How the Actions of a Tiny California School District Sparked Calls for a Statewide Charter Crackdown

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A bill restricting charter schools, authored by Assemblywoman Christy Smith, left, D-Santa Clarita, stems from her experience as a school board member in Santa Clarita. With Smith is Assemblywoman Cottie Petrie-Norris, D-Laguna Beach. (Max Whittaker/CALmatters)

One was a charter school operator desperate for authorization after years of rejection by multiple school districts. The other was a tiny district in Southern California's rural high desert, hemorrhaging students, facing insolvency and in dire need of revenue.

Charter Schools

The Albert Einstein Academy of Letters, Arts and Sciences charter school, part of a larger charter network of the same name, and the Acton-Agua Dulce Unified School District at the northern edge of Los Angeles County answered each other’s prayers in 2013 when they partnered. In a novel use of California’s charter school rules, the district approved the elementary school's charter and agreed to oversee it, even though the school was located about 20 miles west of Acton-Agua Dulce's geographical boundary, within another district that had previously rejected the charter.

In return, Acton-Agua Dulce collected oversight fees of 3.5 percent of the school’s revenue, a formula that officials quickly replicated with more charter authorizations. By the 2015-16 school year, the district had approved and was collecting fees from a growing stable of charters, netting an additional $1.9 million in revenue.

The Albert Einstein elementary school program was ultimately shut down in 2018 because of concerns with its financial model and sustainability, the Santa Clarita Valley Signal reported.

But this creative arrangement between district and charter became the kindling for a prolonged legislative and legal battle over reforms to California’s system for authorizing charter schools.

Citing claims that the district and the charter network improperly gamed the system, Democratic lawmakers are now redoubling efforts to tighten the rules and better prevent small, financially-strapped districts like Acton-Agua Dulce from boosting their budgets by offering authorization and oversight to charter schools dozens, or even hundreds of miles from their supposed minders.

The issue strikes close to home for the legislator behind this year's proposal to clamp down on so-called “far-flung charters.” Democratic Assemblywoman Christy Smith of Santa Clarita sat on the board of the Newhall School District, where the Einstein charter school her district had rejected was located. Adding insult to injury, the school sat directly across from the district's administration building.

Smith is the sponsor of Assembly Bill 1507, which would prevent charters from being located outside the jurisdiction of the district granting the charter. It's one of several regulation proposals being considered on Wednesday by the state Assembly Education Committee that form the battle lines of this year’s faceoff between charter advocates and teachers’ unions. Other measures would cap the total number of charter schools allowed to operate statewide and limit the ability of charters to appeal district petition denials to county and state authorizers.

In past sessions, the longstanding rivalry between those two politically powerful forces has typically ended more or less in a draw.

But this year, the political calculus has shifted. Both the governor and the state’s top school administrator were elected with strong backing from teachers’ unions, which blame declining enrollment and funding, in part, on competition from the publicly funded, independently operated charters that are mostly staffed by non-union teachers. Already, Gov. Gavin Newsom has signed a fast-tracked law that requires charters to follow the same open meeting and conflict of interest laws as traditional schools in the public school system.

'Nothing added up'

Between 2010 and 2014, six school districts — Newhall, Saugus Union, Ventura Unified, Los Angeles Unified, Moorpark Unified and Conejo Valley Unified — and the Los Angeles and Ventura County education offices each denied Einstein's charter petition appeals, according to a Los Angeles county report, legislative testimony and local media reports. One district, Saugus Union, denied four separate petitions from the school.

In their rejections, the districts and counties raised similar concerns over the school’s financial viability and lack of specifics on how it planned to educate specific student groups, such as special needs students and English language learners.

“We took a look at the finances — again, four different times — and nothing added up,” said Joan Lucid, a retired superintendent of the Saugus Union School District.

“We kept being told, ‘Well, we’re going to have a grant from someone. Someone’s going to give us some money. We’re thinking we’ll have this or we’ll have that.’ And when we actually did an analysis of the figures that were there, nothing added up.”

Rabbi Mark Blazer, the founder of the Einstein charter network, downplayed the financial concerns raised by school districts in their charter application denials, and said he felt school districts in the Santa Clarita Valley were innately hostile toward charters.

This tension, he said, is why he believes charter authorizations should be handled primarily at the state level, not through local school districts.

“If we had one authorization, if there was a statewide authorization, we would’ve been fine,” Blazer said.

Then in 2013, the Albert Einstein charter school network discovered Acton-Agua Dulce, a district where enrollment had been declining so inexorably for so long that, in one five-year stretch after the 2008 recession, one elementary school had lost more than half its student body. In a decade, overall enrollment had fallen by more than 40 percent, from 1,849 to 1,080 students.

Blazer said he saw “a cooperative district” that “was willing to work with us.”

Then-superintendent Brent Woodard had proposed a plan that called for Acton to “approve approximately 24 high quality, diverse charter schools” by summer 2016 as a way to bring in more students, according to a presentation to the school board. The district expected to earn more than $1.2 million in revenue as part of its multiyear plan.

Under the Charter Schools Act of 1992, a governing school board can approve a location in another district if no suitable site is available in the chartering district.

Shortly after the new Einstein school opened, the Newhall school district sued the Acton-Agua Dulce district and the charter school they oversaw.

At that point, the role of charter school authorizer was fairly new territory for Acton-Agua Dulce. Up until 2012, the district had never authorized a charter school. But within three years, it had about twice as many students in charter schools than it did in non-charters.


'They’re doing it for the money!'

School boards and district officials pushing for tighter restrictions on charter locations contend that they have the responsibility for — and thus should have the ultimate authority over — the learning programs offered by public schools within their boundaries. Newhall alleged that Acton’s authorization had usurped its local control.

“You have locally elected school board members who were supposedly making the determination for educational programs inside their district, and then some other district decides what’s best for that district,” said Marc Winger, a former Newhall superintendent who served when Smith sat on the school board.

“They’re 20 miles away, they know nothing about it, and on top of that, we have proof that they’re doing it for money.”

Outrage mounted as more and more Acton charters popped up in communities outside its boundaries. Santa Clarita Valley school officials went to Sacramento and began lobbying. Meanwhile, other school districts also went to court over other far-flung charters: Suits were filed by Pasadena Unified and Los Angeles Unified, where Acton approved another charter school in the San Fernando Valley. And San Diego Unified sued the tiny, rural Alpine Union School District for authorizing another Albert Einstein charter within its boundaries.

Commenting in a May 2014 Santa Clarita Valley Signal article about Albert Einstein Academy, Assemblywoman Smith, then a Newhall trustee, accused Acton of “engaging in pay-to-play practices,” called the Einstein authorization a “rubber stamp” and called on the state “to put an end to these abusive practices and waste.”

“Am I opposed to this type of bad actor in the charter business? Absolutely!” Smith wrote.

Newhall eventually won its suit, and Senate Bill 1263, which would have required permission from the host districts for a remote authorization, passed both the state Senate and Assembly, but was vetoed by then-Gov. Jerry Brown.

Brown, who had been a strong proponent of charter schools while he was mayor of Oakland, and helped start two in the city, expressed concerns that the bill’s language might uproot existing charters. Yet in his veto message, he acknowledged that “some districts and charter schools have gone against the spirit of the law and the exemption has instead become the rule.”

By early 2017, Brent Woodard, the superintendent who oversaw Acton’s rapid charter growth, had left the district, citing “multifarious reasons,” the Santa Clarita Valley Signal reported.

Then, in November 2017, the California State Auditor released a yearlong report, at the request of the Legislature, that detailed school districts’ financial incentive to approve charter schools outside of their boundaries.

Specifically, the audit noted that the district approved charter applications — including one for the Einstein school in Agua Dulce — that did not have the required number of signatures from prospective parents and teachers meant to gauge community support and demand.

The state’s audit also found that the Einstein school “consistently failed to meet the district’s minimum (financial) reserve requirement,” putting it at risk for closure.

By then, Action had authorized some 15 charter schools, including three other Albert Einstein Academy schools — one based in Agua Dulce, and two others in Valencia and Beverly Hills, 50 miles southwest of the district.

Currently, more than 14,000 charter school students are enrolled in the district, many of them in non-classroom based programs. Less than one-tenth of Acton’s total enrollment is in its traditional public school classrooms, and its charter enrollment total trails only San Diego and Los Angeles, the state’s two largest school districts.

California's directory of public schools shows that Acton has approved 27 separate charter schools since 2012, including some that appeared never to have actually operated before they closed.

State or local control?

By June 2018, all charter schools in California affiliated with Einstein charter school network had closed as the district “began to question publicly in discussions with the board their financial status,” said Lawrence King, Acton’s new superintendent.

Or, as Winger, the former Newhall superintendent put it, “The financial problems that we predicted (in 2010) came true.”

Today, King describes the district’s approach to charters as “the farthest thing from a rubber stamp or a financial motivation.” Though he acknowledges that the district oversees a large number of charter schools, he points out that the district has not authorized a new charter since October 2017.

'Districts abused this loophole'

It is unknown exactly how many of the state’s 1,300-plus charter schools are based outside of their authorizing district’s boundaries. State auditors in a 2017 report that investigated the Acton-Agua Dulce district noted it was next to impossible to tally a count of far-flung charter schools, in part because the state does not require charter schools to list all of the locations of their classrooms.

Nonetheless, state auditors identified at least 165 charter schools across California that appeared to be operating outside their authorizing district in 2016-17. Many are in small school districts. A recent CALmatters analysis of charter school growth in California found that nearly one-fifth of the state’s 630,000 charter students came from schools authorized by districts that had fewer than 1,500 kids in their traditional public schools.

Smith's office declined to grant an interview to discuss her proposed legislation, but in a statement, she said her bill “continues to address charter transparency goals that have been set forth by Governor Newsom and the Legislature.”

The bill, she added, "restores the right of individual districts to have oversight of schools located within their boundaries. In my tenure as a school board member, neighboring districts abused this loophole and authorization privilege and families were impacted because of this.”

The original version of this article appears on the CALmatters site.

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

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