Editor's Note: This is the first story in an ongoing series of reports on the relationship between Pacific Collegiate School and Santa Cruz City Schools.

At Issue

Pacific Collegiate School has filed its Proposition 39 request to Santa Cruz City Schools, which asks the district to provide facilities and equipment for the 60 percent of PCS students, based on average daily attendance, who live within the district's boundaries. The district has until Feb. 1 to submit its proposal to PCS.
Meanwhile, PCS leaders, in an attempt to improve the school's chances in future years of getting one facility for all its students, have threatened to seek a charter change that would allow them to accept mostly Santa Cruz students in their annual admissions lottery.
Opponents, including some county education officials who govern the school's charter, say such a move would violate the spirit of the school's charter, which says PCS will serve the entire county and reflect its socioeconomic and ethnic diversity.

SANTA CRUZ -- In recent days, the months-long standoff between Santa Cruz City Schools and Pacific Collegiate School over where the national award-winning charter school will land next year has taken on the ruthless air of a high-stakes corporate showdown, with both sides guarding control of their most precious stock -- students.

After the sides failed this spring to negotiate an agreement for PCS to continue leasing the former Natural Bridges Elementary site, the two have been ramping up criticism of each other in advance of the school's first legal claim for facilities.

The Oct. 1 request, made possible by Proposition 39, asks the district to provide facilities and equipment for 60 percent of the charter school's average daily attendance -- about 277 of its 469 projected students for 2009-2010 -- who live in the district's boundaries. The district has until Feb. 1 to provide a facilities offer, which PCS can accept, decline or challenge in court by March 1.

PCS officials and advocates approached the district board Wednesday asking trustees to return to negotiations with the charter school over facilities, which district officials say is improbable now that the Proposition 39 request has been made.

Districts and charter schools throughout California are struggling with similar tensions as the law approved by voters eight years ago is tested in court -- which is where both sides warn the local battle could end up.

As district officials determine where to place PCS students from their district, PCS officials continue to threaten a related charter change that would establish an enrollment preference for Santa Cruz students -- which could siphon off more than 100 additional district students but better position the charter school to bargain for a single facility for all its students.

PCS leaders say the proposal -- which has been met with skepticism from county education officials who govern its charter -- is strictly financially motivated, one they think they were forced to consider when the district's refusal to negotiate a new lease kicked them into what they call "survival mode." Fear swells among PCS board members, teachers and students that the district, in an effort to recoup all its students, wants to disassemble PCS, or at least kill its morale, by splitting up the student body.

"If they were at the table with us right now on a new use agreement, we could agree to do the reverse -- we could more aggressively market for out-of-district," said Ken Cole, father of a PCS student and chair of the school's facilities committee. "We could move in the opposite direction. If they say, 'we think this is really hurting us,' let's come to an agreement."

District officials say the enrollment change would be a devastating cash drain on a budget already squeezed by the state fiscal crisis. Because each student represents state ADA dollars, a loss of 100-plus students could mean at least a $1 million cut.

But district advocates say the PCS plan would create an even more insidious consequence: It would create another PCS enrollment bias that -- when added to existing preferences for siblings of current students, board members and staff -- would diminish the school's ability to fulfill its chartered purpose of serving the entire county while reflecting its ethnic and socioeconomic diversity.

District officials say that, with a reserve of at least $1.2 million and deep-pocketed founders such as Netflix CEO Reed Hastings, PCS could buy or lease its own property. The district, which sought a market-rate lease for Natural Bridges, turned down an offer by PCS, which suggested paying about half of its current rate of $275,000 based on a Prop. 39 calculation.

But PCS, which later offered to continue leasing at its current rate but was turned down, says the reserve was built over a decade of conservative budgeting and fundraising among parents and is for emergencies.

In the middle are officials at the county Office of Education -- the chartering agency for PCS -- who are reluctant to support the enrollment change because it would discriminate against Mid- and South County students whose admission could help address the school's persistent diversity inequities.

PCS' three-quarter white population has led to charges of elitism, considering its 6 percent of Latino students falls short of the countywide total of 50 percent.

"The county chartered them, they were going to be available to the entire county, all the kids," said county board Trustee Arnie Levine, whose area includes the district's boundaries. "The district could have to close a school. I think that would be god-awful. I, for one, would be against it."

Jack Dilles, the other trustee whose area includes Santa Cruz, said, "I would want to hear all sides on the issue before I made up my mind." But Dilles echoed Levine, saying, "Our board views this as a countywide charter."

The county's top education official, Michael Watkins, has been trying to broker an agreement between the two sides for months, saying his "paramount" goal is securing a home for PCS for next school year. He also said he would like PCS to remain intact.

"It would be my hope there could be a temporary resolution, while PCS looks for long-term solution," he said. "I would like to see a transition period."

Watkins initially said he would not support an in-district enrollment preference because it would exclude students from other parts of the county. But, in his efforts to mediate an end to the standoff, Watkins has loosened his stance.

"I'll have to cross that bridge when it occurs," Watkins said. But, he added, "I think there are still access and equity issues that need to be addressed" in the PCS plan.

District Superintendent Alan Pagano said it is too early to comment on the ADA figure for in-district students that PCS cited in its Prop. 39 request. He also said he did not know whether the district would have the legal right -- as PCS claims the district would not -- to place the in-district students on separate middle school and high school campuses.

Pagano strongly criticized the proposal to take more of his students as a bargaining chip, saying, "Any admission policy that is preferential is restrictive and exclusionary, and actually exists in opposition to the notion of a public school institution."

Cynthia Hawthorne, president of the school district board, echoed Pagano, saying the county education office is obligated to make PCS diversify. She said she intends to hold Watkins to his initial pledge to oppose the charter change.

Meanwhile, Cole and PCS Board President Deepika Shrestha Ross are determined to keep the school together and said they will try to address the diversity concerns raised by the charter change, which would first have to be approved by the PCS board.

"We want to make it clear that we're going to find a way to hold our program together," Cole said. "We're going to find a way to make it work."

The two acknowledge the enrollment change proposal is purely a financial initiative -- driven, they say, by the district's unwillingness to negotiate after receiving an initial offer to extend the Natural Bridges lease.

"We just realized it was increasingly likely to be a survival issue for the school," Cole said. "We feel we were left with a very small palette of options or choices that could strengthen our position."

If PCS pursued the change, its goal is to reach a 90 percent in-district population, which Cole said would cause "a significant shift in our chances of securing an adequate facility."

Cole said forgoing a Prop. 39 facility allocation and leasing or buying other space would be costly. "There is no desire on part of the board to give up our right in that way," he said.

Even if PCS opted not to pursue the charter change, Cole said the school could still build an in-district population by focusing its recruitment efforts only on Santa Cruz children, while still technically opening the admissions lottery to every one.

Cole argued that PCS could actually do a better job of recruiting diverse children if it could focus on one geographical area. The sibling enrollment preference alone could help "lock in" diversity improvement.

As another way to improve the number of underrepresented families who apply for the admissions lottery, Cole said the school is looking to reword how it asks parents for the standard annual donation of $3,000. While families are not required to make the contribution, they "are certainly encouraged and are going to hear that message a lot."

But, Cole said, "for lower-income families, we want to make sure that that's not a barrier."

Contact J.M. Brown at 429-2410 or jbrown@santacruzsentinel.com.