Briefing on Merger Prepared by the SUNY Charter Schools Institute Definition of Terms • Education Corporation: a New York, not-for-profit, education corporation that comes into existence through the issuance of a charter pursuant to Article 56 of the Education Law (the Charter Schools Act). Each New York State education corporation is governed by a self-selecting board of trustees that has the ability to operate one school in one or more sites for each charter that is issued to it. • School: a vehicle for the delivery of a complete educational program to students that has: independent leadership; dedicated staff; defined facilities. Note a school may be housed in more than one physical site. An education corporation’s board of trustees determines the grade range of the school, which would be set forth in the charter agreement. A school is its own Local Educational Agency (LEA) for federal program purposes, its own accountability unit for purposes of federal No Child Left Behind (NCLB) and New York Schools Under Registration Review (SURR) accountability and would qualify for federal Charter Schools Program (CSP) grant funding. It is not its own LEA for special education purposes. • Site: one of a number of facility locations for a single charter school typically representing a grade range. (For example, K-4 site, 5-8 site or 9-12 site.) A site would not be its own LEA, NCLB or SURR unit, nor would it qualify for CSP grant funding. More than one charter school building tightly clustered (i.e., a campus) would also be a “single site” under the Charter Schools Act. Educating students of the same grade level in more than one location for part of the day is also considered a single site. The number of constituent education corporations in a merger will determine the number of sites for any particular grade. For example, if three schools merge, Kindergarten may be offered in no more than three sites. • Merger or Consolidation: the legal combining of two separate education corporations such that only one education corporation remains, which may be one of the original education corporations (merger) or a new education corporation (consolidation). The original corporations are called “constituent” corporations, and the remaining corporation is called the “successor” or “resultant” corporation. • Replication: the duplication of the educational program, governance and policies and procedures of one charter school in another. The governance of replication schools may be unified or separate. It also refers to the processes, policies and procedures developed by an authorizer to permit an existing, high-performing education corporation to operate multiple schools. An Overview of the Merger Process • Per the New York Charter Schools Act of 1998, every NYS charter school is its own: – Not-for-profit education corporation; and – Local Educational Agency (LEA) for federal law and federal/state accountability, except for special education • The not-for-profit education corporation holds the charter – Not any management company or partner organization that contracts with the not-for-profit education corporation Note the following text appeared in a chart. Single Charter School Corporate Structure State University of New York Not-for-Profit Charter School Education Corporation Terms of Operation at the Corporate Level • Charter Agreement • Governance - Board of Trustees - Bylaws - Code of Ethics • Budget • Staffing Plan • Programmatic and Fiscal Audits • Closure/Dissolution Terms of Operation • Educational Program - Key Design Elements • Yearly/Daily Calendar • Policies/Processes - Hiring/Personnel - Admissions/Transfer - Student Discipline - Complaints - Transportation - Food Service - Health Services • Serving Students with Disabilities and English Language Learners • Monitoring Plan • Mission Statement • Academic Accountability Plan • Management Agreement • Facilities • Enrollment/Grades Served • Plan for Meeting Enrollment & Retention Targets • Insurance • Additional Terms New York Charter Schools Act of 1998 Before the 2010 Amendments to the Charter Schools Act: • Not-for-profit education corporations operated only one school • Replication was possible, but limited • A new not-for-profit education corporation was formed for each replicated school The May 2010 Amendments to the Act included a “fix” that would bring g the law into alignment with other nationally regarded charter laws allowing multiple pathways for merger and replication • Education Law § 2853(1)(b-1) was amended to read as follows: Brackets [ ] appear around deleted text and added text appears in all capital letters (b-1) An education corporation operating a charter school shall [not] be authorized to operate more than one school or house any grade at more than one site, provided that A CHARTER MUST BE ISSUED FOR EACH SUCH ADDITIONAL SCHOOL OR SITE IN ACCORDANCE WITH THE REQUIREMENTS FOR THE ISSUANCE OF A CHARTER PURSUANT TO THIS ARTICLE AND THAT EACH SUCH ADDITIONAL SCHOOL OR SITE SHALL COUNT AS A CHARTER ISSUED PURSUANT TO SUBDIVISION NINE OF SECTION TWENTY EIGHT HUNDRED FIFTY-TWO OF THIS ARTICLE; AND PROVIDED FURTHER THAT: (A) a charter school may operate in more than one building at a single site; and (B) a charter school which provides instruction to its students at different locations for a portion of their school day shall be deemed to be operating at a single site. New possibilities include merger, where A plus B equals either A or B New possibilities include: one not-for-profit education corporation overseeing multiple schools - Through a streamlined process, one corporation could operate multiple schools under one charter - Certificate of incorporation would be amended to allow authority to operate more than one school - Revised charter agreement governs all schools New possibilities include a feeder school model where students from elementary schools feed into middles schools and then a high school all under an education corporation. Merged Charter School Corporate Structure State University of New York Not-for-Profit Charter School Education Corporation State University of New York “Jane Doe Charter Schools” Corporate Level • Charter Agreement • Governance • Corporate Budget • Corporate Staffing Plan - Board of Trustees - Bylaws - Code of Ethics • Overall Enrollment • Programmatic and Fiscal Audits (with School-Level Schedules) • Closure/Dissolution Uniform Terms of Operation • Educational Program - Key Design Elements • Yearly/Daily Calendar • Serving Students with Disabilities and English Language Learners • Policies/Processes - Hiring/Personnel - Admissions/Transfer - Student Discipline - Complaints - Transportation - Food Service - Health Services • Monitoring Plan for All Schools • Mission Statement • Additional Terms SUNY CHARTER SCHOOLS INSTITUTE March 12, 2012 MEMORANDUM To: Members of the Board of Trustees’ Education, College Readiness and Success Committee From: Susan Miller Barker, Interim Executive Director, Charter Schools Institute Subject: Merger and Consolidation of Existing Charter Schools Accompanying this cover memo is a brief from Institute General Counsel Ralph Rossi outlining the legal aspects of allowing the board of trustees of one charter school to merge or consolidate with another charter school. The purpose of this memorandum is to provide the Committee with a general overview of the merger and consolidation process envisioned by the Institute, and to describe the potential benefits of corporate merger or consolidation to charter schools and the children they serve. Mergers, as you recall, are included in the SUNY Replication Polices approved by the Committee in January. Prior to the May 2010 amendments to the Charter Schools Act (Act), an education corporation was restricted to operating a single charter school. The May 2010 amendments to the Act, however, removed this prohibition. This amendment has two practical effects: first, operating charter schools may revise their charters to operate an additional school or site, and second, two or more operating schools may apply for a revision to merge into one education corporation operating two or more schools. When the legal language is stripped away, merger consists of the following: - Common governance. A sole board of trustees can govern two or more schools eliminating the need to have multiple education corporations formed with the same board members. Paperwork and compliance burdens are reduced when one board can make decisions across a number of schools. - Common oversight and handling of finances. The resources of several schools can be pooled and directed to appropriately oversee the finances of all the schools and the one education corporation. Smaller schools are not restricted by their enrollment in access to resources for financial oversight because of reduced income. In addition, the education corporation can have one outside audit performed on the financial statements of the sole education corporation with audited financial schedules for each school or site. This is a key cost savings over having an audit for each separate school education corporation, especially when the financial policies, reporting systems and internal controls were intentionally designed to be the same. In addition, a common education corporation budget can be developed each year with schedules for each school that would allow the education corporation to direct and share resources amongst schools in a way that was previously difficult or impossible. The single education corporation with more employees also has increased buying power in purchasing employee benefits, insurance, technology, educational materials, services and commodities, and is better positioned for financing charter school facilities. - Shared Educational Programming and Resources. Merger allows several schools the ability to share programs and staff between schools, which is the most significant advantage of merger. Students with disabilities or English language learners can now be integrated from different schools into classes at one site and receive the appropriate setting, resources and instructors. Merged schools can locate a special education or other class in any one of the schools and serve at-risk students from across all of its schools. Similarly, teachers who previously may have taught part-time at more than one school can now be hired full time by the education corporation and be deployed as needed. - Improved student access. As students must be admitted to a charter school through a lottery, access to charter schools has always been limited even for schools in the same “networks” or under common management through a charter management organization. Charter schools students receive a returning student statutory preference under the Act that allows them to return each year, but does not allow any admissions preference for another charter school. Middle and high schools require greater resources than many charter schools can afford. Merger allows separate schools to legally combine to found middle and high schools where the existing elementary schools can legally direct students with the returning student preference. In addition, an education corporation operating multiple schools can accept students into any one of their schools so long as there are seats without the parents having to apply to multiple schools. The result is greater access to charter school education. The Institute has made significant progress in developing a framework to allow existing charter schools to merge, and anticipates bringing the first round of merger or consolidation revision applications to the Committee as soon as April or May 2012 for review, consideration, and potential approval. It is important to note that a merger involves existing schools only. Merger does not create a new charter school; it simply combines existing schools under one governing board. As set forth above, merging existing charter schools charter schools – technically termed education corporations – to better serve students in a variety of ways. Several SUNY authorized charter schools have contacted the Institute to express a strong desire to take advantage of the amendments to the Act by merging. The desire to consolidate pathways between existing elementary, middle and high schools drives much of this demand. This offers students and their families additional choices in planning their K-12 education. For example, a third grade student who enters a K-5 charter school, operated by a governing board who has a charter agreement with SUNY may want, when s/he reaches sixth grade, attend a school with the same type of program, operated by the same board members under a separate charter with SUNY. Currently, that student must enter a lottery with the inherent risk of not getting admitted to the 6-8 school that continues the program s/he attended in elementary school. This is the case with Harlem Prep. The SUNY Trustees voted in 2011 to allow Harlem Prep’s restructuring renewal to go forward. Early indications are that the school’s K-4 parents and students are happy with the program and it is posting early qualitative success. Under a separate charter, in a separate building, the continuation of the Harlem Prep program called Democracy Prep is offered to grades 5-8. Fourth grade students at Harlem Prep may not automatically enroll in 5th grade at Democracy Prep, but must enter a lottery where approximately 100 students out of 1500 applicants are admitted. (That is one of the reasons why the Institute recommended a grade expansion for Harlem Prep.) Merging or consolidating charter school also allows education corporations to provide additional programming. Three of the schools who have reached out to the Institute to express interest in merging assert they would like to offer additional special education settings (collaborative team teaching or 12:1:1 class (twelve students – one special education teacher-one special education aide)). For example, each of the three schools may have 4 students whose IEPs call for the 12:1:1 setting. Rather than ask the district to educate those students, the charter schools could retain all of them in a class sited at any one of the schools if they merge. Others have indicated merger would allow schools to create stronger music programs across the education corporation. As individual charter schools tend to have smaller enrollments, what pre-merger a school with less than 100 students per grade could not do in terms of creating a robust chorus or orchestra, a merged education corporation could offer. The Institute would require all existing schools seeking to merge to complete a number of procedural tasks as set forth in the Education Law and Not-for-Profit Corporation Law (NPCL) as part of a charter revision process for each school. Notably, the schools would have to call a public meeting specifically for the purpose of voting on the merger agreement. The NPCL requires the merger agreement to address a number of elements including the transfer of all assets and liabilities of each education corporation being merger into the surviving education corporation. Again, no liabilities are avoided and no assets are removed by merging existing education corporations. All contracts, including collective bargaining agreements must be honored by the merged entity. Once these procedural steps are taken, all education corporations seeking to merge would apply to SUNY (and, if authorized by another authorizer to that authorizer) for a charter revision. The revision request would include the merger agreement, revised corporate bylaws, as well new budgets and all school policies impacted by the revision. Based on the existing policies of the SUNY Trustees, as well each school’s charter agreement, such a revision request would be deemed a material change in program, triggering formal notice to the school district of location of each merging education corporation and a public hearing in each such school district. All merger revisions would require the approval of the Education, College Readiness and Success Committee. If the merger is approved by the Education, College Readiness and Success Committee, the Institute would enter into a new proposed multi-school charter agreement with the resultant or surviving corporation. As required by the Act for all material charter revisions, the multi-school charter agreement and attachments would be forwarded on to the Board of Regents for review and approval. In a merged or consolidated education corporation, the corporate oversight of the charter schools would be centralized. However, the underlying charter schools would retain their separate character. As set forth in the SUNY Replication Policies, each charter school would continue to operate pursuant to separate accountability plans and periods, enrollment and retention targets, etc. Most importantly, the high-stakes renewal determinations would continue to be made on a school-by-school basis without regard to the overall corporate structure. The Institute has met with the State Education Department, and all parties are in agreement that charter schools authorized by different charter entities are permitted to merge under the Act. In such a scenario, the SUNY Trustees may gain the oversight of a school that had previously been chartered by a different authorizer, or they may lose the oversight of a school it had approved in the past. Both the Board of Regents and the SUNY Trustees have authorized one or more schools that offer the same or similar programs (Uncommon School, Knowledge Is Power Program, Success Academies, Manhattan Charter Schools and others). In some instances schools with these same programs, and common board members, have a few schools authorized by one authorizer, and one or more schools authorized by a different authorizer. Some of these schools would like to merge schools together into one education corporation, operating the same number of schools as before the merger (no new charters are created when existing schools merge), under one authorizer. The Institute believes that the prospect of charter merger will greatly benefit New York charter schools. While the creation of a viable path to merger and consolidation has been difficult, the Institute has been able to utilize the work already being done with respect to replication to develop thoughtful, legally sound process to implement the changes to the Act. Ultimately, merger will permit charter schools to place even greater emphasis on the needs of the children they are entrusted to educate. Attachment Copy: Senior Vice Chancellor Johanna Duncan-Poitier Success Academy Charter Schools 1-5 Merger Summary 4.17.12 Background: SUNY currently authorizes 11 charter schools that contract with the not-for-profit charter management organization Success Charter Network, Inc. (SCN). Each of these charters is a separate not-for-profit education corporation. Prior to amendments to the New York Charter Schools Act (Act) in May of 2010, each individual charter school in New York was required to be an individual not-for-profit education corporation. The 2010 amendments permit one charter school education corporation to operate more than one charter school. This may be accomplished through merger or application for a new charter to operate a new school. In either event, a single charter school education corporation would have the legal responsibility for more than one charter school. The Proposed Merger: In February 2012, four SUNY authorized and one Board of Regents authorized charter schools, Harlem Success Academy Charter Schools 11 through 5, submitted a request to merge together into Harlem Success Academy Charter School 3 (HSA 3), which would be with the sole successor corporation and be renamed “Success Academy Charter Schools-NYC.” Process: To effect the merger, the charter of each charter school education corporation requires revision so that it may merge with the successor education corporation, HSA 3. All SUNY merger revisions need to be approved by the ECRS Committee first and then by the Board of Regents. The Board of Regents originally authorized one of the schools involved in the merger, Harlem Success Academy 1 (HSA 1). The Regents therefore must approve the merger of HSA 1 into the surviving education corporation, HSA 3. Only, and not until after, the ECRS Committee acts to approve the merger request will SUNY’s Charter Schools Institute finalize all materials related to the merger and forward it to the Regents for action. Once the merger is approved, SUNY will be HSA 1’s authorizer and HSA 1’s terms of operation will mirror the terms of operation of the SUNY authorized schools. Post-merger, HSA 3 will operate all five schools under their former corporate names even though the legal name of the merged corporation will be “Success Academy Charter Schools-NYC.” This merger will not create any new charter schools and will therefore not count against the number of charter schools allowed under the Act. Each education corporation is also following the New York Not-For-Profit Corporation Law and has publicly voted and approved a plan of merger in accordance with Article 9 of that law. Both the merger and the changing of authorizers comport with the changes to the Charter Schools Act in 2010 and are first-of-their-kind revisions. Amendments: The merged education corporation will have one charter agreement with SUNY rather than five. Certain provisions of the charter agreement will apply to the HSA 3 education corporation, other provisions known as common terms of operation will apply across all the charter schools, and still other terms of operation will apply only to individual schools. For example, each school will have its own enrollment, grade range and student performance accountability plan. Certain other policies, such as admissions and student discipline policies will be uniform across all schools. The Institute conducted an academic, fiscal and legal review of the uniform and other terms of operation for HSA 3 and the schools it would operate in much the same way it reviews an application for a new charter school – a review that was largely separate from the legal review of the corporate paperwork and plan of merger. The education corporations propose a change from five separate management contracts to a single management contract with the not-for-profit charter management organization, Success Charter Network Inc. (SCN). In exchange for increased services including legal and grant services, SCN would increase its fee from 10% of per pupil charter school expense to 15%. (The expense per pupil in NYC for the 2011-12 school year is approximately $13,500, which works out to a $2,025 per student management fee if the student is enrolled for the full school year.) Some other features of the merger include: • Per the SUNY Replication Policies, student performance accountability will remain at the school level and HSA 1 will receive an accountability plan similar to all other SUNY accountability plans. • The Institute will continue to collect and monitor school-level financial information even though a single corporate audit with school-level schedules will be part of the new multischool charter agreement. The Institute will require in addition corporate level fiscal information. In the same manner as other revisions, the Institute makes a finding of fiscal soundness for the proposed merged entity. • The merger contains plans to provide enhanced special education services between schools (likely a 12:1:1 classroom) as students will have increased mobility between schools to serve at-risk populations. Timing: The merger will not be effective unless and until approved by the ECRS Committee and the Board of Regents and the tolling of the effective date in the plan of merger agreed to by each education corporation (July 1, 2012). If the ECRS Committee or Board of Regents does not approve it until after that date, the effective date will be determined at that time. Footnote: The Institute refers to the education corporation as “Harlem Success Academy Charter School 1;” however, the legal name is “Harlem Success Academy Charter School.” A Policy Framework for Charter School Replication Background, Considerations, Legal Context, Research, Implications and Policies of the Board of Trustees of the State University of New York for the Replication of Charter Schools I. Background: Meeting a Demonstrated Need The State University of New York (SUNY) is the largest charter school authorizer in New York and the largest university-based authorizer in the country. SUNY authorized charter schools lead the state’s charter sector in student achievement on state assessments in mathematics and English language arts. Despite steady growth in the number of authorized schools, demand from New York State families for more seats in SUNY authorized charter schools has far outpaced the rate at which new schools are opening. In fact, the number of students on waiting lists for admissions to SUNY authorized charter schools has increased six fold in the last five years. SUNY sought a way to be responsive to this demand without sacrificing the rigor and quality of its existing new school application review process. SUNY focused on the replication of existing successful schools as a possible area where efficiencies in its review process could be identified. While SUNY has already approved nearly 40 replications of existing, successful schools, it has largely done so one at a time and generally using the same application, contract, monitoring and renewal policies and practices as it uses for new schools. There were also other factors that supported SUNY’s focus on replication. The 2010 amendments to the New York Charter Schools Act of 1998 (Act) provided new pathways to charter replication. Charter networks and single successful independent schools across the state seek to replicate on a larger scale and at a faster pace than envisioned by SUNY’s existing authorizing practices. In order to continue SUNY’s record of granting charters to only the most worthy applicants, SUNY needed to differentiate its authorizing practices to allow for authorizing replicating organizations while maintaining the rigor and accountability for which SUNY is nationally-known. In 2011 SUNY applied for and won a competitive grant from the National Association of Charter School Authorizers (NACSA) and its Fund for Excellence in Charter School Authorizing to support its work in the area of charter school replication. Specifically, the planning grant supported a gathering of national public education leaders, Policy Matters: A SUNY Conference on Charter School Replication, which was held at SUNY Global in New York City in July 2011. New York based and national public education leaders; including fellow authorizers, national policy experts, philanthropists, civic leaders, SUNY Trustees and SUNY Charter Schools Institute (Institute) staff, and representatives from schools and charter management organizations interested in replication – engaged in a focused dialogue about the key design elements of authorizing policy specific to the replication of high quality charter schools. This national conversation was essential in shaping SUNY’s thinking about replication, and in informing the considerations and policies included in the SUNY Trustees’ policies. II. Authorizer Considerations Specific to Replication Among the issues specific to charter school replication, four in particular guide SUNY’s policy-driven approach: - Creating more high-quality charter school seats. Nationwide, a subset of charter schools has achieved extraordinary results, particularly with disadvantaged students. These include stand-alone schools, networks of schools and schools that partner with a charter management organization (CMO) or educational management organization (EMO). These high-performing charter schools have shown that it is possible for disadvantaged children to achieve at high levels, and for families to have choices better than their neighborhood schools. Through charter school replication, authorizers have a tremendous opportunity to build portfolios of high performing schools, by enabling highly-successful schools to serve more students. Indeed, that should be the goal of all replications – to increase the number of high-quality seats for students – rather than increasing quantity alone. At the same time, SUNY will continue its policy of closing low performing schools in accordance with its Practices, Policies and Procedures for the Renewal of Charter Schools Authorized by the Board of Trustees of the State University of New York (SUNY Renewal Practices) to assure the ongoing quality of the charter schools it authorizes. - Manage risk. As authorizers take on growing portfolios of charter schools, and approve network expansion to larger numbers of schools, they will unavoidably take on more risk – risks that a successful school cannot duplicate its success in another location; that the success of a dozen schools hinges on one charismatic leader; or that a successful network will exceed its capacity by opening more schools and perhaps even decreasing the performance of the original school(s), among others. Just as successful charter networks balance the need for growth against resource, human capacity, facilities and other challenges, authorizers must pursue strategies that enable them to meet the needs of growing numbers of students while maintaining a healthy level of risk in their portfolio. SUNY’s replication policies are designed to mitigate the risk inherent in replications while maintaining the highest quality standards for which SUNY has been nationally recognized. Risk assessment of replicating schools seeks to focus more heavily on capacity areas that are high risk to the network or education corporation operating multiple schools. - Increase efficiency with scale. Given current trends, SUNY will increasingly face constraints to the existing investments of time, resources and personnel it can devote to individual schools. Overseeing in excess of 100 SUNY authorized schools open or approved to open by 2012 and the recent history of declining funds at the authorizer level, make a key consideration related to replication the design of streamlined processes and capitalizing on efficiencies made available in the 2010 changes to the Act, while maintaining the SUNY’s rigorous authorizing standards. Resource gains made through replication can then be applied to the traditional one-school-at-a-time application process to promote innovative and strategic schools as well as support other volume-sensitive authorizing functions. - Maintain school-level accountability. For accountability purposes, replicated schools are held accountable in the same manner as SUNY authorized schools that are not replications. While some monitoring and special network-wide accountability will occur at the network level, academic, operational and financial performance should continue to be reported at the school level, with a primary focus on the academic success of each school’s students. In addition, certain new network or education corporation level fiscal and capacity monitoring will be required to help ensure those entities can support their schools. III. Legal Context Prior to the 2010 amendments to the Act, a charter in New York permitted only one education corporation to operate one school. SUNY replicated successful schools within this framework; largely one at a time and largely by the same process as approval of the initial school. The May 2010 amendments to the Act permit a charter school education corporation to operate the same grade at more than one site or to operate more than one school. Adding a new school to an existing education corporation or operating the same grade at more than one site costs a charter off the ‘cap’ of total number of charters allowed in the state. The Act amendments will allow SUNY to provide more high quality charter school seats and will provide new pathways to do so as well as be effective and efficient at the authorizer level. The challenge of multi-school authorizing is to do it in a way that ensures quality while not granting more charters to networks and existing schools than their human and fiscal resources can handle, and to keep the collective and individual risk of school failure low. The language of the operative Act amendment (to Education Law § 2853(1)(b-1)) reads as follows: (b-1) An education corporation operating a charter school shall [not] be authorized to operate more than one school or house any grade at more than one site, provided that a CHARTER MUST BE ISSUED FOR EACH SUCH ADDITIONAL SCHOOL OR SITE IN ACCORDANCE WITH THE REQUIREMENTS FOR THE ISSUANCE OF A CHARTER PURSUANT TO THIS ARTICLE AND THAT EACH SUCH ADDITIONAL SCHOOL OR SITE SHALL COUNT AS A CHARTER ISSUED PURSUANT TO SUBDIVISION NINE OF SECTION TWENTY EIGHT HUNDRED FIFTY-TWO OF THIS ARTICLE; AND PROVIDED FURTHER THAT: (A) a charter school may operate in more than one building at a single site; and (B) a charter school which provides instruction to its students at different locations for a portion of their school day shall be deemed to be operating at a single site. By allowing a charter school education corporation to operate more than one school, the Act amendments allow SUNY at least four new replication/multi-school/multisite pathways: - Add a new school to an existing charter. SUNY can allow the addition of a new school or schools to an existing education corporation whether or not that additional school is an exact replication of the existing school. The Act therefore permits a key legal structure of common governance of multiple schools that heretofore was impermissible, and which SUNY’s authorizing practices mimicked by allowing the same individuals to act as school trustees for multiple education corporations. (SUNY will continue the authorizing practice of allowing individuals to serve on multiple boards and for networks and schools to replicate through multiple education corporations.) - Merge or consolidate existing charter schools. As the Act permits an existing charter to operate another charter school, it follows that the additional charter school could be an existing charter school. Whether the resultant education corporation is one of the two existing corporations (merger) or a new education corporation (consolidation) the combination will have all of the same legal structures as adding a new school to an existing charter. SUNY, additionally, must make certain that corporate requirements and logistics are handled appropriately and within applicable statutes, and that schools are not permitted to merge solely to evade the consequences of student performance accountability (which provides further support for a policy of handling student performance accountability at the school level as opposed to the corporate level). - Initially charter multi-school networks. Combining by design the ability to add a new school to a charter, in this case a newly issued charter, and merger (with another newly issued charter), SUNY will be able to replicate high performing networks that do not currently operate in New York, or create sub-networks of schools intended to be replications that are legally separate from the schools upon which they are modeled. Significantly, this may be accomplished at the application stage. Permit multiple sites for existing or new schools. Under the amended Act, an individual school can have the same grade or all of its grades (essentially another school) at another site so long as SUNY is willing to reduce the number of charters available to accommodate such a request. While clearly a way to increase the number of high performing seats, SUNY would have to weigh the costs and benefits of facility arrangements that would allow similar structures without the use of a charter. A school engaging in such an arrangement would also have one aggregated accountability plan. When seeking input from the charter sector, SUNY has not seen interest in multi-site arrangement as compared to the above multi-school options under the amended Act. - Separation of corporate renewal from school renewal. One education corporation operating multiple schools that began operation at different times and therefore are at different stages of their accountability plans necessarily presents challenges to SUNY’s renewal process. The current renewal process was designed for one school with one accountability plan even if it operated with multiple campuses (of different grades) in multiple locations. The high stakes closure decision at the center of renewal turns on whether the school has met the student performance goals in its accountability plan. Under SUNY’s existing policies, the corporate renewal of the education corporation’s certificate of incorporation and the school’s high stakes closure/renewal decision are always intertwined. Replication presents a challenge because schools within the same education corporation could need to be reviewed pursuant to their individual accountability plans every year or more than once in a year; and the corporate existence of the school would not need to be reviewed except once every three or five years. The amendments to the Act and conservation of authorizer resources necessitate a system where every school receives its high stakes closure decision at an appropriate time and the corporate renewal (so long as it is justified) takes place before the end of the charter term. It is likely that the SUNY Renewal Practices will have to be amended and systems put in place to fulfill the minimum legal requirements of corporate charter renewal (which were not modified by the amendments to the Act) and maintain the individual school accountability policies of the SUNY Trustees. IV. Research Findings SUNY commissioned an external environmental scan of research and best practices from the education, non-profit and corporate sectors on successful growth and replication (full report available at: www.newyorkcharters.org/conference/documents/PublicImpact EnvironmentalScanforSUNYPolicyMatters.doc). The scan included a document review of any existing replication-specific policies and practices currently in place at SUNY and other authorizers across the country. Armed with this research, representatives from the New York State Education Department; the New York City Department of Education; the Office of New Schools, Chicago Public Schools; Volunteers of America-Minnesota; The Center for Charter Schools, Central Michigan University; the DC Public Charter Schools Board and the National Association of Charter School Authorizers joined SUNY Trustees and staff and a number of other distinguished guests to discuss the implications for constructing strong policies to guide authorizing work that directly addresses replicating schools. A complete list of conference attendees is available at: www.newyorkcharters.org/conference/documents/AttendeeList.xlsx. Key research findings relevant to SUNY’s replication policies include: - The replication of proven successful charter schools is a critical tool for increasing the number and accelerating the growth of high-quality public schools. - Experts suggest that authorizers should permit replication only of those schools with proven track records of success and the capacity to replicate successfully while sustaining excellence at existing schools. Experts have noted the importance of authorizers articulating clear definitions of school quality and systems to measure it in order to make decisions about renewal and replication. - Scaling up successful ventures presents some specific challenges, for schools and for organizations outside of education. - Experts note the importance of strong statewide authorizers to facilitate growth of high-quality charter schools. - Researchers have documented the importance of frequent, hands-on monitoring to school oversight, particularly in the context of rapid growth. Particularly with replications, strong school-level relationships and accountability are crucial to detect and capitalize on successes, and to detect and intervene when an effort is off track. - According to NACSA, “A quality authorizer executes contracts with charter schools that articulate the rights and responsibilities of each party regarding school autonomy, funding, administration and oversight, outcomes, measures for evaluating success or failure, performance consequences, and other material terms.” - Some multi-school efforts struggle to balance the need for faithful replication of their original model with the conflicting need to vary their successful designs to address local needs. Network central offices also confront tension between supporting new schools with key challenges, as district offices do, and structuring relationships with individual schools to encourage decentralized control and school-level autonomy. Those that opt to decentralize may do so at the cost of creating a common network-wide culture or ensuring fidelity to their models. Scaling up also brings new challenges to successful schools, such as how quickly to grow, where to site new schools, and what kinds of alliances to form with other networks, schools, districts, and community-based organizations. - National best practice focuses on performance at the school level and will help prevent problems at one school from jeopardizing programs at other schools in a network or other multi-school effort. This is in addition to monitoring network and board activities to ascertain legal, fiscal, or other issues that may impact performance across schools. V. Implications - The SUNY Trustees created the Institute in 1999 to assist it in carrying out its responsibilities as a state-wide charter school authorizer. The work of the Institute is guided by SUNY Trustees’ policies and priorities. Any new charter-related policies will necessitate modifications of or additions to Institute practices and the supporting tools and documents. For example, the Institute may need to develop new replication- specific application(s), a modified charter contract and new school evaluation protocols. - The intent of SUNY’s replication policies is to continue SUNY’s record of chartering strong schools as successful programs to serve more students, but in a way that deliberately ensures quality. SUNY anticipates a measured, but marked increase in new school seats both in the short- and long-term as more existing charter schools demonstrate their interest in and qualification for replication. - SUNY will evaluate the effectiveness of the policies and is committed to continuous quality improvement. It is also expected that lessons learned as part of its replication work will inform not only refinements to the replication policies and practices, but also improvements to SUNY’s already award-winning one-at-a-time authorizing practices which will remain a key component of SUNY’s now differentiated approach to charter school authorizing. - SUNY is the largest comprehensive system of public higher education in the United States. SUNY has made an unprecedented commitment to K-12 education as part of its efforts to strengthen the education pipeline from birth to career in New York State. SUNY’s replication work, particularly its focus on approving replications of schools that have a demonstrated level of success, will facilitate SUNY’s research and dissemination efforts around charter school best practices to the broader public education communities in New York and beyond. VI. Policies of the Board of Trustees of the State University of New York for the Replication of Charter Schools The Board of Trustees of the State University of New York (SUNY Trustees) is a “charter entity” or authorizer of charter schools with statewide authority pursuant to the New York Charter Schools Act of 1998 (Act) to approve, oversee and renew education corporations that operate charter schools. The SUNY Trustees created the SUNY Charter Schools Institute (Institute) in 1999 to assist them in carrying out their responsibilities under the Act. A. Policy Scope The SUNY Trustees have developed the Policies of the Board of Trustees of the State University of New York for the Replication of Charter Schools (SUNY Replication Policies) to guide their charge to the Institute regarding replication and their decisions regarding charter school replication, merger and consolidation including the approval of new applications, the ongoing oversight and evaluation of approved schools, and renewal processes and criteria. B. Purpose and Policy Statement The SUNY Trustees support the replication of high quality charter schools for the purposes of creating more quality charter school seats in New York and better allocating educational resources to serve New York students. SUNY recognizes that replication of proven successful charter schools is a critical tool for increasing the number and accelerating the growth of high-quality public schools. SUNY will maintain its commitment to student academic achievement and to holding charter schools accountable for high student performance outcomes as it makes decisions regarding charter school replication. C. Definitions and Policy Application Charter school replication is defined broadly in this policy and applies to each of the following arrangements. All of the terms below are generally referred to as “replication” in this policy even though that term has a more specific meaning in practice and in context herein. - Replication. The practice of: 1) a single charter school education corporation; or, 2) the same individuals acting as the board of trustees for several education corporations, operating several schools that are each based on the same or a similar model. The term “replication” includes each of the following arrangements. - Multi-school. The practice of one education corporation with an existing school operating additional schools. - Merger. The legal combination of two existing education corporations each of which operates one or more schools into a single successor corporation that is one of the original corporations, which will operate more than one school. - Consolidation. The legal combination of two existing education corporations each of which operates one or more schools into a third successor education corporation, which will operate more than one school. - New Networks. The initial chartering of new charter school networks through a combination of multiple new applications of the same design and merger of the newly -approved education corporations shortly thereafter. - Multisite. The practice of operating the same grade or grades at multiple sites under one education corporation with common governance and leadership. SUNY will consider replication or merger of high quality charter schools whether they are independent schools, schools that have not yet replicated, schools that have already replicated, schools that are part of a network, schools affiliated with a particular management organization or schools that have distinct corporate existence. D. Policy Statements Application and Application Review Processes Policy 1: SUNY will consider replication applications as described above but will maintain application quality standards for all replication applications, which shall be at least as rigorous as those for traditional new school applications. Replication applications must have a high likelihood of improving student learning and academic achievement. Policy 2: SUNY shall offer an “expedited” or streamlined application process specifically for replication applicants who can demonstrate that they have met specific academic performance criteria, but meeting such criteria shall not alone qualify an application for approval. Policy 3: Applicants may be deemed eligible to enter an expedited application process if they have compiled a strong and compelling record of meeting or nearly meeting the original school’s accountability plan goals (or similar standards for one or more existing schools not authorized by SUNY) to be determined by the SUNY Charter Schools Institute. Policy 4: Prior to approval of any replication application a due diligence review of the education corporation, its management partners and partner organizations shall be conducted. Policy 5: The decision to approve another individual school for an existing education corporation pursuant to a replication application, or the decision to approve the merger or consolidation of existing education corporations may be left to the sound discretion of the SUNY Trustees’ Education, College Readiness and Success Committee (Committee) or a similar committee. The action of the Committee shall be final; applicants may not appeal to the SUNY Trustees. Policy 6: The SUNY Trustees or their delegees will maintain close oversight of the replication process through specific approval of each new education corporation or school which is part of a replication, i.e., the SUNY Trustees will not delegate such approval to an education corporation, charter management organization or network. Oversight, Evaluation Revocation and Renewal Policy 7: The performance of each school within an education corporation will continue to be assessed based on its own student achievement data in accordance with the SUNY Renewal Practices, and not based on an aggregation of data across the corporation or network. Each individual school will continue to face a high stakes closure decision in alignment with the SUNY Renewal Practices. Policy 8: The closure of an individual school or site operated by an education corporation that operates multiple schools or sites (as opposed to closure of an entire education corporation as described in the SUNY Renewal Practices ), may be handled by the Committee in conformity with the SUNY Renewal Practices. The full SUNY Board would retain authority to not renew an education corporation or to close the last (or only) school in a network or single school education corporation. Policy 9: Charter school education corporations shall not be permitted to avoid the consequences of school closure by attempting to merge or consolidate with a higher performing education corporation. This prohibition would extend to schools authorized by other charter entities in New York State seeking to merge or consolidate with a SUNY authorized charter school. E. Supplemental Practices, Policies and Procedures The SUNY Replication Policies provide an overview of the policies governing approval, monitoring and renewal of replication and describe its central elements; they do not delineate every detail of the process employed by the SUNY Trustees, the Trustees’ Education, College Readiness and Success Committee or the Institute. Supplemental, interstitial practices and procedures may be required and employed to ensure the integrity, comprehensiveness and excellence of its charter school program and replications in particular. Such amendments and supplements, if material, may be made either through action of the SUNY Trustees or, where appropriate, the Education, College Readiness and Success Committee or the Institute. F. Amendment, Effective Date, and Scope The SUNY Replication Policies may be amended by the Trustees’ Education, College Readiness and Success Committee or by the SUNY Trustees, as the case may be. Amendments shall be effective upon passage of a duly approved resolution by either body or upon such date as may be set forth therein. If one section or clause of the SUNY Replication Policies is found to be unlawful by a court of competent jurisdiction it shall not affect the other parts of the SUNY Replication Policies or references thereto in charter agreements. The SUNY Replication Policies do not limit the discretion or authority of the SUNY Trustees as a charter entity as set forth in the Act.