Legislative proposals to strengthen charter school sponsor capacity and performance

Six proposals have been introduced in the 2005-06 Legislature, all designed to help strengthen the capacity of the wide range of organizations in Minnesota that are authorized to grant and oversee charter schools. These proposals reflect growing awareness of the critical role that sponsors can play in strengthening the governance, management and performance of charter schools — with the ultimate goal of improving the academic achievement of their students. Briefly, these six sponsor-related legislative proposals would:

• Authorize creation of up to five new single purpose sponsoring organizations — non-profits created just for this purpose.
• Add the Perpich Center for Arts Education to the organizations that are authorized to grant and oversee charters.
• End the state’s role as a sponsor on appeal from school districts that formally deny charter applications, effective 2007.
• Require all new sponsors to file a “notice of intent to sponsor” to the State Department of Education.
• Change the basis for determining sponsor revenues from a per student amount to a fixed dollar amount per year.
• Clarify the process for voluntarily changing sponsorship responsibilities from one organization to another.

These proposals are all designed to reinforce the non-legislative initiatives announced in late December by Education Commissioner Alice Seagren that are also intended to strengthen the governance, management and oversight of charter schools. Once implemented, this combination of legislative and non-legislative initiatives is intended to help strengthen and maintain Minnesota’s leadership nationally in making new and high quality school choices available to our state’s students and families.

Here’s background information on each of the above proposals, as well as their status in the legislative process:

1. Authorize single purpose sponsors (HF1303/ SF1707)

Under this proposal, the Commissioner of Education may authorize up to five non-profit organizations to sponsor and oversee charter schools. The is an expansion on the current provision allowing non-profits to grant charters but, in effect, waives the $2.0 million in assets required of other non-profit sponsors. These new sponsors would be single-purpose — having no purpose other than granting and overseeing charters. They would also specialize in at least one area, selecting varying types of schools, geographic areas or types of students to focus on. And, they would be pro-active, by actively encouraging proposals within their areas of specialization from both within and outside Minnesota.

Status: This proposal was included in the Department of Education’s legislative initiative for 2005 and then introduced as separate legislation in the House by Representative Dean (HF 1303) and Senator Kelley (SF 1707). It was included in the omnibus House K-12 education bill, but not in the Senate’s omnibus bill. So, its ultimate fate will be determined in a joint House-Senate conference committee.

2. Add Perpich Center as new chartering authority (HF92/SF145)

The board of directors of the Perpich Center for the Arts would be added to the current list of chartering authorities under this proposal that was first introduced in the last session and included in both the House and Senate omnibus education bills that died in conference committee at the close of the 2004 legislative session. The leadership of the Perpich Center has testified that it would use this authority to grant and oversee charter schools that share its mission focus on strengthening the role of arts in education and that could benefit from linkages with the Center and with other arts-oriented schools and programs across the state.

Status: This proposal was introduced in the current session as SF 145, proposed by Senators Steve Kelley (DFL-Hopkins) and Jeff Michel (R-Edina) and as HF 92 by Representative Ron Latz (DFL-St. Louis Park) and Barb Sykora (R-Excelsior). Although it was reported favorably by the education policy committees in both Houses, it was not included in either K-12 omnibus bill.

3. Eliminate state sponsorship on appeal (HF60)

This proposal would repeal the authority the Commissioner of Education now has to grant charters where proposals have initially been turned down by school districts. This authority, first granted to the then State Board of Education in 1993, was essential at a time when school districts were the only direct chartering authority in the state. Since that time, however, a number of other types of agencies and organizations have been granted chartering authority including public and private colleges and universities and non-profit organizations.

Particularly if the above two proposals are enacted, Minnesota will have a number and variety of available sponsors that makes the concept of an appeal less necessary or relevant. If initial conversations with a school district suggest an unwillingness to grant a charter, developers of that school can simply approach other sponsors — rather than going through the time and effort required for a formal turn-down and appeal. By removing the appeal option — and, over time, shifting the schools now sponsored by the Commissioner on appeal to other sponsors, the State Department could also focus on other charter-related oversight and grant-making functions that require its attention. It should be noted that this proposal would not take effect until 2007, allowing time for the new sponsors authorized under the first two proposals to become operational.

Status: This proposal was introduced in the House as HF 60 by Reps: Mindy Greiling, Jim Davnie, Barb Goodwin, John Dorn, Lyndon Carlson Dean Urdahl and Debra Hilstrom. It was included in the House K-12 omnibus education bill, so its fate will also rest with the joint House-Senate conference committee.

4. Require a ‘notice of intent’ to sponsor (HF1945)

Qualifications for granting and overseeing charters in Minnesota are now limited to meeting certain organizational criteria — ie: being a school district, higher education institution, non-profit organization with $2.0 million in assets, etc. This proposal would require prospective sponsors to file a “notice of intent to sponsor” with the Commissioner prior to agreeing to initially grant one or more charters. In addition, the affidavit submitted with approved charter applications to the state would have to include a description of how the sponsor will perform program and fiscal oversight of the charter and how it will hold the school accountable for requirements of charters established in state law. This is a reasonable set of requirements designed to ensure that new sponsors of charter schools are fully aware of their obligations under the law and are willing and have the capacity to carry them out.

Status: This proposal was developed with input from the Minnesota Sponsor Assistance Network and introduced in the House as a package with the two proposals described below by Rep. Charron as HF 1945. It was included in the House K-12 omnibus education bill, so its ultimate fate will be determined in a joint House-Senate conference committee.

5. Change basis for determining sponsor revenues (HF 1945)

Under current law, charter school sponsors are allowed to charge schools up to $30 per student in their first 3 years and up to $10 per student in subsequent years — up to a maximum of $10,000 in the first three years and $3,500 thereafter. Experience to date, however, is that the cost of providing effective oversight is not related to school enrollments, but does vary from year to year — especially in the initial and renewal years.

To address this reality, the Sponsor Assistance Network developed a proposal that would allow sponsors to charge up to $6,500 in a school’s first year, $7,200 in its second year, $8,200 in its third (first renewal) year. If a sponsor chooses to grant a one-year (rather than three) renewal, the sponsor could chart up to $6,500 in the fourth year. It could then charge up to $4,200 in subsequent years, until a second renewal is granted. After that, and if the school is meeting the terms of its contract, the sponsor cold charge the school up to $3,000 per year, except in subsequent renewal years when it could charge up to $4,200. The proposal further provides that sponsors could charge this revenue only if it meets the criteria of an effective sponsor, as developed by a state charter school sponsoring organization designated by the Commissioner. Presumably, this would be the Minnesota Charter Sponsors Assistance Network.

Status: Under HF 1945 this proposal would be referred to a study over the next year by the Minnesota Department of Education on sponsor functions, what they cost and how they should be financed. The results of this study will then be presented to the 2006 Legislature.

6. Clarify process for changing sponsors (HF 1945)

In recent years, several charter schools have changed sponsors — either because their previous sponsor decided it didn’t want to continue in that role or because the school identified a different sponsor that was a better “fit” for its mission and goals and that of the new sponsor. This proposal is intended to clarify the circumstances under which this kind of change in sponsors may take place and also ensure that charters aren’t allowed to change sponsors merely to avoid a closure.

Under the proposal, switching sponsors would not be an option for schools that are being terminated. However, voluntary changes in sponsors could be initiated by either party by providing notice to the other party at least 90 days before the end of the current contract. The current sponsor would also be required to provide the new sponsor with information regarding the program and financial performance of the school.

Status: This proposal was developed with input from the Minnesota Sponsor Assistance Network and introduced in the House as a package with the two proposals described above by Rep. Charron as HF 1945. It was included in the House K-12 omnibus education bill, so its ultimate fate will be determined in a joint House-Senate conference committee.