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A series of lawsuits alleging that three public school districts -- Santa Ynez Valley Union, Lompoc Unified and Santa Barbara Unified -- intentionally withheld close to $2 million in state mandated payments from a Santa Barbara County charter school have been settled, according to court records and attorneys representing the charter program.

Attorney Christopher Petersen, who represents Olive Grove Charter School, said the districts agreed to “pay 100 percent of what was owed” to the organization. Olive Grove is in the process of dismissing the suits, according to Petersen, a process that should be complete by the end of the month.

“We were contesting the numbers … and refused payment until further clarification,” explained Scott Cory, superintendent of the Santa Ynez Valley Union High School District, who had been at loggerheads with Olive Grove over payments Laura Mudge, the group’s executive director, claimed could be as much as $1.2 million per year.

“Because charter schools are authorized for a five-year period when they petition, it could have been $3 to $4 million [from us] if her numbers were right,” Cory added.

Though all three school districts and the Santa Barbara County Education Office denied Olive Grove’s charter petition, existing law allows charter operators to appeal their authorization to the State Board of Education.

On July 11, 2018, the state board approved Olive Grove's charter, overriding the decision handed down by the local districts and leaving each district with a mandate to transfer per-pupil funding to Olive Grove in lieu of the property taxes Olive Grove stood to receive. Olive Grove filed suit this spring after the districts refused.

Santa Barbara Unified paid $918,401, according to Petersen, and Lompoc Unified forked over $265,879 to settle their lawsuits for the 2018-19 school year. Cory confirmed the suit against Santa Ynez Valley Union was dismissed Aug. 16 after the district paid $746,792 to the charter program.

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“We receive basic aid supplemental funding [of approximately] $194,000,” money Cory said was used to offset their out-of-pocket payment.

Santa Ynez Valley Union’s status as a basic aid district made it especially vulnerable to the mandated payments. Unlike other districts which receive state funding through the Local Control Funding Formula, almost all of Santa Ynez’s unrestricted funds come from local property taxes.

Beginning with the 2019-20 school year, charter programs can only bill basic aid districts for the number of in-resident students (as opposed to the total average daily attendance) that attend their program, a change Cory and other district officials lobbied for throughout the spring.

Roughly 20 of the 83 students that attended Olive Grove’s Buellton learning center were considered residents of the Santa Ynez school district, according to Cory. The district will be liable for between $150,000 and $200,000 in payments each school year should that number hold.

“For us, that's the equivalent of one or two teachers,” said Cory, adding that the district will continue discussions on how to mitigate the impact of the payment. “It’s an ongoing structural payment now which is significantly problematic.”

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