Bullis Charter School

Bullis Charter School Money and Financial Review

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"I believe the funding gap will be litigated, if not by BCS then another charter. It will take 3 to 4 years by the time it goes through all the courts. Unlike the facilities lawsuit, if it wins, BCS can get 6 years back payment - close to $20 million by my estimate. And of course, LASD will have to cut it's run rate by $3 million + a year, because this funding difference is built into their run rate.

IMO, it's a no-brainer lawsuit. Risk a $million for a $20 million one time return and a $3-4 million annual annuity."

-- Ron Haley, Prominent BCS Supporter and Leader of the Campaign Against Measure E

Executive Summary

As the above quote should tell you, what is at stake here is nothing less than the viability of our local public schools. If the dubious claims of Bullis Charter School are left unanswered, their lawyers will do nothing less than bankrupt our school district, laying waste to our schools, our children's education, and our property values.

One of the striking things about the data below is its complexity--it takes a while to fully understand the details of how public schools are funded. Although we worked hard to make this subject as fast and easy as possible to learn, the details here, as you'll see, are very important.

In this day and age of new and experimental "school reform" laws, what were once happy, successful Districts like ours can now be ripped apart by lawyers. Diligent parents must take the time to educate themselves on these matters as this is now, unfortunately, part of life in our public school system.

3/20/2012: Please consider this section to be a "beta" for now as we are still in the process of soliciting community feedback and peer review. It is very, very important to us that this section in particular be "absolutely perfect" as possible.

Update 5/4/2012: The BCS Foundation website has been changed and all of the anti-LASD rhetoric has been removed! We're making a difference!

Summary Points

  • BCS costs the District money: if BCS didn't exist, there would be more money for typical children across our District.
  • BCS doesn't pay it's fair share of "taxes": special-needs kids and retired (and older) teachers cost every LASD student money. Somebody has to pay for the things that our society has voted for, but BCS supporters insist it should not be them (presumably because they are rich and have better lawyers).
  • As BCS now seems to agree, there is no "funding gap": based on County and State documents, the overall difference in funding is $1090, not $5000. This is combined with the fact that our District has much more to pay for in terms of special-needs and other expenses.
  • The BCS financial model is unsustainable: BCS must collect at least $5000/child per year from its parents or it would not exist. There is no magic in what they do: they offer a more program perks because they get more money per 'typical' student--almost twice as much.
  • Any efficiencies in teacher salaries/benefits BCS currently enjoys will be short-lived: BCS is a younger school with younger teachers who have less expensive benefits. Obviously unless the school plans to fire all of their teachers the day they turn 30, their teacher salary expenses will be the same or more as LASD's.
  • The BCS parent donation is unfair to less advantaged kids: being ear-marked solely for the benefit of their own kids--unlike LAEF donations which are spread among all schools, benefiting all students (including special-needs kids) equally. If BCS parents were folded into our District, the overall donation to our schools (through LAEF) here would double, helping all 4500 of our kids, not just the 450 richest ones. This donation effectively makes BCS a tax-deductible private school.

Principles

One of the key pillars of the Bullis Charter School marketing pitch to parents is their need for $5000/year per student donation (which most consider a "tuition") to "fill the gap" left by a lack of public funding.

The rationale--per BCS marketing materials--is that this $5000 is forced upon BCS parents by the Evil School District who is withholding this $5000 from BCS. If only the District would give up this $5000/year per student, then parents would be required to pay nothing and the BCS model could actually scale to non-rich parents.

The above routine is, quite simply, a pack of lies.

The top-line "number": per the BCS Foundation website itself, the "funding gap" is actually only $2874 per their own website, not $5000. Big difference. From the website (homepage, snapshot taken in approximately February, 2012):

"During the 2011-2012 school year it will cost $11,131 to educate each BCS student, comparable to that of Los Altos School District (LASD) public schools. As a public school BCS receives approximately $6,000 per student in public funding versus roughly $8,874 per student received by other local LASD public schools."

Now, these numbers are not "simple" to obtain as there are many vagaries of accounting practises at work here. The "simplest" comparison between the "bottom lines" of BCS versus LASD can be found in two separate accounting reports for each school for the 09/10 school year (the most recent available data in this form). Here you can observe the following comparison (thanks to another helpful community member for researching this):

Los Altos School District Bullis Charter School BCS Difference BCS Tuition2 Real "gap"
Expenditures per Pupil Source Expenditures per Pupil Source
$9,520 CDE $13,430++1 SCCOE $3,910 $5,000 $1,090
Notes:

1. The actual expenditures for each BCS student is far more as this figure does not include "supplemental expenditures" which are funded by additional parent fundraising. BCS's 2012 annual auction was rumored to have raised over $400,000 for their own school of 450 students, for instance.

2. This "tuition" is, generally, tax-deductible, which means that the total cost to US taxpayers is perhaps 40% of the $5000 tuition--or $2000 more per student--bringing the grand-total to about $8,000 of public funding devoted to each BCS student.

Here we can see that if you imagined a scenario where BCS "took over the whole District" and did not have special-needs kids to educate, and did not have promises made in the past to make good on, and did not have to worry about overhead items associated with a District like ours--then they would still need $3,910 more per child.

If you've ever wondered what sort of "magic" Bullis Charter School possesses in order to have all of those amazing perks and programs and lower student/teacher ratio, the answer is simple: there is no magic.

BCS needs more money to do these things, and BCS must ignore very expensive obligations that our District cannot ignore.

In the 10/11 school year, the District spent about $7,500,000 on special-needs programs--about the same amount of revenue obtained from the local parcel tax. Since BCS does not bother itself with special-needs kids, you could say that the parcel tax "cancels itself out" with this expense alone.

All voters in our District, the State of California and the USA voted on many things that Schools are required to do. You do not get to "opt out" of things you don't agree with here in the USA (just ask Wesley Snipes).

Further, to the specific issue of our District's current teacher retirement burden, this was an expense decided upon by a democratically elected body--again, exactly like our National Debt. BCS supporters are in effect using a loophole in the law to get out of paying a burden that the rest of us must legally pay. The more kids who go to BCS, the more the remaining LASD kids are stuck with this burden. Since BCS gathers, by definition, the most advantaged kids in the District, this is a terribly unfair shift of our tax burden to those who can least afford it.

What you get to do is vote in order to change things. BCS is dishonest and unfair when they attempt to stick LASD parents with their share of the "bill" from the things that the majority of Americans voted for. Rather than go convince the voting public to change things (for instance, to screw-over special-needs kids or fire every teacher over the age of 30), BCS prefers litigation.

On the revenue side, BCS parents "concentrate" their "donations" (tuition, basically) on their own school, and given that BCS does not take in special-needs kids, they are essentially concentrating their donations on their own kids in particular.

If BCS parents were normal LASD parents, it's clear that much (if not virtually all) of that $5000/year donation would end up at LAEF, meaning that it would benefit all District children (including special-needs kids) not just their own kids. This would effectively double the overall donations to our school District.

To understand this issue better, ask yourself, "what if BCS actually took over for the the District with all of its legal and moral obligations to the community? Would they still need the $5000/child per year?"

The answer is, yes--and given that collecting $5000/year per child from even a small portion of parents in our two towns in unrealistic, then you have to conclude that the BCS financial model is, ultimately, unrealistic.

Proof that BCS Costs Us Money

Although it is difficult to pull the numbers out of the overall budget (and balance this with special payments in various forms) there are several key areas that BCS fall short in terms of being responsible for, and thus you cannot account for them in BCS's expenses, and thus you must assume that the District is responsible for the BCS share of the overall burden for these items, including (all numbers taken from the LASD annual report):

In a parallel universe between an LASD child and a BCS child, part of the revenue the given LASD child is responsible for bringing to the school District goes to the above items. Since all children at BCS are "the easy ones" in terms of expenditures (not being special needs to ELL), the District, by not having these kids, loses the benefit of having them to help spread out the burden of the more expensive children.

Finally, there is the matter of the donations to LAEF, our District's charitable foundation. LAEF contributes its donations to the District which is then freed to distribute funds where they are needed the most, among all children. Parents at BCS donate to BPESF (the BCS charitable foundation) which benefits only BCS children, arguably the most wealthy in the District. In short, the LAEF grant would be double what it is today if BCS donations were given to LAEF instead--amounting to another ~$500/student per year.

As such, between the added funds available to a typical student by spreading out overhead burden more evenly and the added donations to LAEF, BCS reduced the funds available to the typical LASD student by approximately $800/year.

What About Basic Aid?

This issue, again, complicates things--but understand that it is only because this issue is so complicated that BCS can get away with such lies for so long.

A school district in "Basic Aid" status means that the District relies on local property taxes for revenues, not a "mandatory minimum" from the State. Another term being used for Districts like ours is that it is an "excess revenue" district--it makes more, per student, in local property taxes than the State would otherwise give it on a per-student basis.

In our District this calculation is tricky since we're right on the edge: in 10-11 we were about ~$500/student over our minimum. In other words, if we made ~$500/student less (or about $2.2 million total), we would be better off not being in Basic Aid status.

If the District had within it's budget the extra 460 students at BCS, it would get about $5000 for each of those students, which is to say about $2.3 million. So in short, if all students at BCS were moved to our District, the District would have slightly more money per student (~$300).

BCS: An All-out Attack on Our District's Finances

Besides the structural expenses associated with BCS, our District's finances are under attack in other ways as well:

Conclusion

BCS is for all intents and purposes a tax-deductible private school that takes money away from public schools. Far from saving our District money as they have said for years, their presence in our community takes money away from the kids that need it the most.