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The Texas Charter Schools Conference is early this year on October 28-30, so don't miss out on specialized workshops, dozens of educational sessions and networking opportunities with industry experts. You make the conference better each year and we hope to see you in San Antonio!

Check out the great video below to review fun snapshots from at last year's Texas Charter Schools Conference.

By Denise Pierce, TCSA General Counsel

Denise Pierce

Denise Pierce

An appellate court in Austin on Thursday, September 24, heard arguments from three open-enrollment charter schools on the constitutionality of Texas Education Code Section 12.115(c-1), an automatic revocation provision in Senate Bill 2 passed by the Legislature in 2013. Even though Senate Bill 2 did not become effective until September 1, 2013, Section 12.115(c-1) directed the Commissioner of Education to revoke open-enrollment charter schools based on their academic and financial performance in prior school years.

Before the appellate panel of justices Jeff Rose, Bob Pemberton, and Scott Field were American Youthworks Charter School, Honors Academy Charter School, and Azleway Charter School.

They pressed arguments that Section 12.115(c-1) is unconstitutionally retroactive, that the Texas Education Agency denied procedural due process in its implementation of the new law, and that the TEA improperly considered the performance of Honors Academy high school for the 2011-2012 school year.

All three schools had persuaded a Travis County District Court to enjoin the agency’s revocation process against them, but the State of Texas appealed the district court’s ruling in June 2014, setting up for yesterday’s oral arguments before the Third Court of Appeals.

Representing American Youthworks Charter School, attorney Robert Schulman urged the three-judge panel to declare Section 12.115(c-1) unenforceable, and in the alternative, to remand the case for an actual trial in Travis County District Court.

Attorney Kevin O’Hanlon represented Honors Academy Charter School. O'Hanlon said, “The Court was prepared and understood the matters at issue in the case. They appeared to be receptive to consideration of all constitutional as well as the statutory interpretation issues.”

The outcome of the case is uncertain, but all of the attorneys representing the charter schools were optimistic after the argument.

Attorney Susan Morrison, who represents Azleway Charter School, said she was most surprised by the admission of the State’s attorney: "TEA would treat the three former charter schools as non-revoked if they win this appeal, as long as they are otherwise eligible to hold a charter."

The attorneys anticipate a ruling between 90-120 days - likely in early January - but the court is not beholden to a particular deadline.

Notwithstanding this pending litigation, all three charter charters were formally revoked by TEA in 2014 when the agency exercised its lawful authority as a government agency to supersede the district court’s injunction. Consequently, none of the affected charter holders are currently operating a charter school.

All briefing filed in the case can be found on the court’s website, including the amicus curiae brief filed by the Texas Charter Schools Association.

By Denise Pierce, TCSA General Counsel

Denise Pierce

Denise Pierce

The new Charter FIRST rules, which went into effect August 6, establish the financial rating indicators for the 2015, 2016 and 2017 school years. The Texas Education Agency is to be applauded for its diligence. Since the TEA was required to revamp the charter financial accountability system in 2013 by HB5, the TEA has spent the last two years seeking and incorporating input from charter school operators through phone calls, face-to-face meetings, webinars and public hearings. Our members’ input was valued and incorporated, which is a hallmark of good rulemaking.

However, the timing of the rule adoption leaves less than 30 days in the 2014-15 fiscal period for charter schools with a September 1 fiscal year start dates to react or change their financial practices in order to pass or excel under the new scoring rubric for the 2015-16 rating year. Yet, for 2014-2015 rating, which is based on the 2013-2014 fiscal year data, a large number (92 percent) of schools are expected to pass.

TEA made a number of strong improvements to the 2015 financial indicators, based on suggested changes from TCSA and its member schools, such as:

  • Rating system is fairly familiar to our schools this year because it contained only seven indicators, all of which essentially are holdovers from the prior ratings system;
  • Revised the thresholds for administrative cost ratio, presumably out of recognition that most charters have small enrollment and yet need ample administrative support to capably carry the compliance burden of state and federal regulations;
  • Excluded pension expense, other post-employment benefits (OPED), and net pension liability from the total net asset balance.

As for the 15 particular indicators adopted for the 2016 and 2017 rating years, the TEA also responded positively to the concerns raised by charter operators. Chief among those, the new indicators allow charters to appeal their FIRST ratings based on errors made by the charter school. These appeals will continue to be disfavored by the agency, but at least they will not dismissed outright. Consideration will be given only to appeals that would result in a changed rating. The appeal must be submitted within 30 days after release of the preliminary ratings and must include “adequate evidence and additional information.” The rules add the specification that the appeals process is not for correcting data that has been incorrectly submitted to TEA by the charter school.

Charters should watch out for the aggressively graduated point scale between the 2016 and 2017 rating years. As seen in the graph below, the point system will make it harder to get an "A" or Superior rating in the later period. Similarly, it will be harder to receive a standard rating. Any school that receives an "F" or Substandard Achievement score will receive a strike for revocation and non-renewal purposes.

Texas Education Agency

Texas Education Agency

I’m also pleased the TEA altogether removed some of the least effective indicators from the former system, such as whether the school had a monitor assigned, the ratio of students-to-teachers, and investment earnings. And I’m looking forward to strong charter performance in future years as our schools become familiar with and match their financial practices to coincide with these new targets.

A more in-depth summary of Charter FIRST indicators will be released later this year as a legal advisory for TCSA member schools.

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