Charter Schools – Proposition 39

Mt. Diablo Unified School District v. Clayton Valley Charter High School, et al. – California Court of Appeal, First District (Case No. A158195)

MEMBER(S) INVOLVED: Mt. Diablo Unified School District

IMPORTANCE OF STATEWIDE ISSUE:

School districts must be able to rely on relevant regulations and assess appropriate fees for facilities costs under Proposition 39. School districts could benefit from greater certainty to the process of assigning and charging a pro-rata share of district facilities costs to charter schools.

SUMMARY OF THE CASE:

This case involves the calculation of a charter school’s pro-rata share of districtwide facilities costs under Proposition 39. Proposition 39 requires school districts to make facilities available to charter schools serving students who reside in the district and allows districts to charge charter schools a pro-rata share of the district’s overall facilities costs.

The charter school in this case paid the district $160,000 per year for use of the facilities, well below what the district claims it owes. The charter school unilaterally decided that the district is over-charging it by including costs in the pro-rata share calculation that represent costs the charter school is already incurring to provide maintenance on the facility – in other words, the charter school believed that because it pays its own ongoing operation and maintenance costs, state regulations prohibited the school district from charging for the pro-rata share of any district-wide costs associated with operation and maintenance.

The trial court ruled in favor of the district, finding that the relevant regulations call for each school district to determine a single per-square-foot pro-rata share of districtwide facilities costs, and that “[t]he per-square-foot charge shall be applied equally by the school district to all charter schools that receive facilities under this article …” (Cal. Admin. Code tit. 5, § 11969.7(e).) In August 2019, the charter school appealed the trial court’s ruling.

On March 26, 2021, the ELA filed an amicus brief along with the Association of California School Administrators in support of the school district, arguing that the inclusion of districtwide facilities costs in the pro-rata share rate calculation is appropriate and fair, and that interpreting the relevant regulations to require the exclusion of all districtwide ongoing operations and facilities maintenance costs would negatively impact school district finances and likely result in an increase in Proposition 39-related litigation.

CURRENT STATUS AND/OR OUTCOME:

On October 1, 2021, the court of appeal reversed the trial court’s decision and remanded for further proceedings, finding that while the Proposition 39 regulations were “ambiguous and, in part, self-contradictory . . . a district must exclude from the facilities costs it charges a charter school all costs of both operations and ongoing maintenance if the charter school pays those costs for its own premises.” The court noted that the charter school in this case paid approximately 99 percent of the ongoing operations and maintenance costs incurred at its facility in the school years at issue and clarified that the decision expressed no opinion on how costs should be apportioned for a hypothetical charter school that pays only a portion, less than substantially all, of the ongoing operations and maintenance costs at its facility.