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Comprehensive Community Solutions, Inc. v. Rockford School District No. 205

September 01, 2004


Appeal from Circuit Court of Sangamon County. No. 02MR347. Honorable Robert J. Eggers, Judge Presiding.

The opinion of the court was delivered by: Justice Turner


In June 2001, plaintiff, Comprehensive Community Solutions, Inc. (CCS), submitted a charter-school application to defendant, Rockford School District No. 205 (School District). In September 2001, the School District rejected CCS's proposal. CCS appealed the decision to defendant, the Illinois State Board of Education (ISBE). In May 2002, ISBE affirmed the School District's denial of the charter. In July 2002, CCS filed a complaint for administrative review. In September 2003, the circuit court affirmed ISBE's decision.

On appeal, CCS argues (1) this court should presume the findings of the ISBE appeal panel are true, (2) ISBE's denial of the charter-school application violated the Charter Schools Law (105 ILCS 5/27A-1 through 27A-13 (West 2000)), and (3) ISBE's decision was clearly erroneous. We affirm.


In June 2001, CCS submitted a charter-school application to the School District pursuant to the Charter Schools Law (105 ILCS 5/ 27A-1 through 27A-13 (West 2000)), proposing the YouthBuild Rockford Charter School (YouthBuild) to serve "at-risk and out-of-school students through a multifaceted program of educational, social, and employability supports that provide youth with the full range of resources they need to transition from 'street to work' or 'street to school' effectively." The application included a financial plan regarding the economic soundness of the proposed charter school as required by section 27A-7(a)(9) of the Charter Schools Law (105 ILCS 5/27A-7(a)(9) (West 2000)).

On August 14, 2001, the Rockford Board of Education held a public meeting, wherein several people expressed support for the YouthBuild proposal. The Board of Education's charter-school advisory committee evaluated the proposal and recommended approval of a contract contingent upon successful negotiations of the financial plan. On August 28, 2001, the Board of Education rejected a motion to grant the YouthBuild proposal by a 3 to 3 vote. In September 2001, the Board of Education filed a report, notifying ISBE of the denial of the YouthBuild proposal. In part, the report indicated board members found the YouthBuild proposal would provide "duplicative" services and "[g]iven the dire financial situation, the Rockford School District cannot take on more debt." CCS formally appealed the decision to ISBE.

In November 2001, an ISBE appeal panel held a hearing as to CCS's appeal. The School District stated it currently had a $20 million deficit in its education fund and had been "operating on a deficit budget for at least 25 years." In January 2002, the appeal panel requested additional information from CCS.

In February 2002, the appeal panel found the YouthBuild proposal complied with the Charter Schools Law and recommended the denial of the proposal be reversed and ISBE grant the charter. The appeal panel found the "cumulative net 'deficits' to Rockford over five years ranging from $2,570,962 at 100% of the per capita tuition rate to $1,873,170 at 80% of the per capita rate. These figures represent .27% and .20% respectively of the five-year cumulative educational budgets projected for Rockford." The appeal panel noted the possible loss of revenue was not to be minimized but noted "a revenue loss to the district is inescapable under the Charter Schools Law[] but is necessary to serve the law's goal 'to provide parents and pupils with expanded choices within the public school system.'" Further, the panel found

"[b]y funding charter schools through per[-] capita payments from the district, the Charter Schools Law recognizes that the funding in essence 'belongs to' the student and the student's parents[] and may be spent in a charter school rather than in the district's schools if the parents see fit. So viewed, the creation of a charter 'costs' a district nothing."

The appeal panel concluded the financial impact on the School District did not make the proposal economically unsound by jeopardizing the educational programs available to the School District's other students. The State Superintendent of Education, Respicio F. Vazquez, reviewed the record and recommended ISBE grant a charter to the YouthBuild charter school.

On February 20 and 21, 2002, ISBE held a meeting to discuss CCS's charter-school appeal and requested additional information. On March 13, 2002, ISBE held another meeting and requested additional information. The School District provided information, indicating that if the charter-school proposal was approved, the total estimated deficit incurred by the School District would be $1,037,363. Further, the School District stated that in considering the $12,200,034 in budget cuts and $55,000,000 in tax-anticipation warrants maturing in October 2002, "it [was] apparent that the [School District] cannot take on new debt." The School District's report also indicated a referendum to repay tax objectors would require an additional $3,100,000 to be paid to bondholders over a 10-year period.

In May 2002, ISBE conducted meetings on the charter-school appeal. ISBE board members voted down the motion to reverse the School District's denial of the proposal on a 4 to 4 vote. The members voting to deny the charter expressed their concerns over the School District's financial problems. In its final decision denying the appeal, ISBE found the proposed charter school was "not economically sound for [the School District] in view of the serious financial problems that cur-rently exist in the district."

In July 2002, CCS filed a complaint for administrative review, asking the circuit court to reverse the decisions of the School District and ISBE and grant its charter. In January 2003, the court remanded the matter to ISBE to set forth what evidence it accepted or rejected in making its decision. In June 2003, ISBE indicated it denied the appeal for the following reasons:

"(1) board members were concerned that the charter[-]school proposal had not adequately shown that it was economically sound for the ...

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