Highlands Charter’s $180M debt, superintendent’s reforms, and appeal for second chance

Former Sacramento City Unified School District Superintendent Jonathan Raymond took the helm of Highlands Community Charter and Technical Schools in June and immediately asked its school board to step down. 

The adult charter school, the most recent poster child for charter school reform, owes the state $180 million for K-12 funding it collected in 2022-23 and 2023-24.

The charter wasn’t eligible for the funds because it did not have enough properly credentialed teachers, and students did not attend school enough hours for the school to be eligible for the money, according to a Joint Legislative Audit Committee report released in June. 

Raymond said the board resignations were necessary to allow the school to start again without ties to past mistakes.

“This moment is about accountability at every level,” Raymond said in a statement. “I asked for these resignations because I believe Highlands’ future depends on a clean break from past governance failures. Our community deserves a school governed with integrity, guided by transparency, and built to serve those who’ve historically been left behind. These changes allow us to reset and rebuild from a stronger foundation.” 

Highlands Community Charter and Technical Schools operates Highlands Community Charter, a site-based school with multiple locations, and the California Innovative Career Academy, an independent study school.

The school system has been the subject of investigations and critical news reports over conflicts of interest, wasteful spending and questionable employment practices since shortly after it opened its first campus in 2014. 

A man with a mission

Raymond says he took on the difficult job of rehabilitating the charter school because he believes in its mission — educating adults who are trying to better themselves and their families. 

The students of Highlands Community Charter and Technical Schools are primarily new immigrants and formerly incarcerated people who want to earn a diploma, improve their English language skills, or learn a trade.

“I knew there were problems and I wanted to be part of the solution,” Raymond said in an interview with EdSource. “I wanted to help clean it up. I wanted to use my relationships, my reputation, whatever it took to turn the organization around, because the mission is just so important.”

Raymond has had a long career in education, most recently as the senior vice president and superintendent in residence at City Year, a national youth development and education nonprofit. Before that, he was the superintendent of the City School District of New Rochelle in New York and superintendent of Sacramento City Unified from 2009 to 2013.

His annual salary at Highlands Community Charter is $325,000.

Asking for a second chance

A week ago, Raymond asked Gov. Gavin Newsom and Superintendent of Public Instruction Tony Thurmond to allow him to continue the school’s work.  That cannot happen if it is required to repay the $180 million, he says.

“We believe in second chances — for our students and for our school,” he said in his response to the audit. “The reforms detailed below are structural, not cosmetic. If California truly believes in equity, opportunity and redemption, we ask for continued partnership to let this work continue.”

The reforms outlined in the audit response include:

• Establishing a class-size maximum of 30 for in-person instruction and 25 for the independent learning school. 
• Prohibiting family influence in hiring. 
• Revising the charter to add 11th grade and administering state tests to students. 
• Requiring board approval of purchases over $35,000 and multilevel approvals for all others.
• Creating new policies for reporting student attendance. 
• Eliminating wasteful practices, such as travel for professional development and non-instructional purposes. 
• Improving record keeping. 

Highlands Community Charter is working with UMass Global, an online teacher training program, to prepare intern teachers to earn K-12 credentials. The school will offer tuition and exam reimbursements for teachers pursuing credentials. 

Charter leaders are also trying to recover some of the money auditors said was spent wastefully. It is asking employees who took a trip to Maui for a leadership conference and an employee who flew to Paris to attend a technology conference to repay the school for the trips. The employee who went to Paris had a parent on the Highlands school board.

They are also asking a former director to repay a $1,500 monthly contract he initiated for his spouse.

The Never Too Late Foundation has already reimbursed Highlands Community Charter for the $146,000 the district paid it for student holiday blankets, beanies, scarves and gloves.

Making a clean break

Raymond, new school board President Mike Reid, and two outgoing board members are overhauling staff positions, board policies and school practices. The former board members have agreed to step down after new members are in place.

Once all the school’s leadership positions are filled, the team will develop a new education plan for the charter, Raymond said. His goal is to dramatically increase the school’s focus on academics and improve graduation rates.

Highlands Community Charter had a graduation rate of 2.8% and the California Innovative Career Academy had a rate of 16.9% in 2023-24, according to the audit.

“Academics wasn’t the priority at Highlands,” Raymond said. “But they did a lot of other things to serve students. These are students with tremendous needs — Afghan women who’ve never picked up a pencil, and survivors from Ukraine and other places.”

Enrollment, staffing slashed

In the meantime, in part because of the lack of properly credentialed teachers, school started on Aug. 14 with only seven classroom-based sites and two sites for distance learners — all in Sacramento County.  That’s a far cry from last school year, when the school had more than 50 sites statewide.

School staff was cut by 80% and enrollment was reduced from 13,700 to 1,905. About 7,000 students are on the waiting list, according to charter school officials. 

Since June, the school has hired 67 K-12 teachers, three career technical education teachers and 45 classified staff. School leaders hope to bring back students as appropriately credentialed teachers become available. 

“Mistakes were made, but our students, they’re too important to be abandoned,” Raymond said. “They need a second chance. Highlands needs a second chance. And I need a chance too, to show that we mean what we say, and we say what we mean.” 

To ensure the message is heard, Highlands Community Charter leaders launched the “Build Highlands Back Better” campaign, which calls on alumni, staff, faith leaders, educators, community organizations and community supporters to communicate their support to state legislators.

The campaign’s website includes video testimonials and proclamations of support from community organizations.

“Let Sacramento know you support reform — not retaliation,” the website states.

Highlands is appealing

The California Department of Education officially demanded reimbursement of the $180 million from Highlands on June 30, and the charter school has appealed.

If Highlands does not repay the state, the Twin Rivers Unified School District could be liable for the debt if it is found they did not comply with their oversight responsibilities as required by law, according to the state Education Code. The school district has said that it met all the state requirements as an authorizer.

Forcing Twin Rivers Unified to repay the state would likely put the Sacramento school district in receivership, although payment plans are available to both the charter and the district, said Michael Fine, chief executive officer of the state’s Fiscal Crisis and Management Assistance Team.

Twin Rivers Unified will strengthen its practices as a charter school authorizer, refining policies and procedures to better monitor credentialing, academic performance, state testing compliance and financial accountability, the district said in a statement. 

“These efforts include stronger review protocols, expanded data analysis, increased support for schools in meeting expectations, and the piloting of new oversight tools and evaluation methods to ensure our practices are both effective and equitable,” said the district.

State law needs clarity

Raymond is hopeful the state will soon try to clear up some of the “murkiness” around charter oversight that allowed the problems at Highlands Community Charter to continue for so many years. 

“School districts really struggle with the authorizing function,” said Eric Premack, executive director of the Charter Schools Development Center, whose membership includes Highlands Community Charter. “Very few of them do it well. Other states have figured them out and fixed that in their laws or attempted to.”

He proposes that California create an organization with the sole job of authorizing and overseeing charter schools. In some states, there is one organization; in others, there are several statewide.

Currently, charter reform bills are being hammered out that could address some of the issues at Highlands. The bills — Assembly Bill 84 and Senate Bill 414 — could be merged into one piece of legislation that could offer more fiscal oversight.

David Patterson, president of California Charter Authorizing Professionals, or CCAP, doesn’t think either of the two bills adequately addresses the responsibilities of authorizers.

Charter authorizers currently are allowed to collect at least 1% of each charter school’s state Local Control Funding Formula entitlements — a total of $90 million statewide, according to Patterson.

“It is not known how the money is currently spent,” he said. “Until it is clear what the job is (authorizing and oversight) and how the money is being spent, then it is not possible to determine if 1%, 2% or what percent is the right number.”

The CCAP will complete a study on charter authorization later this month. Patterson hopes it will lead to legislation to clarify and strengthen state laws around charter school authorization.

Audit could mean new laws

The state audit of Highlands Community Charter also asked legislators to make changes to charter law to ensure the problems at the school don’t occur at other schools. It recommends establishing maximum student-to-teacher ratios and rules to ensure students are making satisfactory progress toward their diplomas at adult charter schools. 

Auditors also suggested that legislation be passed to ensure that charter high schools without 11th grade require seniors to take standardized tests and that charter schools that consistently have placed underprepared teachers in classrooms be fined.

In the meantime, Raymond will focus on the rehabilitation of Highlands Community Charter and Technical Schools.

“I can assure you some of the really poor decisions that were made will not happen on my watch,” Raymond said.