How a tiny California school district sparked calls for a charter crackdown

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

The Albert Einstein Academy of Letters, Arts and Sciences and the Acton-Agua Dulce Unified School District at the northern edge of Los Angeles County answered each other’s prayers in 2013 when they partnered. In a novel use of California’s charter school rules, the district agreed to oversee Albert Einstein’s elementary charter school even though it sat far outside Acton-Agua Dulce’s geographical boundary, and was inside the attendance area of another district that had already denied an Einstein petition.

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

But the win-win creative partnership was also the kindling for a prolonged legislative and legal battle over reforms to California’s system for authorizing charter schools.

Citing claims that the district and charter network improperly gamed the system, Democratic lawmakers are redoubling efforts to tighten rules that have let small, financially-strapped school districts boost their budgets by offering authorization and oversight to charter schools dozens or hundreds of miles from their supposed minders.

The issue strikes close to home for the legislator behind this year’s proposal to clamp down on so-called far-flung charters. Democratic Assemblywoman Christy Smith of Santa Clarita, the sponsor of Assembly Bill 1507, sat on the board of the Newhall School District, about 20 miles west of Acton-Agua Dulce, when Acton’s authorization stuck her community with an Einstein charter school it had rejected, eventually prompting Newhall to sue.

AB 1507 is one of several charter regulation proposals forming the battle lines of this year’s faceoff between charter advocates and teachers’ unions. In past sessions, the longstanding rivalry between those two politically powerful forces has typically ended more or less in a draw.

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

Now on April 10 the Assembly Education Committee will begin hearings on bills that would curb the growth of charters from an assortment of angles, capping the number of charter schools allowed to operate in California, removing a charter’s ability to appeal petition denials to county and state authorizers and putting strict limits on locations of charter schools.

‘Nothing added up’

In California, a charter school must be “authorized” to operate by a local school district that is willing to monitor its finances and academic progress. In the event of a denial by a school district, the law also lets charter applicants appeal to a county office of education or the State Board of Education. The state has more than 350 charter school authorizers, according to a 2018 study published by Stanford University, with the overwhelming majority overseeing five or fewer charter schools.

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

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

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

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

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

Then-superintendent Brent Woodard had proposed a plan that called for Acton to “approve approximately 24 high quality, diverse charter schools” by summer 2016 as a way to bring in more students, according to a PowerPoint presentation to the school board.

In Acton, Rabbi Mark Blazer, a founder of the Albert Einstein Academy of Letters, Arts and Sciences, said he saw “a cooperative district” that “was willing to work with us.” Under its multi-year plan, the district expected to earn more than $1.2 million in revenue.

At that point, the role of charter school authorizer was fairly new territory for Acton-Agua Dulce. Up until 2012, the district had never authorized a charter school. Within three years, the district had about twice as many charter as non-charter students. Meanwhile, Acton’s traditional enrollment, and the state funding that goes with it, held steady because the district—citing a lack of space on its own grounds—insisted the new charters be situated elsewhere.

The new Einstein school opened a half-hour away, in Newhall. And in summer 2014, Newhall sued.

‘Victim of bad charter policy’

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

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“You have locally elected school board members who were supposedly making the determination for educational programs inside their district, and then some other district decides what’s best for that district,” said Marc Winger, a former Newhall superintendent who served when Smith sat on the school board, referring to the Acton district’s 2014 charter authorization.

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

Outrage mounted as more and more Acton charters popped up in communities that weren’t Acton. Santa Clarita Valley school officials went to Sacramento and began lobbying. Meanwhile, other school districts also went to court over other far-flung charters: suits were filed by Pasadena Unified and Los Angeles Unified, where Acton approved another charter school in the San Fernando Valley. Also, San Diego Unified sued the tiny, rural Alpine Union School District for authorizing an Albert Einstein charter in its boundaries.

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

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

Blazer, the founder of the Albert Einstein Academy of Letters, Arts and Sciences, cast his operation as “a victim of bad charter policy in the state of California.”

Newhall eventually won its suit, and Senate Bill 1263, which would have required permission from the host district for a remote authorization, passed both the state Senate and Assembly. But the courts didn’t change provisions in the law that allow for far-flung charters and SB 1263 was vetoed by then-Gov. Jerry Brown.

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

By early 2017, Brent Woodard, the superintendent who oversaw Acton’s rapid charter growth, had left the district, citing “multifarious reasons,” the Santa Clarita Valley Signal reported. The prior year, lawmakers passed another bill restricting charter school locations, but were stymied by another Brown veto.

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

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

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

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

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

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

State or local control?

In summer 2017, Albert Einstein’s longest-operating California school, a charter high school authorized by the William S. Hart Union High School District, closed its doors after the Hart school board denied to renew the charter.

By June 2018, all charter schools in California affiliated with the Albert Einstein Academy of Letters, Arts and Sciences had closed. The last three schools authorized under the Acton school district closed last summer as the district “began to question publicly in discussions with the board their financial status,” said Lawrence King, Acton’s new superintendent.

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

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

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

“If we had one authorization, if there was a statewide authorization, we would’ve been fine,” Blazer said, later adding: “Charter schools should not be authorized by hostile parties whose very goal is for charter schools not to exist in the first place … If we’re looking to actually create school choice and opportunities, which charters do, then the goal shouldn’t be to put them under the authorization of schools who want them to fail.”

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

“If a charter organization wants to petition with our district … then we go through the process,” King said. “It’s not an emotional process, it’s not something where we go, ‘boy, this is potential income for the district or that sort of thing.’ It’s, ‘Do they offer something unique instructionally to the students that they’re going to serve, and are they fiscally solvent? Do they have a solid fiscal plan?’”

‘Districts abused this loophole’

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

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

This year’s attempt to curb far-flung charters, AB 1507, would again essentially force charter schools to get permission from their host districts.  Lawmakers, with the support of teachers unions, also want to strip most of the appeals for denied charter applications, giving local districts even more power.

Einstein founder Blazer believes a better solution would be to take the responsibility for authorization away from the districts and give it to an independent statewide body that doesn’t have political or financial motives to deny charters, but that appears to be an uphill battle this year.

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

“This bill restores the right of individual districts to have oversight of schools located within their boundaries,” Smith said in the statement. “In my tenure as a school board member, neighboring districts abused this loophole and authorization privilege and families were impacted because of this.”