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Indiana Charter School BoardCARPE DIEM EXPANSIONAn “experienced operator” is defined as either: (a) an applicant group that has previously operated a charter school or a networkof charter schools; or (b) an applicant group that has not previously operated a charter school but intends to contract with anEducation Service Provider (ESP). Per IC § 20-24-1-6.1, ESP is defined as a “for profit education management organization,nonprofit charter management organization, school design provider, or any other partner entity with which a charter school intendsto contract for educational design, implementation, or comprehensive management.”A Letter of Intent (LOI) must be completed by the team of individuals and/or the organization considering submittingan application to the Indiana Charter School Board to establish a charter school in Indiana.Note: Submission of an LOI does not obligate the team and/or organization to submit an application. However,applicants are advised that the name of any entity that submits an LOI will be posted on the ICSB website. In addition,the LOI is subject to Indiana’s Public Access Laws, including public records requests.Name of charter school:Carpe Diem – School 2Charter school location:*Northeast Indianapolis*Please indicate the city/town and, if known, potential address or neighborhood of the school location. Virtual operators shouldindicate the relevant geographies the operator intends to serve.School district of school location:Indianapolis Public SchoolsLegal name of group applying for charter:Carpe Diem IndianaApplicant’s designated representative:Robert SommersAddress:301 North Breiel BlvdMiddletown OH 45042Office and cell phone numbers:513-673-2733Email address:[email protected] opening year for the school:2015Model or focus of proposed school:(e.g., arts, college prep, dual-language, etc.)Proposed grade level(s) and student enrollment:Academic YearGrade Levels ServedYear 16-10At Full Capacity6-12Target student population (if any):ICSB: Letter of Intent for Experienced OperatorsPersonalized blended learningTotal Number of Students Served160300Not applicablePage 1

ICSB: Letter of Intent for Experienced OperatorsPage 2

Does the school expect to contract or partner with an Education Service Provider (ESP) or other organizationfor school management/operation?Yes x NoIf yes, identify the ESP or otherpartner organization.ICSB: Letter of Intent for Experienced OperatorsCarpe Diem Learning Systems, LLCPage 3

Indiana Charter School BoardCARPE DIEM EXPANSIONAn “experienced operator” is defined as either: (a) an applicant group that has previously operated a charter school or a networkof charter schools; or (b) an applicant group that has not previously operated a charter school but intends to contract with anEducation Service Provider (ESP). Per IC § 20-24-1-6.1, ESP is defined as a “for profit education management organization,nonprofit charter management organization, school design provider, or any other partner entity with which a charter school intendsto contract for educational design, implementation, or comprehensive management.”A Letter of Intent (LOI) must be completed by the team of individuals and/or the organization considering submittingan application to the Indiana Charter School Board to establish a charter school in Indiana.Note: Submission of an LOI does not obligate the team and/or organization to submit an application. However,applicants are advised that the name of any entity that submits an LOI will be posted on the ICSB website. In addition,the LOI is subject to Indiana’s Public Access Laws, including public records requests.Name of charter school:Carpe Diem – School 3Charter school location:*Northwest Indianapolis*Please indicate the city/town and, if known, potential address or neighborhood of the school location. Virtual operators shouldindicate the relevant geographies the operator intends to serve.School district of school location:Indianapolis Public SchoolsLegal name of group applying for charter:Carpe Diem IndianaApplicant’s designated representative:Robert SommersAddress:301 North Breiel BlvdMiddletown OH 45042Office and cell phone numbers:513-673-2733Email address:[email protected] opening year for the school:2015 or 2016Model or focus of proposed school:(e.g., arts, college prep, dual-language, etc.)Proposed grade level(s) and student enrollment:Academic YearGrade Levels ServedYear 16-10At Full Capacity6-12Target student population (if any):ICSB: Letter of Intent for Experienced OperatorsPersonalized blended learningTotal Number of Students Served160300Not applicablePage 1

ICSB: Letter of Intent for Experienced OperatorsPage 2

Does the school expect to contract or partner with an Education Service Provider (ESP) or other organizationfor school management/operation?Yes x NoIf yes, identify the ESP or otherpartner organization.ICSB: Letter of Intent for Experienced OperatorsCarpe Diem Learning Systems, LLCPage 3

1Carpe Diem Indiana Growth2015-2016Presented for consideration toIndiana Charter School BoardJune, 2014Carpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

2ContentsOverview . 3Indiana Charter School Board proposal . 4Carpe Diem - Meridian stability . 4Academic . 4Financial . 6Carpe Diem Learning Systems commitment. 8Financial support for expansion. 9Financial sustainability of all schools . 10Community engagement . 11Hiring . 11Marketing materials . 11Community team . 12Information sessions . 12Email blasts . 12Social media . 12Purchased marketing . 12Press . 13Local support. 13New school sites . 13Model adjustments to accommodate parent/student recommendations . 14Major project milestones . 14Carpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

3OverviewWe have been asked by key community leaders to grow the Carpe Diem presence in Indiana, beginningwith expansion in Indianapolis. The Carpe Diem Indiana Board of Directors concurred with this desireand voted affirmatively to activate 2 charters.The proposal is to use 2 of the board’s 5 remaining charters to open new schools within the Indianapolisschool district. These will be 300 student models similar to the Meridian school. One school is proposedfor opening in FY2015 with the potential for a second opening if funding is available by 3rd quarter 2014.Carpe Diem Learning Systems, LLC acting as the Carpe Diem Indiana’s CEO and central officerecommended approval of this project. The recommendation was based upon the following criteria:1. A quality timeline capable of building the buildings required and engaging school leaders earlyenough to build community support and, in turn, enrollment.2. Immediate cash availability and long term cash capacity to maintain the 60 day working capitalexpectation set by the management company.3. Support from community leaders and a plan for acquiring grass roots community support inadvance of construction and opening.4. The generally supportive nature of the charter environment in the Indianapolis area.5. A solid operating budget.6. Sustainability of Meridian enrollment as school expansion occurs.Carpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

4Indiana Charter School Board proposalThe proposal before the board is to activate 2 charters immediately, but plan their opening for FY2015and FY2016 unless additional funding is established by the 3rd quarter of 2014. If additional funding isprovided by then, both schools will be opened in FY2015.It was the intention of Carpe Diem Learning Systems in cooperation with the Carpe Diem Indiana boardof directors to grow to at least 6 schools in Indiana. Carpe Diem Learning Systems established thisexpectation when they required 6 charters to be approved prior to committing to Indiana. This proposalis consistent with this long term growth strategy.Carpe Diem - Meridian stabilityAcademicCarpe Diem - Meridian is on track for another successful academic year. While academic results are notyet available, interim performance results are tracking well as indicated in chart 1 below. As a reminder,Carpe Diem – Meridian had an exceptional FY2013 academic performance. It exceeded targetperformance rates by 14 percentage points (89% average versus 75% target) and exceeded theunderlying school district by 31 percentage points.FY2014 academic growth has been strong. According to NWEA-MAP results from fall and winterassessments, the average growth by subject area has beenCarpe Diem – Meridian 1st Semester ResultsSchool year ars of GrowthThese results are very strong considering there are several students who were able to “max out” on theNWEA-MAP test last year and therefore cannot demonstrate additional growth.Carpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

5Using NWEA-MAP results from fall and winter of each year, we have predicted a conservative estimateof academic achievement for FY2014. We anticipate being slightly above the 75% performance targetand well above the underlying school district. Meridian academic staff report a very challenging groupof students (approximately 36% students with disabilities) again this year, but they are optimist as thesepredictions are consistent with their daily performance tracking. Further state academic performancedata may be available by the time the Indiana Charter School Board meets.Academic performance trends - Carpe Diem MeridianYear SubjectFY2013 MathScienceReadingFY2014* MathScienceReadingFall MAP Winter MAP State assessment 1%76%94%79%IPS61%51%61%51%*Actual Fall and Winter results. All others projected.How to read the chart: Fall and winter MAP results report the percent of students who are at grade level according toMWEA-MAP criteria. These results are NOT percent passage rates on tests. State assessment results and IPS results are the percent of students who passed theassessments at the state established cut scores.Chart 1 – Actual and predicted academic performanceCarpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

6FinancialCarpe Diem – Meridian had a difficult financial year in FY2013 due to low start up enrollment. The lowenrollment was the result of an aggressive opening strategy. The proposal before the board forexpansion corrects this aggressive opening strategy so a repeat of these problems is not likely.FY2014 has proven to be a very successful year financially. Chart 2 contains the year to date incomestatement. It shows the school is exceeding budget expectations and is trending to a positive netincome. All indications are the school will end the year with a positive net income, will pay down thecash flow line of credit to 0, and will see revenues exceed and expenses come in under budgetexpectations.Account DescriptionActual YTDBudget YTDVariance %Total BudgetBudget RemainingRevenue L imit 9 1 3 ,5 2 9 9 3 4 ,6 3 4-2 .3 % 1 ,2 5 5 ,6 3 8 3 4 2 ,1 0 9Federal Revenue 3 1 4 ,0 6 7 2 7 1 ,7 2 21 5 .6 % 3 5 0 ,8 4 1 3 6 ,7 7 4--0 .0 %-- 6 9 ,8 4 3 9 5 ,0 0 0-2 6 .5 % 9 5 ,0 0 0 2 5 ,1 5 7 1 ,2 9 7 ,4 3 9 1 ,3 0 1 ,3 5 6-0 .3 % 1 ,7 0 1 ,4 7 9 4 0 4 ,0 4 0 3 9 6 ,6 0 8 4 1 2 ,9 4 74 .0 % 5 5 0 ,5 9 6 1 5 3 ,9 8 8C las s ified Salaries 2 4 ,5 6 7 2 2 ,5 0 0-9 .2 % 3 0 ,0 0 0 5 ,4 3 3E mployee Benefits 1 1 8 ,9 1 7 1 4 7 ,8 1 61 9 .6 % 1 9 7 ,0 8 8 7 8 ,1 7 1( 4 ,1 6 0 )O ther State RevenueL oc al RevenueT otal RevenuesC ertific ated SalariesBooks and SuppliesServic es & O ther O perating E xpens esC apital O utlayO ther O utgoT otal E xpens esN et I nc ome 6 0 ,3 4 4 4 2 ,1 3 8-4 3 .2 % 5 6 ,1 8 4 5 6 6 ,1 9 6 4 6 9 ,1 5 2-2 0 .7 % 6 2 5 ,3 2 8 5 9 ,1 3 2 1 7 ,8 0 8 1 3 3 ,6 5 08 6 .7 % 1 7 8 ,2 0 0 1 6 0 ,3 9 2 1 4 ,9 3 6 9 ,9 0 0-5 0 .9 % 1 3 ,2 0 0( 1 ,7 3 6 ) 1 ,1 9 9 ,3 7 6 1 ,2 3 8 ,1 0 33 .1 % 1 ,6 5 0 ,5 9 6 4 5 1 ,2 2 0 9 8 ,0 6 3 6 3 ,2 5 35 5 .0 % 5 0 ,8 8 3( 4 7 ,1 8 0 )Chart 2 – Carpe Diem – Meridian income statement, March YTD FY2014Carpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

7Carpe Diem – Meridian’s balance sheet continues to improve. All debts are being paid on schedule.Outstanding loan principle has been reduced by 150,000 on debts exclusively the responsibility ofCarpe Diem Indiana. The balance sheet includes philanthropically backed lines of credit of 350,000.Liquidity Ratio1 2 .4A sset sCurrent A sset sC as h 3 2 ,1 6 4P repaid E xpens es 9 0 ,0 0 0Total Current As s ets 122,164Fixed A sset sBuildings and I mprovements 2 1 3 ,6 8 1C omputer E quipment 3 3 9 ,6 3 8A c c umulated D eprec iation( 6 8 ,1 6 6 )Total Fixed As s ets 485,153Other A sset sTotal Other As s etsTota l Assets 607,317Liabilities A nd Net A sset sCurrent LiabilitiesA c c ounts P ayable 1 0 ,1 3 0A c c rued Salaries , P ayroll T axes , P os temployment Benefits( 2 4 4 )Total Current Liabilities 9,886Long Term LiabilitiesL oans P ayable 8 1 1 ,8 5 2Total Long Term Liabilities 811,852Tota l Li a bi l i ti es 821,738Net A sset sU nres tric ted N et A s s ets( 3 1 2 ,4 8 4 )P rofit/L os s Y T D 9 8 ,0 6 3Total Net As s ets( 214,421)Tota l Li a bi l i ti es And Net Assets 607,317Chart 3 – Carpe Diem – Meridian balance sheet, March 2014Carpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

8Carpe Diem – Meridian’s financial stability continues to track well into FY2015. Enrollments continue toimprove and cost saving measures implemented in FY2014 will further improve net income projections.This will position the school well for future capital needs and staffing requirements.Adding the proposed schools will accrue cost savings to Carpe Diem – Meridian. These cost savings arenot included in the projections and would represent a further improvement in the overall financialstability of Carpe Diem - Meridian. The savings include: Sharing IT support costs across the 2-3 schools (estimated 15,000 savings per year)Student information system discounting for multiple schools (estimated 4,000 savings per year)Health insurance (increased subsidized coverage available for staff without cost increases)General insurance including D&O insuranceFacilities management (estimated 10% discount for multiple sites)Carpe Diem Learning Systems commitmentIf three Indiana schools are operational in the fall of 2015, Carpe Diem will establish a full time residentCarpe Diem manager in Indianapolis at Carpe Diem Learning Systems expense. This person will haveexclusive responsibility to work with Carpe Diem Indiana to manage the central office responsibilitiesand raise funds for the remaining 3 charters to be activated.Carpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

9Financial support for expansionThe per-school start up revenue required for each school is 610,290. Technology and furniture will befinanced like it was for Carpe Diem - Meridian. Chart 4 contains start-up cost details consistent withexperiences with Carpe Diem – Meridian.ItemStartup staff costsTechnologyMarketingLegalStaff developmentProject management (CDLS)*Furniture and equipmentFirst year expenses**Total Expenditures Cost 000267,9401,270,290Cash required 132,351 Financed 400,000 260,000 660,00050,0005,00035,000120,000 267,940610,290* Project payment begins upon project start** Based on 160 1st year enrollment & 7,200 per pupil state fundingChart 4 – Anticipated start-up costsThe financial support of the first school’s opening has been secured through the term sheets for 3backed lines of credit. These lines of credit will provide working capital for the start-up and first year ofoperation. The term sheets are specifically designed to assure financial stability for the school until it isfully operational. These lines of credit are anticipated to be paid for by philanthropic and federal startup funds. One line of credit will be maintained to assure maintenance of the 60 day working capital cashflow provision required by Carpe Diem Learning Systems.The lines of credit are provided so the project management fees, which begin immediately, and thecosts for hiring a full time principal in August can occur. These lines of credit will also ensure financialstability regardless of additional philanthropy or grants and the payback provisions have been structuredto assure a strong financial picture regardless of philanthropy results.Two immediate sources of funds to pay for the lines of credit are Walton grant - 245,000o The Walton grant will be applied for in the fall of 2014 and will be available for expensesanticipated in summer of 2015.o The deadline for submitting this grant is anticipated in August, 2014 and at other timesbetween now and the start of school.o This funding source has a moderate risk of not materializingFederal startup funds (PCSP funds) - 90,000 first year, 240,000 second year, 240,000Carpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

10oooWe have confirmed the continued availability of the federal charter school start-upfunds for FY2015. The amounts presented are based on experiences with Carpe Diem –Meridian.The deadline for submission of the first year grant is a rolling window. IndianaDepartment of Education staff suggest submitting the grant after receiving charterapproval and at least 60 days prior to anticipated need for funding. Grant applicationmaterials are substantially prepared and can be submitted at any time after August,2014.This funding source has a minimal risk of not materializingFinancial sustainability of all schoolsThe following is a 5 year projection of the financial sustainability of Carpe Diem Indiana schools. Thebudget projections are provided in detail for 5 year budget projections for Carpe Diem – Meridian andfor the new school respectively. Opening 2 schools in the fall of 2015 would simply add an additionalschool using the budget provided for a new school. Some minor financial advantages may be accruedbut are not presented.Overall 5 year projections of revenue, expenses, and net cash position for Carpe Diem Indiana arepresented below.Carpe Diem - MeridianSchool 2School 3Carpe Diem - MeridianSchool 3Carpe Diem Indiana financial summary (3 schools)FY2015FY2016FY2017 1,949,477 2,198,633 2,204,841 125,000 1,686,077 2,152,433 125,000 1,686,077 2,152,433Total Revenue 2,199,477 5,570,786 6,509,707 FY20182,240,4892,204,8412,204,8416,650,171 FY20192,244,0802,240,4892,240,4896,725,058 Total Expenses 1,868,5741,733,3661,733,3665,335,306 1,883,0971,771,6141,771,6145,426,324Net Income 1,726,075229,700229,7002,185,475 14,001 1,760,4401,548,3081,548,3084,857,057 1,830,2331,654,5131,654,5135,139,259713,730 1,370,448 1,314,864 1,298,734Chart 5 – Carpe Diem Indiana summary budgeted financial position – 5 year projectionCarpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

11Community engagementOur targeted community is noted in the site selection section of this proposal. As noted in the selectioncriteria, this community needs more good academic seats and has tremendous potential to improvestudent results. We are confident this need will result in strong community support once we have aprincipal engaged full time.Community engagement has at least two parts. The first is simply acceptance by the community andproviding information about the school and what it hopes to accomplish. The second is actual studentenrollment.HiringTo accomplish the community engagement, a principal will be hired by August, 2014. The principal willbe the key leader for community engagement. 100% of the principal’s time from August throughDecember will be devoted to this effort. Significant time will be devoted to community engagementthroughout the first quarter of 2015 as well.From March through start of the school, all energy will be focused on enrollment and staff preparationfor the start of the school year. Marketing will continue until enrollment targets are met.In additional to cultivating relationships in order to better support our potential students, parents andfamilies, the school leader will inform the community of our unique program that includes: Student-centered personalized learningCulture of learning with high expectationsIndividualized pacing and mastery-based accelerationTeachers plus technologyData informed instructionStudent empowerment over instructionPyramid of interventions to meet academic, social and emotional needsCommunity partnerships for internships, college and community serviceParental involvement opportunitiesDual credit (earn an AA degree and a HS diploma)Flexible learning pace, place and purposeCareer Technical Education (CTE)Marketing materialsMarketing and distribution materials need to be created and, based upon neighborhood demographics,may need to be created in both English and Spanish. These materials include: Brochure of results of current campusesPull tab fliersPostcards1 pagerCarpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

12 Door hangersInfo session PPT“Day in the Life” videoUpdated webpageCommunity teamA community team will include parent volunteers who are truly passionate about the school coming tothe community – they will help sell the unique nature of Carpe Diem in order to convince families thatthe school will make a big difference. The team of people on the ground will be those who areconvinced that Carpe Diem is the best option for students who are interested in becoming activeparticipants in their education. The team will post fliers, host info sessions, place stacks of postcardsand individually hand out door hangers as appropriate. The team will also arrange parent visits CarpeDiem - Meridian, so that these parents can give first hand testimonials and speak at info sessions.Information sessionsA minimum of 2 information sessions will be held each week, and sessions for the community at largewill be planned as often as we’re confident that we’ll have 30 attendees (60 is preferred). Examplesthat don’t fit this “community at large” description but will be pursued include sessions in people’s livingrooms and community spaces, sessions hosted by an individual company/employer, or sessions open toparents of a specific school or other subgroup. Public sessions will be held at least every other weekduring open registration and once a month thereafter (including during the school year). Info sessionscan also be scheduled around “special events” when possible. Examples: Hiring PrincipalAnnouncing locationVisit from existing Carpe Diem familyOther guest speakersEmail blastsWeekly or biweekly email blasts will go out on Fridays or over the weekend. The primary focus of theseemails will be to advertise info nights, location updates, open registration, and to encourage communitymembers to spread the word and asking for their input on effective advertising and other topics.Reminder emails will be sent the day before each info session.Social mediaFacebook, Twitter, and LinkedIn accounts will be created and actively maintained as soon as possibleafter charter activation.Purchased marketingThis is a secondary tool unless other efforts prove ineffective. Select ads will be taken out with theircontinued/ongoing reach in mind.Carpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

13PressPress coverage will not begin until all board and state approvals have been received. Press coverage willbe top of mind as each phase of the school development occurs.Local supportBefore the site is finalized, but after it is under control, Carpe Diem will identify and contact local electedofficials and seek their support. Additional neighborhood and area groups or organizations includingarea churches will be contacted to both provide information and seek support. As supporters areidentified, they will be enlisted in a volunteer effort to “spread the word” about the new school.New school sitesThe Carpe Diem Indiana board established some basic criteria for a new site for the schools beingproposed. These criteria included: Impact on Meridian enrollmentAccessibility to potential student populationsGeneral support from the surrounding communityDesirability for school site including such factors as cost, challenges, location, and bandwidthAcademic need for improving the educational options available to potential studentsCarpe Diem Learning Systems has reviewed 33 potential sites in detail. Most have been eliminated asunusable for one reason or another. The most common reasons for elimination included too close toMeridian, too expensive, inadequate space, location/challenges within the area, and not in IPS.The recommended site for the first school is in Northeast Indianapolis. The additional school isrecommended for Northwest Indianapolis. A primary site is under consideration pending charteractivation for each of the two schools. The asking price is within our budget on both sites. Bandwidth isstrong. General conditions around the school site are desirable.The sites are beyond 5 miles from Meridian and should have, at worst, minimal impact on the MeridianCampus site. The sites are within close proximity to active neighborhoods. Student populations arestrong. Population growth is anticipated over the next 5 years. There is a mix of household incomelevels with about 50% below 50,000 per year.The sites will provide underserved students with a quality educational option. Students will logicallycome from IPS, but some will come from neighboring school districts. IPS school quality problems areevident. Surrounding schools to the site have C state ratings. The sites are within or near an IFF PriorityArea.Carpe Diem Learning Systems, LLC, all rights reserved, 2014Subject to change without notice

14Model adjustments to accommodate parent/student recommendationsWhile the Carpe Diem – Meridian Campus has been successful, we have received useful feedback fromparents and students regarding school amenities. The new schools will be adjusted to incorporate someof these recommendations. The most prominent changes will include Additional physical fitness space including a gym.The capacity for serving hot food for breakfast and lunchExpanded project work activities including provisions for artExpanding the number of schools under operation will also afford more student interaction, joint socialevents, and other opportunities desired by students at Meridian. This will not detract from the uniqueexperiences each school will develop for their students.Carpe Diem Indiana will be undertaking retrofits to the Carpe Diem – Meridian Campus to assure allCarpe Diem Indiana school facilities are of similar quality. This will be critical to enrollment and staffmorale at Carpe-Diem - Meridian.Major project milestonesThe major milestones with start and deadline requirements are presented below. This is presented as a“per school” list. If both schools are implemented, some synergies are accru

Indiana Charter School Board CARPE DIEM EXPANSION An “experienced operator” is defined as either: (a) an applicant group that has previously operated a charter school or a network of charter schools; or (b) an applicant group that has not previously operated a charter school but inte