Board of Trustees Basin Ehearra President Stacey Bastin Vice President Christine Jefferson Clerk Michael Baker Member Sharon Reichelt Member Rebecca Sandoval Member Sascha Vogt Member Superintendent Steve Martinez, FAD. To inspire each student to extraordinary achievement every day TwinRivers UNIFIED SCHOOL DISTRIC — June 12, 2025 VIA OVERNIGHT DELIVERY AND EMAIL (without ex! Bill McGuire, Executive Director Highlands Community Charter and Technical Schools 1333 Grand Ave. Sacramento, CA 95838 bill. meguire@hects.org Highlands Community Charter and Technical Schools Board of Directors: Emie Daniels - erniedaniels7 @gmail.com Sharon Rocco - silvr0| @yahoo.com Matt Powers - powersmatt(@comcast.net Sonja Cameron - scameron|945@gmail.com Rick Jones - capiainrick513@email.com Mary DeChance - mary.dechance@hects.org Mike Reid - mike.eid(@hecis.ore RE: _ Notice of Violation Pursuant to Education Code Section 47607 Highlands Community Charter School Dear HCCTS Board of Directors and Mr. McGuire: With this letter, the Twin Rivers Unified Schoo! District (“District”) Board of Trustees (“Board”), the authorizer for Highlands Community Charter School (CHCCS” or “Charter Schoo!”), is providing this Notice of Violation and a reasonable opportunity to remedy the violations stated herein, pursuant to Education Code section 47607 and Title 5, sections 11965 et. seq. of the California Code of Regulations. In accordance with Title 5, section 11968.5.2(a) and (b), of the California Code of Regulations (“Section 11968.5.2”), the District provides this Notice of Violation to the Charter School’s governing body at least seventy-two (72) hours prior to the District’s June 17, 2025, Board Meeting during which the District’s Board of, Trustees will consider whether to issue this Notice in accordance with applicable law. In conformity with Section 11968.5.2(a), the Charter School is hereby provided with notice of the following proposed action by the Board: Physical Address: 9118 Dudley Bhd. + McCleBan, CA 95652 Mang Address: $222 Winona Way « North Highlands, CA 95660 (816) 566-1600 + FAX (016) 566-1784 + wow.tusd netPLEASE TAKE NOTICE that at or about 6:00 p.m. on June 17, 2025, the Twin Rivers Unified School District Board of Trustees will hold a board meeting at the District Office, 5115 Dudley Blvd., MeClelland Park, California, and consider whether to issue this Notice of Violation under Education Code Section 47607, based upon HCCS’ material violations of the conditions, standards, or procedures of its Charter; failure to ‘meet generally accepted accounting principles, or engaged in fiscal mismanagement; and violations of law. Alll relevant documents related to the proposed action to issue the Notice of Violation are attached as Exhibits. HCCS is in material violation of the conditions, standards, and procedures set forth in its Charter, has failed to meet generally accepted accounting principles, or engaged in fiscal mismanagement, and is in violation of the law as further described below, 1. BACKGROUND. ‘The Board initially approved the petition for the establishment of HCCS in 2014 for a term running through June 30, 2019. On or about March 5, 2019, the Board conditionally approved the petition to renew HCCS’ Charter for a five-year term from July 1, 2019, through June 30, 2024 (“Charter”).' HCCS is operated and governed independently by Highlands Community Charter and Technical Schools (“HCCTS"), a California nonprofit public benefit corporation, and its Board of Directors. The District and the Charter School also entered into a Memorandum of Understanding (“MOU”) on or about May 19, 2019, to document the arrangement and agreement between the parties regarding HCCS” program, operation, structure, and obligations. Subsequent amendments to the MOU approved by the Board extended its term through June 30, 2027. On or about January 23, 2024, the District and HCCS subsequently agreed to Amendment No. 3 of the MOU (MOU Amendment No. 3”) which, among other things, confirmed the District’s authorization of specified locations HCCS had established for charter school operations and made other clarifications regarding the process for approval of any new facility locations, facility safety expectations, and supervisorial oversight. MOU Amendment No. 3 provides in part: “The terms of the MOU are intended by the District and Charter School to become part of the standards and procedures set forth in the Charter School's Charter approved by the District ("Charter"). Along with the Charter, MOU will govern the relationship between the District and the Charter School regarding the operation of the Charter School. To the extent the terms of the MOU is/are inconsistent with any terms of the Charter, the MOU shall control. In addition, if the Charter is silent on an issue addressed by the MOU, the MOU shall control. As such, any violation of MOU by Charter School that also constitutes grounds for revocation per Education Code section 47607 willbe treated and enforced by the District in the same manner, subject to Education " Pursuant to Education Code section 47607.4 (enacted by SB 114), “all charter schools whose term expires on or between January 1, 2022, and June 30, 2025, inclusive, shall have their term extended by ‘two years, and all charter schools whose term expires on or between January 1, 2024, and June 30, 2027, inclusive, shall have their term extended by one additional year.” Therefore, HCCS* Charter was automatically extended by three additional years by operation of law and currently expires June 30, 2027. 2IPagCode Section 47607 and applicable implementing regulations, as it would any other violation constituting a ground for revocation.” * (Emphasis added.) ‘As the charter authorizer, the District is responsible for overseeing HCCS pursuant to the Education Code. This oversight responsibility is in place to ensure HCCS is operating in ‘compliance with the conditions, standards, or procedures set forth in its Charter, meeting legal requirements of law, meeting and/or pursuing the pupil outcomes identified in its charter, and engaging in sound fiscal practices. (Ed. Code, § 47607(f).) Specifically, Education Code section 47607(£) provides the following: A charter may be revoked by the chartering authority if the chartering authority finds, through a showing of substantial evidence, that the charter school did any of the following: (1) Committed a material violation of any of the condi procedures set forth in the charter. (2) Failed to meet or pursue any of the pupil outcomes identified in the charter. (3) Failed to meet generally accepted accounting principles or engaged in fiscal mismanagement. (4) Violated any law. , standards, or This Notice of Violation (“Notice”) sets forth: a 2) GB) The Charter School's alleged specific material violations of a condition, standard, or procedure set out in the Charter School's Charter pursuant to Education Code section 47607(1)(1); the Charter School's alleged fiscal mismanagement or specific failure to follow generally accepted accounting principles pursuant to Education Code section 47607(1)(3); and the specific provisions of law that the Charter School allegedly failed to follow pursuant to Education Code section 47607(f)(4), in conformity with Title 5, section 11965(f) of the California Code of Regulations; All evidence relied upon by the chartering authority in determining the Charter School ‘engaged in any of the acts or omissions identified in Section 47607(f)(1) including the date and duration of the alleged violation(s), showing the violations is/are both material and uncured, and that the alleged violations occurred within a reasonable period of time before a notice of violation is issued; and ‘The period of time that the chartering authority has concluded is a reasonable period of time for the Charter School to remedy or refute the identified violations. In identifying, the time period that will serve as the charter school's reasonable opportunity to remedy the identified violations, the District has considered the amount of time reasonably necessary to remedy each identified violation. (Title 5, Cal. Code Regs, § 11965(1(1)-(3).) 2 “Charter Schoo!” as used in the MOU Amendment No. 3 collectively refers to Highlands Community Charter and Technical Schools and Highlands Community Charter School. alraceAccordingly, the District hereby places HCCS on notice that should it fail to submit to the District a detailed, written response addressing each identified violation which shall include the refutation, remedial action taken, or proposed remedial action by the Charter School specific to each alleged violation, on or before September 26, 2025, the Board may proceed with the process for revoking HCCS’ Charter. Il. VIOLATIONS OF THE CHARTER HCCS has committed the following material violations of the conditions, standards, or procedures set forth in the Charter and the MOU: A. Grade Level Changes Education Code section 47604(a)(4) provides in part: “After receiving approval of its petition, a charter school that proposes to expand operations to one or more additional sites or grade levels, request a material revision to its charter and shall notify the chartering authority of those HCCS' Charter only authorizes the Charter Schoo! to provide instruction to students in grades 1, 2, and 12. However, HCCS has operated and received state apportionment for students enrolled in grades 9 and 10 without submitting a material revision request, in violation of its Charter and Education Code § 47604(a)(4). By correspondence dated August 28, 2024, HCCTS sent a letter to the District stating that HCCS, had added grade 9 and 10 through a non-material revision to its Charter based on the approval of District staff on October 29, 2020. The District sent an inquiry to HCCTS on September 30, 2025, requesting evidence to support HCCTS’ statement that the District has approved the change in grades through non-material revision. The District reviewed the documentation provided by HCCTS and with correspondence dated February 3, 2025, the District informed the Charter School that it failed to notify the District before changing the approved grade levels. (See Exhibits A and B.) B. Location Changes On or about January 23, 2024, the District and HCCTS agreed to the MOU Amendment No. 3 which included a list of approved locations for HCCS’ charter school operations. The MOU, Amendment No. 3 includes the express requirement for HCCS to submit a written request to the District if the “Charter School seeks to establish operations at one or more additional locations( or move any of its existing location(s), includi ite facilities or resource centers...” HC enrollment reports submitted beginning with July 2024 through March 2025 reflect students ‘enrolled at locations that are not reflected in the current MOU Amendment No. 3, In addition, on October 3, 2024, October 17, 2024, and November 7, 2024, the HCCTS Board of Directors approved multiple locations for HCCS operations which are not included in the list of approved locations identified in MOU Amendment No. 3. The District has sent multiple communications regarding HCCTS" addition of locations without submitting a material revision request. In a Notice of Concer and Request for Information dated April 23, 2025, the District outlined specific steps that must be taken to address discrepancies and comply with MOU Amendment No. 3. To date, no material revision request has been submitted for these locations 4lPageand HCCS continues to operate at these locations in violation of the MOU Amendment No. 3 and Education Code section 47605(a)(4). (See Exhibits A, C, and H.) Additionally, HCCTS has failed to provide fully executed copies of lease agreements as requested in the District's April 23, 2025, Notice of Concern/Request for Information. As the chartering authority, the District is entitled to information and documentation regarding the Charter School’s operations (Ed. Code, § 476043). The failure to timely provide such information interferes with the District’s oversight obligations Il. VIOLATIONS OF LAW HCCS has committed the following violations of law: A. Failure to Submit Annual Independent Audit Report Education Code section 47064,33(a) requires that all charter schools file certain periodic financial reports, including annual audits. Likewise, section 47064.33(b) recognizes the importance for the charting authority to rely on these and any other financial reports in carrying ‘out its oversight duties and “monitoring the fiscal condition of [a] charter school.” (Ed. Code, § 47064.33(b).) Additionally, Education Code section 47605(m) requires charter schools to, “transmit a copy of its annual, independent financial audit report for the preceding fiscal year..o its chartering authority..by December 15 of each year.” _HCCTS requested an extension to the December 15, 2024, deadline for submitting its 2023-24 audit report. The District granted an extension until January 15, 2025, but HCCTS failed to meet this deadline. On March 19, 2025, the District sent a Request for Information requiring HCCTS to submit the ‘annual independent financial audit report no later than March 31, 2025. When HCCTS failed to comply, the District sent a Notice of Concem to HCCTS dated April 7, 2025 and outlined a requirement for HCCTS to submit the annual report by April 18, 2025. A subsequent Notice of Concern was sent to HCCTS on April 24, 2025 requiring HCCTS to submit the report by May 5, 2025. To date HCCTS’ audit report has not been submitted to the District. (See Exhibit D and a) HCCS is in violation of Education Code sections 47604.33 and 47605, and its own Charter, for failing to complete and submit its 2023-24 annual independent audit report to the District. HCCS* failure to provide its annual audit report for 2023-24, hinders the District's ability to properly carry out its duties as charter authorizer to oversee the Charter School's operations and monitor its fiscal condition. B. Credential Misassignments Education Code section 47605(I) provides in part: “Teachers in charter schools shall hold the Commission on Teacher Credentialing certificate, permit, or other document required for the teacher's certificated assignment, These documents shall be maintained on file at the charter school and are subject to periodic inspection by the chartering authority.” HCCS has provided instruction to its students using teachers who do not hold the appropriate credential as required by the Education Code. In correspondence dated March 17, 2025, HCCTS represented that Nancy Mora, Credentials Technician from San Diego County Office of 5|PaveEducation (“SDCOE”), provided them with a recommendation that the Adult Education Credentials would be the appropriate credential for HCCTS teachers of record in a general education K-12 assignment. The District inquired with the California Commission on Teacher Credentialing (“CTC”) and in correspondence dated March 11, 2025, received clarification confirming that the SDCOE's interpretation was incorrect: “While the credential was not designed only for providing instruction in an adult setting like the Designated Subjects Adult Education teaching credential, both the Multiple Subject and Single Subject teaching credentials authorize teaching in classes for adults in the respective classroom settings...” HCCTS failed to seek guidance from the CTC regarding credential requirements, but instead relied on faulty information from the Ms. Mora resulting in disallowed ADA. (Exhibit E.) C. Failure to Track Minimum Instructional Minutes Education Code 47612.5(¢)(1) states: “For purposes of calculating average daily attendance for classroom-based instruction apportionments, at least 80 percent of the instructional time offered by the charter schoo! shall be at the schoolsite, and the charter schoo! shall require the attendance of all pupils for whom a classroom-based apportionment is claimed at the schoolsite for at least 80 percent of the minimum instructional time required...” HCCS’ average class sizes have far exceeded classroom capacity with averages as high as 227 students. As a result, and as observed by District representatives during site visits and noted as. part of the 2024-25 Attendance Audit conducted by CFE Consultant Dennis Snelling, HCCS students were observed arriving and leaving continuously without intending to stay for instruction. It was also observed that students were routinely sent home with packets or instructed to attend only part of the instructional day due to limited classroom capacity. The District believes that these practices resulted in students receiving significantly less than 80% in- person instruction and demonstrates that the HCCS did not require attendance of all pupils. The District authorized 2024-25 Attendance Audit also noted that attendance records were discarded, thereby removing any documented evidence of student attendance, which is necessary to verify the accuracy of enrollment reported for ADA. The above demonstrates HCCS’ violation of the law. (See Exhibit E.) D. Viol jon of WIOA Exclusive Partnership Agreement During its 2024-25 oversight review, the District discovered that HCCTS had allowed individuals who were not enrolled students to participate in its Career Technical Education (CTE) Truck Driving program. This practice violates the legal requirement that instruction be provided exclusively in partnership with Workforce Innovation and Opportunity Act (WIOA) programs. According to HCCTS, this practice began in 2014 at the direction of a Board member, ‘was supported by the Executive Director, and continued with Board approval through the 2024— 25 school year. The issue was previously raised during the 2018 FCMAT audit of HCCS. In a letter dated June 22, 2018, HCCTS asserted that Education Code sections 47612.1(a) and 47605.1 requires a charter schoo! “provide instruction exclusively in partnership with WIOA,” ‘but does not require the charter school to “operate exclusively in partnership with” WIOA. While the District agrees with the interpretation of law as outlined by HCCTS in its letter dated June 22, 2018, the practice of providing instruction to non-students as part of HCCTS” partnership 6[Pawith the Volunteers of America, Local 185 Union, Sacramento County Sheriff's Office, and the Sacramento Police Department, violates this agreement. (See Exhibit E and H.) IV. FISCAL MISMANAGEMENT HCCS has failed to meet generally accepted accounting principles, and/or engaged in fiscal mismanagement as follows: A. San Diego Administrative Location As approved by the HCCTS Board of Directors on or about August 4, 2022, HCCTS secured a site at 406 9th Avenue, Suite 310, San Diego, CA 92101 (“San Diego site”). HCCTS represents, that the San Diego site is used for administrative purposes despite having no students in or near the area. However, public records show the location is marketed as luxury office condominiums, with Suite 310 (HCCTS’ suite) advertised as having a “dedicated balcony with unparalleled view of Petco Park” and being the highest priced suite among the listed units for this address at the purchase price amount of $725,000. This costly expenditure of a public funds on an administrative condominium located nowhere near HCCS student locations constitutes fiscal mismanagement of public funds. (See Exhibit F and H.) B. Marysville 2 Location The “Marysville 2” site at 1431 C Street, Marysville, CA (“Marysville 2”), was identified by HCCTS in both Exhibit B of the approved MOU Amendment No. 3 and a December 29, 2023, site list as a location for HCCS Career Technical Education (CTE) programs. However, during a site visit on March 4, 2024, the District’s representative confirmed the site is not an instructional facility but a baseball field and no students were enrolled at the site. Further investigation by the District revealed HCCTS donated $25,000 for upgrades to the field, including $12,500 to sponsor the Marysville Drakes, a privately operated professional baseball team. This use of public funds for a private sports team raises serious concems about misuse of educational resources. ‘The District issued a Notice of Concem and request for information on Mach 14, 2024 regarding the baseball field, HCCTS replied on April 5, 2024 stating that the donation was and that HCCTS received benefits which were intended to “attract new students”. The District issued additional Notices of Concern/Requests for information on June 17, 2024, August 15, 2024, October 1, 2024, and February 19, 2025. HCCTS responded to these communications on July 23, 2024, September 25, 2024, January 14, 2025, and March 21, 2025. HCCTS’ January 14, 2025 letters included a copy of a termination agreement between HCCTS and the City of Marysville. Per a termination agreement HCCTS and the City of Marysville terminated the lease effective November 30, 2024. However, the termination agreement obligates HCCTS to continue paying $33,639.80 in lease payments annually through April 30, 2026. Additionally, HCCTS sold publicly funded equipment (valued at $52,494.34) to the City of Marysville for $1.00 as outlined in the November 30 termination agreement. While HCCTS potentially has the option per the 7[Pavetermination agreement to have the equipment returned if HCCTS leases the Marysville 2 property in the future, the option is subject to agreement by the City. The ongoing lease payments, the disposal of equipment at a nominal price, and the initial misrepresentation of the site’s intended use constitutes fiscal mismanagement. (See Exhibit G.) V. CONCLUSION AND REMEDY PERIOD Please be advised that the District views HCCS’ material violations of the conditions, standards, or procedures of its Charter, failure to meet generally accepted accounting principles, or engaged in fiscal mismanagement, and violations of law as grounds to issue this Notice of Violation and the District may pursue further steps towards revocation of the Charter if these violations are not remedied. Section 11968.5.2(¢) describes a charter school governing body's obligation once a Notice of Violation is received: Upon receipt of a Notice of Violation, the charter school's governing body, as described in the school's charter, if it chooses to respond, shall take the following actions: (1) Submit to the chartering authority a detailed, written response addressing each identified violation which shall include the refutation, remedial action taken, or proposed remedial action by the charter school specific to each alleged violation; the written response shall be due by the end of the remedy period identified in the Notice of Violation; and (2) Attach to its written response supporting evidence of the refutation, remedial action, or proposed remedial action, if any, including written reports, statements, and other appropriate documentation. The District provides HCCTS with a reasonable remedy period of up to and including September 26, 2025, to provide the written response described above. While the District appreciates and acknowledges HCCTS’ responsiveness to various requests for information and notices of concem in other areas over the past twelve months, HCCTS has either failed to remedy multiple areas of concer despite its receipt of multiple information requests, and notices of concem from the District or makes promises of future improvements without offering viable plans that either have been implemented or are capable of being implemented by HCCTS. As a result and since the District views HCCS’ material violations of the conditions, standards, or procedures of its Charter and MOU, failure to meet generally accepted accounting principles, or engaged in fiscal mismanagement, and violations of law as grounds for revocation, the District has determined that the point has been reached where it is necessary to initiate the first step in the formal revocation process contained in the Education Code, which is the issuance of a Notice of Violation per Education Code section 47607(g) and Title 5, Cal. Code of Regulations, section 11968.5.2. 8[PageSteve Martinez, Superintendent ce: Dave Gordan, Sacramento County Superintendent of Schools (dgordon@scoe.net) Enclosures: Exhibits A-H 9|Page