Or. Admin. R. 581-026-0500

Current through Register Vol. 63, No. 6, June 1, 2024

Section 581-026-0500 - Process for Sponsor to Terminate Charter

(1) A sponsor may terminate a charter for failure to:

(a) Meet the terms of the approved charter or any requirement of ORS Chapter 338, unless waived by the State Board of Education;

(b) Meet the requirements for student performance as established in the approved charter;

(c) Correct any violation of a federal or state law described in ORS 338.115;

(d) Maintain insurance as described in the approved charter;

(e) Maintain financial stability; or.

(f) If the charter is terminated on or after July 1, 2011, failure to maintain, for one or more consecutive years, a sound financial management system described in the proposal submitted under ORS 338.045 and incorporated into the written charter under 338.065.

(2) A sponsor intending to terminate an approved charter must:

(a) Notify the public charter school governing body in writing at least 60 calendar days prior to the proposed effective date of the termination;

(b) Include in the notification the grounds for the termination; and

(c) Deliver the notice to the business address of the charter school.

(3) If the grounds for termination include failure to maintain financial stability or failure to maintain a sound financial management system, the sponsor and the public charter school may agree to develop a plan to correct deficiencies. The plan must be finalized and agreed upon within 30 days of the notice of termination. Under a plan to correct deficiencies:

(a) The sponsor shall identify a date at least 60 days from the date of the notice by which the public charter school may attempt to correct any deficiencies related to financial stability or to a sound financial management system. The deadline identified in the plan to correct deficiencies may be extended by mutual agreement of the sponsor and the public charter school;

(b) The proposed effective date of the termination may be extended to the date identified under subparagraph (a) of this paragraph.

(c) The sponsor may withhold up to 50 percent of the moneys owed to the public charter school while the public charter school is on the plan to correct deficiencies unless the withholding would create undue hardship. The sponsor shall indicate if it plans to withhold moneys within 10 days of the notice of termination.

(A) For the purpose of this section, "undue hardship" shall be defined as a significant and limiting factor in the public charter school's ability to continue operating through the duration of the plan to correct deficiencies under subparagraph (a) of this paragraph and project a positive ending fund balance for 2 consecutive fiscal years following compliance with the plan.

(B) A public charter school attempting to prove undue hardship must provide the following evidence to the sponsor within 20 days of the notice of termination:

(i) A current balance sheet;

(ii) A current profit and loss statement;

(iii) All current financial statements showing assets and liabilities; and

(iv) Any other financial documents requested by the sponsor related to the financial operation of the public charter school.

(C) The sponsor must evaluate the public charter school's evidence of undue hardship and determine whether or not to withhold any moneys within 10 days of receiving the evidence from the public charter school. If the sponsor plans to withhold moneys, the sponsor shall indicate in the plan to correct deficiencies the terms of any withholding of moneys.

(d) The sponsor must hold in trust any moneys withheld under subparagraph (c) of this paragraph until:

(A) The public charter school complies with the plan to correct deficiencies, at which time the public charter school is entitled to the moneys held in trust; or

(B) The public charter school fails to comply with the plan to correct deficiencies, at which time the charter is terminated and the public charter school forfeits any claim to the moneys held in trust.

(e) The sponsor shall apply any moneys withheld under subparagraph (c) of this paragraph if the public charter school is terminated to the debts of the public charter school. Any remaining moneys shall be returned to the state.

(4) The governing body of a public charter that has received notice from the sponsor of the sponsor's intent to terminate the charter may request a hearing by the sponsor related to a termination of the charter or a plan to correct deficiencies. Such a request must be made in writing and be delivered to the business address of the sponsor. Within 30 days of receiving the request for a hearing, the sponsor must provide the public charter school with the opportunity for a hearing.

(5) Following a notice of termination or completion of the plan to correct deficiencies, the sponsor of a public charter school shall make a final decision whether to terminate the public charter school. The decision must be made at a public meeting.

(6) If the sponsor reasonably believes that a public charter school is endangering the health or safety of the students enrolled in the public charter school, the sponsor may act to immediately terminate the approved charter and close the public charter school without providing the notice requirements set out in subsection (4) of this rule.

(7) The governing body of a public charter that is closed under the provisions of subsection (6) of this rule may request a hearing by the sponsor. Such a request must be made in writing and be delivered to the business address of the sponsor. Within 10 days of receiving the request for a hearing, the sponsor must provide the public charter school with the opportunity for a hearing on the termination.

(8) Nothing in this rule should be construed as limiting the ability of a sponsor and a public charter school to include in the charter a procedural requirement for alternative dispute resolution prior to invoking the termination process.

Or. Admin. R. 581-026-0500

ODE 19-2002, f. & cert. ef. 8-2-02; ODE 11-2010, f. & cert. ef. 6-30-10; Renumbered from 581-020-0380, ODE 10-2014, f. & cert. ef. 2-19-14; ODE 30-2018, amend filed 09/26/2018, effective 9/26/2018

Statutory/Other Authority: ORS 326.051

Statutes/Other Implemented: ORS 338.105