OPERATIONS: USE OF SCHOOL PROPERTY

BUSINESS AND OPERATIONS: USE OF SCHOOL PROPERTY [LAW]

1. Definitions

As used in this policy, the following terms are defined as follows:

A. Real Estate – an interest, including a lease interest, in real property recognized by Texas law, or in improvements such as buildings, fixtures, utilities, landscaping, construction in progress, or other improvements;

B. Lease Interest – the legal rights obtained under a capital or operating lease. These include the right to occupy, use, and enjoy the real estate given by the property owner in exchange for rental payments or other consideration specified in the lease, together with any associated rights that the lease confers on the tenant under the lease or other law;

C. Personal Property – an interest in personal property recognized by Texas law, including:

(1) Furniture, equipment, supplies, and other goods;

(2) Computer hardware and software;

(3) Contract rights, intellectual property such as patents, and other intangible property;

(4) Cash, currency, funds, bank accounts, securities, and other investment instruments;

(5) The right to repayment of a loan, advance, or prepayment, or to the payment of other receivables; and

(6) Any other form of personal property recognized by Texas law.

19 Tex. Admin. Code § 100.1011(4)-(6).

D. Public Property – an interest in real estate or personal property acquired, improved, or maintained using any state funds that were received by the charter holder on or after September 1, 2001.

19 Tex. Admin. Code § 100.1063(a).

(1) Property acquired, improved, or maintained partly using state funds and partly using other funds is mixed public and private property and is subject to all requirements of this policy that apply to public property.

19 Tex. Admin. Code § 100.1063(e).

(2) An interest in real estate acquired, improved, or maintained using 50% or more state funds is public property, even if all the state funds used were received by the charter holder before September 1, 2001.

19 Tex. Admin. Code § 100.1065(b)(1).

(3) An interest in real estate acquired, improved, or maintained partly using state funds received on or after September 1, 2001 and partly using state funds received before September 1, 2001, is public property.

19 Tex. Admin. Code § 100.1065(b)(2).

(4) An interest in personal property acquired, improved, or maintained partly using state funds received on or after September 1, 2001, and partly using state funds received before September 1, 2001, is public property.

19 Tex. Admin. Code §§ 100.1063(a), (e), 100.1065(b)(1)-(3).

E. Non-Public Property

(1) Personal Property

An interest in personal property acquired, improved, and maintained solely using state funds that were received by the charter holder before September 1, 2001, is non-public property.

(2) Real Estate

An interest in real estate acquired, improved, and maintained using less than 50% state funds is non-public property if all state funds used were received before September 1, 2001.

19 Tex. Admin. Code § 100.1065(a)(1)-(2).

2. Nature of Charter School Property

A. An interest in real estate or personal property acquired, improved, or maintained using state funds that were received by the charter holder on or after September 1, 2001:

(1) Is public property for all purposes under state law;

(2) Is held in trust by the charter holder for the benefit of the students of the school; and

(3) May be used only for a purpose for which a school district may use school property.

The date on which the property was acquired, improved, or maintained is not determinative.

Tex. Educ. Code § 12.128(a); 19 Tex. Admin. Code § 100.1063.

3. Ownership of Public Property

Public property is owned by the charter holder, regardless of the funds used to acquire it. Unless the commissioner has taken action to repossess or dispose of a former charter holder’s property, the charter holder retains all title to the property, exercises complete control over the property, and is entitled to all uses and benefits from the property.

19 Tex. Admin. Code § 100.1063(d).

4. Property Held in Trust

A. Public property is held by the charter holder in trust for the benefit of the students of the charter school.

B. With respect to the public property they manage, the board of the charter holder, and the board and officers of the school are trustees under Texas law. The students enrolled in the school are beneficiaries of the trust.

C. Trustees shall be held to the standard of care and fiduciary duties that trustees owe the beneficiary of a trust under Texas law; that is, trustees shall exercise the judgment and care under the circumstances then prevailing that persons of ordinary prudence, discretion, and intelligence exercise in the management of their own affairs.

19 Tex. Admin. Code § 100.1063(b); Tex. Prop. Code § 113.056(a).

5. Use of Public Property

A. School property is public property that may be used only for a purpose for which a school district may use school district property, and only to implement an instructional program to students at one or more elementary or secondary grade levels that is consistent with the school’s charter.

(1) Any use or application of public property for a purpose other than implementing an instructional program that is described in the school’s charter constitutes misuse and misapplication of such property, and is subject to Texas law governing misuse or misapplication of public property.

(2) The board of a charter holder shall adopt and enforce local policies governing the use and application of public property by its employees, agents, contractors, and management companies. The policies shall prohibit the use or application of public property for any purpose but a program described in the open-enrollment charter, except that the policies may authorize charter holder employees to use local telephone service, cellular phones, electronic mail, Internet connections, and similar public property for incidental personal use, if the policies:

(a) Do not result in any direct cost paid with state funds, or the charter holder is reimbursed for any direct cost incurred;

(b) Do not impede school functions;

(d) Authorize only incidental amounts of employee time – time periods comparable to reasonable coffee breaks during the day – for personal matters.

(3) The charter holder board, and the board and officers of the school, shall authorize all uses and applications of the public property under their control, and shall not authorize any use or application that is inconsistent with school policies regarding use of school property.

(4) Delegation of Management

If the school charter delegates daily management of the school’s property to any person, including a management company, the charter holder board, and the board and officers of the charter school, shall remain fully responsible to authorize all uses and applications of public property and enforce the school’s policies regarding use of school property.

(5) Use by a Contractor

The charter holder may authorize use of its public property by a contractor for the purpose of providing goods or services under a contract, if such use is an express contract term, factored into the price of the contract, and the contract is duly authorized by the board of the charter holder.

B. Joint Use

The board of the charter holder shall, by separate vote, approve any joint use of real property for charter and non-charter activities. In the minutes of the vote approving the joint use, the charter holder board shall set forth the methodology used to allocate shared costs and the percentage allocation basis between charter and non-charter activities.

19 Tex. Admin. Code § 100.1063(c).

6. Accounting for Public Property

All property held, acquired, improved, or maintained by the charter holder is subject to the annual audit requirement regardless of whether it is public or private property.

A. Annual Audit Report

(1) Exhibit Identifying Assets

Each charter holder shall include in its annual audit report an exhibit identifying the fixed assets of the charter holder and the ownership interest of all parties for all real estate and capitalized personal property presently held by the charter holder or acquired, improved, or maintained by the charter holder during the term of the open-enrollment charter.

(2) Details of Exhibit

Pursuant to the requirements in 19 Tex. Admin. Code § 109.41 (relating to Financial Accountability System Resource Guide), the annual audit report must separately disclose the cost basis and accumulated depreciation of all public property and all other property held, acquired, improved, or maintained by the charter holder.

(3) Alternative to Exhibit

As an alternative to the exhibit described in subsection (6)(A)(1) above, the charter holder may submit a statement, in accordance with the requirements of 19 Tex. Admin. Code § 109.41, that all property acquired, improved, or maintained during the term of the open-enrollment charter, and all property presently held by the charter holder, is public property.

19 Tex. Admin. Code § 100.1063(f).