February 2018 ACCS Agenda Item 10 - Attachment 7 Advisory Commission on Charter Schools

85 Pages·2017·30.88 MB·English

This document was provided, as is, to the California Department of Education (CDE) by
College Preparatory Middle School La Mesa - Spring Valley. This document is posted
to the CDE Web site to meet the legal requirements of California Education Code Section
33009.5.
For more information regarding the content of this material, please contact the Charter
Schools Division by phone at 916-322-6029 or by e-mail at [email protected].
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La Mesa Spring Valley School District Attachment 7
Findings for Denial and Petitioner's Response Page 1 of 84
MINUTES
BOARD OF EDUCATION MEETING
LA MESA-SPRING VALLEY SCHOOL DISTRICT
SPECIAL MEETING: June 30, 2017
The President, Dr. Turner, called the meeting to order at 2: 10 p.m. at the CALL TO ORDER
Education Service Center.
The President led the Pledge of Allegiance to the Flag. PLEDGE OF ALLEGIANCE
Board members present: Chong, Duff, Long, Turner ESTABLISHMENT OF
QUORUM
Board members absent: None
Staff members present Feliciano, Guzman, Magliato, Marshall,
on assignment: Sardina
COMMUNICATIONS COMMUNICATIONS
PowerPoint: College Preparatory Middle School - La Mesa-Spring PPT: CPMS-LMSV Charter
Valley Charter Petition Review/Recommendation Petition Review /Recommend.
Memo from Brian Marshall, Superintendent, providing expanded Memo RE: Resolution 16-17-27
infonnation regarding Resolution 16-17-27, Exhibit 4, Page 241
AGENDA AGENDA
It was moved by Chong, seconded by Long, and carried unanimously Approved as presented
with the following votes: Ayes: Chong, Duff, Long, Turner; Noes: None;
Absent: None, to approve the agenda as presented.
HEARING SESSION HEARING
The President announced a hearing for anyone who wished to address M.Miller, Petitioner, CPMS
the Board regarding matters specified on this agenda. Mitch Miller,
Petitioner, College Prep Middle School, announced his disappointment
regarding the denial of the CPMS-LMSV petition and appreciated the
Board's consideration. He delivered a letter and packet to each Board
member.
Michelle Anderson, Southern California Regional Manager for M. Anderson, CA Charter
Advocacy, California Charter Schools Association (CCSA), announced Schools Assoc.
the full support of the CCSA for the CPMS-LMSV Charter Petition.
CCSA has perfonned a rigorous review of the petition, and considers it
legally compliant and educationally sound.
REPORTS OF OFFICERS OF THE BOARD REPORTS
On May 2, 2017, the Board received a charter school petition to establish CPMS-LMSV Charter Petition
the ali-eady existing College Preparatory Middle School as a charter Review /Recommendation
school under the jurisdiction of La Mesa-Spring Valley Schools. A
public hearing was held on May 16, 2017.
A capacity interview to discuss concerns regarding the petition was
LMSV Board Minutes - June 30, 2017 (Special)
Laacc Ms-efesba1 S8pitreinmg1 V0 alley School District Findings for Denial and Petitioner's Response
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scheduled for June 9, 2017. Petitioners refused to attend the interview.
The petition as submitted contained a myriad of deficiencies that
petitioners have been unwilling to discuss or resolve. The District did not
receive any substantive response to multiple inquiries regarding these
shortcomings.
District staff and legal counsel have reviewed the petition and other
relevant documents in order to provide the Board with an informed,
educated and appropriate recommendation regarding whether to approve
or deny the submitted petition.
Superintendent Marshall presented findings relative to the submitted
petition, as well as his recommendation to deny the charter petition, and
responded to clarifying questions.
At 2:42 p.m. President Turner announced a short break to allow the BREAK
Board to review the information received by Mitch Miller, Petitioner,
CPMS. At 2:48 p.m., President Turner announced the meeting was
reconvened.
Board members requested clarification from Superintendent Marshall:
Member Duff: Does the Superintendent have all the necessary and
requested documents? Do there continue to be Education Code
violations?
Answer: No, the Superintendent does not have all the necessary and
requested documents. Yes, there appear to be Education Code violations.
Documents related to the 33% increase in rents are a concern. Has
CPMS been reimbursed by Education Capital Solutions for the $34,500
down payment? Does the 33% include making up for past payments?
Where are documents related to the agreements by and between CPMS,
Education Capital Solutions and HighMark?
President Turner: Is there an explanation for the duplicate counting of
students?
Answer: No. Both the CMPS-EC and the CPMS-LMSV petitions
designate 5150 Jackson Drive in La Mesa as the location of the school.
For both petitions to be accurate, there would need to be 480 students at
the Jackson Drive campus. CPMS has stated multiple times the facility at
Jackson Drive is at capacity with an enrollment of 240 students.
Member Long: Since the CPMS-EC petition has already been approved
by MEUSD, isn't it appropriate for the CPMS-LMSV petition to address
some of the concerns regarding student counts?
Answer: Yes, this information is important, as each petition affects the
other. Additionally, the $1.5 million being allocated to both CPMS-EC
and CPMS-LMSV needs clarification.
Vice President Chong: What is the precedent for multiple charters by the
same organization?
Answer: There doesn't seem to be a precedent for multiple charters at the
same address, serving the same students. However, there are examples of
successful charter schools with multiple locations, or even on the same
campus, but serving different students.
LMSV Board Minutes - June 30, 2017 (Special) 2
aLcac Ms-efesba1 S8pitreinmg1 V0alley School District Findings for Denial and Petitioner's Response
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Vice President Chong: Hasn't CPMS previously appealed to the State of

California for charter approval, even though they have a current active

charter?

Answer: Yes, they have. The State refused to hear the case, citing the

current active charter.

President Turner: When does the current charter expire?

Answer: The original CPMS-MEUSD expires in 2020. The recently

approved CPMS-MEUSD expires in 2022.

Member Duff: Does CPMS have any Special Education students?

Answer: Yes, they do. It is presumed they are currently serviced under

MEUSD and East County SELPA. It is unknown what provisions have

been made for these students in the CPMS-EC petition.

Member Duff declared that as an official entrusted with managing public

funds, he felt there were too many inconsistencies with the charter as

presented to vote for approval.

Member Long announced he spent more than 20 hours reviewing the

CMPS-LMSV petition, as well as the recently approved CPMS-EC

petition. After reviewing these documents, and using California

Education Code for reference, Mr. Long stated the petitions presented

conflicting and confusing information.

Member Chong stated it was his duty to protect the taxpayers who

elected him to the Board by making sound financial decisions. Having

spent the last year reviewing multiple iterations of the CMPS Charter

Petition, it is his opinion there is a demonstrated history of fiscal

malfeasance.

NEW BUSINESS NEW BUSINESS
It was moved by Chong, seconded by Duff, and carried unanimously Resolution 16-17-27,
with the following votes: Ayes: Chong, Duff, Long, Turner; Noes: None; Denying Charter Petition­
Absent: None, to adopt Resolution 16-17-27, Denying Charter Petition CPMS-LMSV
for the Establishment of College Preparatory Middle School - La Mesa­
Spring Valley and Written Factual Findings of Support Thereof.
The meeting was adjourned at 2:54 p.m.
Bri~~
of Education
Approved and ordered into the proceedings of the District at the next
regular meeting of the Board of Education to be held August l, 2017.
LMSV Board Minutes - June 30, 2017 (Special) 3
Laacc Ms-efesba1 S8pitreinmg1 V0 alley School District Findings for Denial and Petitioner's Response
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La Mesa-Spring Valley School District
Resolution No. 16-17-27
DENYING CHARTER PETITION FOR THE ESTABLISHMENT OF
COLLEGE PREPARATORY MIDDLE SCHOOL - LA MESA-SPRING VALLEY
AND WRITTEN FACTUAL FINDINGS OF SUPPORT THEREOF
WHEREAS, on May 2, 2017, Mitch Miller and Christina Callaway submitted a Petition to
establish College Preparatory Middle School-La Mesa Spring Valley ("CPMS-LMSV"); and
WHEREAS, the Governing _Board of the La Mesa Spring Valley School District held a public
hearing to consider the level of support for the Petition by teachers employed by the school
district, other employees of the school district, and parents, of which there was none; and
WHEREAS, pursuant to Education Code Section 47605 et seq., the Governing Board of the
La Mesa-Spring Valley School District ("District") is required to review and consider authorization
and renewal of charter schools when a charter petition is submitted; and
WHEREAS, the College Preparatory Middle School ("CPMS"), is a California charter school
currently operating at 5150 Jackson Drive, La Mesa, California under a charter approved by the
Mountain Empire Unified School District ("MEUSD") on December 9, 2014 for the term July 1,
2015 through June 30, 2020 that does not identify its location; and
WHEREAS, the College Preparatory Middle School-East County ("CPMS-EC") is a second
charter authorized by Mountain Empire Unified School District ("MEUSD") on May 23, 2017 for
the term May 23, 2017 through May 23, 2022 to operate at the same location by the same
Petitioners who submitted a petition to the District's Board; and
WHEREAS, CPMS and CPMS-EC currently operate outside of the boundaries of MEUSD
and inside the boundaries of the District, under charters approved by MEUSD, and Petitioners are
proposing a third charter for the same students and within the same facility with the same budget
for the upcoming school year; and
WHEREAS, on December 8, 2015, the District Governing Board ("Board") first received a
petition from Petitioners proposing to establish College Preparatory Middle School-La Mesa-Spring
Valley (CPMS-LMSV 1) in the District ("Charter Petition" or "Petition") and held a public hearing
compliant with Education Code Section 47605; and
WHEREAS, on January 15, 2016, the Board voted to deny the Petition to establish CPMS­
LMSV 1 and adopted written factual findings in Resolution No. 15-16-14 (attached as Exhibit 1 );
and
WHEREAS, CPMS-LMSV 1 Petitioners appealed to the San Diego County Board of
Education, which denied its petition on April 13, 2016 for similar reasons as the District; and
WHEREAS, CPMS-LMSV 1 Petitioners appealed to the State Board of Education on August
1, 2016, and on September 23, 2016, the California Department of Education notified Petitioners
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that because "the petition ... is unclear as to whether the CPMS-LMSV charter will replace the
existing charter ... or if the new charter will be established to operate in addition to the existing
CPMS charter ... [and] CPMS still has four years remaining on its charter with MEUSD" the SBE
would not be taking action on the CPMS-LMSV 1 appeal" (attached as Exhibit 2); and
WHEREAS, on December 6, 2016, the MEUSD Board and the CPMS Board approved and
submitted a waiver to the State Board of Education seeking a temporary waiver of portions of the
Charter Schools Act pertaining to the location of charter schools for its facilities within the
LMSVSD; and
WHEREAS, on April 11, 2017, CPMS withdrew its request for a waiver because its
operations were not eligible under SBE's policy, as CPMS is a classroom-based facility outside its
authorizer's boundaries without required oversight, the legal requirements of which were
undisputed; and
WHEREAS, the District and Petitioners are in existing litigation because CPMS unlawfully
located and continues to operate outside the boundaries of MEUSD and within the District without
notice, pursuant to a charter that does not identify the location (See Exhibit 2); and
WHEREAS, the Petition currently pending before the Board does not account for any of this
history or explain Petitioners' intentions in proposing four charter school petitions in less than two
years; and
WHEREAS, in compliance with California Education Code Section 47605, the Governing
Board is required to approve or deny the request for a charter petition within sixty (60) days of its
receipt of the petition, unless that timeline is extended for up to thirty (30) additional days by
mutual written agreement of the parties; and
WHEREAS, in reviewing the Charter Petition, the Governing Board is guided by the
Legislature's intent that charter schools are and should become an integral part of the California
educational system, and the establishment of charter schools should be encouraged; and
WHEREAS, Education Code Section 47605(b) charges school district governing boards
with the responsibility of reviewing charter petitions to determine whether they meet the legal
requirements for a successful charter petition; and
WHEREAS, District staff and legal counsel reviewed and analyzed all information provided
by petitioners and gathered from other sources with respect to the request to establish CPMS­
LMSV, and CPMS and CPMS-EC's existing operations, and the potential effects of establishing
CPMS-LMSV within the District; and
WHEREAS, the District attempted to gain clarification through a capacity interview with
Petitioners on June 9, 2017, to allow Petitioners to answer questions and explain several
deficiencies identified in the Petition, but Petitioners were unwilling to attend the capacity
interview and alleged in an email dated June 5, 2017 that it was not in CPMS' interest to attend the
meeting, despite the District's attempts at clarification; and
WHEREAS, Petitioners have not amended the Petition or otherwise addressed many of the
District's concerns at the review of the CPMS-LMSV 1 Petition and more recently, have refused to
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disclose and discuss fundamental operational plans that could have drastic liability impacts on the
District, yet continue to propose to operate under the District's authorization and oversight; and
WHEREAS, District staff made a recommendation to the District Governing Board that the
Charter Petition be denied; and
WHEREAS, the District Governing Board specifically notes that Resolution No. 16-17-27 is
not exhaustive as to every defect in the Charter Petition submitted, but rather limited to issues of
most significant concern; and
WHEREAS, each and every finding on its own is sufficient for denial pursuant to the
Charter Schools Act, and should any finding be held to be invalid or unenforceable by a court of
competent jurisdiction, that determination shall not invalidate or render unenforceable any other
findings.
NOW, THEREFORE, BE IT FURTHER RESOLVED AND ORDERED that the District
Governing Board finds the above listed recitals to be true and correct, and incorporates them
herein by this reference.
BE IT FURTHER RESOLVED AND ORDERED that the District Governing Board, having
fully considered and evaluated the Petition for the establishment of CPMS-LMSV, hereby denies
the Petition and adopts the factual findings in this Resolution pursuant to Education Code Section
47605(b), supporting the following findings:
I. The Petitioners are demonstrably unlikely to successfully implement the
program presented in the Petition [See Findings, Section 1].
II. The Petition does not contain the number of required signatures. [See
Findings, Section 2).
Ill. The Petition does not contain an affirmation of each of the conditions
required by statute. [See Findings, Section 3].
IV. The Petition fails to provide a reasonably comprehensive description of all
required elements of a charter petition [See Findings, Section 4].
BE IT FURTHER RESOLVED AND ORDERED that the District Governing Board hereby
makes the following factual findings justifying denial of the Petition based on the grounds specified
herein:
1 . The Petitioners are demonstrably unlikely to successfully implement the program
presented in the Petition. (Ed. Code, § 47605, subd. (b)(2).)
(a) Petitioners currently have two charters approved by MEUSD (CPMS and CPMS-EC)
for the same students and facility and are now seeking a third Petition (CPMS­
LMSV).
(i) CPMS-EC and CPMS-LMSV Petitions are 94.7% the same and propose the
same charter school that is already illegally operating in LMSV's
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boundaries. For example, both Petitions state "we intend to transition the
current CPMS to this CPMS-LMSV charter as soon as the 2017-2018 school
year" and the MEUSD Board Agenda approving CPMS-EC states "the
current existing charter (CPMS) will cease to exist." (See CPMS-LMSV
Petition Page 4; CPMS-EC Petition Page 4, and May 23, 2017 MEUSD
Board Agenda, Item 3 attached as Exhibit 3.)
(ii) The CPMS-LMSV Petition does not explain the relationships between the
three charter Petitions or disclose key information necessary to consider the
Petition. It attaches the same ten teachers' signatures and proposes to be
operated at the same location with the same administrators and the same
Board as the currently existing CPMS. The Petition is confusing and has
many of the same infirmities as the CPMS-LMSV 1 Petition submitted to the
District in December 2015. (See Exhibit 1.) Petitioner never discussed with
the District or attempted to address the Board's prior denial findings or
concerns with its refusal to comply with the Education Code.
(iii) The CPMS-LMSV Petition and CPMS-EC Petition are also reliant upon the
same anticipated revenue of $1,567,000 for "Expected cash balance of
existing CPMS to be gifted to new CPMS." (See CPMS-LMSV and CPMS-EC
Budgets, attached as Exhibit 4.) Both of the Petitions also propose to enroll
the same 240 students and operate at the Jackson Drive facility during the
2017-2018 school year. (See CPMS-LMSV and CPMS-EC Enrollment
Projections and Facility Language, attached as Exhibit 5.)
(iv) CPMS-EC and CPMS-LMSV cannot lawfully claim the same ADA twice, nor
can it rely on a single gift as the basis for two charter petition budgets.
Without the $1,567,000 gift from CPMS which is already pledged to the
CPMS-EC petition, CPMS-LMSV would run a negative cash flow every
month of the 2017-2018 school year.
(v) The State Board of Education previously took no action in the CPMS-LMSV
1 Petition because Petitioners currently had an active charter petition for
the same students and program. (See Exhibit 2.) Now, Petitioners have two
active charter petitions for the same students and program and are seeking a
third charter from the District without any clarity as to how the various
authorizations will be implemented lawfully or where Petitioners will
actually operate the charter school or charter schools.
(b) The Petition does not disclose or adequately explain CPMS' agreement with
HighMark School Development to lease a new school facility that HighMark is
proposing to build in Spring Valley for CPMS, despite its drastic fiscal and
operational impact. The transaction amounts to gross fiscal mismanagement at
best:
(i) On November 13, 2013 Christina Callaway entered into an agreement with
Casa De Oro Living Springs to purchase land at 10269 Madrid Way, Spring
Valley, CA (hereinafter "Madrid Way") for $1,200,000. That day Ms.
Callaway sent an email to the CPMS Board (on which she sat as a voting
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member) stating, "We will need to ratify your approval for Mitch and I to
sign the purchase agreement at the January meeting." The agreement was
signed on November 18, 2013 without prior Board approval and no Board
direction or involvement. On November 20, 2013, Ms. Callaway
transferred $34,500 to Chicago Title Company as a deposit on the property.
This again was without Board approval. On November 26, 2013, escrow
was opened for the Madrid Way property.
(ii) In and around April 2014, Ms. Callaway amended the purchase agreement
with Casa De Oro Living Springs and introduced HighMark Land LLC
("HighMark") as a party. HighMark is a for-profit, limited liability company
operating in Utah. In the amended purchase agreement CPMS assigned its
interest in the Madrid Way property to HighMark. On April 30, 2014,
CPMS entered into a "Non-Binding Letter of Intent with Certain Binding
Provisions" with HighMark. This document introduced another for profit
company, Educational Capital Solutions, LLC ("ECS") (a Delaware limited
liability company) to the deal.
(iii) The LOI indicated that ECS would acquire the Madrid Way property at
close of escrow. ECS and Highmark would enter into a lease to develop
and build a school for CPMS on the property, who would then occupy the
property once construction was complete via sublease for the property.
The LOI estimates the cost of the project to be $6,768,324. The LOI sets
CPMS' lease payments at 9.5% of the project cost and are increased by
2.5% per annum starting in the third year. At stated intervals (years 5, 7,
10, 15, 20) CPMS has the option to purchase the property at prices
significantly above the project cost, and therefore at significant profit to
HighMark. This option to purchase is after many years of inflated lease
payments, and without credit for the lease payments. (See Findings, Section
(4)(a)(1 ).)
(iv) On March 29, 2015, the District received notice from the Valle de Oro
Community Planning Group that a hearing was to be held regarding a
proposal by CPMS to build a school at Madrid Way. The District had not
received any notice of CPMS' plans to relocate within the District and build
a school, and it was discovered that CPMS had preliminary plans for the
site, had submitted the plans to the County for review, and was in escrow
for the property. The District attempted to communicate with MEUSD and
CPMS in an effort to better understand and resolve concerns it had
regarding the property. The District was concerned that the land purchased
by Christina Callaway on Madrid Way is not suitable for a new school
facility, presenting significant traffic, environmental, and safety concerns.
(v) If it were to authorize CPMS-LMSV, the District is required to monitor the
fiscal condition of the charter school. (Ed. Code, § 47604.34.) It is already
apparent that CPMS' budget is based on a speculative gift proposed to be
relied upon by another authorizer, and to more than double its enrollment
solely to pay exorbitant rents to a for-profit corporation in Utah. The ability
to pay rent and adhere to contractual obligations is fundamental to the
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fiscal condition of a charter school and the District's oversight
responsibilities, and the current proposal is not fiscally sound or reliable,
and is likely to subject the District to liability.
(vi) Petitioners provided no information about its acquisition and plan for the
Madrid Way property and it is only apparent in drastic increases for rent
over the term. The Petition proposes increases in rent, repairs and
maintenance from $180,000 in year 1 to $965,047 in year 5, an increase of
about 436%. CPMS-LMSV plans to spend between a quarter and a fifth of
its budget during the term of the charter for facility related expenses, when
previously it had been expending under ten percent of its revenue for
facility related expenses. There is no offsetting revenue or decrease in
expenditures, and a bold proposal to more than double in size, eliminates
the fiscal viability of the proposal.
CPMS-LMSV Facility Related Costs
School Year 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Rent $175,000 $626,281 $835,041 $855,917 $877,315
Repairs and $5,000 $62,628 $83,504 $85,592 $87,732
Maintenance
Total $180,000 $688,909 $918,545 $941,509 $965,047
Increase NIA $508,909 $738,545 $761,509 $785,047
From Year
One 283% 410% 423% 436%
Increase Increase Increase Increase
Percent of 9.7% 24.6% 24.1% 19% 19.8%
Total Public
Revenue
(vii) It is likely CPMS will be bankrupt by the facilities arrangement and the
public education dollars that go into financing it will be transferred out of
the public trust. The LOI provides CPMS with the option to purchase the
property after five years of paying the lease for 125% of the projected cost,
with the payment price reduced by 5% of the projected cost every 2-3 years
after five years. During the terms of the lease, CPMS would also be
responsible for all expenses associated with the operation of the property.
Under the best case scenario, CPMS could buy the property after five years,
but would expend $11,654,959 for the property including prior rent, even
though its projected cost is only $6,768,324. If CPMS is unable to purchase
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