§ 10155. Application for Preliminary, Advance, and Final Apportionment.

(a) Preliminary Apportionment - In determining whether a charter school is financially sound for the purposes of the Board's Preliminary Apportionment, the Authority shall require the following information be provided by the applicant with its application (Form CSFA 03-01, revised 3/04) for Preliminary Apportionment:

(1) Organizational information.

(A) History of charter school and founding group

1. Date charter school commenced instructional operations;

2. Description of charter school curriculum, including specific focus or theme;

3. Analysis of competition and charter school's competitive advantage(s), including method of student recruitment and marketing;

4. Description of relationships with the chartering authority and all major funding sources, both public and private;

5. Copy of Articles of Incorporation and Corporate Bylaws (or documentation of charter school's current legal status in the event the charter school is not incorporated); and

6. Copy of charter agreement/approved charter amendment/contract.

(B) If the applicant's charter is due to expire within 12 months of application submission, written documentation describing the applicant's plan for charter renewal along with any available information regarding the chartering authority's support for the renewal. For any applicant, regardless of the timing of charter renewal, the Authority reserves the right to request additional and specific information regarding the applicant's charter renewal status, including information directly from the chartering authority.

(C) The charter school's most recent business plan and/or strategic plan. If possible, such plans should encompass the next three academic years. For expansions, staffing plans also must be submitted;

(D) The operational agreement or memorandum of understanding between the charter school and the chartering authority;

(E) Historical, current, and projected enrollment and attendance, by grade level, for the next five years or through the first two fiscal years following the occupancy of the program-funded facility, whichever is longer, and the charter school's waiting list, if available;

(F) Targeted student population and student year-to-year retention rates for all years of operation of the charter school;

(G) Student performance data for the past three academic years;

(H) List of the charter school's board of directors including their occupations, cities of residence, and terms of office; and

(I) Resumes of key staff members (e.g., Chief Executive Officer, President, Operations Manager, Chief Financial Officer, Principal, etc.) of the charter school.

(2) Project Information

(A) Overview of project, including size in square feet, number of classrooms, type of facility, and student capacity;

(B) Project type, including new construction, renovation, or rehabilitation;

(C) Project address, if known. If yet to be determined, a general description of the proposed project location;

(D) School district where project is located;

(E) Anticipated date that instructional operations will begin at the project; and

(F) Anticipated total project costs.

(3) Financial information.

(A) The charter school's organizational budgets for the current and next fiscal years;

(B) The charter school's projected income statements and cash flows, including written assumptions, for the next five years or through the first two fiscal years following the occupancy of the Program-funded facility, whichever is longer;

(C) The charter school's audited financial statements, including notes, for the last three fiscal years. If the charter school is in its third year of operation, only two fiscal years of audited financial statements are necessary;

(D) The charter school's anticipated financial contribution to the project, including any lump sum payment to be made to meet its local match requirements by or on behalf of the charter school, and the source of the anticipated financial contribution;

(E) The charter school's most current available financial statement (unaudited), including a year-to-date actual and estimated annual financial statement and a current total annual budget;

(F) A listing of historical, current, and anticipated future funding through private contributions; and

(G) Where a charter school has a guarantor or co-borrower, financial information, as described in Section 10157, related to the guarantor or co-borrower.

(4) All Existing and Anticipated Debt Obligations.

(A) List the total amounts, annual amounts, interest rates, and maturity dates of all existing and anticipated short- and long- term debt obligations of the applicant or charter school;

(B) A description of the equipment or facilities financed with the debt obligations;

(C) If applicable, provide information about any debt covenants that could impact the Program debt obligation; and

(D) Provide copies of all financing documents associated with the debt obligations.

(5) All Material Contracts.

(A) List and copy of all material contracts, including, but not limited to, management, support services, transportation contracts, and any such anticipated contracts involving use of space or equipment to be financed with Program funds;

(B) A description of services provided by the vendor to the charter school; and

(C) For those charter schools contracting with educational management organizations, the following information also must be provided:

1. Brief history of the organization, including most recent annual report;

2. Description of who is served by the organization, including mission and targeted geographic area;

3. Budget of the organization for the current and next three fiscal years;

4. Financial audits of the organization for the last three fiscal years;

5. Resumes for key staff of the organization;

6. List of board of directors of the organization, including their occupations and cities of residence;

7. Contact information for the organization; and

8. A narrative describing the organization's scope and strategic plan for the next three years.

(6) Legal Status Questionnaire.

(A) A completed Legal Status Questionnaire submitted in the form set forth by the Authority as part of Form CSFA 03-01, revised 3/04, and which can be found at www.treasurer.ca.gov/csfa/charter/application.pdf.

(7) For a charter school which is governed by a school district, county office of education, or the State Board of Education, if any of the specific documentation requested in this section is not available, the applicant must provide a justification for not providing the specific documentation requested and provide alternative documentation that addresses the requested information.

(8) For organizations which operate multiple schools or which are applying on behalf of multiple schools, the information requested in this section must be submitted specifically with respect to each school for which an application is submitted, along with such information for the organization as a whole.

(9) Failure to provide sufficient required information as described in this section, in a timely manner, may result in the Authority's inability to determine the financial soundness of an applicant and the applicant's disqualification from the Program.

(b) Advance Apportionment -Where an applicant has applied to the Board for an advance release of funds, the following holds:

(1) The Authority will conduct a review of the applicant's financial status at the time of the application for Advance Apportionment to determine whether the charter school has maintained a financially sound status. The Authority will, in connection with this review, request updates of any information that was provided in the applicant's preliminary application, as described in Section 10155(a). Furthermore, where the applicant has a guarantor or co-borrower, the review may include a request of updates of any information that was provided by the guarantor or co-borrower in connection with the applicant's preliminary application, as described in Section 10157;

(2) Prior to the release of funds for site acquisition for advance apportionments, a charter school holding title to the project facility must comply with Section 17078.63 of the Education Code; and

(3) Advance funds will only be released when Program Agreements have been executed by all parties.

(c) Final Apportionment -In determining whether an applicant is financially sound prior to the Final Apportionment, the Authority will require the applicant to update information submitted in the original application for Preliminary Apportionment, or submitted for Advance Apportionment, including, but not limited to:

(1) Any material changes to information provided pursuant to sections 10155(a)(1), (2), (3), (4), (5), and (6), and updates, including, but limited to:

(A) If applicable, renewals and amendments to the charter agreement/contract and any operational agreement or memorandum of understanding between the charter school and the chartering authority;

(B) Updated business and strategic plans encompassing the next five academic years;

(C) Current enrollment, targeted student population, and student retention rates for all years after the date of the Preliminary Apportionment but prior to the Final Apportionment;

(D) Projected enrollment and attendance, by grade level, for the next five years or through the first two fiscal years following the occupancy of the Program-funded facility, whichever is longer, and current waiting list, if available;

(E) Student performance data for all years after the date of the Preliminary Apportionment but prior to Final Apportionment;

(F) Current list of board of directors, including their occupations, cities of residence, and terms of office;

(G) Resumes of new key staff, along with notice of any resignations or terminations of key staff originally identified in the application;

(H) Audited financial statements for all years ending not less than 180 days after the Preliminary Apportionment and prior to the Final Apportionment;

(I) Most current unaudited financial statement, including year-to-date actual and estimated annual financial statement and a current total annual budget;

(J) Projected income statements and cash flows, including written assumptions, for the next five years or through the first two fiscal years following the occupancy of the Program-funded facility, whichever is longer;

(K) Updated financial information regarding the guarantor or co-borrower, if applicable;

(L) Any material changes in material contracts and debt obligations existing as of the date of the Preliminary Apportionment and additional material contracts and debt obligations entered into since the Preliminary Apportionment, including any changes to educational management organization contracts, if applicable; and

(M) A completed Legal Status Questionnaire submitted in the form set forth by the Authority, as part of Form CSFA 03-01, revised 3/04, and found on the Authority's website reflecting any changes since the application.

(d) Prior to the release of funds for site acquisition or new construction for final charter school apportionments, a charter school holding title to the project facility must comply with Section 17078.63 of the Education Code.

(e) In the event that the charter school's charter is no longer valid, the Authority will notify the Board that the charter school is no longer financially sound.

(f) Final Apportionment funds will only be released when Program Agreements have been executed by all parties.

HISTORY

1. New section filed 2-13-2003 as an emergency; operative 2-13-2003 (Register 2003, No. 7). A Certificate of Compliance must be transmitted to OAL by 6-13-2003 or emergency language will be repealed by operation of law on the following day.

2. Certificate of Compliance as to 2-13-2003 order transmitted to OAL 6-12-2003 and filed 7-14-2003 (Register 2003, No. 29).

3. Amendment of section and Note filed 3-29-2004 as an emergency pursuant to Education Code section 17078.57(b); operative 3-29-2004 (Register 2004, No. 14). A Certificate of Compliance must be transmitted to OAL by 7-27-2004 or emergency language will be repealed by operation of law on the following day.

4. Amendment of section and Note refiled 7-19-2004 as an emergency pursuant to Education Code section 17078.57(b); operative 7-27-2004 (Register 2004, No. 30). A Certificate of Compliance must be transmitted to OAL by 11-24-2004 or emergency language will be repealed by operation of law on the following day.

5. Certificate of Compliance as to 7-19-2004 order, including further amendment of subsection (a)(2), transmitted to OAL 11-8-2004 filed 12-23-2004 (Register 2004, No. 52).

6. Amendment of first paragraph and subsections (a)(4), (b)(5) and (d) filed 11-3-2006 as an emergency; operative 11-3-2006 (Register 2006, No. 44). A Certificate of Compliance must be transmitted to OAL by 3-5-2007 or emergency language will be repealed by operation of law on the following day.

7. Reinstatement of section as it existed prior to 11-3-2006 emergency amendments pursuant to Government Code section 11346.1(f) (Register 2007, No. 39).

8. Amendment of subsections (a)(5)-(6), (b)(2) and (b)(6), new subsections (c)-(c)(4) and subsection relettering filed 9-9-2010 as an emergency; operative 9-9-2010 (Register 2010, No. 37). A Certificate of Compliance must be transmitted to OAL by 3-8-2011 or emergency language will be repealed by operation of law on the following day.

9. Certificate of Compliance as to 9-9-2010 order transmitted to OAL 1-19-2011 and filed 2-16-2011 (Register 2011, No. 7).

10. Amendment of section heading, section and Note filed 11-3-2011 as an emergency; operative 11-3-2011 (Register 2011, No. 44). A Certificate of Compliance must be transmitted to OAL by 5-1-2012 or emergency language will be repealed by operation of law on the following day.

11. Certificate of Compliance as to 11-3-2011 order, including further amendment of subsection (b)(2), repealer of subsection (c)(1)(B), subsection relettering and amendment of subsection (d) and Note, transmitted to OAL 2-7-2012 and filed 3-5-2012 (Register 2012, No. 10).

Note

Note: Authority cited: Section 17078.57, Education Code. Reference: Sections 17078.52, 17078.53, 17078.57 and 17078.63, Education Code.