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Facilities Financing for DC Public Charter Schools
The Office of Public Charter School Financing and Support (OPCSFS) has a range of financial tools to help public charter schools meet facility needs. The majority of OPCSFS products and support is in the form of “gap financing” for public charter school facility projects which are primarily supported by leveraging the facilities allowance to secure private financing and other sources. The OPCSFS offers the following products to provide the supplemental capital that may be necessary to allow public charter schools to secure appropriate facilities through new construction, acquisition and/or rehabilitation and thus deliver a rigorous and rich education to their students:
- Credit Enhancement Revolving Fund: The Credit Enhancement Revolving Fund is authorized by Section 603 (e)(3)(C)(iii) of the Student Loan Marketing Association Reorganization Act of 1996 (20 U.S.C. 1155(e)(3)(C)(iii)) and approved in accordance with D.C. Official Code§2-301.05a (Supp. 2007). The Credit Enhancement Revolving Fund provides enhanced credit, lease guarantees, and access to financial assistance to eligible public charter schools for the acquisition, renovation, and/or construction of school facilities.
- Direct Loan Fund: The Direct Loan program was funded initially by the District of Columbia 2003 Appropriations Act to structure and provide loans to District of Columbia public charter schools for the purpose of construction, acquisition, renovation, and and/or maintenance of public charter school facilities.
Additional capital allocations were appropriated to the Direct Loan Funds and the Credit Enhancement Fund during the period FY01-FY11. In FY12, the Direct Loan fund was awarded additional amount of funds under the Scholarships for Opportunity and Results Act. As of October 2013 the available DL Fund balance is $21,496,914.98 and the available CE Fund balance is $652,232.77.
The Office of Public Charter School Financing and Support helps finance public charter school facility projects that:
- Create appropriate, safe, and economically efficient environments for the provision of high quality public education;
- Provide “gap financing” for public charter school facility projects which are primarily supported by leveraging the facilities allowance to secure private financing and/or other financing sources; and
- Improve DC education outcomes by financing the development and expansion of high quality public charter school facilities through the construction and/or renovation of:
- Former DCPS schools occupied by public charter schools, or
- ”Commercial market” facilities to be occupied by public charter schools in the District of Columbia.
Since inception, the Credit Enhancement Program has provided over $25 million of support to 30 public charter schools, leveraging over $235 million in additional funding for school facilities. The Direct Loan Program has disbursed close to $37 million in direct loans to 27 public charter schools, leveraging over $220 million additional funding for school facilities.
Examples of transactions that the OPCSFS facilitated include:
- $2MM Direct Loan to Capital City PCS to support the leasehold improvements of a 168,000 sf former DCPS Facility – The Rabaut School. The total project cost exceeded $24MM and OSSE’s sub-loan leveraged $16MM in senior debt. A total of 380 new student seats were created.
- $2MM Direct Loan and $1MM Credit Enhancement to Yu Ying PCS to finance the acquisition and development of a 39,000 sf state of the art learning environment at 220 Taylor St, NE. The total project cost reached $15MM and OSSE’s sub-loan and credit enhancement leveraged a total of $10.5MM in senior debt. 295 new student seats were created.
- $0.75MM to Carlos Rosario PCS to support a $16MM NMTC transaction to finance the construction of a 48,273 square foot school building at 514 V Street, NE. The total project cost was $22MM, creating 1,100 new student seats in the District.
The OPCSFS performs a rigorous analysis and underwriting for each prospective project in order to efficiently and responsibly deploy capital to promote the growth of high-performing public charter schools. Pursuant to the legislation, the Public Charter School Fund Credit Committee, an independent loan committee, is responsible for approving any transactions funded from the Credit Enhancement Revolving Fund, Direct Loan Fund, and may also review requests for other OPCSFS administered programs supporting charter school financing as established by the Mayor and Council of the District of Columbia, or the Congress. The independent loan committee is comprised of five members; three members are appointed by the Mayor of the District of Columbia and two are appointed by the DC Public Charter School Board.