[Federal Register: November 8, 2001 (Volume 66, Number 217)]
[Notices]
[Page 56544-56547]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08no01-37]
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DEPARTMENT OF EDUCATION
[CFDA No. 84.354A]
Office of Elementary and Secondary Education; Charter Schools
Facilities Financing Demonstration Program; Notice Inviting
Applications for New Awards for Fiscal Year (FY) 2001 funds
Purpose of Program: Charter schools provide parents and students
with options that can lead to better student achievement. However, many
of these schools have insufficient revenue and lack access to private
financing for facilities. This program will provide one-time grants to
eligible entities to permit them to demonstrate innovative credit
enhancement initiatives that assist charter schools in accessing
private sector and other non-Federal capital to address the cost of
acquiring, constructing, and renovating facilities. Grant projects
awarded under this program will be of a sufficient size, scope, and
quality so as to ensure an effective demonstration of the proposed
strategies.
Eligible Applicants: (A) A public entity, such as a State or local
governmental entity; (B) A private nonprofit entity; or (C) A
consortium of entities described in (A) and (B).
Applications Available: November 8, 2001.
Deadline for Transmittal of Applications: January 4, 2002.
Deadline for Intergovernmental Review: March 6, 2002.
Estimated Available Funds: $25,000,000.
Estimated Range of Awards: $2,500,000-$10,000,000.
Estimated Average Size of Awards: $8,333,000.
Estimated Number of Awards: 3-5. The Secretary will make, if
possible and appropriate, at least one award in each of the three
categories of eligible applicants.
Note: The Department is not bound by any estimates in this
notice.
Project Period: From the start date indicated on the grant award
document until the Federal funds and earnings on those funds have been
expended for the grant purposes or until financing facilitated by the
grant has been retired, whichever is later.
Page Limit: We have found that reviewers are able to conduct the
highest-quality review when applications are concise and easy to read.
Applicants are encouraged to limit their applications to no more than
50 double-spaced pages (not including the required forms and tables),
to use a 12-point or larger size font with one-inch margins at the top,
bottom, and both sides, and to number pages consecutively.
Applicable Regulations: (a) The Education Department General
Administrative Regulations (EDGAR) in 34 CFR parts 74, 75, 77, 79, 80,
82, 85, 86, 97, 98, and 99.
SUPPLEMENTARY INFORMATION:
Application Content
Each Charter Schools Facilities Financing Demonstration Program
application must include the following specific program elements:
1. A statement identifying the activities proposed to be undertaken
with grant funds (the ``grant project'') and the timeline for the
activities, including how the applicant will determine which charter
schools will receive assistance, how much and what types of assistance
these schools will receive, and what procedures the applicant will use
for documenting grant project procedures and results.
2. A description of the involvement of charter schools in the
application's development and the design of the proposed grant project.
3. A description of the applicant's expertise in capital markets
financing and organizational capacity to implement the proposed grant
project successfully. (Consortium applicants must list information for
each of the participating organizations.)
4. A description of how the proposed grant project will leverage
the maximum amount of private sector and other non-Federal capital
relative to the amount of Charter Schools Facilities Financing
Demonstration Program funding used, the type of schools to be served,
and the type of assistance to be provided, and how the proposed
activities will otherwise enhance credit available to charter schools.
5. In the case of an application submitted by a State governmental
entity, a description of current and planned State funding policy and
other forms of financial assistance that will help charter schools meet
their facility needs.
Use of Funds: Grant recipients must, in accordance with State and
local law, directly or indirectly, alone or in collaboration with
others, deposit the grant funds received under this program (other than
funds used for administrative costs) in a reserve account established
and maintained by the grantee for this purpose. Amounts deposited in
such account shall be used by the grantee for one or more of the
following purposes to assist charter schools in accessing private
sector and other non-Federal capital:
(1) Guaranteeing, insuring, and reinsuring bonds, notes, evidences
of debt, loans, and interests therein;
(2) Guaranteeing and insuring leases of personal and real property;
(3) Facilitating financing by identifying potential lending
sources, encouraging private lending, and other similar activities that
directly promote lending to, or for the benefit of, charter schools;
and
(4) Facilitating the issuance of bonds by charter schools, or by
other public entities for the benefit of charter schools, by providing
technical, administrative, and other appropriate assistance (such as
the retention of bond counsel, underwriters, and other advisors,
attracting potential investors, the procurement of bond counsel, and
the consolidation of multiple charter school projects within a single
bond issue).
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Funds received under this program and deposited in the reserve
account shall be invested in obligations issued or guaranteed by the
United States or a State, or in other similarly low-risk securities.
Investments shall be designed to preserve principal.
Any earnings on funds received under this program shall be
deposited in the reserve account and be used in accordance with the
requirements of this program.
An eligible entity receiving a grant under this program shall use
the funds deposited in the reserve account to assist one or more
charter schools in accessing capital to accomplish one or both of the
following objectives:
(1) The acquisition (by purchase, lease, donation, or otherwise) of
an interest (including an interest held by a third party for the
benefit of a charter school) in improved or unimproved real property
that is necessary to commence or continue the operation of a charter
school.
(2) The construction of new facilities, or the renovation, repair,
or alteration of existing facilities, necessary to commence or continue
the operation of a charter school.
Grantees must ensure that all costs incurred using funds from the
reserve account are reasonable. The burden of proof is upon the
grantee, as a fiduciary under its agreements with the Secretary, to
establish that costs are reasonable. Each grantee must also clearly
indicate with respect to each financial obligation it enters into
pursuant to this grant program that the full faith and credit of the
United States is not pledged to the payment of funds under such
obligation.
Grantee Performance Agreements and Reporting Requirements
Applicants that are selected to receive an award must enter into a
Performance Agreement with the Department prior to receiving their
award. A key element of the Performance Agreement is the performance
goals. In developing performance goals, Department staff and each
applicant will rely on the applicant's annual projections submitted
under the Business/Organizational Capacity section of the application
and the objectives established in the approved application. The
Performance Agreement will also describe the ways in which the
Department and the grantee will work together to accomplish the
purposes of the program.
The Secretary, in accordance with applicable authorities, shall
collect all of the funds in the reserve account established with grant
funds (including any earnings on those funds) if the Secretary
determines that the grantee has permanently ceased to use all or a
portion of the funds in such account to accomplish the purposes
described in the authorizing statute and the Performance Agreement or,
if not earlier than 2 years after the date on which the entity first
received these funds, the entity has failed to make substantial
progress in undertaking the grant project.
During each fiscal year that the grantee's obligation to the
Federal government remains in effect, grantees will submit reports (as
detailed below) to the Department. The grantee's commitment continues
for the duration of the Project Period.
Applicants selected for funding will be required to submit the
following reports to the Department:
1. An annual report that includes:
a. a copy of the most recent financial statements and any
accompanying opinion on such statements prepared by the independent
public accountant reviewing the financial records of the grantee;
b. a copy of any report made on an audit of the financial records
of the grantee conducted during the reporting period;
c. an evaluation by the grantee of the effectiveness of its use of
the Federal funds in leveraging private sector and other non-Federal
funds;
d. a description of characteristics of lenders and other financial
institutions participating in activities undertaken by the grantee
during the reporting period;
e. a narrative description of the grantee's activities in support
of the objectives of the program and its performance goals including a
listing and description of the charter schools served during the
reporting period; and
f. such other information as the Secretary may require.
2. Semiannual reports that include internal financial statements
and such other information as the Secretary may require in the
Performance Agreement.
Grantees must also cooperate and assist the Department with any
periodic financial and compliance audits of the grantee, as determined
necessary by the Department. The specific grant agreement between the
grantee and the Department may contain additional reporting
requirements.
Grantees must maintain and enforce standards of conduct governing
the performance of its employees, officers, directors, trustees, and
agents engaged in the selection, award, and administration of contracts
or agreements related to this grant. The standards of conduct should,
at a minimum, require disclosure of direct and indirect financial or
other interests, mandate disinterested decision-making, and indicate
corrective actions to be taken in the event of violation.
Limitation on Administrative Costs
A grantee may use not more than 0.25 percent (one quarter of one
percent) of the grant funds for the administrative costs of the grant.
Charter Schools Eligible to Benefit From This Program
The charter schools that a grantee selects to benefit from this
program must meet the definition of a charter school, as defined in the
Public Charter Schools Program authorizing statute in section 10310 of
the Elementary and Secondary Education Act of 1965. This definition is
repeated as follows in this application notice for the convenience of
the applicant.
(1) A charter school is a public school that--
(A) in accordance with a specific State statute authorizing the
granting of charters to schools, is exempted from significant State or
local rules that inhibit the flexible operation and management of
public schools, but not from any rules relating to the other
requirements of this paragraph;
(B) is created by a developer as a public school, or is adapted by
a developer from an existing public school, and is operated under
public supervision and direction;
(C) operates in pursuit of a specific set of educational objectives
determined by the school's developer and agreed to by the authorized
public chartering agency;
(D) provides a program of elementary or secondary education, or
both;
(E) is nonsectarian in its programs, admissions policies,
employment practices, and all other operations, and is not affiliated
with a sectarian school or religious institution;
(F) does not charge tuition;
(G) complies with the Age Discrimination Act of 1975, title VI of
the Civil Rights Act of 1964, title IX of the Education Amendments of
1972, section 504 of the Rehabilitation Act of 1973, and part B of the
Individuals with Disabilities Education Act;
(H) is a school to which parents choose to send their children, and
that admits students on the basis of a lottery, if more students apply
for admission than can be accommodated;
(I) agrees to comply with the same Federal and State audit
requirements as do other elementary and secondary schools in the State,
unless such requirements are specifically waived for the purpose of
this program;
[[Page 56546]]
(J) meets all applicable Federal, State, and local health and
safety requirements;
(K) operates in accordance with State law; and
(L) has a written performance contract with the authorized public
chartering agency in the State that includes a description of how
student performance will be measured in charter schools pursuant to
State assessments that are required of other schools and pursuant to
any other assessments mutually agreeable to the authorized public
chartering agency and the charter school.
Methods for Applying Selection Criteria
The Secretary gives distinct weight to the listed criteria and the
maximum score for each criterion is indicated in parenthesis. Within
each criterion, the Secretary evaluates each factor equally. The
maximum score that an application may receive is 100 points. In making
final funding decisions, the Secretary intends to make, if possible and
appropriate, at least one award in each of the three eligible applicant
categories.
In evaluating applications for grants under this program
competition, the Secretary will use the following project selection
criteria. The selection criteria address two important questions:
A. Does the applicant have the capacity to carry out the proposed
grant project?
B. Has the applicant proposed a grant project that will make a
significant contribution toward meeting the purpose of the Charter
Schools Facilities Financing Demonstration Program and thereby increase
charter schools' access to facilities financing?
A. The selection criteria related to the applicant's capacity to
carry out the proposed grant project include:
1. The business and organizational capacity of the applicant to
carry out the grant project (25 points).
--The amount and quality of experience the applicant has with the
activities it proposes to undertake in its application, such as
enhancing the credit on debt issuances, guaranteeing leases, and
facilitating financing;
--The applicant's financial stability;
--The adequacy of the applicant's policies and procedures regarding
loan underwriting, portfolio monitoring, and financial management to
protect against unwarranted risk; and
--The adequacy of standards of conduct to prevent conflicts of
interest.
2. The grant project team (20 points).
--The qualifications, including relevant training and experience, of
the project manager and other members of the grant project team,
including consultants or subcontractors; and
--The adequacy of the applicant's staffing plan for the grant project.
--For non-profits only, the qualifications, including relevant training
and experience, of members of the board of directors holding key
positions.
3. The adequacy of resources (5 points)
--The resources to be contributed by each co-applicant (consortium
member), partner or other grant project participant to the
implementation and success of the grant project; and
--The extent to which the requested grant amount is reasonable in
relation to the objectives, design, and potential significance of the
proposed grant project.
--For State governmental entities, the extent to which steps have or
will be taken to help charter schools within the State obtain adequate
facilities.
B. The selection criteria related to the potential contribution of
the proposed grant project to achieving the purpose of the Charter
Schools Facilities Financing Demonstration Program include:
1. The quality of the design and potential significance of the
proposed grant project (35 points).
--The extent to which the grant project goals and objectives are
clearly specified, measurable, and appropriate for the purpose of the
Charter Schools Facilities Financing Demonstration Program;
--The extent to which the grant project implementation plan and
activities, including the partnerships established, are likely to
achieve the objectives sought by the project.
--The extent to which the proposed grant project is likely to produce
results that will be documented and helpful to others nationally in
providing facilities financing assistance to charter schools;
--The extent to which the grant project will use appropriate criteria
for selecting charter schools for assistance and for determining the
type and amount of assistance to be given;
--The importance or magnitude of the results or outcomes likely to be
attained by the proposed grant project (e.g., the number and variety of
charter schools assisted and the amount of capital leveraged).
2. The quality of the services (15 points).
--The extent to which the services to be provided by the proposed grant
project are appropriate to the needs of the charter schools to be
served;
--The extent to which charter schools and chartering agencies were
involved in the design of and demonstrate support for the grant
project;
--The extent to which the technical assistance and other services to be
provided by the proposed grant project involve the use of cost-
effective strategies for increasing charter school access to facilities
financing; and
--The extent to which the services to be provided by the proposed grant
project are focused on quality charter schools with the greatest needs.
Waiver of Proposed Rulemaking
It is the Secretary's practice, in accordance with the
Administrative Procedure Act (5 U.S.C. 553), to offer interested
parties the opportunity to comment on proposed rules. Section 437(d)(1)
of the General Education Provisions Act (GEPA), however, allows the
Secretary to exempt from rulemaking requirements rules governing the
first grant competition under a new or substantially revised program
authority (20 U.S.C. 1232(d)(1)). Funding for this new initiative was
provided in the Department's FY 2001 appropriations act, enacted
December 21, 2000. The Secretary, in accordance with section 437(d)(1)
of GEPA, has decided to forego public comment in order to ensure timely
grant awards.
For Applications Contact: Education Publications Center (ED Pubs),
P.O. Box 1398, Jessup, MD 20794-1398. Telephone (toll free): 1-877-433-
7827. FAX: (301) 470-1244. If you use a telecommunications device for
the deaf (TDD) you may call (toll free): 1-877-576-7734.
You may also contact ED Pubs at its Web site: http://www.ed.gov/
pubs/edpubs.html; or you may contact ED Pubs at its e-mail address:
edpubs@inet.ed.gov.
If you request an application from ED Pubs, be sure to identify
this competition as follows: CFDA number 84.354A.
FOR FURTHER INFORMATION CONTACT: Jennifer Ryan McMahon, U.S. Department
of Education, 400 Maryland Avenue, SW, Room 3E239, Washington, DC
20202. Telephone: (202) 260-9738 or via Internet:
Jennifer.McMahon@ed.gov.
Electronic Access to This Document: You may view this document, as
well as all other Department of Education documents published in the
Federal Register, in text or Adobe Portable
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Document Format (PDF) on the Internet at the following site:
www.ed.gov/legislation/FedRegister
To use PDF you must have Adobe Acrobat Reader, which is available
free at this site. If you have questions about using PDF, call the U.S.
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in
the Washington, DC area at (202) 512-1530.
The Department intends to offer further information about the
program at the following Internet site: http://www.ed.gov/offices/OESE/
goals/progresp.html
Individuals with disabilities may obtain this document in an
alternative format (e.g., Braille, large print, audiotape, or computer
diskette) on request using the contact information provided under FOR
APPLICATIONS CONTACT.
Note: The official version of this document is the document
published in the Federal Register. Free Internet access to the
official edition of the Federal Register and the Code of Federal
Regulations is available on GPO access at: http://
www.access.gpo.gov/nara/index.html.
Program Authority: Elementary and Secondary Education Act of
1965, title X, part C, subpart 2, as amended by the Department of
Education Appropriations Act, 2001, section 322.
Dated: November 5, 2001.
Susan B. Neuman,
Assistant Secretary for Elementary and Secondary Education.
[FR Doc. 01-28087 Filed 11-7-01; 8:45 am]
BILLING CODE 4000-01-U