) 

Baa3 

NR 

NR 

A 

MDY 

S&P 

97 10/01/05 TX Beasley Higher Education Finance Corporation Uplift Education (North Hills) 15.945 ACA Financial 

98 09/20/05 MI Summit Academy North Summit Academy North 26.595 Unenhanced S&P Na BB+ Na BB+ 

NR 

NR 

WDN (5/09) 

WDN 

WDN (6/08) 

A 

NR 

NR 

BBB- 

AAA 

Aaa 

AAA 

Fitch 

MDY 

S&P 

Syncora/ 


99 08/30/05 CO Colorado Educational and Cultural Facilities Authority Excel Academy Charter School 7.610 

NR 

NR 

WDN (6/07) 

WDN 

WDN (6/08) 

A 

NR 

NR 

BBB- 

AAA 

Aaa 

AAA 

Fitch 

MDY 

S&P 

Syncora/ 


100 08/30/05 CO Colorado Educational and Cultural Facilities Authority Ridgeview Classical Schools 8.185 

101 08/16/05 MI Detroit Community High School Detroit Community High School 11.865 Unenhanced S&P Na BB Na BB 

102 08/09/05 MI Chandler Park Academy Chandler Park Academy 7.420 Unenhanced S&P Na BBB- Na BBB




Credit 

Enhancement 

$ Par 

Millions 

Dated 


Leadership Learning Partners 

103 07/21/05 PA Philadelphia Authority for Industrial Development 

10.700 Unenhanced S&P Na BBB- Na BB 

Charter School 

104 06/28/05 WI Milwaukee, WI Redevelopment Authority Milwaukee Academy of Science 12.260 Unenhanced S&P Na BB+ Na BBB- 


Pima County IDA Pool (Series M&N) 

(Academy of Tucson) 


NR 

NR 

BBB- 

WDN 

WDN (6/08) 

A 

NR 

NR 

BBB- 

AAA 

Aaa 

AAA 

Fitch 

MDY 

S&P 

Syncora/ 


106 06/07/05 CO Colorado Educational and Cultural Facilities Authority Lincoln Academy Charter School 2.470 

16.600 Bank of America MDY Aa1 NR Aa3 NR 

St. Coletta Special Education 

Public Charter School 


WDN 

NR 

WDN (2/09) 

WDN 

WDN (6/08) 

A 

WDN 

WDN (6/08) 

A 

AAA 

Aaa 

AAA 

AAA 

Aaa 

AAA 

AAA 

Aaa 

AAA 

Fitch 

MDY 

S&P 

Fitch 

MDY 

S&P 

Fitch 

MDY 

S&P 

Syncora/ 


108 06/01/05 CO Colorado Educational and Cultural Facilities Authority Bromley East Charter School 14.370 

NR 

NR 

BBB- 

Syncora/ 


109 05/15/05 CO Colorado Educational and Cultural Facilities Authority Woodrow Wilson Academy 6.275 

NR 

NR 

NR 

WDN 

A3 

A 

BBB- 

NR 

BBB- 

NR 

NR 

BBB- 

NR 

NR 

NR 

National/ 

School District Lease 

Obligation6 110 04/19/05 FL School Board of Osceola County, FL Four Corners Charter School 12.095 

111 03/17/05 MA Massachusetts Development Finance Agency Mystic Valley Regional Charter School 3.310 Sovereign Bank S&P AA+ NR AA+ NR 

112 03/09/05 AZ Pima County Industrial Development Authority Horizon Community Learning Center 32.845 Unenhanced S&P Na BBB- Na BBB 

113 02/17/05 TX Orchard Higher Education Finance Corporation A.W. Brown Fellowship Charter School 6.250 ACA Financial S&P A NR WDN (2/10) NR 

114 12/01/04 TX Texas Public Finance Authority, Charter School Finance Corporation School of Excellence in Education 9.070 Unenhanced S&P Na BB Na BB 

6.295 Bank of America MDY Aa1 NR Aa3 NR 

Howard Road Academy Public 

Charter School, Inc. 


NR 

NR 

BBB- 

WDN 

WDN (6/08) 

A 

NR 

NR 

BBB- 

AAA 

Aaa 

AAA 

Fitch 

MDY 

S&P 

Syncora/ 


116 11/10/04 CO Colorado Educational and Cultural Facilities Authority Platte River Academy 8.025 

117 10/15/04 PA Chester County Industrial Development Authority Collegium Charter School 16.000 ACA Financial S&P A B BB+ 4 BB+ 

NR 

NR 

BBB- 

WDN 

WDN (6/08) 

A 

NR 

NR 

BBB- 

AAA 

Aaa 

AAA 

Fitch 

MDY 

S&P 

Syncora/ 


118 09/15/04 CO Colorado Educational and Cultural Facilities Authority Aurora Academy 7.275 

9.700 Zions First National MDY A2 NR WDN (7/07) NR 

James Irwin Charter High School, 

James Irwin Charter Middle School 

119 09/02/04 CO Colorado Educational and Cultural Facilities Authority 

NR 

Baa3 

BBB- 

WDN 

Baa34 A 

NR 

Baa3 

BBB- 

AAA 

Aaa 

AAA 

Fitch 

MDY 

S&P 

Syncora/ 


120 08/01/04 CO Colorado Educational and Cultural Facilities Authority University Lab School 20.525 

S&P A+ NR BB+ NR 

Columbus Bank & 

Trust Co 

121 07/17/04 FL Bay County, FL Bay Haven Charter Academy 11.600 

Appendix B 

59

Appendix B 

60 




Credit 

Enhancement 

$ Par 

Millions 

Dated 


NR 

NR 

BBB- 

WDN 

WDN (6/08) 

A 

NR 

NR 

BBB- 

NR 

NR 

BBB- 

NR 

NR 

BBB 

AAA 

Aaa 

AAA 

AAA 

Aaa 

AAA 

AAA 

Aaa 

AAA 

Fitch 

MDY 

S&P 

Fitch 

MDY 

S&P 

Fitch 

MDY 

S&P 

Syncora/ 


122 05/15/04 CO Colorado Educational and Cultural Facilities Authority Collegiate Academy of Colorado 8.195 

NR 

NR 

WDN (6/07) 

WDN 

WDN (6/08) 

A 

Syncora/ 


123 05/01/04 CO Colorado Educational and Cultural Facilities Authority Academy of Charter Schools 20.765 

NR 

NR 

BBB 

WDN 

WDN (6/08) 

A 

Syncora/ 


124 04/15/04 CO Colorado Educational and Cultural Facilities Authority Peak to Peak Charter School 23.300 


Pima County IDA Pool (Series K&L) 

(Kingman Academy of Learning) 


NR 

WDN (5/09) 

WDN (6/08) 

A 

NR 

BBB 

Aaa 

AAA 

MDY 

S&P 

Syncora/ 


126 03/25/04 CO Colorado Educational and Cultural Facilities Authority Parker Core Knowledge Charter School 4.805 

Pima County IDA Pool (Series I&J) 


(Academy of Tucson, 


Carden Elementary Charter School) 

128 03/04/04 AZ Pima County Industrial Development Authority Noah Webster Basic School 12.495 Unenhanced S&P Na BBB- Na BBB- 

129 03/04/04 TX Heart of Texas Education Finance Corporation A.W. Brown Fellowship Charter School 4.450 ACA Financial S&P A NR WDN (2/10) NR 

130 01/30/04 CO Colorado Educational and Cultural Facilities Authority Challenge to Excellence Charter School 6.950 Zions First National MDY A2 NR WDN (10/07) NR 

131 12/30/03 MA Massachusetts Development Finance Agency Neighborhood House Charter School 7.100 Fleet Bank NA S&P A+ NR A+ NR 

NR 

BBB- 

WDN (6/08) 

A 

NR 

BBB- 

Aaa 

AAA 

MDY 

S&P 

Syncora/ 


132 12/15/03 CO Colorado Educational and Cultural Facilities Authority Liberty Common School 7.190 

133 11/01/03 DC District of Columbia Friendship Public Charter School 44.880 ACA Financial S&P A BBB BBB 4 BBB 

Rutgers University 

Guaranty7 MDY Aa3 NR Aa3 NR 

134 10/02/03 NJ Delaware River Port Authority, PA Leap Academy University Charter School 8.500 

NR 

NR 

BBB 

NR 

BBB 

A 

WDN (6/08) 

A 

WDN (6/08) 

A 

NR 

NR 

BBB 

NR 

BBB 

AAA 

Aaa 

AAA 

Aaa 

AAA 

Fitch 

MDY 

S&P 

MDY 

S&P 

Syncora/ 


135 10/01/03 CO Colorado Educational and Cultural Facilities Authority Pinnacle Charter School 22.305 

Syncora/ 


136 10/01/03 CO Colorado Educational and Cultural Facilities Authority The Classical Academy 39.595 

137 09/16/03 IL Illinois Development Finance Authority Learn Charter School 5.000 Harris NA MDY Aa3 NR A1 NR 

138 08/26/03 AZ Pima County Industrial Development Authority Phoenix Advantage Charter School 10.970 ACA Financial S&P A NR WDN (1/08) NR 

139 06/26/03 AZ Pima County Industrial Development Authority Paradise Education Center 12.945 Unenhanced S&P Na BBB- Na BB 


Jefferson Academy, 

Cheyenne Mountain Charter Academy 

140 05/22/03 CO Colorado Educational and Cultural Facilities Authority 


Pima County IDA Pool (Series G&H) 

(Benchmark, New School for Arts) 


BB 

NR 

BB 4 

WDN (1/08) 

BB 

NR 

A 

A 

Fitch 

S&P 

142 11/15/02 MO Missouri Health and Educational Facilities Authority St. Louis Charter School 6.130 ACA Financial




Credit 

Enhancement 

$ Par 

Millions 

Dated 


143 11/01/02 CO Colorado Educational and Cultural Facilities Authority Stargate Charter School 6.795 Unenhanced S&P Na BBB- Na WDN (12/07) 

Pima County IDA Pool (Series E&F) 


(Ball-Dobson, New School for Arts, 


Valley Academy) 

145 06/15/02 PA Philadelphia Authority for Industrial Development Community Academy of Philadelphia 13.795 ACA Financial S&P A NR WDN (1/08) NR 

146 06/01/02 ID Idaho Housing and Finance Association Nampa Charter School 2.485 Wells Fargo Bank MDY Aa1 NR WDN (6/03) NR 

Chicago Charter School Foundation 

147 06/01/02 IL Illinois Development Finance Authority 

16.050 Unenhanced S&P Na BBB Na WDN (7/09) 

(Chicago International Charter School Basil) 

148 03/15/02 CO Colorado Educational and Cultural Facilities Authority DCS Montessori Charter School 9.795 Unenhanced S&P Na BBB Na BBB 

WDN 

WDN (10/05) 

Na 

BB+ 

Ba1 

Na 

Fitch 

MDY 

149 03/01/02 CO Colorado Educational and Cultural Facilities Authority Platte River Academy 6.875 Unenhanced 

150 02/15/02 TX Danbury Higher Education Authority, Inc. George Gervin Academy 5.145 ACA Financial S&P A NR WDN (1/08) NR 

NR 

NR 

NR 

WDN 

Baa1 

A 

NR 

NR 

NR 

AAA 

Aaa 

AAA 

Fitch 

MDY 

S&P 

151 02/01/02 FL Osceola County Industrial Development Authority Canoe Creek Charter School 9.860 National 

152 01/15/02 CO Colorado Educational and Cultural Facilities Authority Littleton Academy Charter School 4.450 Unenhanced S&P Na BBB Na BBB 

153 01/15/02 CO Colorado Educational and Cultural Facilities Authority Collegiate Academy of Colorado 6.780 Unenhanced MDY Na Ba1 Na WDN (5/04) 


Pima County IDA Pool (Series C&D) 

(Hearn, Dobson, Paramount Education 

Studies, Academy with Community Partners- 

Arizona, Stepping Stones Academy) 


WDN (2/04) 

WDN (11/03) 

Na 

Baa3 

BBB 

Na 

MDY 

S&P 

155 12/01/01 CO Colorado Educational and Cultural Facilities Authority Pinnacle Charter School 12.355 Unenhanced 

156 10/01/01 CO Colorado Educational and Cultural Facilities Authority Frontier Academy 15.830 Unenhanced MDY Na Ba1 Na WDN (3/07) 

157 09/15/01 CO Colorado Educational and Cultural Facilities Authority University Lab School 17.630 Unenhanced MDY Na Baa2 Na WDN (5/04) 

158 08/15/01 CO Colorado Educational and Cultural Facilities Authority Peak to Peak Charter School 18.800 Unenhanced MDY Na Ba2 Na WDN (5/04) 

159 06/07/01 CO Colorado Educational and Cultural Facilities Authority Cherry Creek Academy 4.155 Unenhanced MDY Na Baa2 Na Baa2 

43.000 Unenhanced MDY Na Ba1 Na Ba1 

Detroit Academy of Arts & Sciences, YMCA 

Service Learning Academy 

160 05/16/01 MI Michigan Municipal Bond Authority 

Pima County IDA Pool (Series A&B) 

(Young Scholars Academy, 



International Studies Academy, 

Kingman Academy Learning ) 

162 05/01/01 MN Housing and Redevelopment Authority of St. Paul, MN Community of Peace Academy 11.045 Unenhanced MDY Na Baa3 Na WDN (5/07) 

163 01/01/01 MI Summit Academy North Summit Academy North 8.955 Unenhanced MDY Na Baa3 Na WDN (6/06) 

164 11/28/00 CO Colorado Educational and Cultural Facilities Authority Classical Academy 19.600 Unenhanced MDY Na Baa3 Na WDN (2/04) 

165 11/01/00 CO Colorado Educational and Cultural Facilities Authority Academy Charter School 7.560 Unenhanced S&P Na BBB Na WDN (2/09) 

Appendix B 

61

Appendix B 

62 




Credit 

Enhancement 

$ Par 

Millions 

Dated 


WDN 

WDN (7/06) 

Na 

BBB- 

Baa3 

Na 

Fitch 

MDY 

166 10/01/00 CO Colorado Educational and Cultural Facilities Authority Bromley East Charter School 12.955 Unenhanced 

167 09/28/00 AZ Maricopa County Industrial Development Authority Horizon Community Learning Center 29.590 ACA Financial S&P A NR WDN (6/07) NR 

168 08/15/00 FL City of Tallahassee Florida State University Schools 23.330 National MDY Aaa A3 A3 4 A3 

169 06/01/00 MI Sankofa Shule Sankofa Shule 2.555 Unenhanced MDY Na Ba1 Na WDN (11/09) 

28.965 Unenhanced MDY Na Baa3 Na B1 

Maricopa County IDA Pool 

(Westwind, Omega, Tempe Prep, 

Foothills, American Heritage, 

Arizona Montessori, Challenge) 

170 03/01/00 AZ Maricopa County Industrial Development Authority 

NR 

NR 

WDN 

Baa1 

NR 

NR 

AAA 

Aaa 

Fitch 

MDY 

171 02/01/00 FL School Board of Osceola County, FL Four Corners Charter School 17.080 National 

172 02/01/00 MI Black River Public School Black River Public School 5.770 Unenhanced MDY Na Baa3 Na WDN (3/07) 

Uplift Education 

173 01/01/00 TX Fate, TX Higher Education Facilities Corporation 

6.000 Unenhanced MDY Na Baa3 Na WDN (11/09) 

(North Hills Charter School) 

174 11/03/99 CO Colorado Educational and Cultural Facilities Authority Core Knowledge Charter School 3.330 Unenhanced S&P Na BBB Na WDN (9/06) 

175 10/01/99 CO Colorado Educational and Cultural Facilities Authority Jefferson Academy 2.600 Unenhanced S&P Na BBB- Na BBB- 

176 09/29/99 CO Colorado Educational and Cultural Facilities Authority The Renaissance School 3.690 Unenhanced S&P Na BBB- Na WDN (2/09) 

TOTAL 2,424.670


A downloadable spreadsheet is available at http://www.lisc.org/effc/2010Landscape. 

Notes 

1 This credit enhancement consists of a $20 million partial guaranty of principal and interest provided by PHILO Houston, LLC. 

2 Since this is a general obligation of the school district on behalf of the charter school, Moody’s and S&P’s “underlying” ratings of 

“A1” and “A+”, respectively, are based on the school district’s credit strength rather than that of the charter school. Thus, for these 

purposes, there is no unenhanced rating. 

3 This rating is shown here as withdrawn; however, the rating for the bonds is “AAA” on S&P’s website because the bonds have been 

escrowed to maturity, and the investments held in escrow have been assigned a “AAA” rating. 

4 The underlying school rating is higher than the rating of the enhancement vehicle; thus, the underlying rating is also listed as the 

enhanced rating. 

5 Since this is a lease obligation of the school district on behalf of the charter school, Moody’s “underlying” rating of “A2” is based on 

the school district’s credit strength rather than that of the charter school. Thus, for these purposes, there is no unenhanced rating. 

The school district’s rating is higher than that of the insurer and is listed as the current enhanced rating. 

6 Since this is a lease obligation of the school district on behalf of the charter school, Moody’s “underlying” rating of “A3” is based on 

the school district’s credit strength rather than that of the charter school. Thus, for these purposes, there is no unenhanced rating. 

Moody’s rating for the school district is higher than its rating for the insurer and is listed as the current enhanced rating. 

7 This credit enhancement consists of a guaranty provided by Rutgers University for the charter school. 

General Methodology & Terminology 

- Issues are arranged in chronological descending order. 

- Par amounts include both taxable and tax-exempt portions of an issuance, as applicable. 

- For the purposes of this study, an “enhanced” rating is a rating stemming from additional credit enhancement or some other security 

pledge in addition to the revenues from the charter school itself. An “unenhanced” rating is an underlying rating of the charter 

school rather than that of any other security which may be considered as part of the issue. For example, many Colorado issuances 

have three ratings: an enhanced rating provided by the credit strength of the insurer; an underlying rating for the issue provided by 

the State’s moral obligation pledge; and an underlying rating for the individual school. The “unenhanced” ratings included in this 

listing are the underlying ratings for the school. 

- “Fitch” is Fitch Ratings; “MDY” is Moody’s Investor Services; “S&P” is Standard & Poor’s. 

- “Current Ratings” are those as of March 12, 2010. 

- “Na” means not applicable and applies to bond issues which did not have credit enhancement and thus do not have an 

enhanced rating. 

- “NR” means not rated and generally applies to the underlying credit for the school. It is also used in instances where a rating 

agency did not rate the credit enhancement vehicle. 

- “WDN” means the rating has been withdrawn. The dates on which Fitch has withdrawn its ratings are unavailable and are not 

included in this listing. 

- National Finance Guarantee Corp. was formerly MBIA Insurance Corp. of Illinois and is listed here as “National.” 

- Syncora Guarantee Inc. was formerly XL Capital Assurance Inc. and is listed here as “Syncora.” 

Appendix B 

63

Appendix C 

64 

appendix C 

long-terM MuniCipal Bond rating SCaleS 

Rating Description Fitch Ratings Moody's Investor Services Standard & Poor's 

INVESTMENT GRADE 

AAA Aaa AAA 

Highest Quality 

Minimal Risk 

AA+ 

AA 

AA- 

A+ 

A 

A- 

BBB+ 

BBB 

BBB- 

Aa1 

Aa2 

Aa3 

AA+ 

AA 

AA- 

A+ 

A 

A- 

BBB+ 

BBB 

BBB- 

NON-INVESTMENT GRADE 

High Quality 

Very Low Risk 

A1 

A2 

A3 

Upper Medium Grade Quality 

Low Risk 

Baa1 

Baa2 

Baa3 

Lower Medium Grade Quality 

Some Speculative Characteristics 

BB+ 

BB 

BB- 

B+ 

B 

B- 

CCC+ 

CCC 

CCC- 

CC 

C 

Ba1 

Ba2 

Ba3 

Speculative 

Substantial Risk 

B1 

B2 

B3 

Highly Speculative 

High Risk 

Caa1 

Caa2 

Caa3 

Ca 

C 

BB+ 

BB 

BB- 

B+ 

B 

B- 

CCC+ 

CCC 

CCC- 

CC 

C 

DDD 

DD 

D 

Substantial Risks 

In Poor Standing 

Na D 

In Default

June 2010 

501 Seventh Avenue, New York, NY 10018 212.455.9800 www.lisc.org


Charter Schools – Standardized Financial Reporting Model 

Fiscal Year 2010-11 Instructions Revised 9/15/2010 

These instructions are provided to assist charter schools in completed the Standardized 

Financial Reporting forms and tables that are enclosed with this document. There are 

three reporting processes/timelines that make up this system: 

System Element Form Name & No. Reporting Deadline 

Budget Reports Budget Summary – Form 1 

Budgeted Functional 

Expenses – Form 2 

Certification – Form 8 

June 11, 2010 

Year-end Financial Reports Balance Sheet – Form 3 

Income Statement – Form 4 

Statement of Functional 

Expense – Form 5 

Enrollment Report – Form 6 

(due October 22) 



Budget Proviso Forms 2011-12 Projected Income 

Statement – Form 4a 

Schedule of Facilities 

Revenues & Expenses – 

Form 5a 

Enrollment Report – Form 6 


November 30, 2010 

Budget Briefing Tables to the 

State Legislature 

Table 7 thru Table 12 December 31, 2010 

This document is organized to provide information to charter schools regarding how to 

complete the forms enclosed in the attached MS Excel spreadsheet in meeting these 

reporting requirements. This document is organized into four sections – (1) General 

Instructions; (2) Budget Report Instructions; (3) Year-end Financial Reporting 

Instructions; and (4) Budget Briefing Tables Instructions. 

GENERAL INSTRUCTIONS: 

Due dates are as follows: For budget reporting forms (Form 1, 2 & 8) the due date is 

June 11, 2010. For year-end financial reporting (Forms 3, 4, 5, 6 & 8) the due date is the 

same date as due date for the self-evaluations and should be submitted together (October 

15, 2010) except for the enrollment report with October 15, 2010 enrollments which is 

due on October 22, 2010. For budget proviso reporting the CSAO will use 2010-11 

budget data and 2009-10 actual year end data plus the data provided on the Projected 

Income Statement (Form 4a) and the Schedule of Facilities Revenues and Expenses 

(Form 5a) and November 15 enrollment data provided on Form 6. The deadline for the 

budget proviso forms is November 30, 2010. A certification statement should be 

submitted each time the charter school submits any of these forms. The comments page 

1


Charter Schools – Standardized Financial Reporting Model 

Fiscal Year 2010-11 Instructions Revised 9/15/2010 

(Form 7) is submitted at the discretion of the charter school. The budget briefing tables 

(Tables 7, 10, 11 & 12) are due to the CSAO no later than December 31, 2010. 

The attached MS Excel spreadsheet has multiple tabs that are to be used by charter 

schools in reporting their budget and financial results for budget year 2010-11, actual 

year 2009-10 and budget proviso data. Tables 7, 10, 11 & 12 are to be used by charter 

schools to report data required by the legislature. For each form data entry is made in the 

GREEN colored cells. YELLOW colored cells are totals or other data that calculates 

automatically. 

The forms to use to submit budget information are: 

Form 1: Budget Summary (Budgeted P&L) 

Form 2: Bgt_FuncExp (Budgeted Functional Expenses) 

Form 8: Certification Statement 

The forms to use to submit year end financial results are: 

Form 3: Balance Sheet (aka Statement of Net Assets). 

Form 4: Income Statement (aka Statement of Revenues, Expenses & Changes in 

Net Assets). 

Form 5: Statement of Functional Expenses. 

Form 6: Enrollment Report. 

Form 8: Certification Statement. 

The forms to use to submit remaining data needed to comply with the Budget Provisos 

are: 

Form 4a: 2011-12 Projected Income Statement. 

Form 5a: 2009-10 Schedule of Facilities Revenue and Expense (Actual). 

Form 6: Enrollment Report (including 11/15/2010 actual enrollments and at least 

one year of projected enrollment (2011-12). 

From 8: Certification Statement. 

The forms to be used to submit Budget Briefing information are: 

Table 7: Non-general Funds (unencumbered) 

Table 10: Vacant Positions 

Table 11: Personnel Separations 

Table 12: New Hires 

Note: When you submit your year end financial results also submit any changes 

you have made to your budget during the year on Forms 1 & 2 which may be 

revised (and approved as revised by your LSB) based on fiscal changes that may 

occur during the fiscal year. 

Detailed instructions for completing the forms follow: 

2

BUDGET REPORTING FORMS: 

Standardized Budget and Financial Reporting Instructions 

Fiscal Year 2010-11 

Revised on: 9/15/2010 

Form 1. BudgetSumm: This is the Budget Summary table. This table is used to 

report your overall budgeted revenues and expenses, that your LSB has approved. 

The due date for submitting this completed form as well as one version of the 

"Budget by Functional Expense" form is June 11, 2010. Enter the name of your 

school in the space provided (currently entered with "sample charter school." 

Enter the Org ID of your school in the space provided (a table of ORGIDs has 

been provided in Appendix A). 

OPERATING REVENUES: Use this section to report normal, ongoing operating 

revenues that have been budgeted. Using the instructions in Column M of the 

form enter the appropriate data. Note that if the school has a component unit then 

data for the component unit is also required to be completed in the column 

labeled "Sample Component Unit.” If you do have a component unit enter the 

actual name of the component unit in the space provided at the top of the column. 

If the school or the component unit has normal, ongoing revenues budgeted from 

a source that does not fit into the revenue categories provided (1-14) use the space 

provided for items 15 & 16 to enter revenues from these sources. Be sure to 

include a description of the source as well. 

OPERATING EXPENSES: Operating expense data for the charter school will 

load onto this form automatically from the Schedule of Budgeted Functional 

Expenses form. Data for a component unit is reported as total component unit 

expenses excluding amounts transferred to the charter school and the amount the 

component unit transferred to the charter school. This amount should match the 

amount entered in line 30 for the charter school: "Contributions, from Component 

Unit." 

NONOPERATING REVENUES: Use for one-time or unusual revenues that are 

not part of your regular operating revenues. Example would be a large one-time 

gift of cash or property to the school. Contributions to the charter school from 

your component unit, if applicable, would also be reported in this section. 

NONOPERATING EXPENSES: Use for nonrecurring or unusual expenses that 

are not part of your usual operating expenses. Example would be a major repair of 

a facility that is not capitalized. Interest on long-term debt, if any, should also be 

reported in this section. 

Form 2. Bdg_FuncExp: This form is used to report the expenses of the charter 

school by function. The due date for returning this form is the same as the due 

date for the BudgetSumm form - June 11, 2010. The name of your school and 

ORGID will load automatically from the BudgetSumm form. This form is 

organized by functional expense. The functional expense categories are: 

100 Administration; 

3




200 Instructional Services; 

300 Pupil Services; 

400 Operation and Maintenance of Plant; 

500 Benefits and Other Charges; 

600 Community Services; and 

700 Other Non-operating Expenses. 

Budgeted amounts are entered in the green cells as appropriate. For most charter 

schools the 100, 200, 300, and 400 functional categories will account for most of 

your planned expenses. Some charter schools may have planned (budgeted) 

expenses in the 500, 600 & 700 functions. Descriptions of the expenses that 

should be reported in each line can be found on the form in Column L. Suggested, 

or sample, detailed accounts are provided under each of the functional categories. 

Circumstances at your charter school may require different accounts or additional 

accounts in some or all of these functional categories. If that is the case add 

additional accounts as necessary under the appropriate functional area. For 

example, under the School Leadership sub-function within Administration there is 

no account for Travel. If you chose to report school leadership travel separately 

you should add an account under this sub-function and include the appropriate 

amount. 

Other schools may not breakout their expenses at the same level of detail as that 

shown on this form. If this is the case at your school, then report the expenses in 

the functional category that most closely represents the function where most of 

the expense was incurred. For example, within the Administration function each 

of the sub-functions includes an account for Contracted Services. Your school 

could have contracted with a provider for training for your LSB and your School 

Leadership staff, Business staff, etc. In this case use your judgment in 

determining the sub-function under which you report the expense. It should 

approximate the sub-function that benefited the most from the expense. 

YEAR- END FINANCIAL REPORTS: 

Form 3: Balance Sheet 

This is a basic balance sheet format which separates current assets from 

non-current (capital or long-term assets) and current liabilities from noncurrent 

(long-term) liabilities. The format of this report is designed to be 

able to accommodate virtually any combination of assets and liabilities 

that charter schools may encounter. Additional space has been provided if 

the pre-assigned accounts are insufficient. Be sure that Total Assets line 

agrees with the Total Liabilities and Net Assets line. The descriptions in 

Column M have been provided to assist you in completing this report. 

Form 4: Income Statement 

Instructions for the completion of this form are similar to the instructions 

for Form 1 BudSumm. The difference is that this form is used to report the 

actual revenues and expenses incurred while the Budget Summary form is 

4




used to report budgeted (planned) expenses. The due date for submitting 

this completed form is October 15, 2010 the same due date as the CSRP 

self-evaluation document. The instructions for completing Operating 

Revenues, Operating Expenses, Nonoperating Revenues and Nonoperating 

Expenses are the same as for the BudSumm form except the data is actual 

year end results. 

Form 5: Schedule of Functional Expenses 

Instructions for the completion of this form are similar to the instructions 

for Form 2 Budgeted Functional Expenses. The difference is that this form 

is used to report the actual expenses by functional category rather than 

budgeted (planned expenses). The due date for submitting this completed 

form is the same due date as the CSRP self-evaluation document (October 

15, 2010). The detailed instructions for completing this form are the same 

as for the Budgeted Functional Expenses form. 

Form 6: Enrollment Report 

Use this form to report your 2009-10 actual, May 15, 2010 projected, 

October 15, 2010 actual, November 15, 2010 actual and projected October 

15, 2011 through 2016 enrollments. Breakout your enrollment by grade 

and Regular Ed/SPED per the space provided on the form. Refer to the 

deadlines on the form and the information provided above. 

BUDGET BRIEFING TABLES 

Because the legislature typically does not release the upcoming session version of 

these forms until December, this packet includes the legislative tables used last 

year (20l0 legislative session). The 2011 forms will likely be very similar to the 

forms provided herein. An updated version of this document will be distributed 

after the legislature finalizes these tables for 2011. As stated in the General 

Instructions the deadline for submitting these tables to the CSAO is December 31, 

2010. 

Table 7 Non-general Funds: Include a list of all non general and non-federal 

sources of funds your school is receiving this year. That list, naming the source, 

goes in the column labeled "Name of Fund." If your school is receiving money 

through your non-profit, regardless of the source of the money to the non-profit, 

then enter the name of your non-profit in that column. If your school is receiving 

money directly from KSBE then enter KSBE in that column. When the column is 

completed it should list out all of the sources other than federal and other than 

state funds that you school is receiving funds from this year (2010-11). Then for 

each of the sources listed in the first column, if your school has spent or 

encumbered all of the funds as of November 30, 2010 then enter zero ($0) in the 

"Unencumbered Cash Balance" column. If your school has any unencumbered 

amounts from any of these sources as on hand (in cash) as of November 30, 2010, 

enter the amount of the unencumbered balance in the “Unencumbered Cash 

Balance" column of this table. MOF (Means of Financing) codes to be used in the 

MOF column are provided in Appendix A. The only charter schools that should 

5




enter anything in the Statutory Authority column are charter schools receiving 

funding from Hoò ka koò Corp. These schools should only cite the statutory 

authority in HRS 302B for unencumbered cash balances on hand on November 

30, 2010 from Ho'o ka ko'o Corp. 

Table 10 Vacant Positions: The purpose of this form is to provide information 

to the legislature regarding vacant positions at your school as of November 30, 

2010. This form should be used to report positions at your school that are 

budgeted for but were unfilled as of November 30, 2010. If you have a position 

that is unfilled and unbudgeted then it is not a vacant position it is an unbudgeted 

position and should not be included on this table. If you do have a budgeted, 

vacant position this would typically be due to a position that was filled early in 

the year and then the incumbent left employment with the school prior to 

November 30, 2010 and the position was not filled as of November 30, 2010 or a 

position that was budgeted for at the start of the year when it was unfilled and the 

position remains unfilled as of November 30, 2010. . If you have either of these 

situations at your school you should report data on this form regarding these 

positions. 

Table 10 Instructions for the specific columns: 

Date of Vacancy: If you have positions that fall within the description of vacant 

positions as described above provide the date that the position was vacated. 

Typically this would be sometime during this year. 

Position Title: Provide the generic title of the vacant position (e.g. teacher, 

custodian, business manager, etc.) 

Position Number: Provide the number of the position that the school has created 

to identify this position. This is not the same as the unique employee 

identification number, it is the number for the position. If you do not number your 

positions enter N/a. 

Exempt (Y/N): Is the position exempt from collective bargaining. 

Budgeted Amount: Enter the entire amount that was budgeted this year for the 

position. 

Actual Salary Last Paid: Enter the total amount of salary actually paid for this 

position during this year through November 30, 2010. 

MOF: Means of Finance – (see Appendix A for a table of MOF codes) 

Prog ID: Identify the program that is paying for the position. For positions 

funded with per pupil funds use 15137 as the PROGID. For positions paid from 

Title I funds use PROGID 18902. If you have other positions paid from other 

sources type in a brief identifier of the source of funds in this column. 

Authority to Hire (Y/N): This column is nonsensical for charter schools. If the 

position was authorized by your LSB then you had authority to hire and should 

enter a Y (yes) in this column. 

Table 11 Personnel Separations: The purpose of this table is to provide a list to 

the legislature regarding positions that were filled on July 1, 2009 and 

subsequently vacated during the period between July 1, 2009 and November 30, 


6




Instructions for the specific columns: 

Program ID/Org: As with the vacancy table, if the position was funded with per 

pupil funds use 15137 as the code here along with your school’s ORGID. If the 

position was funded with Federal Title I funds use 18902 along with your 

school’s ORGID. If the position was funded with funds from other than these two 

sources enter a brief description of the source along with your school’s ORGID. 

Your ORGID is the DOE ORGID for your school. I’ve attached a table of the 

ORGIDs for all of the charter schools in Appendix A. For example HAAS’ 

ORGID is 561. 

Position Number: Same instructions as per the Vacancy Report. 

Perm/Temp: If the position is a permanent position enter PERM; if it is a 

temporary position enter Temp. 

MOF: Same instructions as per the Vacancy Report. 

Position Title: Same instructions as per the Vacancy Report. 

Budgeted FTE: Enter the full time equivalent amount for the separated position. 

This should be a value between 0.00 and 1.00. For a full time position enter 1.00, 

for a half time position enter 0.50, etc. If the normal hours for the position you are 

entering as a full time position are 37.5 hours per week and the position was less 

than full time, to calculate the FTE use the actual number of hours of the position 

divided by 37.5. 

Budgeted Salary: Enter the amount budgeted in 2009-10 for this position. Actual 

FTE: If the actual FTE differed from the budgeted FTE enter the actual FTE. IF 

the budget and actual FTEs are the same, enter the same number as the budgeted 

FTE. Actual FTE may differ if the position was created as a full time position yet 

you were only able to find an employee willing to work part-time. 

Actual Salary: Enter the actual salary paid in 2010-11 through November 30, 


BU Code: Enter the bargaining unit code for the position (e.g. BU Code for 

teachers is 5, BU Code 3 is for clerical positions, BU Code 6 is for Educational 

Officers, BU Code 4 is for White Collar Supervisory – Admin Assistants and 

SASAs). If you have a question on which BU Code to use call Mary Jane Munoz 

in the CSAO office. 

SR Level: This is the code for the salary range for the position. The salary range 

code can be found in the collective bargaining unit’s salary schedule. Next to each 

salary on the salary schedule is an alpha-numeric code, enter the appropriate code 

for the position you are reporting as a separation. If you are not compensating 

your employees based on the salary schedule in the collective bargaining 

agreement enter the SR code that most closely approximates the amount of the 

salary that you are paying for the position. 

Table 12 New Hires: The purpose of this table is to report to the legislature Use 

this table to report new hires at your charter school during the period between July 

1, 2009 and November 30, 2010. This table is very similar to Table 11 so these 

instructions will only cover those elements that are different than Table 11. Refer 

to the Table 11 instructions for columns that are the same. 

7




New Hire Effective Date: Enter the date that the new hire was employed by your 

school. This date should be somewhere during the period between July 1, 2009 

and November 30, 2010. 

8

Means of Financing Table: 

Code Description Use 

A General Funds State General Funds 

B Special Funds Donations, funds from other 

agencies, etc. 

N Federal Funds Federal Program Funds 

T Trust Funds Student activity funds, Funds 

provided per a trust agreement 

V Federal ARRA Funds Federal ARRA Part A funds 

W Revolving funds Payments from parents/students for 

transportation, food services, etc. 

Organization Code (ORGID) Table: 

School Name ORGID # 

Connections-PCS 396 

Educ Lab: A Hawaii NC-PCS 543 

Hakipu'u Learning Ctr-PCS 546 

Halau Ku Mana-PCS 540 

Halau Lokahi NC-PCS 542 

Hi Academy of A&S-PCS 561 

Hawaii Technology Academy 551 

Innovations-PCS 548 

Ka 'Umeke Ka'eo-PCS 562 

Ka Waihona O Ka Naauao-PCS 545 

Kamaile 275 

Kawaikini 565 

Kanu O Ka'aina-PCS 397 

Kanuikapono-PCS 564 

Ke Ana La'ahana-PCS 549 

Ke Kula Nawahi Iki Lab-PCS 563 

Ke Kula O Kamakau Lab-PCS 547 

Ke Kula Ni'ihau Kekaha-PCS 556 

Kihei-PCS 554 

Kona Pacific 566 

Kualapuu-PCS 411 

KANAKA - PCS 466 

Kua O Ka La-PCS 557 

Lanikai-PCS 320 

Myron Thompson Acad-PCS 544 

Volcano Sch of A&S-PCS 560 

Voyager-PCS 541 

Waialae-PCS 149 

Waimea Mid-PCS 394 

Waters of Life-PCS 398 

West Hi Explor-PCS 399 

9 

Appendix A

10 

Appendix A

CHARTER SCHOOLS 

FACILITIES FUNDING 

A PROPOSED FRAMEWORK 

Prepared for: Charter Schools Funding Task 

Force 

Prepared by: Bob Roberts 

October 26, 2010

2 

Potential Framework: 

State Per Pupil Facilities Funding 

+ Public Private Partnerships 

= Facilities Solution for Charter Schools ($)

3 

Public-Private Partnerships 

These are funding “vehicles.” 

Pros: 

More Efficient 

Generate Leverage 

Innovative 

Cons: 

Result in obligation to service debt

4 


Examples of funding programs available: 

SPRBs 

NMTCs 

GO Bonds/CIP (State) 

Leases 

Certificates of Participation (COPs) 

Federal Matching Grants 

Private Grants

5 


However, most of these programs: 

Do not pay for the cost of Construction or R&M, 

and/or… 

Produce efficiencies and leverage as “pros” and debt 

service obligations as “cons” 

As a result the formula is not complete without State Per 

Pupil Facilities Funding 

Needed to provide a reliable source for debt service 

payments 

Needed for ongoing major R&M expenses

6 

State Per Pupil Funding For Facilities 

Basing SPP for Facilities on Debt Service is reasonable 

because: 

Purpose is the same – Long term facilities needs for Hawaii’s 

public school students 

Charter schools are a bargain because – SPP + PPP is more 

efficient 

Using debt service as basis is reasonable because the annual 

appropriation for debt service is a factor of the historical cost of 

DOE facilities not current cost (i.e. 30 year old bond means that 

cost of facility was cost 30 years ago, not current cost. Debt 

service cost is a factor of the average maturity of the bond). 

Therefore using current debt service does not reflect current 

construction costs.

7 

Questions/Issues


Presentation to the 


The Politics of Charter School Facility Funding 

seeking clarity

Quality 

• The only reason to have charter schools in 

Hawaii is to elevate success for ALL students. 

• Charters: 

– Offer innovative options. 

– Reach underserved populations. 

– Create choice in public education, which creates 

healthy competition.

Level Playing Field 

• Charters can provide insights into: 

– Innovative curriculum 

– Alternative assessment methods 

– Effective instructional strategies for at risk groups 

• We don’t get the full benefit of charters if we 

don’t keep the playing field level. 

• What is level?

Quality = Equity = Expectations 

• In order for charter schools to achieve their 

purpose, they need adequate resources. 

• Charters believe adequate is equitable. 

– Already the state’s education philosophy 

– Hawaii made that commitment in RTT2 

– Politically sound 

• Without equity, we create “yea, but…”

Expectations vs. Autonomy 

Expectations 

• Serve all students. 

• High academic achievement. 

• All state testing requirements. 

• All collective bargaining 

requirements. 

• All health and safety 

requirements. 

• Provide data and information 

upon request. 

• Support the larger education 

movement. 

• Other compliance (eg. Annual 

financial audit) 

Autonomy 

• Local governance 

– Some autonomy over hiring 

– Select curriculum 

– Determine budget 

Freedom from bureaucracy = 

the ability to partner. 

• Not bound by state 

procurement, but must 

follow best practice.

Per Pupil Funding 

• Operational 

dollars - all the 

day to day costs 

• Hawaii has 

committed to 

equity 

• Statute implies 

equity 

• We’ve gotten 

closer ($5363) 

Charter School Funding 

Facilities 

• Start up 

charters have 

only received 

facility support 

once 

• Current year 

facility support 

is carved out of 

Per Pupil 

($197) 

FED & SPED 

• System is 

weighted against 

small schools and 

charters. 

• Not all schools 

receiving their 

fair share. 

• Policy fix, not a 

legislative fix

Start Up vs. Conversion 

Start Up 

• Does not receive any 

guaranteed support. 

• Has access to state 

property, but must struggle 

to attain access and 

developable rights. 

• Not allowed to participate 

in CIP unless on state land. 

• The schools can not own 

the property. 

Conversion 

• Receive use their facility 

rent free. 

• Must pay all operational 

costs. 

• Allowed to participate in CIP 

and larger R&M (roof 

repair).

We need clarity 

• Legislators have said, “you are funded 

equitably.” 

• It is currently being reported that the funding 

difference “is only $300.” 

• Charters have been told that they agreed not 

to ask for facility support. 

• Are we getting facility support this year? 

Frustration comes as much from the confusion 

as it does from the level of funding.

Facility Funding Clarity 

Yes No 

• Be clear what charter 

schools will receive and 

make it stable. 

• Per pupil facility support for 

start up is the only 

manageable solution. 

• Other facility supports are 

only enhancements. 

• Providing clear facility 

support improves 

accountability. 

• Charter schools are 

expected to meet all 

expectations AND handle 

facility costs on their own. 

• Student’s at public charter 

schools are not entitled to 

facility support.

Creating an Industry 

• Providing charter schools with per pupil 

facility funding creates an industry in Hawaii. 

• Not all charter schools can or should become 

facility developers. 

• There are organizations that have the 

experience and desire to play this role – all 

they need is state commitment. 

• What would these organizations do?

December 30, 2010 Senator Shan Tsutsui Representative Calvin ...

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