LIVE OAK CHARTER SCHOOL

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100 Gnoss Concourse Petaluma, CA 94928•(707) 762-9020

Agenda for the Regular Meeting of the Board of Directors Live Oak Charter School Multi-purpose room

January 12, 2017

Mission & Program

To ensure the humanity and potential of its students through an education resonant with their unfolding awareness and capacities, and supportive of the full and integrated development of body, heart, and mind. LOCS provides a K-8 program inspired by Waldorf education to children and families of Petaluma and surrounding communities. Waldorf inspired education is a developmental approach to learning that cultivates the innate capacities of each child through age appropriate curriculum. Live Oak educates the whole child – head, heart, and hands, through an education that integrates each child’s creative, intellectual, emotional, physical and social domains. Live Oak oﬀers an interdisciplinary liberal arts program where art, music, and movement are integrated with core academic instruction.

Exploration of the natural world, human culture, language and mathematics enlivens curiosity which is the foundation of intellectual growth, conceptual flexibility, empathy and sense of connectedness.

OPENING (7:00 pm)

PUBLIC COMMENT This portion of the meeting is set aside for members of the audience to make comments or raise issues that are not specifically on the agenda. These presentations are limited to three minutes per presentation and the total time allotted to non-agenda items will not exceed fifteen minutes.

OPEN SESSION A. Approve the agenda B. Reports

1. Committee reports

2. Executive Director Report C. Consent agenda

All matters listed under Consent Agenda are considered to be routine, and all will be enacted by one motion and vote. There will be no separate discussion of these items unless a Board member requests items to be removed from the Consent Agenda for separate action.

1. Board Minutes: December 8, 2016 2. Monthly Financials for December 2016

D. The board will consider the following for discussion and approval 1. Adopt final audit for 2015/16

2. Discuss and approve farmer’s market

3. Discussion and adoption of declaration in support of diversity

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E. The board will consider the following for discussion 1. 2016/17 Parent Survey

2. 2016/17 Fund A Need

3. Discussion in regards to opening a preschool 4. Revised Bylaws

CLOSED SESSION

F. Pursuant to Government Code 54956.8 Conference with Real Property Negotiator

Property: 100 Gnoss Concourse, Petaluma; Negotiating Parties: Sonoma-Marin Fair; under negotiation: price and terms

G. Pursuant to Government Code 54957.8: Planning

OPEN SESSION

H. Report on actions taken in closed session ADJOURNMENT

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LIVE OAK CHARTER SCHOOL

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Executive Director Report

January 12, 2017

Enrollment & Attendance

Enrollment is currently 299 with one enrollment pending.

Facilities

The recent rains have revealed a good deal of leaks in several of our buildings including Kinder, Handwork, and the Middle School. We have notified the Fairgrounds and they have responded by putting in patches. New leaks are being identified and work is pending.

The Resurfacing and striping of the Grades 3-5 playground is complete. The total cost for the project was $12,135, covered through a portion of the 2016 Fund a Need donations. A similar project will be conducted for the grades k-2 play area weather permitting. In addition, an imaginative play space is under design to be installed in the K-2 play area adjacent to the orchard. The play space will feature interactive false fronts for village play similar to the installation at Howarth Park in Santa Rosa.

Special Projects

Enrollment season is upon us with tours now occurring weekly. So far this year we have hosted over 80 visitors to Live Oak. These events are helpful both in orienting folks to Live Oak, as well as learning about the interests and research that parents are conducting as they look for schools to enroll in. Live Oak appears to have a positive reputation and is attracting numerous tour participants that are looking to move into the area specifically to attend our school.

We have organized an author presentation for February 1^st at the public Library. We will be hosting Vicki Hoefle author of The Straight Talk on Parenting and Duct Tape Parenting. The author will also be offering a parenting workshop series for members of the community. Live Oak and Petaluma Education Foundation are partnering in sponsorship of the event.

Curriculum

The In service held with faculty on January 2^nd was a great success. The day focused on a deep review of the Academic Coaching Team program and consideration of integrated writing curriculum throughout the grades. The conversation was rich, rewarding and affirming of the collaboration, professionalism and comradery of our faculty. It was a truly inspiring day.

Human Resources

No changes, though we are now in planning stages for next year. Budget considerations will play a large part in informing the process. We will be surveying staff in the coming weeks regarding their intent to return and hour/placement preferences.

Finance

The Governor’s 2017 budget preview was released days ago, a preliminary break down of the proposals is attached below. In short, we expect next year’s budget to be worse than projected, though revised numbers are not available at this time to determine what impact the January proposal will have on our Multi Year projection.

Inter-Agency Relations

Staff is meeting with the Middle School Athletic League next week to discuss and possibly adopt language regarding female participation on male sports teams. Live Oak’s position is to allow exceptions to gendered teams in exceptional circumstances. Please see letter attached.

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Governor Releases 2017-17 State Budget Plan:

School Funding Levels Off in 2017-18

On January 10, 2017, Governor Jerry Brown introduced his proposed state budget for the 2017- 18 fiscal year. The Governor notes that “this is the most difficult budget we have had since 2012” and proposes rolling back some planned spending increases to close a projected $2 billion deficit if left unaddressed. If the economy strengthens over the next few months, projections could be revised in May before the budget is enacted. CCSA will provide a full CCSA Budget Brief and additional resources in the coming days.

Overall, the budget proposal provides $122.5 billion in General Fund spending in 2017-18, reflecting a flattening of the state economy during the fiscal year. The budget does not assume any changes to federal policy at this point, but notes that considerable uncertainty in federal policies may require future adjustments.

Highlights of the education funding proposal for 2017-18 include:

Overall, the budget for K-14 education provides a Proposition 98 funding level of $73.5 billion in 2017-18, but also reduces the guarantee by $900 million in 2015-16 and 2016-17 combined.

With a revised guarantee of $71.4 billion in 2016-17, the 2017-18 budget proposal increases Proposition 98 by $2.1 billion.

$744 million for a Cost of Living Adjustment (COLA) of 1.48 percent to the LCFF but no additional investment toward full implementation of LCFF. LCFF funding will remain at 96 percent of full funding targets.

$851 million in a one-time LCFF “cost shift” to defer LCFF payments from June to July of 2017 to accommodate the reduction in the Proposition 98 guarantee in 2016-17 without imposing operational cuts in the current year.

$58 million for a 1.48 percent COLA for other state categorical programs such as special education and child nutrition.

$287 million (about $48 per pupil) in one-time per pupil discretionary block grants to be allocated per pupil based on prior year average daily attendance counts.

$30 million for tobacco use prevention in accordance with Proposition 56.

$10 million for grants to LEAs for truancy and dropout prevention programs through Proposition 47.

Charter Schools: No specific proposals or new funding for charter schools, but maintains current funding rates for existing programs such as SB 740 Facility Grants.

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Special Education: Only technical and caseload budget adjustments are proposed. However, the Governor recommends a stakeholder engagement process through the spring to evaluate and consider recent recommendations on revising special education funding formulas and

structures.

School Facilities: Voters approved a new state school bond in November, including $500 million for charter schools. The Governor proposes to support the expenditures of the bond funds only after tighter accountability provisions on the appropriate use of bond funds are enacted.

Childcare: $111 million for the full-year adjustment to the multi-year expansion of early education programs that was enacted in the 2016 budget. However, the Governor proposes delaying by one year the additional augmentations that were anticipated in the multi-year plan.

Next Steps: The Governor's budget release is only the first step in the budget process. The California State Legislature will discuss budget priorities through the spring and key economic indicators will be updated in May 2017 before a final plan is adopted in June 2017. CCSA will provide a full CCSA Budget Brief and additional resources in the coming days. We will inform charter schools of details and updates as they emerge and work on your behalf to ensure positive budget outcomes for charter schools.

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LIVE OAK CHARTER SCHOOL

100 Gnoss Concourse Petaluma, CA 94952 • 707.762.9020

November 4, 2016

Dear Middle School Sports League,

Given the situation that has unfolded regarding the presence of a female athlete on our 8^th grade boys’ basketball team, I wish to offer this letter of explanation in the hopes of healing any rift within our League and clarifying the state of our situation at present.

I would like to begin by offering an apology for an incident that was reported to have occurred at a game last week. The League president informed me that a parent in attendance at the game (not the female athlete’s parent, as they weren’t present) made legal threats against the League. I was extremely disappointed that such a statement could have been made. All of us involved in education understand the crippling effects that such a threat, when vocalized, can have. Such threats are both coercive and corrupting of civil discussion amongst friends. Live Oak has never had an interest in “suing the League”, quite the contrary: Our efforts to date have intended to avoid such risk for all parties. As this may seem incongruent with perceptions of our activity over the past 2 weeks, I feel it is important to explain.

Recent Events

Several weeks ago, Live Oak approached the League over the issue of an 8^th grade girl participating on the 8^th grade boys’ basketball team. The League responded by surveying its member schools and ultimately denied the request.

As Live Oak coaching staff was familiar with examples of girls playing on boys’ teams, (even when girls teams are available), they were caught off guard by the rejection and asked me for guidance. As my fellow administrators will likely agree, one of our primary mandates is navigating liability. I was immediately concerned about the legal implications of denying the request and began investigating public school obligations under Title IX and the Equal Protections Clause of the 14^th amendment. Specifically, I sought to determine if our school and/or the League, would be at risk of non-compliance if we refused such an opportunity to the student. Further, as I believe it is always important to look beyond the (sometimes low) bar of legal compliance, I wanted to understand the ethical issues that such a request raised: Is a policy of comprehensive gender segregation in basketball a best practice for our League to pursue?

Given the short timeline and the absence of a specific League bylaw, I began reaching out to experts in the field. our own legal counsel, representatives from several of local

Leagues (both middle and high), the Office of Civil Rights, the California Interscholastic Federation (CIF), the Women’s Sports Foundation, District Superintendents, Title IX

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Officers, Deans of athletics and Coaches from around the bay area, and scholars of Title IX and EPC. As such folks are busy, it took a few days for my inquiries to mature. Indeed, several waves of inquiry were necessary to get a more comprehensive view of the issues.

As responses were initially slow to arrive, I needed to make a decision on how to handle the first game without the benefit of well-informed analysis. I considered then, that the best path forward was to avoid contravening the female athlete’s right to participate until further research was conducted. If I chose to deny the student’s participation, and it turned out later that I did not have the right to do so, it would have put the school and the League in a more difficult circumstance. Thus prior to the game, on October 26^th, I

contacted Nick Galvin with a decision that we were going to field the player until we had a better picture of the situation we were in. I offered to Nick, at that time, that the school was prepared to forfeit, but we were not prepared to deny the student until we had a better understanding of our (and the League’s) obligations. Ultimately, I felt that the greater risk rested in denial of participation, rather than in inclusion. Thus we chose to field our female athlete, with full cognizance that the team could refuse to play, or we would play the game but a later determination could be made that we forfeit due to fielding an ineligible player. This understanding was communicated to the League

president prior to the game with an apology for the dilemna this posed for the League and our pending opponent.

The game was played with the female student. Soon after the game, League members heard of Live Oak’s action and I received an initial cancellation from our next opponent.

Though the cancellation was unfortunate, I certainly respect the right of each school to make choices most beneficial for their students and institution. Several days later the League informed Live Oak that the female student would be allowed to participate for the season but that each school would need to determine if they wished to play their

scheduled game with Live Oak. We were also told that new bylaws would be considered on conclusion of the season. The following day we received a cancellation from another opponent.

In the ensuing week, I have continued in my endeavor to better understand our

obligations, both legal and ethical. Nick Galvin can also share his findings which he has pursued with diligence and equanimity. Below you will find a summary of my research.

Research

What I have found is that Title IX is complex: Though it does not require that a female athlete be offered the opportunity to participate on boys’ teams, it does not restrict a school or League from pursuing such a practice, even when a girls’ team is offered.

Further, Title IX is not the only law that guides gender issues in athletics. Notably, the Equal Protections Clause (EPC) of the 14^th amendment is also invoked by courts to inform gender equity policies in athletics. In fact, the EPC is often applied in cases that involve reconciliation of individual rights and the rights of a protected group.

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By creating separate (but equal) opportunities, Title IX ensures that women have

opportunities to participate. In some cases, this has led to co-ed sports but more often has led to a division of sports by sex. The most common reason for the “separate but equal”

approach is to account for the possibility that male participants would out-compete their female counterparts for positions and playing time, and thus women would again face exclusion from athletic participation. Though this reason could diminish over time as women gain better access to high level of play and training, some sports could show persistence due to biological dimorphism in the sexes. It is important to note however, that biological dimorphism occurs on a continuum. This variability creates a significant overlap of physical characteristics between the sexes such that individuals of either group may have greater strengths or weakness than the other. This reality calls into question the long term persistence of need for divisions, particularly in middle school athletics as the differences in physical capacity are far less prevalent on average.

Another reason often used to support the separation relates to contact sports. Title IX makes special note about women not being allowed to participate on boys’ teams when it is designated as a contact sport. In an age when girls’ play football, little League baseball, wrestle in weight classes with boys, and take top billing at UFC bouts, this provision appears the most antiquated and through analysis appears to be an artifact of outdated perceptions of female athleticism (or an underestimation of the resilience of the male ego).

Interestingly, many of the court challenges to Title IX “contact sports” exclusion has occurred through the application of the Equal Protection Clause. In most cases, women have won the opportunity to participate in contact sports alongside male players.

Title IX has accomplished much, but because it handles issues of gender equality through a broad lens, constructing large scale opportunities, it is perhaps less able to address the needs of unique individuals. In a way, sex separated Leagues make the claim that “what is good for the gander is good for the goose”. This seems to have been mostly true, for we would not have seen the incredible growth in women’s athletics without such an

approach, but we can also recognize that the unique needs of some individuals may not be met by such a blanket practice. Further, though the need for Title IX protections will persist, the ultimate goal of Title IX, that of creating a more egalitarian society, may require that we re-evaluate and adapt our strategies to further this goal as the dynamics within society itself shifts.

On the ground, I contacted many coaches and administrators locally. It is true that it is common practice for Leagues to deny the opportunity of female students to play on boys’

teams when girls teams of equal opportunity are offered at the school. CIF has regulations under section 300¹ that proscribes the participation of a girl on a boys’ team when a girls’

team is offered in the same sport. Several districts, including San Francisco Unified, reported that they follow such a rule in their middle school athletics program.

1 http://static.psbin.com/f/6/kdml81memojrdh/2016-2017_NCS_Constitution.pdf

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My research also revealed that several Leagues allow girls to play on boys’ teams, even when girls’ teams are offered. CYO Leagues frequently allow such activity, as does Oakland Unified School District at the middle school level. Notable graduates of the Oakland program include two star athletes, Asha Thomas (Cal)² and Aisia Robertson (Kansas)³. I spoke with Coach Coop, the Montera Middle School Coach who invited both Asha and Aisia onto the 8^th grade boys team (even though a girls’ team existed). Coach Coop was ardently supportive of the practice and was incredulous when told that our League would not allow a girl to play on the boys’ team. Other examples exist, including Jaime Nared (Portland, OR), who played on AAU boys’ teams until the League attempted to ban her, only to be overturned when challenged⁴.

Coaches at UC Berkeley, St. Mary’s, and Sonoma State University have expressed support in this circumstance. The Women’s Sports Foundation in New York has also expressed support⁵. After discussing Title IX issues with the consulting attorney at the Office of Civil Rights, and reviewing the policy guidelines as described in the 1979 interpretation of Title IX⁶, I spoke with several other legal experts including Deborah Brake⁷, Law professor at University of Pittsburgh and author of Getting in the Game: Title IX and the Women’s Sports Revolution.

Ms. Brake provided an insightful take on the history of Title IX. Ms. Brake noted that the issue of girls playing on boys’ teams is an unsettled legal matter. Her critique is that Title IX has been tremendously successful, but that it has some limitations due to the

intersection of competing goals in modern women’s athletics: That of providing a safe harbor of athletic opportunities for women, while simultaneously working towards gender integration such that individual women are able to play on the same field, literally, as men. Ms. Brake advocates for a blended system that provides sexed team opportunities while also providing for access to male Leagues for female athletes that want the

experience (and potential career opportunity) that such an option affords.

Moving Forward

The League president informed us several days ago that the League will allow our female student to play on the boys’ basketball team and will take up the issue of drafting related bylaws after the season ends. Though I have offered CIF rules as an example of a (to date)

2 http://www.dailycal.org/2016/03/15/its-all-in-the-game-how-basketball-brought-asha-thomas-and- her-family-together/

3 http://www.sfgate.com/sports/article/Bishop-O-Dowd-s-Big-4-players-share-a-6148963.php

4 http://www.espn.com/espnw/news-commentary/article/9448361/hoopgurlz-jaime-nared-the- national-basketball-scene-was-12-westview-senior-now-ready-dive-women-basketball-recruiting- process

5 https://www.womenssportsfoundation.org/advocate/foundation-positions/equity-issues/girls-boys- competing-sports-physical-activity-settings/

6 http://www2.ed.gov/about/offices/list/ocr/docs/t9interp.html

7 http://law.pitt.edu/people/deborah-l-brake

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legally accepted set of rules, I believe that ethical considerations compel us to reach above the low bar set by the CIF and seek a goal of balancing the baseline of sex separate teams with occasional exceptions allowing integration based on merit for individuals of underserved populations. Given the rapid change in gender politics over the last several decades, including a growing awareness of gender fluidity issues, it is time for our League to take on the task of building a set of policies that more accurately reflect our reality today, while striving for a tomorrow that is more inclusive, more integrated, and more equitable across genders.

In conclusion, Live Oak will be fielding a female student on our 8^th grade boys’ team. This will preclude her playing on the girls’ team. I would ask my colLeagues to consider that Live Oak is taking this position after an earnest endeavor to research this issue deeply and take a reasoned approach to our position. We are taking what we consider to be the most defensible position, both on legal grounds as well as ethical.

I strongly encourage my colLeagues in the Middle School Sports League to read Ms.

Brake’s book. Even if you disagree with her conclusions, you will find a comprehensive examination of the most cogent arguments (both pro and con) outlined in therein. Having a common understanding of the history and case law surrounding Title IX and the Equal Protection Clause, will provide a strong foundation for the construction of appropriate bylaws governing gender participation issues.

For our partner schools in the League, I invite you to play with us. We mean no harm by our efforts to accommodate this unique situation. We are striving, like you, to meet the needs of our students. Live Oak coaches will be reaching out to the remaining teams on our schedule to confirm our dates. Thank you for your consideration and understanding.

Thanks also to Nick Galvin for his hard work and thoughtfulness.

Warm regards,

Matthew Morgan Executive Director

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LIVE OAK CHARTER SCHOOL

100 Gnoss Concourse Petaluma, CA 94928 (707) 762-9020 Minutes for the Regular Meeting of the Board of Directors

Live Oak Charter School Library December 8, 2016

OPENING (7:07pm)

Present: Shaina Ferraro (SF), Chair

Erin Wrightsman (EW), Vice Chair Josh Kizner (JK), Treasurer

Sarah Grossi (SG), Secretary Chris Fox (CF), Director John Gerber (JG), Director

Mathew Morgan (MM), Executive Director PUBLIC COMMENT (7:08pm)

A parent whose family is new to Live Oak this year thanked the school faculty, staff, Executive Director, and Board for the educational program provided at Live Oak.

The Chair read a letter from a parent commenting on the School Calendar and urging that the Board to align with Petaluma City Schools’ calendar in the future to the extent possible.

OPEN SESSION (7:15 pm) A. Approve the agenda

JG moved to approve the agenda, JK seconded, all approved.

B. Reports

1. Committee Reports

Executive (SF), met and set agenda for this meeting.

Finance (JK), met and reviewed current annual budget and future projections. They discussed potential solutions to address projected budget shortfall for 2017/18.

2. Executive Director Report

MM reviewed and submitted report.

C. Consent Agenda

JK moved to approve the consent agenda, SG seconded, all approved.

1. Board Minutes: Nov 10, 2016

2. Monthly Financials for November 2016

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D. The Board considered the following for discussion

1. Redwood Empire School’s Insurance Group liabilities

MM reported the Redwood Empire School’s Insurance Group liabilities and it was reviewed by the Board.

2. Discussion with Live Oak Foundation board members

The Live Oak Foundation Board members were in attendance. A potential joint training retreat for Live Oak and Foundation Boards to be held in January 2017 was discussed.

The current fundraising report and activities were addressed.

3. LCAP

2016/17 LCAP was reviewed including progress toward actual annual measurable outcomes.

4. Discussion in regards to opening a preschool

The Board explored issues related to potentially opening a preschool. MM will continue targeted research and will report back to the Board in January 2017.

E. The Board considered the following for discussion and approval 1. 2017/18 School Calendar

JK moved to approve the 2017/18 school calendar, JG seconded, all approved.

CLOSED SESSION (9:46pm)

F. Pursuant to Government Code 54956.8

Conference with Real Property Negotiator

Property: 1000 Gnoss Concourse, Petaluma; Negotiating Parties: Sonoma-Marin Fair; under negotiations: price and terms

G. Pursuant to Government Code 54957: Public Employee Contracts H. Pursuant to Government Code 54957.8: Planning

OPEN SESSION (10:00pm)

I. Report on actions taken in closed session None.

ADJOURNMENT (10:03pm)

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LIVE OAK CHARTER SCHOOL

100 Gnoss Concourse Petaluma, CA 94928•(707) 762-9020

Agenda for the Special Meeting of the Board of Directors Live Oak Charter School Multi-purpose room

December 14, 2016

Present: Shaina Ferraro (SF), Chair Josh Kizner (JK), Treasurer

Sarah Grossi (SG), Secretary Erin Wrightsman (EW), Vice Chair John Gerber (JG), Director Matthew Morgan (MM), Executive

Director

Missing: Chris Fox (CF), Director

OPENING (6:16 pm)

PUBLIC COMMENT (6:17 pm)

No comment

OPEN SESSION (6:18 pm) A. Approve the agenda

JK moved to approve - all approved

B. The board will consider the following for discussion and approval 1. Review and Adoption of 1st Interim Financials

JK moved to approve - all approved ADJOURNMENT (6:25 pm)

JK moved to approve - all approved

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Live Oak Charter School Charter School #0382 Financial Statements June 30, 2016

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INDEX TO FINANCIAL STATEMENTS

Independent Auditor’s Report ... 2 Statement of Financial Position ... 4 Statement of Activities ... 5 Statement of Cash Flows ... 6 Notes to Financial Statements ... 7 Supplementary Information

Organization ... 16 Schedule of Average Daily Attendance ... 17 Schedule of Instructional Time ... 18 Statement of Functional Expenses ... 19 Reconciliation of Annual Financials and Budget Report With

Audited Financial Statements ... 20 Other Independent Auditor’s Report Section

Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial

Statements Performed in Accordance with Government Auditing Standards ... 21 Independent Auditor’s Report on State Compliance ... 23 Findings and Recommendations Section

Schedule of Audit Findings and Questioned Costs ... 25 Summary Schedule of Prior Audit Findings ... 27

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INDEPENDENT AUDITOR’S REPORT

Board of Directors Live Oak Charter School Petaluma, California

Report on the Financial Statements

We have audited the accompanying financial statements of Live Oak Charter School (a nonprofit organization), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities and cash flows for the fiscal year then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, and issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Live Oak Charter School as of June 30, 2016, and the changes in its net assets and its cash flows for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

Prior Period Adjustment

As discussed in Note 7 to the financial statements, net assets at June 30, 2015 were adjusted in the amount of $125,573 due to the correction of an error. Our opinion is not modified with respect to this matter.

Other Matters

Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 15, 2016, on our consideration of Live Oak Charter School’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Live Oak Charter School’s internal control over financial reporting and compliance.

SQUAR MILNER LLP San Diego, California December 15, 2016,

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LIVE OAK CHARTER SCHOOL STATEMENT OF FINANCIAL POSITION

June 30, 2016

Page 4 The accompanying notes are an integral part of these financial statements.

ASSETS

Current assets:

Cash $ 610,095

Accounts receivable 246,568

Total current assets 856,663

Fixed assets, net 31,538

TOTAL ASSETS $ 888,201

LIABILITIES AND NET ASSETS Current liabilities:

Accounts payable $ 106,477

Due to grantor government 77,850

Accrued expenses 4,272

Total current liabilities 188,599

Total liabilities 188,599

Net assets:

Temporarily restricted 24,582

Unrestricted 675,020

Total net assets 699,602

TOTAL LIABILITIES AND NET ASSETS $ 888,201

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LIVE OAK CHARTER SCHOOL STATEMENT OF ACTIVITIES For the Fiscal Year Ended June 30, 2016

Temporarily

Unrestricted Restricted Total REVENUES

Revenue limit sources:

State apportionments $ 621,377 $ - $ 621,377 Education protection account 242,958 - 242,958 In-lieu of property taxes 1,157,359 - 1,157,359 State revenues 366,322 24,582 390,904 Local revenues:

Interest 4,526 - 4,526 Fees and contracts 129,515 - 129,515 Other local revenue 219,738 - 219,738 Total revenues 2,741,795 24,582 2,766,377 EXPENSES

Program services:

Education 1,864,170 - 1,864,170 Support services:

Management and general 951,596 - 951,596 Total expenses 2,815,766 - 2,815,766 CHANGE IN NET ASSETS (73,971) 24,582 (49,389) NET ASSETS, BEGINNING OF YEAR 623,418 - 623,418 PRIOR PERIOD ADJUSTMENT 125,573 - 125,573 NET ASSETS, END OF YEAR $ 675,020 $ 24,582 $ 699,602

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LIVE OAK CHARTER SCHOOL STATEMENT OF CASH FLOWS For the Fiscal Year Ended June 30, 2016

CASH FLOWS FROM OPERATING ACTIVITIES:

Change in net assets $ (49,389)

Adjustments to reconcile change in net assets to net cash used in operating activities:

Depreciation 7,585

(Increase) decrease in operating assets:

Accounts receivable 18,018

Increase (decrease) in operating liabilities:

Accounts payable (69,350)

Due to grantor government 69,408

Accrued expenses 4,272

Net cash flows used in operating activities (19,456)

NET CHANGE IN CASH (19,456)

CASH, BEGINNING OF YEAR 629,551

CASH END OF YEAR $ 610,095

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LIVE OAK CHARTER SCHOOL NOTES TO FINANCIAL STATEMENTS

June 30, 2016

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1. ORGANIZATION AND MISSION

Live Oak Charter School (the Organization) was incorporated on February 16, 2001, under the laws of the State of California’s nonprofit public benefit corporation and the Organization was granted its charter by Petaluma City School District on March 27, 2001 and renewed through June 30, 2018, pursuant to the terms of the Charter Schools Act of 1992, as amended. This charter, among other matters, calls for the Petaluma City School District and the Organization to enter into a mutually agreeable memorandum of understanding, regarding the funding entitlements of the Organization, pursuant to Education Code Section 47612 and 47613.5, to define the operational and oversight arrangements between the Petaluma City School District, and to define and resolve other matters of mutual interest.

The mission of the Organization school students of Southern Sonoma County with a K-8 whole- child program inspired by Waldorf Education. The Organization embraces a developmental approach to learning that strives to bring forth from each child his or her innate capacities through an age-appropriate curriculum. The Organization seeks to educate the whole child – head, hands and heart – through an education that cultivates and integrates each child’s creative, intellectual, emotional, physical, and social capacities. The Organization offers an artistically rich and experientially-based program that enlivens student curiosity about the natural world and human culture as the foundation for fostering academic achievement.

The organization commenced operations during the 2001-2002 fiscal year and currently serves 295 students in Kindergarten through Grade 8.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Financial Statement Presentation

The financial statements are presented in conformity with Accounting Standards Codification (ASC) 958-205, Not-For-Profit Entities – Presentation of Financial Statements. Under ASC 958-205, the Organization reports information regarding its financial position and activities according to three classes of net assets:

Unrestricted Net Assets: Unrestricted net assets are available to support all activities of the Organization, and are not subject to donor-imposed stipulations. These generally result from revenues generated by providing services, receiving unrestricted contributions, and receiving interest from investments, less expenses incurred in providing program-related services, raising contributions, and performing administrative functions.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Financial Statement Presentation (continued)

Temporarily Restricted Net Assets: Net assets that are subject to donor-imposed stipulations that will be met either by actions of the Organization and/or the passage of time. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and are reported in the statement of activities as net assets released from restrictions. There were $24,582 in temporarily restricted net assets as of June 30, 2016.

Permanently Restricted Net Assets: Net assets that are subject to donor-imposed stipulations that the restrictions be maintained permanently by the Organization. Generally, the donors of these assets permit the Organization to use all or part of the income earned on the related investments for general or specific purposes. There were no permanently restricted net assets as of June 30, 2016.

Accounting Method - Basis of Accounting

The financial statements were prepared in accordance with accounting principles generally accepted in the United States of America as applicable to not-for-profit organizations. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported on the financial statements. The Organization uses the accrual basis of accounting, under which revenues are recognized when they are earned and expenditures are recognized in the accounting period in which the liability is incurred.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Income Taxes

The Organization is exempt from income taxes under Internal Revenue Code Section 501(c)(3).

It is, however, subject to income taxes from activities unrelated to its tax-exempt purpose. The Organization uses the same accounting methods for tax and financial reporting.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income Taxes (continued)

Generally accepted accounting principles provides accounting and disclosure guidance about positions taken by an entity in its tax returns that might be uncertain. Management has considered its tax positions and believes that all of the positions taken in its federal and state exempt organization tax returns are more likely than not to be sustained upon examination. The Organization’s returns are subject to examination by federal and state taxing authorities, generally for three years and four years, respectively, after they are filed.

Functional Allocation of Expenses

The costs of providing the program services have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the program services based on employees’ time incurred and management’s estimates of the usage of resources.

Cash and Cash Equivalents

Cash is, from time to time, variously composed of cash on hand and in banks. The Organization considers all highly liquid investments with original maturities of three months or less at the time of acquisition to be cash equivalents. As of June 30, 2016, there were no cash equivalents.

Fixed Assets

Fixed assets are recorded at cost and depreciated under the straight-line method over their estimated useful lives of 5 to 10 years. Repair and maintenance costs, which do not extend the useful lives of the asset, are charged to expense. The cost of assets, sold or retired, and related amounts of accumulated depreciation are eliminated from the accounts in the year of disposal, and any resulting gain or loss is included in the earnings. Management has elected to capitalize and depreciate all assets costing $5,000 or more; all other assets are charged to expense in the year incurred.

Deferred Revenue

Cash received for federal and state special projects and programs is recognized as revenue to the extent that qualified expenditures have been incurred. Deferred revenue is recorded to the extent cash received on specific projects and programs exceeds qualified expenditures.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Sources and Recognition

The Organization receives federal, state and local revenues for the enhancement of various educational programs. This assistance is generally received based on applications submitted to and approved by various granting agencies.

The Organization primarily receives the funds from California Department of Education (CDE).

Amounts received from the CDE are recognized by the Organization based on the average daily attendance (ADA) of students.

The Organization recognizes federal revenue to the extent that eligible expenditures have been incurred.

Revenue that is restricted is recorded as an increase in unrestricted net assets if the restriction expires in the reporting period in which the revenue is recognized. All other restricted revenues are reported as increases in temporarily restricted net assets.

New Accounting Pronouncements

In February 2016, FASB issued Accounting Standards Update (ASU) 2016-02, Leases (ASU 2016- 02). ASU 2016-02 requires a lessee to recognize a lease asset representing its right to use the underlying asset for the lease term, and a lease liability for the payments to be made to lessor, on its balance sheet for all operating leases greater than 12 months. ASU 2016-02 will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Organization has not yet assessed the potential impact of this guidance on its financial statements.

In August 2016, The FASB issued ASU No. 2016-14, Not-for-Profit Entities (Topic 958):

Presentation of Financial Statements of Not-for-Profit Entities (ASU 2016-14). ASU 2016-14 changes how a not-for-profit organization classifies its net assets, as well as the information it presents in financial statements and notes about its liquidity, financial performance, and cash flows. ASU 2016-14 requires amended presentation and disclosures to help not-for-profits provide more relevant information about their resources (and the changes in those resources) to donors, grantors, creditors, and other users. These include qualitative and quantitative requirements in the following areas: (1) net asset classes; (2) investment return; (3) expenses; (4) liquidity and availability of resources; and (5) presentation of operating cash flows. ASU 2016- 14 will be effective for annual financial statements issued for fiscal years beginning after December 15, 2017, and for interim periods within fiscal years beginning after December 15, 2018. Application to interim financial statements is permitted but not required in the initial year of application. Early application of the amendments is permitted. The Organization has not yet assessed the potential impact of this guidance on its financial statements.

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3. CASH

Cash at June 30, 2016, consisted of the following:

Pooled funds:

Cash in County Treasury $ 593,962

Deposits:

Cash in banks 11,133

Cash in revolving fund 5,000

Total cash $ 610,095

The Organization maintains a portion of its cash in the Sonoma County ("County") as part of the common invest pool ($593,962 as of June 30, 2016). Cash may be added or withdrawn from the investment pool without limitation.

The county is restricted by Government Code Section 53635 pursuant to Section 53601 to invest in time deposits, U.S. Government securities, state registered warrants, notes or bonds, State Treasurer’s investment pool, bankers’ acceptances, commercial paper, negotiable certificates of deposit, and repurchase or reverse repurchase agreements.

The County Treasurer's investments consist of 1.00% cash and cash equivalents, 12.82% U.S.

Treasury notes, 60.57% other governmental notes, 9.28% negotiable certificates of deposit, 10.84% corporate notes and bonds, 5.28% money market mutual funds, and 0.20% government pools and JPA’s. The credit ratings for these investments included A+/A1 by Moody's Investor Service, and AAA by Standard and Poor's.

Cash in Banks

Cash balances held in banks are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). The Organization maintains its cash in bank deposit accounts that at times may exceed federally insured limits. The Organization has not experienced any losses in such accounts. At June 30, 2016, the Organization had no funds in excess of excess of FDIC insured limits.

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4. ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2016, consisted of the following:

Revenue limit sources:

State apportionments $ 133,071

State revenues 113,326

Local revenues:

Miscellaneous 171

Total accounts receivable $ 246,568

5. FIXED ASSETS, NET

Fixed assets at June 30, 2016, consisted of the following:

Buildings $ 13,979

Leasehold improvements 32,729

Less: Accumulated Depreciation (15,170)

Total Fixed Assets $ 31,538

During the fiscal year ended June 30, 2016, $7,585 was charged to depreciation expense.

6. PRIOR PERIOD ADJUSTMENT

The accompanying financial statements include a prior period adjustment in the amount of

$125,573 to correct an understatement in accounts receivable as of June 30, 2015. This was due to the under accrual of the Charter School Facilities Grant Program for the fiscal year ended June 30, 2015.

7. TEMPORARILY RESTRICTED NET ASSETS

Temporarily restricted net assets include funds received but not expended and consist of the following as of June 30, 2016:

Educator Effectiveness $ 17,825

Lottery 6,079

Other local 678

Total temporarily restricted net assets $ 24,582

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8. EMPLOYEE RETIREMENT SYSTEMS

Qualified employees are covered under multiple-employer defined benefit pension plans maintained by agencies of the State of California. Certificated employees are members of the State Teachers' Retirement System (STRS), and classified employees are members of the California Public Employees' Retirement System (CalPERS).

Plan Description and Funding Policy STRS

Plan Description

The Organization contributes to the STRS, a cost-sharing multiple-employer public employee retirement system defined benefit pension plan administered by STRS. The plan provides retirement, disability and survivor benefits to beneficiaries. Benefit provisions are established by State statutes, as legislatively amended, within the State Teachers’ Retirement Law. According to the most recently available Comprehensive Annual Financial Report and Actuarial Valuation Report for the year ended June 30, 2015, total plan assets are $180.6 billion, the total actuarial present value of accumulated plan benefits is $301.3 billion, contributions from all employers totaled $2.5 billion, and the plan is 68.5% funded. The Organization did not contribute more than 5% of the total contributions to the plan.

Copies of the STRS annual financial reports may be obtained from STRS, 7667 Folsom Boulevard, Sacramento, CA 95826 and www.calstrs.com.

Funding Policy

Active plan members are required to contribute 9.20% of their salary and the Organization is required to contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those adopted by the STRS Teachers’ Retirement Board. The required employer contribution rate for fiscal year 2015-2016 was 10.73% of annual payroll. The contribution requirements of the plan members are established by state statute. The Organization’s contributions to STRS for the fiscal year ending June 30, 2016 were $78,236, and equals 100% of the required contributions for the fiscal year.

CalPERS

Plan Description

The Organization contributes to the School Employer Pool under the CalPERS, a cost-sharing multiple-employer public employee retirement system defined benefit pension plan administered by CalPERS. The plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions are established by State statutes, as legislatively amended, within the Public Employees’ Retirement Law.

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8. EMPLOYEE RETIREMENT SYSTEMS (continued) CalPERS (continued)

Plan Description (continued)

According to the most recently available Actuarial Valuation Report for the year ended June 30, 2015, the Schools Pool total plan assets are $56.9 billion, the total actuarial present value of accumulated plan benefits is $71.7 billion, contributions from all employers totaled $1.3 billion, and the plan is 77.5% funded, the Organization did not contribute more than 5% of the total contributions to the plan. Copies of the CalPERS’ annual financial reports may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814 and www.calpers.ca.gov.

Funding Policy

Active plan members are required to contribute 7.0% of their salary, and the Organization is required to contribute an actuarially determined rate. Effective January 1, 2013, any new participants in the plan will be required to contribute 6.0% of their salary. The actuarial methods and assumptions used for determining the rate are those adopted by the CalPERS Board of Administration. The required employer contribution rate for fiscal year 2015-2016 was 11.847%

of annual payroll based on PERS reduction transfers. The contribution requirements of the plan members are established by the state statute. The Organization’s contributions to CalPERS for the fiscal year ending June 30, 2016, were $77,578, respectively, and equals 100% of the required contributions for each fiscal year.

9. OPERATING LEASE

The Organization leases various buildings and equipment that are for more than one year. The future minimum lease payments are as follows:

Year Ending Lease

June 30, Payments

2017 $ 168,888

2018 178,188

2019 179,590

2020 180,319

Total future lease payments $ 706,985

The Organization receives no sublease rental revenues nor pays any contingent rentals associated with this lease. For the fiscal year ended June 30, 2016, operating lease expense was $159,996.

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10. COMMITMENTS AND CONTINGENCIES State Allowances, Awards, and Grants

The Organization has received state funds for specific purposes that are subject to review and audit by the grantor agencies. Although such audits could generate expenditure disallowances under terms of the grants, management believes that any required reimbursement will not be material.

11. SUBSEQUENT EVENTS

The Organization’s management has evaluated events or transactions that may occur for potential recognition or disclosure in the financial statements from the balance sheet date through December 15, 2016, which is the date the financial statements were available to be issued.

Management has determined that there were no subsequent events or transactions that would have a material impact on the current year financial statements.

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SUPPLEMENTARY INFORMATION

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LIVE OAK CHARTER SCHOOL ORGANIZATION

JUNE 30, 2016

Page 16 See accompanying Independent Auditor’s Report.

Live Oak Charter School [Charter #0382] is a Kindergarten through Grade 8 Charter School and was granted its charter renewal by Petaluma City School District in December 2013, pursuant to the terms of the Charter School Act of 1992, as amended. The Organization is currently operating at 100 Gnoss Concourse in Petaluma, California.

The Board of Directors for the fiscal year ended June 30, 2016, was comprised of the following members:

Name Office Term Term Expiration

Karna Dawson Chair 2 years June 30, 2016

John Kizner Treasurer 2 years June 30, 2017

Shaina Ferraro Secretary 1 year June 30, 2016

Cliff Schlueter Member 3 years June 30, 2016

Sarah Grossi Member 2 years June 30, 2016

Erin Wrightsman Member 3 years June 30, 2017

John Gerber Member 2 years June 30, 2017

Administration

Name Position

Matthew Morgan Executive Director

Kim Anderson Office Manager

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SCHEDULE OF AVERAGE DAILY ATTENDANCE June 30, 2016

Second Annual

Period Report Report

Transitional Kindergarten/Kindergarten - Grade 3 133.51 133.79

Grades 4 - 6 86.11 86.91

Grades 7 - 8 58.04 58.19

Total 277.66 278.89

The Organization is 100% classroom-based and does not generate any ADA from a full-time Independent Study program.

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LIVE OAK CHARTER SCHOOL SCHEDULE OF INSTRUCTIONAL TIME

For the Fiscal Year Ended June 30, 2016

2015-16 Number of Days

Minutes 2015-2016 Traditional

Grade Level Requirements Actual Minutes Calendar Status

Kindergarten 36,000 45,900 180 In Compliance

Grade 1 50,400 54,200 180 In Compliance

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LIVE OAK CHARTER SCHOOL STATEMENT OF FUNCTIONAL EXPENSES

Program Support Services Services

Management

Education and General Total Certificated salaries $ 702,792 $ 110,000 $ 812,792 Classified salaries 447,654 230,895 678,549 Employee benefits 377,055 128,148 505,203 Books and supplies 224,160 43,156 267,316 Travel and conferences 21,575 466 22,041 Dues and memberships 17,345 - 17,345 Insurance 7,717 - 7,717 Operation and housekeeping services - 31,895 31,895 Rental, leases, repairs, and

non-capitalized improvements - 183,610 183,610 Direct support/indirect cost charges - 102,965 102,965 Professional/consulting services and

operating expenditures 61,990 105,634 167,624 Communications 3,882 7,242 11,124 Depreciation - 7,585 7,585 Total expenses $ 1,864,170 $ 951,596 $ 2,815,766

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RECONCILIATION OF ANNUAL FINANCIAL AND BUDGET REPORT WITH AUDITED FINANCIAL STATEMENTS

Charter School June 30, 2016, Annual Financial and Budget Report,

Ending Fund Balance $ 614,140

Adjustments and reclassifications:

Increasing (decreasing) the fund balance to net assets:

Cash overstatement (7,593)

Accounts receivable understatement 45,333

Accounts payable understatement (77,850)

Deferred revenue understatement 125,573

Rounding (1)

Net adjustments and reclassifications 85,462

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OTHER INDEPENDENT AUDITOR’S REPORTS

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INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT

OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Board of Directors Live Oak Charter School Petaluma, California

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Live Oak Charter School (a nonprofit organization), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated December 15, 2016.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered Live Oak Charter School’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Live Oak Charter School’s internal control. Accordingly, we do not express an opinion on the effectiveness of Live Oak Charter School’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses.

However, material weaknesses may exist that have not been identified.