By Raiza Giorgi and Victoria Martinez
A decision by the California Department of Education apparently requires the Santa Ynez Valley Union High School District to pay more than $700,000 this year to help operate Olive Grove Charter School, which high school district officials say they can’t afford.
“This decision by the Department of Education could be crippling, and the ripple effects will be massive. We are already facing a $750,000 structural deficit this year, so adding an additional $700,000 with potentially more in the coming years will ruin us,” SYHVUHS Superintendent Scott Cory said.
Cory will present an agenda item about the in-lieu property tax payments to Olive Grove during the high school board’s meeting at 4 p.m. on Tuesday, Jan. 15. Also on the agenda is appointing a fifth board member.
The high school district twice denied a petition from Olive Grove to operate a charter school within its boundaries, but Olive Grove’s appeal to the California Department of Education (CDE) was approved in July.
That makes Santa Ynez a “sponsoring district” for Olive Grove and, although SYHS will have no supervisory role, it will be required to help pay for the charter school.
Because Olive Grove also has campuses in Lompoc, Santa Maria, Santa Barbara and New Cuyama, those districts will be required to pay support to the charter school as well.
According to the latest estimates, Santa Ynez owes $350,942 to the charter school immediately, and Olive Grove officials project a total of between $1 million and $1.2 million for the 2018-19 fiscal year. Those numbers are subject to change when the numbers are finalized at the end of the year.
The total operating budget for SYVUHS this fiscal year is roughly $12.4 million. The board voted in June to certify that budget, and since Olive Grove’s petition had been denied, there wasn’t a big concern at the time, Cory said.
“When we found out the state approved Olive Grove, we knew there would be an impact, but since Olive Grove didn’t send in their numbers by the deadline in September, we didn’t know how much this would impact our district when we did the first interim budget in October,” Cory stated.
Olive Grove’s numbers were certified by the CDE on Dec. 15, and the districts were notified on Dec. 28, Cory added.
“This is why it’s such a shock to us,” he said.
Cory said he has been talking with the County Education Office as well as legal counsel and the CDE to figure out exactly what the ramifications and impacts are.
“Since we are a basic-aid district, that means we do not get any funding from the state to backfill this loss, because when the laws were made basic-aid districts were not taken into consideration,” Cory said.
Why Olive Grove needs a ‘Sponsoring District’
Olive Grove opened in 2000, operating under the Los Olivos School District. Olive Grove provides education for students who typically don’t do well in a traditional classroom or who are looking for an alternative way to learn, such as kids who are professional athletes, are in the entertainment business, or working. In July 2015, the CDE authorized Olive Grove Charter School to continue operating on its own in Santa Barbara County.
However, an appellate court ruling in 2017 said that a charter school could not set up shop within another district without that district’s permission. That case, Anderson Union High School (AUHS) vs. Shasta Secondary Home School, set a precedent in the Charter School Act by saying that charter schools are prohibited from operating facilities outside the geographical boundaries of their authorizing school district, subject to limited exceptions.
Olive Grove was forced either to close or to ask the nearby school districts to grant a separate charter to operate the charter campuses. Failing to get that permission meant they could appeal the denial of a district charter to the county board of education or the California State Board of Education.
In the spring of 2017, Olive Grove went to all the other districts starting with SYVUHS, asking for a memorandum of understanding to operate under their district, and all of them denied their applications.
“We reviewed Olive Grove twice and both times felt that they were inadequate. Their test scores were weak and performance reviews showed poor results,” Cory said.
In an article published on Noozhawk.com on April 11, 2017, Cory was quoted saying “the Santa Ynez high school district also questioned the program’s financial stability, noting the school needed loans to “float” the budget.”
The article also stated concerns from Santa Barbara Unified School District officials who noted average daily attendance — the number that schools report to receive state funding — exceeded its enrollment from 2011 through 2016.
Laura Mudge, CEO and executive director of Olive Grove, asserted that she was willing to negotiate with the districts to come to an agreement but no one was willing to work with her.
“My main focus is providing education to kids that necessarily didn’t fit into a traditional setting. They should have every opportunity to get a great education,” Mudge said.
Olive Grove then appealed to the Santa Barbara County Office of Education, which also denied their appeal twice, and then Olive grove appealed to the CDE. At its meeting in July, the CDE board approved the school as “OGCS’s petition presents a sound educational program and the petitioner is demonstrably likely to implement the intended program due to fiscal viability,” according to the meeting’s minutes.
A video of that meeting shows a lawyer representing SYVUHS and another representing the Santa Maria Unified School District rebutting Olive Grove’s appeal.
What happens now
According to the CDE’s ruling, all of the districts in which Olive Grove operates are supervisory districts and will have to make monthly payments to the charter school.
The SYVUHS District and Santa Barbara Unified School District will feel the most impact because they are basic-aid districts, which means their revenue comes from local property taxes rather than state payments based on average daily attendance (ADA).
Lompoc and Santa Maria are ADA districts, so even though they will have to make payments to Olive Grove, most of their funding will come from the state, Mudge said.
While the figure for Santa Barbara Unified wasn’t available, based on the certified numbers from Olive Grove, SYVUHS is facing the $1 million to $1.2 million payment by the end of the year, Mudge said.
“It’s not my worry how Santa Ynez comes up with the payment, it’s their worry on how to adjust,” Mudge said.
Mudge said the funds from SYVUHS will go only toward the Buellton location of Olive Grove, which serves about 95 students with a current budget of $1.2 million. Olive Grove’s total budget is approximately $8 million for all their locations, she added.
“It’s not the intent of the law that this should happen, but there is a crack in the system and it’s not equitable. As we have our new board members and voting in the fifth member on Tuesday, it’s not much of a honeymoon. We will be hard at work figuring out solutions,” Cory said.