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Charter Schools

Guidance on Restructuring an Existing Education Corporation At Risk of Non-Renewal/Closure

2018 Guidance of Restructuring an Existing Education Corporation At Risk of Non-Renewal/Closure  

I. Introduction

The Performance Framework outlines the standards, benchmarks and indicators that represent the high-level of performance necessary for charter schools authorized by the Regents to earn a charter renewal. The Regents and the Department evaluate three areas of charter school performance using quantitative and/or qualitative data and evidence, compiled over the course of the school’s charter term.

  • Educational Success
  • Organizational Soundness
  • Faithfulness to Charter and Law

The above key areas are measured by corresponding performance benchmarks. Though each performance benchmark is important, the Regents and the Department will consider increases in student academic achievement for all groups of students described in Section 1111(b)(2)(C)(v) of the ESEA as the most important factor when determining to renew or revoke a school’s charter.

Student performance is held as a paramount indicator of a charter school’s academic success because the nature of charter schools allows them to be procedurally untethered; they are afforded the opportunity to make strides toward innovative education practices that are beyond the threshold of what traditional public schools could realize. In exchange for this autonomy, charter schools are held to a higher degree of accountability and, ultimately, proof that this freedom promotes a rich academic environment that produces results surpassing other traditional educational paths.

The Framework clearly outlines the performance benchmarks that charter schools are expected to meet, Department renewal recommendations and Regents’ renewal decisions are not dictated by a formula or point system. The Regents will make a charter renewal decision based on the totality of evidence presented by the charter school, and the Regents have the discretion to consider many relevant qualitative and quantitative factors when making these decisions.

Renewal Outcomes:
The following three renewal outcomes are possible:

Full-Term Renewal: A school’s charter may be renewed for the maximum term of five years. For a school to be eligible for a full-term renewal, during the current charter term, the school must have compiled a strong and compelling record of meeting or exceeding Benchmark 1, and at the time of the renewal analysis, have met substantially all the other performance benchmarks in the Framework;
Short-Term Renewal: A school’s charter may be renewed for a shorter term, typically of three years. In general, the option for a short-term renewal will be available only to schools applying for their first renewal, and the past practice of granting multiple short-term renewals to charter schools that have not been academically successfully will no longer be continued. For a school to be eligible for short-term renewal, a school must either:

  • have compiled a mixed or limited record of meeting Benchmark 1, but at the time of the renewal analysis, have met substantially all the other performance benchmarks in the Framework which will likely result in the school’s being able to meet Benchmark 1 with the additional time that short-term renewal permits, or
  • have compiled an overall record of meeting Benchmark 1, but falls far below meeting one or more of the other performance benchmarks in the Framework; or

Non-Renewal: A school’s charter will not be renewed if the school fails to meet the benchmark for either full-term or short-term renewal. In the case of non-renewal, a school’s charter will be terminated upon its expiration and the school will be required to comply with the Department’s Closing Procedures to ensure an orderly closure by the end of the school year.
 

II. About the Submission of Plans to Restructure an Existing Education Corporation At Risk of Non-Renewal

The NYSED Charter School Office (the “CSO”) may accept plans to restructure charter schools at-risk of non-renewal and closure due to academic underperformance.  In accepting such plans, the CSO endeavors to hold existing education corporations/boards of trustees, charter management organization (“CMO”), and schools accountable for academic underperformance by terminating the current governing board of trustees and educational program BUT alternatively accept a new or restructured board of trustees to govern and operate a new educational program for the same students utilizing the same charter.

The current Board of Trustees of the existing education corporation using the guidance contained herein must submit a plan that will allow the ‘essentially new charter school’ to operate under a new or restructured governing board to oversee a new/restructured educational program and operations that will serve the same students utilizing the same charter.  The CSO will treat any resultant school as a new school with a five-year charter.  The resultant school will not be eligible to apply for or receive a federal Charter Schools Program (CSP) grants. 

If the submitted plan meets the high standards of the Board of Regents (the same standards that apply to the approval to create a new charter school), the CSO may recommend to the Regents that the charter be renewed, subject to the following requirements:

  1. The current Board of Trustees of the existing education corporation submits the plan to restructure the charter school;
  2. The plan may not be filed in conjunction with a for-profit management partner;
  3. The plan must demonstrate that the “new operator” and/or restructured board has the organizational capacity to effectively operate the school given the unique circumstances pertaining to the renewal situation;
  4. The plan must meet the standard for describing a high-quality educational program and providing sufficient evidence that the restructured charter school is likely to operate in an educationally and fiscally sound manner, meet all Performance Framework standards for Board of Regents-authorized charter schools, improve student learning and achievement of the students enrolled and to be enrolled in the schools and materially further the purposes set out in Education Law § 2850(2) as well as meet any additional requirements established by the Board of Regents as part of their rigorous commitment to student achievement; and
  5. The plan must have viable strategies to attract and retain students with disabilities, ELLs and economically disadvantaged students.

In addition, any successful new operator and/or restructured board must agree to the following as part of the terms and conditions of a positive recommendation being presented to the Board of Regents:

  1. The proposed new operator and/or restructured board must serve all grade levels currently served and students currently enrolled in the school that wish to remain enrolled, except for those who would have graduated from the highest grade (or aged out at 21). A plan may not propose or include any additional grades beyond those identified in the approved charter;
  2. The proposed new operator and/or restructured board may propose a new school name which does not need to be resemble the existing name;
  3. The proposed new operator and/or restructured board will be required to accommodate or account for existing contracts, assets and liabilities.  (The key concept is that the new operator and/or restructured board cannot vitiate the existing contracts through the restructuring process, (unlike the process of a bankruptcy restructuring);
  4. A successful new operator and/or restructured board will be required to perform its own due diligence on the existing school(s) and agree to accept the charter(s) “as is” in terms of compliance issues, resources, liabilities, liens and existing contracts and obligations.  The Board of Regents and NYSED makes no representations about the schools, their condition or states of compliance with applicable law, other than the fact that the schools are in good standing in terms of their corporate existence;
  5. NYSED will apply its normal review standards for an initial charter application in evaluating any proposal for a proposed educational program tailored to address the current renewal circumstances.  If NYSED’s review of the plan is positive, NYSED will recommend that Board of Regents approval as a restructured charter application to the Board of Regents with restrictions so long as the current education corporation board(s) of trustees’ assents;
  6. The successful new operator and/or restructured board may replace all existing staff members;
  7. Except for good cause shown, a successful plan must replace all existing education corporation board members, all existing school leaders/administrators, and the CMO (if applicable);
  8. The new operator and/or restructured board acknowledges that the school may have existing debt and obligations to be repaid; terms of grants that must be fulfilled and be in possession of restrictive gifts with terms that must be honored.  The Board of Regents and NYSED make no representations about the fiscal condition of the education corporation;
  9. The decision to accept or reject the restructuring plan and proposed new operator rests solely with the Board of Regents;
  10. The decision by the Board of Regents is final and not appealable; and
  11. If the Board of Regents approves the plan, the education corporation must be maintained (NYSED will entertain any potential merger later as a separate revision).

Review Process for Restructured Plans:
The review process will include:

  1. a NYSED staff review of the plan with a focus on academic, legal and fiscal soundness;
  2. a NYSED staff interview of the proposed new operator and/or restructured board and proposed education corporation trustees; and
  3. a Request for Amendment process to resolve NYSED concerns, assure compliance with the Act and all applicable laws, rules and regulations and to conform to existing conditions at the school(s).

In addition, in cases where the proposed new board would partner with a non-profit CMO or a non-profit, community, or educational partner organization, NYSED will review the organization’s business plan and conduct a due diligence review of the organization in the same manner as is done for new or initial charter school applications.  The process requires the organization to provide information regarding the organization’s structure, staffing, finances, future growth plans, and the academic performance of other schools it serves that enroll similar student populations to determine the organization’s capacity to support the restructured school.  At their discretion, NYSED staff may also conduct an interview of representatives of the proposed CMO or partner organization in conjunction with the overall evaluation process. 

If more than one plan is submitted to meet the Board of Regent’s rigorous standards, NYSED will give greater weight to those proposed new operators and/or restructured boards that successfully demonstrate the following:

  • Experience and expertise in implementing a program serving a similar student population;
  • Experience and expertise in implementing a school turnaround model;
  • Ability to provide remediation to meet a range of student needs across the given grade span; and
  • The ability to effectively serve all at-risk student populations, including students with disabilities, English language learners, young parents, and economically disadvantaged students.

Business Plan Requirement:
Proposed new operators and/or restructured boards that meet either of the two following criteria must also submit a business plan:

  1. Applicants submitting a plan in conjunction with an organization that would be responsible for managing and/or providing significant portions of the school’s academic program; in this case the CMO or partner organization must complete a business plan to be submitted with the Application; or
  2. Existing Board of Regents approved education corporations seeking to operate this charter school and maybe later merge them into the education corporation; in this case, the education corporation must complete and submit a business plan in conjunction with the Application.
     

III. Process for Submission of an Application to Restructure an Existing Education Corporation At Risk of Non-Renewal

Using the 2018 RFP, the current board of an existing education corporation is the recognized applicant for submission of a plan to restructure an existing education corporation at-risk of non-renewal. Such a plan is akin to the submission of an application to establish a new charter school where applicant groups are expected to fully address a set of requests and evaluation criteria that directly align to the requirements and priorities stated in the Charter Schools Act. In reviewing the restructuring plans, the Department seeks to assess the will, skill, and capacity of the proposed board to launch and sustain a quality public charter school in New York State and demonstrate educational alignment and operational compliance with the requirements and educational priorities of the Act. This information becomes part of the approved charter and sets the conditions under which an education corporation may operate a school.

The plan to restructure a charter school may not exceed 75 pages and the required attachments may not exceed an additional 75 pages, with certain exceptions outlined in the attachment information.  Upon submission, NYSED staff will screen the Full Applications for compliance with submission requirements.

Evaluation of Restructuring Plans:

Review panels (referred to as peer reviewers) with expertise in charter school operations, and when appropriate, knowledge that is relevant to the proposed school design, will evaluate Full Applications. Each reviewer will independently evaluate and rate how well the proposed plan addresses the evaluation criteria.  articulated in each section of the application. Reviewers will rate the response to each criterion as Meets the Standard, Approaches the Standard, or Does Not Meet the Standard, as defined in the sample evaluation rubric in Appendix A. The review panelists will develop a summary rating for each application section, as well as for the Full Application. 

Note Regarding Criminal Background Check/Fingerprint Scan:  Proposed board members will be required to undergo criminal background checks via fingerprint scans. NYSED will contact each member to arrange for the required fingerprint scans. The result of the background check may be shared with senior managers at the Department and/or the Board of Regents if a concern is noted. The inability or unwillingness of any member of the applicant group to promptly undergo the required criminal background checks via fingerprint scans within the timeframe requested in advance of the Board of Regents meeting shall be grounds for denying a charter recommendation.

Capacity Interview:

Restructuring plans that substantially meet the evaluation criteria and demonstrate the proposed board of trustees has the required skills to operate a high-quality charter school will be invited to a Capacity Interview.  Unless otherwise noted by NYSED, all Capacity Interviews will be held at 89 Washington Avenue, Albany, NY 12234. NYSED officials conduct the Capacity Interview foremost to assess the capacity of the proposed board of trustees to effectively launch and oversee the proposed charter school.  NYSED staff use the interview to evaluate the proposed board members’ understanding of academic and operational accountability as well as the community to be served.  The interview also provides the proposed board of trustees with the opportunity to present and elaborate on the information provided in the Full Application, and respond to any technical questions that may have been generated by reviewers during the review process.

NYSED Recommendation for Approval or Denial of the Application:

Based on the review of the proposed plan and Capacity Interview, NYSED will determine whether to recommend approval of the restricting plan to the Board of Regents. Plan that do not meet the rigorous standards required will not receive a recommendation for Board of Regents approval.

A plan that is recommended to the Board of Regents for approval will provide a detailed and complete school design plan that:

  • Demonstrates the ability to operate the school in an educationally and fiscally sound manner;
  • Is likely to improve student learning and achievement and materially further the purposes of the Act;
  • Includes clear strategies to meet or exceed enrollment and retention targets for students with disabilities, students who are English language learners, and economically disadvantaged students;
  • Provides evidence of public outreach that conforms to the process prescribed by the Regents for soliciting and incorporating community input regarding the proposed charter school;
  • Meets all requirements set forth in the Charter Schools Act as well as all other applicable laws, rules, and regulations; and
  • Would have a significant educational benefit to the students expected to attend the proposed charter school.

In addition to all the above, the proposed board of trustees must demonstrate appropriate knowledge, capacity, and ability to effectively create, maintain, and oversee a high-quality charter school.  For applications that meet all these conditions, NYSED will recommend that the Board of Regents approve the application and issue a charter. 

If recommended for approval, NYSED will provide the proposed board members with an opportunity to review the terms and conditions of the initial charter agreement (contract) between the proposed school and the Board of Regents, and to sign said agreement. This will occur in preparation for the Board of Regents meeting at which the Regents will act to approve or deny charters.

The inability or unwillingness of all newly proposed board members to promptly undergo a fingerprint/background check in accordance with NYSED procedures for Adding a Board of Trustee Member to an Existing Board of Regents-Authorized Charter School (see http://www.nysed.gov/charter-schools/add-board-member) within the timeframe requested shall be grounds for denying a charter recommendation.

 

IV. Content of A Plan to Restructure an Existing Education Corporation At-Risk of Non-Renewal

 The current board of an existing education corporation is the recognized applicant for submission of a plan to restructure an existing education corporation at-risk of non-renewal. The current board must submit a plan to restructure the existing education corporation that addresses the same a set of requests and evaluation criteria for the development of a new charter school application as outlined in the 2018 Request for Proposals. The specific set of requests and evaluation criteria are stated in the full Guidance, which can be found by clicking on this link: 2018 Guidance of Restructuring an Existing Education Corporation At Risk of Non-Renewal/Closure 

*If you have any questions regarding the Guidance, please contact the charter school's Liaison. Any other comments or concerns can be sent to CharterSchools@nysed.gov.