David Olson presented the second interim financials for all schools, incorporating updated enrollment based on certified P1 ADA. Overall, most schools are performing at or above budget, with positive projected surpluses, except Upland, which is currently operating at a deficit but is expected to recover in future years.

Key Highlights by School

• Oceanside: Projected $470K surplus; slight ADA decline reduced revenue, but offset by expense savings.
• Orange County: Tracking close to budget with a $222K projected surplus; ADA increased; $600K in revenue deferred to support future years.
• South Bay: Strong performance with a $395K projected surplus; no material changes from prior report.
• Riverside: Projected $240K surplus; revenue decline due to ADA drop offset by stable expenses.
• Upland: Projected $647K deficit; recovery expected by 2027–28; revenue increases tied to child nutrition and expense increase tied to higher special education costs.

Additional Financial Notes

• Cash flow remains strong across most sites.
• Bridge loans are supporting Upland and Riverside cash flow needs.
• Orange County and South Bay are meeting bond covenant requirements.
• Additional detailed reports and variance analyses were provided in the appendix.

Board President Charles Friedrichs asked is the Upland campus on track to cover the bridge loan that was provided. Jason Sitomer answered that yes, while the loan will not be repaid this year due to typical new school funding delays, it is expected that most or all of the bridge loan will be repaid by the end of next year (maturity date).

Charles asked how many years into the future can ELOP deferred funding be pushed, and Jason Sitomer from Charter impact answered that it can be deferred for up to two years from the year it is awarded.

John Ing, Board Treasurer, asked for additional context on the ADA shortfall at Oceanside. Andrew Crowe answered saying that Oceanside began the year with high enrollment and a strong waitlist. As some students left, the school chose not to backfill those spots, allowing for more space on campus and in classrooms. This intentional decision led to the ADA decrease rather than a lack of demand.

Executive Director, Jason Watts, provided the organization update and provided information:

• The organization received a $50,000 donation to the Foundation, which supports students, families, and staff in areas where public funding cannot (e.g., housing transitions and essential needs).
• The Grand Avenue campus sale is near completion. Families and the authorizer (OCDE) have been notified. Planning is underway for a smooth transition of students and staff to the 17th Street campus.
• The cabinet will meet with a board candidate recommended by Pete Watson to fill his vacancy. If successful, the candidate will be presented to the Board in April.
• CalSTRS Update:
  • Increased scrutiny on charter school roles and eligibility for “creditable service.”
  • Ongoing discussions between charter school advocates (CCSA) and CalSTRS regarding equitable treatment compared to district staff.
  • A final decision is expected before the next fiscal year.
  • Potential requirements may include written employment agreements by January 31, 2027; however, these may change as advocacy efforts continue.
  • Current status remains uncertain, and the organization is monitoring developments.

Concern was raised that CalSTRS actions may limit charter school effectiveness by deeming certain roles ineligible or non-essential. Jason responded and said this is part of an ongoing discussion. Initial concerns about complete ineligibility for CalSTRS have been alleviated. The focus now appears to be on determining specific requirements rather than eliminating eligibility.

Concern that new requirements could increase administrative burden (e.g., revising job descriptions, contracts, and compliance processes) was also discussed. Jason said that no definitive requirements have been finalized. The organization is in a holding pattern to avoid unnecessary work until clear guidance is issued.

Charles Friedrichs expressed condolences to the family of Denise Hobbensiefken following her recent passing. Denise was remembered for the light, joy, and energy she brought to Scholarship Prep, and it was noted that she will be greatly missed. 

Charles also acknowledged the Scholarship Prep Foundation for providing financial support to Denise’s family during this time. It was highlighted that the foundation continues to be a valuable resource for supporting students, families, and the broader school community.

Charles also provided a reminder to all board members to complete the executive director evaluation survey that was sent via email from Andrew Crowe. Board members were advised to check their email for the survey link. It was noted that if any board member did not receive the survey, they should notify the team. Charles asked Andrew to resend the survey if any members had not received it.