Pub. 1 2011-2012 Issue 2

21 The effort in creating a state enhancement program allows these schools to lower their borrowing costs because of a well-run state stepping in and supporting qualifying deals. That lets you go from marketing your bonds to a really small pool of buyers to a much larger pool of buyers because the risks are now much better managed. That will save these schools tens of thou- sands of dollars a month, or hundreds of thousands of dollars a year, per school. Think about what a board and director is going to be able to do with that amount of money at one school. It’s going to be dramatic. Jon Bronson: The potential savings from this program for charter schools ought to create a real incentive for charter schools to want to meet the higher criteria and higher standards both in terms of financial operations and performance as well as management in order to attain the sav- ings that we hope will be in the program. What do schools need to be doing now in order to be successful in this program? Richard Ellis: They need to be at least investment grade, which is the BBB rat- ing, from one of the credit agencies (S&P, Moody’s and Fitch) and they need to make sure their financial house is in order. They need cash on hand, they need reserves, and they need to manage their costs well. Questions to ask themselves are: “How am I operating the school? Do I have high turnover? Am I retaining my students? What are the graduation rates? Are my test scores where they need to be?” We want to see a well-run school, not just financially. It’s the overall sustainability of the school that drives this program. Is there a recurring theme for schools that are successful? Marlies Burns: Successful schools fol- low good governance. The governing board clearly understands their role and they perform their role well. They also understand the administrator’s role and the administrator understands his or her role and performs that role well. Where we see issues is when the governing board doesn’t govern and the administrator doesn’t administer. Tell us a little bit about the legislative process and the roles of key players? Ryan Warburton: Sen. Valentine was a champion of this bill and the fact that it flew through the committee unanimously and almost unanimously through the house committee, is a testament to his sponsorship of the bill, the preparation in creating the bill, and effective advocacy from UAPCS. Jon Bronson: I think there ought to be praise for the process with this group. The charter school community always listened to the concerns that we had on trying to protect the State from as much risk as possible. I thought that made a big difference and there was a lot of trust among the participants. Howard Headlee: There were a number of champions on this bill. Treasurer Ellis and his team. Sen. Valentine and Rep. Derek Brown as sponsors of the bill. UAPCS and Chris Bleak did a phenomenal job bringing people together and talking with legisla- tors both before and during the legislative session. It was a pleasure to be a part of this excellent process. Clint Biesinger: It’s been a team effort and I hope that the people in Utah, not just the charter schools, can recognize the depth of thinking and leadership that went into making sure that this was constructed in a way that could help the State maintain its AAA rating into the future because that really helps us all. Why is this bill important beyond the obvious costs savings potential? Chris Bleak: It’s important that charter schools, regardless of their academic pro- gram, curriculum or charter, are well-run and well-governed. Financial fitness is paramount. This program provides an enormous incentive to be financially fit. In addition, we need to focus our time and effort on providing consistency to the State and market. For example, we should look at parameters and structure around waiting lists so that investors can know that when we say we have a certain number of students on a waiting list they will know that number is real. This bill gives us the incentive to focus on these issues going forward.