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LEGAL ISSUES


Is Charter School Work Public or Private? C


By Rosemary Nunn and Nasim Tourkaman, Musick, Peeler & Garrett LLP


ontemplating charter school work? You may be asking yourself myriad questions. Is


the job public or private? Is it union work? Do prevailing wage rates apply? Why aren’t the jobs competitively bid? Characterization of a construction


project as “public” or “private” has broad implications, especially in California. But in the charter school arena, determining whether a project is public or private is anything but straightforward. A charter school receives education


funding primarily from the state. Its charter is authorized by the board of the local school district, a county board of education or directly by the State Board of Education. So you might think charter school construction is a public work. But that isn’t necessarily the case. In fact, most charter school construction work is private. If you are confused, take solace


– you aren’t alone. Courts across the United States have very different, often conflicting, holdings on this issue. California courts and tribunals (Department of Industrial Relations, the Attorney General) have skirted the issue, or just narrowly ruled on related issues, avoiding a holding squarely on point. Each year assembly bills are drafted, usually declaring charter schools to be public entities for certain purposes, but each bill has died on the floor or been vetoed, never becoming law. So where does California stand on this today?


Public v. Private Works 101 In California, three main


factors are used to analyze whether a construction project is public or private: (a) ownership; (b) funding; and (c) use. By way of background, in 1992 the Charter Schools Act (CSA) revolu- 16 March/April 2019


tionized public education by allowing laypersons to obtain charters to operate schools that function within public school districts, charge no tuition, and receive financing through state and local tax dollars. In 1998, California enacted Education Code section 47604, allowing charter schools to be operated by nonprofit corporations. Tis nuance changes the landscape


for charter school construction. In Wells v. One2One Learning


Foundation, Inc. (2006) 39 Cal.4th 1164, several charter schools argued that they should be treated the same as public school districts, pointing to language in the CSA and Education Code stating that charter schools are under the jurisdiction of the Public


The Wells court noted that although charter schools receive public monies to operate schools, the mere fact the schools receive public funds, earmarked for “public” education, does not mean public construction laws apply.


School System, and thus are public entities. Te Wells court disagreed, holding that despite this language, because charter schools are not operated by the public school system, but rather, by nonprofit corporations, they are not public entities, and thus are exempt from the laws governing school districts. Te court focused on the autonomy


and independent responsibility of charter school operators. When a charter school is operated by a non-profit corporation, the corporation


Rosemary Nunn Nasim Tourkaman


is responsible for the school’s debts and obligations, not the chartering authority. In other words, the public district, or chartering authority, is immune from financial liability for the charter school. Ergo, charter schools and public school districts are not the same; logic dictates that charter school corporations are private entities.


Providing Public Education Doesn’t Make It a Public Entity


In Gateway Community Charter


v. Spiess (2017) 9 Cal.App.5th 499, a charter school claimed it was a quasi- municipal corporation to avoid liability under California employment laws. Although the court acknowledged that charter schools provide an essential government function, by providing public education through the charter schools they operate, nevertheless, the court concluded this did not make the charter school a public entity. In coming to this decision, the


Gateway court focused on several indicia of a public entity, that do not exist for charter schools: power to acquire property through eminent domain; power to impose taxes and fees upon those who live within its geographical jurisdiction (indeed, charter schools have no geographical jurisdiction, but exist pursuant to a charter); independent regulatory or police powers; and board members elected by the public. Given the absence of these key characteristics, the court concluded that charter schools are not quasi-municipal corporations California Constructor


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