Governing for Greatness: Ten Fundamentals Every Charter School Board Member Needs To Know

Description

Sample from this book:

Topic Seven
Facilities

“Every great dream begins with a dreamer.”
— Harriet Tubman

As a board member, you must understand your school’s facilities and related costs because, next to payroll and benefits, they generally represent the largest part of a charter school’s budget.  

Identifying and acquiring suitable facilities is often a big challenge for charter schools, especially those that are new.  Many schools start out leasing space in storefronts, churches, or old district buildings.  It is also common for schools to lease modulars for additional classroom space. While none of these solutions are optimal, it’s too often the case that a new school has to take what it can get, at whatever price it can get it.

This problem is compounded in high-cost of living areas and by the fact that in all but a few states, charter schools don’t receive any money for facilities. This can put a strain on the operating budget because facilities costs have to be paid directly out of it.  Sadly, this often negatively impacts the amount of compensation that charter schools can provide their teachers.

According to research, a charter school’s facilities costs typically represent between about 9-10% of its budget⁶ although cases of 15%-17% or higher are not uncommon in our experience. There are, of course, outliers on both ends of the spectrum. We’ve seen facilities as low as $1 per year and as high as 23% of the budget. (As a caution, while we appreciate that every school would like to find a $1 per year deal, they are few and far between and usually bring with them the necessity to spend a lot of money on leasehold improvements, etc. We’ve visited many charter schools in old buildings that have had to contend with asbestos everywhere, lead paint and pipes, working transoms, and coal-fired furnaces, as well as challenges meeting ADA accessibility requirements.)

Beyond the cost of leasing a facility as well as any potential renovations, there are other considerations to make when evaluating an initial site or new campus. These include, but are not limited to: (1) zoning restrictions, (2) traffic flow (especially during student drop-off and pick-up times), (3) parking, and (4) proximity to the families the school serves or intends to serve (i.e., whether the school will have to operate bus routes). Space is also necessary for playground areas and athletic fields. Finding a property or facility that meets all of these requirements can be daunting.

Just as other organizations do, charter schools must usually finance facilities. Generally speaking, once a school has been operational for a couple of years and can demonstrate a good track record (consisting of sound financial performance, academic results, stability of leadership, effective board oversight, and enrollment growth), it can go to the market for financing. The cost of doing so varies with the type of financing, that is, whether through the use of a private developer’s capital (where the school then leases a facility until it’s in a position to buy out the developer), traditional financing through a bank, or going to the bond market.

In some instances, a school’s Education Service Provider or an entity related to it will finance construction or renovation of facilities and then lease them to the school. While such an arrangement may be the only viable solution, the board needs to ensure that: (1) the existence of any related parties is fully disclosed in writing, (2) the cost to the school reflects fair market value, (3) the deal is negotiated at arm’s length, i.e., that the ESP doesn’t unilaterally approve the lease agreement with little or no board oversight, and (4) that the school will be permitted to continue leasing the facilities even if it parts ways with the ESP at some point down the road. (This latter consideration is often written into charter contracts nowadays, but not always. Either way, it’s our position that it should be.)

Lastly, if your school is in the process of developing or renovating a site right now, we want to bring up one final concern that is related to facilities: We urge the board to devote serious inquiry to the issue of campus safety and security, as both a routine, everyday matter and in the event of an outlier scenario such as an active shooter on campus. 

Because a school has children on campus everyday, it is imperative that your board ensures management is doing everything reasonably possible to protect them. In part, this means that access to buildings and playgrounds has to be closely supervised and controlled. For all external doors, we recommend keys or fobs, and/or a buzz-in system. Once inside buildings, we recommend an ID scanning system that checks visitors against a sex-offender national registry. For playgrounds and other outside areas, fences are often necessary.

As to active shooter incidents, although statistically rare, they are becoming far too frequent. The best thing your board can do is to ensure that management has consulted with experts, developed a well thought-out, written plan that is frequently rehearsed. A school’s emergency response plan has to be tailored to its facilities. Routinely communicating the details of that plan with local first responders is also a vital step in ensuring campus safety.

Key questions:

• 1. As a percentage of the total expenses in this year’s budget, what percent is our facility lease or mortgage payment?
• 2. Has your board documented in its minutes that it has verified that your school’s occupancy costs reflect fair market value?
• 3. If your board is leasing a facility from its ESP (or a related party), is there a provision in the lease which provides that the school will be permitted to continue leasing the facility at a fair market value even if it terminates the ESP’s management contract?
• 4. Does documentation in board minutes reflect that it has considered the following issues with respect to your school’s facility or proposed facility?
  • zoning restrictions
  • traffic flow (especially during student drop-off and pick-up times)
  • parking
  • proximity (and thus, accessibility) to the families the school serves or intends to serve
• 5. Are all of the external doors on your school’s buildings controlled by keys or fobs?
• 6. Does your school utilize an ID scanning system that checks visitors against a sex-offender national registry?
• 7. Are playground areas and other outside areas of your school protected by fences?
• 8. Do the board’s minutes in the past 12 months reflect that the school has created or revised an emergency response plan?
• 9. Has the board verified (by examining a log or some other documentation) that regular rehearsal of responses to various emergency scenarios is occurring, including active shooter drills?

Potential motion:

In the event that the school does not appear to have met all of the considerations discussed in this section:

“I move that the board [your proposed remedy].”