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Charter School Capital California Charter Schools Conference Panel Presentation

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Branche Jones, Education Consultant and Charter School Advocate, John Palmer, Attorney, Public Finance, Orrick, Herrington, & Sutcliffe, Michele Huntoon, School Services of California, John Helgeson, …

Branche Jones, Education Consultant and Charter School Advocate, John Palmer, Attorney, Public Finance, Orrick, Herrington, & Sutcliffe, Michele Huntoon, School Services of California, John Helgeson, Chief Marketing Officer, Charter School Capital, discuss how the California state budget changes will impact your charter school.

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  • 1. BUILDINGCHARTER SCHOOLSUCCESSTuesday, March 122013 California Charter Schools Conference San Diego, CA Copyright © 2013 Charter School Capital, Inc.
  • 2. Welcome. Copyright © 2013 Charter School Capital, Inc.
  • 3. SPEAKERSPanelists•  Branché Jones – Education Consultant and Charter School Advocate•  John Palmer – Attorney, Public Finance, Orrick, Herrington & Sutcliffe•  Michele Huntoon – CPA, Associate Vice President, School Services California•  John Helgeson – Co-founder, Charter School Capital3Copyright © 2013 Charter School Capital, Inc.
  • 4. TOPICSWhat we will cover tonight•  Impact of Prop 30: EPA This Year and Next•  Budget & Programming Planning•  What is the Local Control Funding Formula (LCFF)?4Copyright © 2013 Charter School Capital, Inc.
  • 5. PROP 30Finishing this year•  Continue to “withhold” 21.2% of annual Prop. 98 Revenue (based on LY P-2)•  Distribute EPA funds in June and possibly July – Will adjust EPA payment based on TY P-2 – Total Funds will not increase, but timing may change5Copyright © 2013 Charter School Capital, Inc.
  • 6. EPA Intake and DistributionThis Year 25.00% Pecent of Annual Revenues Received EPA 20.00% Each Month 15.00% EPA 10.00% EPA? GPE 5.00% 0.00%6Copyright © 2013 Charter School Capital, Inc. Fiscal Year 2012-2013
  • 7. PROP 30What will Prop 30 look like next year?•  State estimates tax revenues for EPA before June 30 in each year until 2018•  ¼ amount estimated EPA transferred during last 10 days of each of the first three quarters of each fiscal year•  Last Q: State re-calculates the EPA estimate – too high or too low? – 2015: there is an additional true-up based on the last two years’ tax receipts•  If Too High: the following quarterly payments will be reduced•  If Too Low: the difference is deposited into the EPA for distribution7Copyright © 2013 Charter School Capital, Inc.
  • 8. PROP 30What will Prop 30 look like next year?•  GPE funded by EPA, then In Lieu, then GPBG•  Schools get 5% of their total funding July, 5% in August, and 9% in September•  We believe the 5-5-9 distributions and subsequent monthly warrants will be net of funds disbursed from the EPA at the end of each quarter8Copyright © 2013 Charter School Capital, Inc.
  • 9. PROP 30Effect of the EPA on GPE Calculation GPBG GPBG In-Lieu In-Lieu EPA9Copyright © 2013 Charter School Capital, Inc.
  • 10. POLICY UPDATEProgram changes•  Charter School Facility Grant Program and Charter School Revolving Loan Program shift from the DOE to the California State Finance Office•  Modifying the funding determination process for non-classroom based charter schools by limiting it to the first and third years of operation in most instances•  Expanding the Charter Schools Facility Grant Program to include eligibility for non- classroom based charter schools, as these schools still have facility needs for instructional support•  Extending for five years the 2012-13 requirement that school districts with identified surplus property and facilities first offer to sell those resources to charter schools before selling them to other entities or disposing of those assets10Copyright © 2013 Charter School Capital, Inc.
  • 11. DEFERRALSWhat do next year’s deferrals look like?•  Governor’s proposed budget provides $1.9B to pay down deferrals•  Likely equal to February and March deferrals•  Leaves April, May and June deferrals to be paid down in later years•  Still waiting on legislation that would put dollar amounts to specific months•  Could change significantly before adoption11Copyright © 2013 Charter School Capital, Inc.
  • 12. INTERYEAR DEFERRALSProposed for 2013-14 Amount Month Amount Month $521.7 million February 2013 Eliminated* July 2013 $1.03 billion March 2013 Eliminated* July 2013 $594.7 million April 2013 $390.9 million* July 2014 $763.8 million April 2013 $763.8 million August 2014 $1.976 billion May 2013 $1.976 billion July 2014 $2.5 billion June 2013 $2.5 billion July 2014 *The Governor’s budget for 2013-14 proposes to reduce the February, March and April deferrals by $0.53 billion, $1.03 billion, and $0.2 billion respectively Information provided by School Services California12Copyright © 2013 Charter School Capital, Inc.
  • 13. Deferral Schedule ’13-14 10.00%Percent of of Annual Revenues 9.00% 8.00% Received Each Month 7.00% 6.00% 5.00% 4.00% GPE 3.00% EPA 2.00% 1.00% 0.00% Fiscal Year 2013-2014 13 Copyright © 2013 Charter School Capital, Inc.
  • 14. LCFFWhat is the Local Control Funding Formula?•  Does away with revenue limit and restructures GPE•  Wraps more categorical money into base grant –  Unclear how this will impact charter schools•  Phases out deficit factor over 6 years•  Pays down deferrals over the same period ending in 2018-19•  Establishes base grant for K-3, 4-6, 7-8, 9-12•  Supplements the base grant –  English Language Learners and Low Income Students –  Concentration of ELL’s and LIS’s over 50% student population, K-3 students and high school students•  35% supplement per ADA for every ELL and LIS, plus additional 35% for each ADA over 50% concentration•  11.2% supplement for K-3 students and 2.8% for high school students•  ELL student and concentration money must substantially benefit those students14Copyright © 2013 Charter School Capital, Inc.
  • 15. LCFFSome projections•  Approximate increase in 2013-14 over 2012-13 is 10%, although charters in basic aid districts may feel less or no increase•  On a hypothetical base grant of $6,342, the 35% supplement is approximately $2,220. This means in some high concentration districts a portion of the ADA could generate as much as $10,76215Copyright © 2013 Charter School Capital, Inc.
  • 16. EXAMPLE PROJECTIONFAME•  FAME is a Public Charter School in Alameda County•  ADA of 1,495•  44% of the kids are free and reduced price meal eligible•  26% are ELL•  2011-12 per ADA was $6,199•  2013-14 estimated at $6,421•  2014-15 is projected at $6,764•  Full implementation is projected at $9,45316Copyright © 2013 Charter School Capital, Inc.
  • 17. Presentation available at: SlideShare.net/CharterSchoolCapital17Copyright © 2013 Charter School Capital, Inc.
  • 18. Thank you.18Copyright © 2013 Charter School Capital, Inc.