Court ruling will hinder some charter schools’ right to cross district borders

January 31, 2017

The California Supreme Court has let stand a 2016 appeals court decision that will restrict some charter schools’ ability to expand and jeopardize the status of an estimated 38,000 students studying under charter school arrangements that the appeals court declared illegal.

The case involved a small but growing number of charters, called “nonclassroom-based” charter schools or “independent study charters” – schools that don’t operate in a traditional bricks-and-mortar setting. They serve a range of students, among them children home-schooled for religious reasons, students who struggled in a regular school environment, and child actors and athletes needing a flexible schedule. Some of these schools, like for-profit K12 Inc., operate only online, while others offer limited face-to-face services in satellite offices or “resource centers,” where the schools run science labs, tutor students, give standardized tests and serve special education students.

At issue in “Anderson Union High School District v. Shasta Secondary Home School” was whether the charter school law permits an independent study charter authorized in one district to open a “resource center” to serve students living in other districts in the same county. A district court said Shasta Secondary Home School, recently renamed Shasta Charter Academy, could; a three-judge panel of the 3rd District Court of Appeals ruled it couldn’t.

The Supreme Court’s decision earlier this month not to hear the Shasta Charter Academy’s appeal will leave the affected charters the choice of converting to a fully virtual operation or closing the centers and forcing students to travel to a resource center in the district that authorized the charter. More than a quarter of the 142,000 students that, according to the California Charter Schools Association, were enrolled in independent study charter schools in 2014-15 may be left with the choice of adapting or finding another school.

Anderson Union’s lawsuit was the latest skirmish that districts have had with independent study charters. Charter school organizations say independent study charters are providing competition with district schools that the charter school law encourages and alternatives that families want. School districts that have filed similar lawsuits working their way through courts dislike the loss of students and state tuition. They argue that some small districts have treated independent study charters as cash cows. They have a financial incentive to encourage the schools to expand enrollment to other districts even though they lack the capacity to oversee them. Authorizing districts receive an oversight fee of 1 percent** of state funding per student, even though they frequently have done little or no monitoring.

In an egregious case of abuse, the former superintendent of tiny Mountain Empire Unified School District in San Diego County pleaded guilty last year to violating conflict of interest laws for personally taking a cut of the oversight fees and creating a consulting firm to serve the 13 independent study charters, operating outside of Mountain Empire, that his district approved.

Charter oversight and academic performance, however, weren’t the subject of the lawsuit against Shasta Charter Academy. Independent study charters have assumed they could legally operate resource centers for the convenience of students living in other nearby districts. Redding-based Shasta Charter Academy – which offers a mix of online and on-site classes to about 240 students in grades 9-12 – operates two centers within the boundaries of the Shasta Union High School District, which granted the charter. Anderson Union sued when Shasta Charter rented meeting space three days a week at an elementary school located in Anderson Union’s geographic area.

What did lawmakers intend?

In 2002, concerned about oversight problems in far-flung areas, the Legislature amended the charter law to limit the location of bricks-and-mortar charters to the authorizing district, with a few exceptions. Independent study charters could locate satellite centers for auxiliary services in counties adjacent to the authorizing charter district. What the law didn’t explicitly permit, though, was locating centers in districts within the same county – even though usually they’d be closer to the home district and easier to oversee.

The law, in effect, appeared to create a doughnut-shaped expansion structure. An independent study charter authorized, say, by Sacramento City Unified could open a satellite location in Placer or Yolo counties, but not next door in Elk Grove Unified or anywhere else in the county.

Eric Premack, executive director of the nonprofit Charter Schools Development Center in Sacramento and a participant in negotiations over the 2002 bill, acknowledged sections were poorly drafted. But “all the insiders had agreement what the law meant in 2002,” he said. “The assumption was that you could have a resource center in your county.” To interpret that centers could only be in surrounding counties, as the court of appeals did, is “goofy and illogical,” he said.

The California Charter Schools Association agreed with Premack. “If anyone had made the case at a committee hearing (in 2002) that explicit language was necessary for in-county resource centers, of course it would have been added. But no one did; and it wasn’t,” it wrote in a letter asking the Supreme Court to take the case.

Premack and charter schools association attorney Julie Umansky said that both a task force created by county superintendents in 2011 and the California Department of Education in 2002 made the same interpretation.

But last year, the department changed its view and said the law prohibited out-of-district, in-county satellite operations. And writing for the court of appeals, Justice Elena Duarte said that the language of the statute is clear, and it’s not the court’s role to second-guess the Legislature’s intent. “We presume the Legislature meant what it said,” she wrote. “We do not find the accurate interpretation of this statute to be so absurd as to permit us to rewrite it.” It noted Shasta Charter Academy also had another option: seek a charter from the county board of education letting it operate anywhere in Shasta County.

In a news release, the law firm Lozano Smith, which represented Anderson Union, said the court got it right. “By emphasizing the importance of effective local oversight, this decision is a victory for charter school accountability,” the statement said. Charters used “a perceived loophole” in the law to set up facilities in districts, often without their knowledge, it said.

Since the appeals court’s decision provides “binding precedent and clarity,” said Lozano Smith attorney Sloan Simmons, school districts across the state can cite the appeals court decision to order closure of resource centers of charters authorized by nearby districts. That will leave the charters several options: close down the centers or ask the nearby school district to grant a separate charter to operate – something that many may not be inclined to do. Failing that, they can appeal the denial of a district charter to the county board of education or the California State Board of Education.

They can also seek a waiver from the state board to allow them time to phase out operations. Shasta Charter and Anderson Union haven’t discussed yet what will happen to the resource center, Simmons said.

Charter advocates could also ask lawmakers to clarify the state law to explicitly permit in-county resource centers, but the California School Boards Association, which backed Anderson Union’s position in court briefs, will strongly fight that.

** Correction: An earlier version said the fee is 3 percent, which is not the case for independent study charters, as a reader noted.

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