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Application
Texas Credit Enhancement Program (TCEP) For Texas Open-Enrollment Charter Schools
Adopted by the Texas Public Finance Authority Charter School Finance Corporation
April 24, 2006
Table of Contents
Introduction 2Background 2Amount of Funding 2Allowable Uses of Funds 2Criteria 2Timeline 3Submission Instructions 3
Signature Page 4
Application Questions 5Introductory Information 5Section A. Mission Clarity and Fulfillment 8Section B. Governance 11Section C. Local Characteristics 14Section D. Viability of and Need for Project 18Section E. Financial Strength 22
Scoring Matrix 27
Rules of the Texas Public Finance Authority Charter School 30Finance Corporation
Consortium Contact Information 33
Introduction Background
The Texas Credit Enhancement Program (“TCEP”) for Texas open-enrollment charter schools was established to provide a guarantee fund for issuing tax exempt revenue bonds to provide financing for the acquisition, construction, repair, or renovation of Texas charter school facilities, including refinancing of facilities debt within federal program guidelines. (Federal program guidelines require that new construction or renovation be part of any project approved through this grant application.) This application is for an allocation of the credit enhancement guarantee fund. Schools will receive no grant funds directly.
A consortium of Texas entities was awarded a federal grant to create the guarantee fund. The consortium consists of the Texas Public Finance Authority Charter School Finance Corporation (“CSFC”), the Resource Center for Charter Schools (“RCCS”) in San Antonio, and the Texas Education Agency (“TEA”). The CSFC is a non-profit corporation created by the Board of Directors of the Texas Public Finance Authority (“TPFA”), a state agency, pursuant to Section 53.351 of the Texas Education Code. The rules of the CSFC are included as an attachment to this application.TPFA provides administrative and staff support for the CSFC. The CSFC is the entity responsible for awarding access to TCEP grant funds.
Charter schools are welcome to contact the consortium representatives for guidance during the application development process. Contact TPFA Executive Director Kimberly Edwards at [email protected] for information on the bond issuance process; Erika Pierce, TEA, at [email protected] for help gathering relevant TEA-generated data; or Patsy O’Neill (RCCS) at [email protected] for other questions. Two TCEP information sessions will be held in Spring 2006. See the timeline section of this application for details. (Links in this application are provided for information purposes only. They are not live.)
Amount of FundingThe guarantee fund currently contains approximately $7,000,000. It is estimated that this amount could guarantee between $70,000,000 to $80,000,000 in total debt. So that the fund can serve as many charter schools as possible, charters may not apply for access to more than $1,000,000 of the guarantee fund per series of bonds nor more than $3,000,000 maximum per charter holder.
Allowable Uses of Grant and Bond FundsThe TCEP guarantee fund may be allocated to bonds issued on behalf of Texas open-enrollment charter schools to finance the acquisition, construction, repair, or renovation of Texas charter school facilities or the refinancing of bonds including refinancing of facilities debt, within federal program guidelines. However, in the event that applicable state law is amended to permit the use of TCEP funds for other purposes, applications will be considered in accordance with law in effect at the time grant funds are awarded.
CriteriaIn order to be eligible for the TCEP, a charter must (1) meet the federal definition of “charter school” (given in the instructions for Attachment B on Page 6); (2) have earned no rating lower than Academically Acceptable or AEA: Academically Acceptable in the state accountability system at the district or campus level for two consecutive years, including the 2006 rating; and (3) earned a satisfactory rating in the 2006 School Financial Integrity Rating System of Texas (FIRST), as modified for charter schools. Although, as of the publication date of this application, the Texas Legislature had not applied FIRST to charter schools, the Texas Education Agency will compute a rating for the purpose of this grant.
Access to grant funds will be awarded based on a combination of elements, including application scores, agency staff recommendations, and other criteria decided upon by the CSFC board. The CSFC will vote on TCEP applications at one or more public meetings. Applicants will be notified of the date(s), time(s), and location(s) of these meetings.
Criteria (continued)Grantees will forfeit access to grant funds if the proposed financing does not close within 12 months after the award of access to the TCEP fund. A grantee that has forfeited access to grant funds is not prohibited from applying for an award again.
TimelineThis timeline will be used for the first round of applications (those due on September 15, 2006) only. After this application cycle, charter schools may apply for access to grant funds at any time, subject to the continuing availability of grant funds.
TIMELINE
April 26, 2006
May 15, 2006 & May 23, 2006
September 15, 2006 at 5:00pm
September-November 2006
January-March 2007
Submission InstructionsApplicants must submit the original plus five copies of the application – six (6) total complete applications. The “application” includes (1) the application form to be filled out on the computer (www.tpfa.state.tx.us) and (2) relevant requested attachments. The application should be printed once it is completed on the computer, and the signature page should be signed. The attachments are to be labeled as directed and must be included in the order specified. If some attachments are not relevant to an application, they may be left out, but the remaining attachments must be labeled as originally requested. Attachments must be typed in Arial or Times New Roman font, in no smaller than 11-point type on one side of 8 ½ x 11 inch white paper. Page numbers must be included on all pages.
Applications must be received by by the deadline (5:00 p.m., September 15, 2006) in the office of the Texas Public Finance Authority, William P. Clements Building, 300 W. 15th Street, Suite 411, Austin, Texas 78701.
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Application Published.Texas Credit Enhancement Program for Open-Enrollment Charter Schools Application Published.
Applicant Conferences HeldThese meetings are optional but recommended. The same information will be covered at each meeting. They will both be held at 1:30 p.m. in Room 1-104, in the William B. Travis Building, 1701 N. Congress, Austin, Texas 78701.
Applications Submitted
by
Consortium Members Prepare Applications for Considerationby the Charter School Finance Corporation Board
Charter School Finance Corporation Board Allocates Access to TCEP
Texas Credit Enhancement ProgramApplication
TCEP applications must be received by the deadline (5:00 p.m., September 15, 2006) in the office of the Texas Public Finance Authority, William P. Clements Building, 300 W. 15th Street, Suite 411, Austin, Texas 78701.
The signature of the chair of the governing body of the charter holder indicates that all of the statements made and the information contained in this application are accurate.
Signature Date
3
Introductory InformationGRANT FUNDS REQUESTED (estimated amount):
Estimated Amount of Grant Funds Requested:
(This is the estimated size of the debt service reserve fund for the proposed project. Because the exact amount cannot be calculated until bonds are issued, please provide an estimated amount for purposes of awarding access to the TCEP fund. The debt service reserve fund will likely be about one-tenth of the total cost of the project. For example, a bond issue of $7 million probably would require a debt service reserve fund of about $700,000.)
CHARTER SCHOOL INFORMATION:Name of Charter School:
Name of Charter School Superintendent (or Equivalent):
Mailing Address: Physical Address(es):
Phone Number, Charter School:
Email Address, Charter School:
Does the school operate in an owned facility? Yes No
Does the school operate in a leased facility? Yes NoCHARTER HOLDER INFORMATION:
Legal Name of Charter Holder:
Name of Chairperson of Charter Holder Governing Board:
Mailing Address, Chairperson: Phone Number, Chairperson:
Email Address, Chairperson:
BOND COUNSEL INFORMATION: Name of Bond Counsel (if available):
Mailing Address, Counsel:
Phone Number, Counsel:
Email Address, Counsel:
OTHER LEGAL COUNSEL INFORMATION:Name of Other Legal Counsel:
Mailing Address, Counsel:
Phone Number, Counsel:
Email Address, Counsel:
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Introductory Information (continued)FINANCIAL ADVISOR INFORMATION:
Name of Financial Advisor(s):
Mailing Address, Financial Advisor(s):
Phone Number, Financial Advisor(s):
Email Address, Financial Advisor(s):
AUDITOR INFORMATION:Name of Auditor:
Mailing Address, Auditor:
Phone Number, Auditor:
Email Address, Auditor:
ARCHITECT INFORMATION: Name of Architect (if any):
Mailing Address, Architect:
Phone Number, Architect:
Email Address, Architect:
STRUCTURAL ENGINEER INFORMATION: Name of Structural Engineer (if any):
Mailing Address, Engineer:
Phone Number, Engineer:
Email Address, Engineer:
OTHER DESIGN PROFESSIONAL INFORMATION: Other Design Professional (if any):
Profession:
Mailing Address, Design Professional: Phone Number, Design Professional:
Email Address, Design Professional:
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Attachments to be submitted as part of this section:
ATTACHMENTS TO BE SUBMITTED AS PART OF THIS SECTION
Attachment A – A copy of the minutes of the meeting of the governing body of the charter holder during which the body voted to apply to the TCEP.
Attachment B – A notarized board resolution showing the name of each member of the governing body and the signature of each member who voted to apply to the TCEP. The resolution must clearly state the intention of the board to apply to the TCEP and must also state that the charter school meets the federal definition of “charter school”and will continue to meet the definition for as long as grant funds are being used by the school. The definition is provided below. Please read the definition carefully. Note especially (E)-(K).
FEDERAL DEFINITION OF A CHARTER SCHOOL
Under Public Law 107-110, Title V, Part B, Section 5210, the term charter school means a public school that:
(A) in accordance with a specific State statute authorizing the granting of charters to schools, is exempt from significant State or local rules that inhibit the flexible operation and management of public schools, but not from any rules relating to the other requirements of this paragraph;
(B) is created by a developer as a public school, or is adapted by a developer from an existing public school, and is operated under public supervision and direction;
(C) operates in pursuit of a specific set of educational objectives determined by the school's developer and agreed to by the authorized public chartering agency;
(D) provides a program of elementary or secondary education, or both;
(E) is nonsectarian in its programs, admissions policies, employment practices, and all other operations, and is not affiliated with a sectarian school or religious institution;
(F) does not charge tuition;
(G) complies with the Age Discrimination Act of 1975, title VI of the Civil Rights Act of 1964, title IX of the Education Amendments of 1972, section 504 of the Rehabilitation Act of 1973, and part B of the Individuals with Disabilities Education Act;
(H) is a school to which parents choose to send their children, and that admits students on the basis of a lottery, if more students apply for admission than can be accommodated;
(I) agrees to comply with the same Federal and State audit requirements as do other elementary schools and secondary schools in the State, unless such requirements are specifically waived for the purpose of this program;
(J) meets all applicable Federal, State, and local health and safety requirements;
(K) operates in accordance with State law; and
(L) has a written performance contract with the authorized public chartering agency in the State that includes a description of how student performance will be measured in charter schools pursuant to State assessments that are required of other schools and pursuant to any other assessments mutually agreeable to the authorized public chartering agency and the charter
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school.
Section A. Mission Clarity and FulfillmentQUESTION ONE – SECTION A:
1. QUESTION ONE – SECTION A:
In the space provided below, describe the school’s mission in succint terms. Include information about the founding and other history of the school, if necessary.
Submit, as Attachment C, a copy of the charter holder’s 501(c)(3) determination letter from the Internal Revenue Service (IRS).
QUESTION TWO - SECTION A:
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2. QUESTION TWO - SECTION A:
Describe and define the measurable standards that are used by the school to determine whether the mission is being fulfilled?
Section A. Mission Clarity and Fulfillment (continued)QUESTION THREE - SECTION A:
3. QUESTION THREE - SECTION A:
Demonstrate that the school is fulfilling its mission, based on the measurable standards described in Number 2.
3
3
Section A. Mission Clarity and Fulfillment (continued)QUESTION FOUR- SECTION A:
4. QUESTION FOUR - SECTION A: State the 2005 and 2006 accountability ratings of the charter and each of its campuses. If the charter holder operates more than three campuses under the same charter, please note that in the comments box and attach another page containing this information. List any 2006 ratings that are under appeal and attach copies of the appeal documents filed in support of the appeal and any response received from the TEA.
DISTRICT DATA
Charter NameCounty
District #District Rating
2005District Rating
2006
2006 District Rating
Appealed? Click Here Click Here Click Here
CAMPUS DATA
Campus Name Campus #Campus Rating
2005Campus Rating
2006
2006 Campus Rating
Appealed? Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click HereComments, if necessary:
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Section B. GovernanceQUESTION ONE – SECTION B:
1. QUESTION ONE – SECTION B:
19 TAC §100.1033(c)(6)(C) requires the governing body of the charter holder to retain authority over all non-delegable duties. State which, if any, duties have been delegated by the governing body of the charter holder to another entity or person.
QUESTION TWO – SECTION B:2. QUESTION TWO – SECTION B:
Does the governing body of the charter holder operate according to its adopted bylaws? Yes No Submit, as Attachment D, a copy of the charter holder’s adopted bylaws.
Comments, if necessary:
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Section B. Governance (continued)QUESTION THREE – SECTION B
3. QUESTION THREE – SECTION B
Are the members of the governing body of the charter holder (as defined by 19 TAC §100.1011(16)) in compliance with the training requirements in Texas Education Code, §12.123)? Yes NoComments, if necessary:
Are the members of the governing body of the charter school, if any, (as defined by 19 TAC §100.1011(16)) in compliance with the training requirements in Texas Education Code, §12.123)? Yes NoComments, if necessary:
Are the school officers (as defined by 19 TAC §100.1011(16)) in compliance with the training requirements in Texas Education Code, §12.123)? Yes NoComments, if necessary:
QUESTION FOUR – SECTION B:4. QUESTION FOUR – SECTION B:
Has the governing body of the charter holder adopted the following policies? Check all that apply:
A student code of conduct that complies with state law. Yes No
Employment policies and procedures that comply with state and federal law, including but not limited to employment discrimination, sexual harassment, Americans with Disabilities Act, Family and Medical Leave Act, workers' compensation, and employee grievance and discipline. Yes No
Policies on reporting child abuse and the administration of medication that comply with state law. Yes No
A complaint process policy for students and parents that complies with state law and TEA regulations. Yes No
A state Public Information Act policy and procedure. Yes No
Family Educational Rights and Privacy Act (FERPA) policies that comply with state and federal law. Yes No
Special education and bilingual/English as a second language policies that comply with state and federal law and TEA regulations. Yes No
Investment policies. Yes No
Policies that comply with state law for the procurement of services of construction professionals, including architects, engineers, and design professionals. Yes No
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Section B. Governance (continued)QUESTION FIVE – SECTION B:
5. QUESTION FIVE – SECTION B:
Is the school or any of its administrators, employees or directors involved in litigation regarding the school? Yes No
Would any pending litigation have a material impact on operations or financial condition of the charter holder? Yes No
If so, please explain.
Other attachment to be submitted as part of this section:
Attachment E – Professional biographies of all board members and key staff (e.g., superintendent, chief operating officer, chief financial officer, principals).
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Section C. Local CharacteristicsQUESTION ONE – SECTION C:
1. QUESTION ONE – SECTION C:
In which traditional independent school district (ISD) is the charter school physically located? (If the charter has campuses that are physically located in more than one district, please list the ISD(s) in which the charter campus(es) whose facilities would benefit from the TCEP is (are) located.
Name of Charter School and/or Campus:Name of Tradional ISD the Charter School and/or
Campus is Physically Located:
Was (were) the school district(s) named above placed on Title I School Improvement status in 2005? Yes No
TIP: You may find the 2005 School Improvement status list at http://www.tea.state.tx.us/nclb/PDF/SIPDistrict.pdf. If you need help finding the correct School Improvement status, please call TEA’s Division of Charter Schools at (512) 463-9575.
QUESTION TWO– SECTION C:2. QUESTION TWO– SECTION C:
Were any campuses of the school district(s) named in Number 1 placed on Title School Improvement status in 2005? Yes No
TIP: You may find the 2005 School Improvement status list at http://www.tea.state.tx.us/nclb/PDF/SIPCampus.pdf. If you need help finding the correct School Improvement status, please call TEA’s Division of Charter Schools at (512) 463-9575.
Section C. Local Characteristics (continued)QUESTION THREE – SECTION C:
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3. QUESTION THREE – SECTION C:
What was (were) the 2005 and the (preliminary) 2006 accountability rating(s) of the school district(s) named in Number 1?
Name of Tradional School District in Number 12005 District Rating
(For Tradional ISD(s))
2006 Preliminary District Rating
(For Tradional ISD(s)) Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here Click Here
TIP: Accountability ratings may be found at http://www.tea.state.tx.us/perfreport/account/. If you need help finding the correct accountability rating, please call TEA’s Division of Charter Schools at (512) 463-9575.
Section C. Local Characteristics (continued)QUESTION FOUR – SECTION C:
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4. QUESTION FOUR – SECTION C::
What percentage of the students served by the ISD(s) named in Number 1 are economically disadvantaged?
Name of Tradional School District in Number 1Percentage of Students That are Economically
Disadvantaged
TIP: This percentage may be found on the district’s most current Academic Excellence Indicator System (AEIS) report, which can be found at http://www.tea.state.tx.us/perfreport/aeis/. The “economically disadvantaged” category is usually found between the middle and the end of the AEIS reports. If you need help finding the correct AEIS report, please call TEA’s Division of Charter Schools at (512) 463-9575.
Section C. Local Characteristics (continued)QUESTION FIVE – SECTION C:
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5. QUESTION FIVE– SECTION C:
What percentage of the students served by the campus(es) that would be part of the proposed project are economically disadvantaged?
Name of the Charter Campuses Campus No.Percentage of Economically
Disadvantaged Students
TIP: This percentage may be found on the most current campus Academic Excellence Indicator System (AEIS) report, which can be found at http://www.tea.state.tx.us/perfreport/aeis/. The “economically disadvantaged” category is usually found between the middle and the end of the AEIS reports. If you need help finding the correct AEIS report, please call TEA’s Division of Charter Schools at (512) 463-9575.
Section D. Viability of and Need for ProjectQUESTION ONE – SECTION D:
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1. QUESTION ONE – SECTION D:
In the space provided below, describe the proposed project.
Attachments to be submitted as part of this question (question one):
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Attachment F – A legal description of any real property, if the project is to include the acquisition of real property, new construction, or renovation of existing facilities.
Attachment G – The proposed project budget, including the anticipated par amount of the financing or bond issue and the amount of TCEP funds requested. So that the fund can serve as many charter schools as possible, charters may not apply for access to more than $1,000,000 of the guarantee fund per series of bonds nor more than $3,000,000 total per charter holder.
Attachment H – A description of the sources and amounts of any other funds to be used for the project in addition to the proceeds of the proposed bond issuance.
Attachment I – A project expenditure schedule showing projected expenditures of bond proceeds for each month of the project.
Attachment J – A letter showing the results of the Phase I environmental assessment, if one has been completed
Attachment K – Copies of your design professional’s (architect and/or engineer) plans, specifications, or drawings.
Attachment L – The charter’s long-range facilities plan.
Section D. Viability of and Need for Project (continued)QUESTION TWO – SECTION D:
2. QUESTION TWO – SECTION D:
Are the current school facilities of the campus or campuses that would be part of the proposed project at capacity? Yes No
Describe any current facilities to be renovated or replaced as part of the proposed project. Include in the description the location, size, purpose, age, condition, current student capacity, and current enrollment of the facilities.
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Section D. Viability of and Need for Project (continued)QUESTION THREE– SECTION D:
3. QUESTION THREE – SECTION D:
Describe the school’s process for compiling and updating the student admissions waiting list. Submit, as Attachment M, a list showing the number of students on the waiting list at each grade
level or a statement that the school does not have a waiting list.
Section D. Viability of and Need for Project (continued)QUESTION FOUR– SECTION D:
4. QUESTION FOUR – SECTION D:
State the enrollment, as of the October PEIMS Snapshot date in 2003, 2004, and 2005, of the campus or campuses that are part of the proposed project. If the campus or any of the campuses have not been operating in each of these years, then give the information for the relevant years.
Campus Name Campus No.Enrollment
2003Enrollment
2004Enrollment
2005
TIP: The school should have records regarding the student enrollment information it submitted for each of these years. The following webpage contains the requested information for 2003 and, perhaps, 2004: http://www.tea.state.tx.us/perfreport/aeis/. If you need help finding this information, please call TEA’s Division of Charter Schools at (512) 463-9575.
Section E. Financial Strength
QUESTION ONE – SECTION E:1. QUESTION ONE – SECTION E:
What is the charter’s 2006 FIRST rating? (Although, as of the publication date of this application, the Texas Legislature had not applied FIRST to charter schools, the Texas Education Agency (TEA) will compute a rating for the purpose of this grant. If you do not know the charter’s rating, please contact the TEA Division of Charter Schools at (512) 463-9575.)
QUESTION TWO – SECTION E:2. QUESTION TWO – SECTION E:
Who would serve on the proposed project’s financial management team and what are their qualifications?
Section E. Financial Strength (continued) QUESTION THREE– SECTION E:
3. QUESTION THREE – SECTION E:
Who would serve on the proposed project’s construction management team and what are their qualifications?
Section E. Financial Strength (continued)
QUESTION FOUR – SECTION E:4. QUESTION FOUR – SECTION E:
Describe the charter holder’s contingency plans to sustain revenues in an emergency. (For instance, a charter might hold property and casualty insurance on owned facilities or business interruption insurance on leased facilities.)
Submit, as Attachment N, a copy of the lease(s) or proof of ownership status (such as documentation from a mortgage holder) for buildings and/or property involved in the proposed project.
QUESTION FIVE – SECTION E:5. QUESTION FIVE – SECTION E:
Has the charter holder received unqualified audit opinions for each of the last three years? Yes No
Submit, as Attachment O, copies of the audited financial statements for the last three years, or for each year of operation, if less than three.
Section E. Financial Strength (continued)
QUESTION SIX– SECTION E:6. QUESTION SIX – SECTION E:
Describe any previous financing of the charter holder’s capital facilities, including grants, bank loans, or bond issues.
If bonds have been previously issued on behalf of the charter holder, state the par amount, the issue date, and the name of the issuer, and submit, as Attachment P, copies of the final official statements from each bond issue.
QUESTION SEVEN – SECTION E:7. QUESTION SEVEN – SECTION E:
Has the charter holder ever requested a formal or informal bond rating? Yes No If a rating was given, submit, as Attachment Q, a copy of the rating report.
QUESTION EIGHT – SECTION E:8. QUESTION EIGHT – SECTION E:
Have the bond documents for the proposed project been drafted? Yes No If so, submit, as Attachment R, copies of the drafted Preliminary Official Statement, trust indenture,
bond resolution, and loan agreement.
QUESTION NINE – SECTION E:9. QUESTION NINE – SECTION E:
Has a property appraisal for the proposed project been conducted? Yes No If so, submit, as Attachment S, a copy of the appraisal report.
Section E. Financial Strength (continued)
QUESTION TEN– SECTION E:10. QUESTION TEN – SECTION E:
Discuss the school’s fundraising program and/or the endowment, if either exists.
Other attachments to be submitted as part of Section E:
Attachment T – The current year operating budget, and projections for the following three years. Attachment U – A description of the charter holder’s budgeting procedures and long-term financial
and capital planning process. Include, if available, policies for maintaining an appropriate cash balance, expenditure of fund balance, funding maintenance, and establishing reserve and replacement funds, and include any related documents .
Attachment V – A financial analysis including estimated sources and uses of bond funds, proposed debt structure, debt service schedule, and revenue or coverage projections. Clearly identify the projected enrollment or enrollment assumptions on which these projections are made.
Attachment W – A ten-year cash flow projection, including the proposed bond issue. Clearly identify the projected enrollment or enrollment assumptions on which these projections are made.
Scoring MatrixName of Charter Holder:
Amount Requested:
TPFA Scorer's Name:
Date of TPFA Scoring:
TEA Scorer's Name:
Date of TEA Scoring:
Strongly Disagree
or No
Strongly Agree
or Yes
Max pts
% of Total
Section A. Mission Clarity and Success 40 12.31%
1 The charter’s mission is clearly described. 0 1 2 3 4 5
2Meaningful measures are used to determine whether the charter is fulfilling its mission.
0 1 2 3 4 5
3The charter is fulfilling its stated mission based on these measures.
0 2 4 6 8 10
4The charter earned a district-level rating of Recognized (3 points) or Exemplary (5 points) in 2005.
0 3 5
5The charter earned a district-level rating of Recognized (3 points) or Exemplary (5 points) in 2006.
0 3 5
6One or more of the charter’s campuses earned a rating of Recognized or Exemplary in 2005.
0 3 5
7One or more of the charter’s campuses earned a rating of Recognized or Exemplary in 2006.
0 3 5
Section Totals 0 40
Section B. Governance 50 15.38%
1The governing body of the charter holder maintains authority over all non-delegable duties
0 10
2The chair of the governing body of the charter holder states that the body functions according to its adopted bylaws
0 5
3
The chair of the governing body of the charter holder states that (1) the members of the governing body of the charter holder, (2) the members of the governing body of the charter school (if such a body exists), and (3) school officers (as defined by 19 TAC §100.1011(16)) are in compliance with the training requirements in Texas Education Code, §12.123
0 5
4The chair of the governing body of the charter holder states that it has adopted the policies listed in Question B4.
0 10
5
The chair of the governing body states that no pending litigation would have a material impact on operations or financial condition, based on the standard of materiality defined by FASB.
0 10
6The biographies of the members of the governing body of the charter holder and key staff show expertise in education, finance, and/or management.
0 2 4 6 8 10
Section Totals 0 50
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Scoring Matrix (continued)Section C. Local Characteristics 30 9.23%
1
The relevant charter campus is physically located within an independent school district (ISD) that has been placed on Title I School Improvement status in 2005. (If more than one charter campus is part of the grant application, and if any of the campuses meets this criterion, then “yes.”)
0 5
2
The relevant charter campus is physically located within an ISD that has at least one ISD campus that has been placed on Title I School Improvement status in 2005. (If more than one charter campus is part of the grant application, and if any of the campuses meets this criterion, then “yes.”)
0 5
3
The relevant charter campus is physically located within an ISD whose 2005 or 2006 accountability rating was less than Acceptable. (If more than one charter campus is part of the grant application, and if any of the campuses meets this criterion, then “yes.”)
0 5
4
The relevant charter campus is physically located within an ISD whose student population is 40% or more economically disadvantaged. (If more than one charter campus is part of the grant application, and if any of the campuses meets this criterion, then “yes.”)
0 5
5
The student population of the relevant charter campus(es) is at least 40% economically disadvantaged. (If more than one charter campus is part of the grant application, and if any of the campuses meets this criterion, then "yes.")
0 10
Section Totals 0 30
Section D. Viability of and Need for Project 50 15.38%
1a The proposed project is well defined and reasonable. 0 2 4 6 8 10
1b
The project is for “instructional facilities” as defined by 19 TAC §61.1032 and further described in the TEA document “Instructional Facilities Allotment: Examples of Qualified and Non-Qualified Projects,” available at http://www.tea.state.tx.us/school.finance/facilities/ifa/qual.html
0 2 4 6 8 10
1cThe Phase I Environmental Assessment has been conducted and indicates no areas of concern.
0 5
1d The long-range facilities plan is reasonable. 0 1 2 3 4 5
2Current relevant facilities are at or very near their capacity to hold students.
0 1 2 3 4 5
3
The campus or campuses that are part of this application maintain a formal, written waiting list that is updated at least annually OR the school is under capacity and has no waiting list, but has reasonable procedures in place to recruit students, develop, maintain and update a waiting list.
0 5
4The enrollment of the campus or campuses that are part of this application has not declined more than 1% in any of the last three years according to PEIMS Snapshot enrollment figures.
0 10
Section Totals 0 50
Section E. Financial Strength 155 47.69%
1The 2006 FIRST rating of the charter holder is one rating (6 points) or two ratings (10 points) above the minimum rating requirement to be eligible for this grant.
0 6 10
2The charter holder has financial management expertise or has secured a team with such expertise
0 2 4 6 8 10
3The charter holder has construction expertise or has secured a team with such expertise.
0 2 4 6 8 10
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Scoring Matrix (continued)Section E. Financial Strength (continued) 155 47.69%
4
According to the description offered in Question E4, adequate contingency plans are in place to sustain revenues (e.g., the charter holder has property and casualty insurance on owned facilities or business interruption insurance on leased facilities, etc.)
0 5
5The charter holder has received unqualified audit opinions for each of the last three years.
0 5
6
The audited annual financial statements show that the charter holder has a history of stable operating performance (e.g., operations are supported by operating revenues; the fund balance is increasing, exclusive of one-time expenditures such as capital repairs; etc.).
0 2 4 6 8 10
7The audited financial statements show that the charter holder has at least 45 days' cash on hand.
0 5
8The charter holder has previously obtained bond financing or a bank loan.
0 5
9The charter holder has a credit rating of BB (S&P, Fitch) or Ba (Moody's) or higher
0 5
10The Preliminary Official Statement and other bond documents are substantially complete and contain covenants that mitigate credit risk.
0 1 2 3 4 5
11
The property appraisal has been completed, and the appraisal report shows that the appraised value of currently held property is at least equal to debt outstanding, after the proposed financing.
0 5
12 The endowment and/or fundraising revenues for FY 2004, 2005 and 2006 support capital expenditures and operations.
0 1 2 3 4 5
13The operating budget shows that current facilities costs (e.g. rent, mortgage, debt service) of the charter holder are less than 15% of the current annual operating budget.
0 5
14The operating budget projections show that projected facilities costs (e.g. rent, mortgage, debt service) of the charter holder are less than 15% of the projected annual operating budget.
0 5
15
The operating budget projections indicate projected stable operating performance (e.g., operations will be supported by projected operating revenues; the fund balance is projected to increase; etc.).
0 2 4 6 8 10
16The operating budget projections include projected maintenance costs of the proposed facilities.
0 5
17
The operating budget projections show that the charter holder has a reasonable reserve for future renewal and capital expenses and that the reserve is funded from the operating budget.
0 1 2 3 4 5
18The cash flow projection makes reasonable assumptions and shows sufficient revenue coverage for debt service and operations.
0 3 6 9 12 15
19The budgeting procedures show that the charter holder has a resonable policy for establishing and funding maintenance reserves or a renewal and replacement fund.
0 1 2 3 4 5
20The financial analysis is substantially complete and makes reasonable assumptions.
0 2 4 6 8 10
21
The budgeting procedures show that the charter holder has a reasonable policy regarding the maintenance of the fund balances and cash flow requirements (e.g., maintain a cash balance is equal to 1-2 months operating cash flow).
0 2 4 6 8 10
22The cash flow projections and the financial analysis show that an enrollment increase is not required to support projected debt service.
0 5325
Section Totals 0 155
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RULES OF THE TEXAS PUBLIC FINANCE AUTHORITY CHARTER SCHOOL FINANCE CORPORATION (“RULES”)
I. PURPOSE
A. The Board of the Texas Public Finance Authority (the “Authority”) established the Texas Public Finance Authority Charter School Finance Corporation (the “Board” or the “Corporation”) for the specific and limited purpose to issue revenue bonds to finance or refinance “educational facilities” for open enrollment charter schools and facilities which are incidental, subordinate, or related thereto or appropriate in connection therewith all in accordance with and pursuant to Section 53.351, Texas Education Code (the “Act”). Such purposes are to be accomplished by the issuance of revenue bonds through the Corporation (the “Revenue Bonds”) as provided for under Act.
B. INDEPENDENT STATUS OF THE CORPORATION. The Corporation shall act as an independent entity with primary responsibility for the Revenue Bond program. Such responsibility includes adopting these Rules for the submission and evaluation of applications for financing. The Corporation may exercise all rights, duties and responsibilities prescribed under the Act and these Rules. The Corporation shall issue rules as may be required for fair and efficient operation of the Revenue Bond program. Such rules shall conform with the Act.
II. GENERAL A. BOARD. The affairs of the Corporation shall be managed by a Board of Directors which shall be
composed of three (3) persons appointed by the Authority (the “Board”), in consultation with the Texas Commissioner of Education.
B. TPFA & CONSULTANTS. The Corporation may engage any consultants or professionals necessary to conduct the business of the Corporation. Administration and technical support for the Corporation shall be provided through the Authority or any successor entity, which may include the following:
1. Receiving, delivering and filing correspondence;
2. Maintaining official business records of the Corporation;
3. Complying with open meeting notice and related requirements;
4. Maintaining the Corporation’s financial books and providing necessary accounting services;
5. Performing work required in the solicitation of vendors and entering into contracts on behalf of the Corporation; and
6. Acquiring goods or services needed by the Corporation to fulfill its responsibilities.
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Rules (continued)
III. FINANCING REQUEST
1. An open-enrollment charter school considering revenue bond financing through the Corporation may contact the Authority’s executive director for informal review, technical assistance and planning, or further information about the financing process at any time.
2. A school may request financing by submitting a Request for Financing (“Request”) to the Corporation, directed to the attention of the Authority’s Executive Director, as agent for the Corporation.
3. As may be further determined by the Authority’s Executive Director, the request may include the following documents and information:
a. A resolution of the governing board of the school approving the request and delegating to an officer or employee authority and responsibility for pursuing the request and taking all actions necessary or required in furtherance of the financing;
b. A one page executive summary addressing the following:
(1) Purpose and need for the financing and the project;
(2) Summary description of the project and estimated project costs (note additional project information required in item (e) below)
(3) Background information about the school including:
(a) Location (b) Mission (c) Number of years in operation; and (d) Governing board structure and board members.
c. Financial information:
(1) Copies of the school’s most recent three years audited financial statements (or the audited financial statements for each year of operation if less than three);
(2) IRS determination letter of the school’s 501(c)(3) status;
(3) Current year’s operating budget and estimated budgets, (with revenue projected for five years in future); and
(4) Specific information concerning the school’s current or historical financing efforts and other loans incurred, whether outstanding or paid.
29
Rules (continued)
d. A copy of the school’s charter and a copy of the charter renewal application, if any, or an explanation of the time requirements relating to the charter renewal process; and
e. A detailed preliminary project description and project budget, schematic drawings, plans and specifications, if available.
f. School performance history (i.e., student achievement scores, TEA ratings, etc.)
4. When a completed Request has been received, the Authority’s staff will forward it to the Board of the Corporation and schedule an open meeting for the Board to consider the Request.
5. In considering a Request, the Board may:
a. Approve the request, select outside consultants, and determine a method of sale;
b. Request additional information for subsequent reconsideration of the Request; or
c. Determine that a revenue bond financing is not economically feasible at the current time and reject the Request.
d. Take any other action consistent with the purpose for which the Board was created.
6. When the Board gives final approval to the Request, the Authority staff and selected consultants will proceed with the financing, and, subject to successfully marketing the bonds, shall take any and all actions to complete the financing in a timely manner.
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Kimberly K. EdwardsExecutive Director, Texas Public Finance Authority
Physical Address300 W. 15th Street, Suite 411
Austin, Texas 78701
Mailing AddressP.O. Box 12906
Austin, Texas 78711
Phone: (512) 463-5544Website: http://www.tpfa.state.tx.us/
Mary PerryDirector, Division of Charter Schools
Texas Education [email protected]
1701 N. Congress AvenueAustin, Texas 78701
Phone: (512) 463-9575Website: http://www.tea.state.tx.us
Patsy O’NeillExecutive Director, Resource Center for Charter Schools
40 N.E. Loop 410, Suite 408San Antonio, Texas 78216
Phone: (210) 325-4449Website: http://www.charterstexas.org
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