Court of Appeals Rules in Favor of Charter Schools

The Colorado Court of Appeals issued their decision in Ridgeview Classical Schools v. Poudre School District. The case was filed after the Poudre School District (PSD) made the charter school leaders sign a charter contract that made an adjustment to funding when students left the charter school after the annual October 1 count day. Contract stipulations required the charter school to give up funding for students that didn't remain in the school.

The Court of Appeals, in a 3-0 decision, said that the contract provisions requiring prorated student funding were "null and void" because they were contrary to the Charter Schools Act. In the suit, the district claimed the prorated funding was a "purchased service," but the court said that wasn't a valid argument because the charter school hadn't chosen to purchase the service, there wasn't any way to determine the actual cost (as required by statute for purchased services), and the school would need to get a service to carry out its educational program.

This case had already been heard in district court. It's possible that PSD may decide to appeal the Court of Appeals decision to the state Supreme Court.

The opinion, written by Judge Roy and supported by Judge Graham and Judge J. Jones, has numerous interesting statements. The opinion recognizes the lack of negotiating power a charter school developer has in contract negotiations by stating, "the school district is the conduit through which all of the public funding for the charter school -- local, state, and federal -- must pass, resulting in the school district having a vastly superior bargaining position."

The court examined the legislative history of charter school laws and determined that "legislators were specifically concerned that charter schools had to accept less funding than that dictated by the statute to get their applications approved."

The funding for public schools in the state School Finance Act is predicated on the annual October 1 count. The court said that "there is no funding enrollment date specified in the Charter Schools Act" and that the district's position "ignores the school's need for stability in funding because a significant portion of its annual expenses are fixed and do not vary with enrollment."

This decision is momumental for the charter schools that have recently signed prorated contracts, believing they had no other options. Some districts have enacted policies that district schools don't have to accept charter school students who disenroll after the October 1 count day. Other districts have required monthly or quarterly student counts on which they base charter school funding. This court decision bolsters charter school leader's contentions that their funding must be based strictly on the annual count, the same as school districts get their funding from the state.

This case was originally heard by the State Board of Education in September 2006. The board remanded the case back to the district for reconsideration. After Ridgeview Classical School leaders were required to sign the prorated contract, they did so with a letter stating they signed it under durress and immediately filed the lawsuit.

Ridgeview Classical Schools is a K-12 Core Knowledge and classical charter school serving about 700 students. Every year the school has been in the top three high schools in the state based on its School Accountability Report score.