Letter to city council regarding 2020-627

To the City Council,

The state legislature has taken away the school board’s authority to safeguard our sales tax dollars going to the charter school industry. (ref 3) It is up to the city council to be diligent when voting on ordinances that are giving our sales tax dollars to the charter school industry. I urge the city council to vote no on 2020-627 as the money appears to be aimed at enriching real estate investors.

If the city council had not prevented us from voting on the sales tax referendum in 2019, our referendum would not have fallen under HB 7097 passed in 2020 which took away the school board’s ability to protect our sales tax dollars going to the charter school industry in addition to forcing us to give our sales tax dollars to charter schools on a per student formula instead of a needs basis.

Superintendent Greene (in an email I received in response to my inquiry) confirmed that in the event a charter school closes, our sales tax money (except for the money sitting in the bank) will be forfeited to the real estate investor. It is up to the city council to protect our sales tax dollars going to the charter school industry because the state legislature has taken away the school board’s authority.  

The City of Jacksonville’s Office of Economic Development and the Office of General Counsel negotiated the bond application (2020-627) with the Jacksonville Alliance for KIPP Schools. Based on the bill summary, they indicate that they will provide oversight and administration. 

The bond is outside the purview of the Duval County School Board. The city council needs to ascertain the legitimacy of the claim that KIPP’s “affiliates” and “any successor” and “McDuff QALICB2, Inc”  qualify as an educational institution for purposes of the bond. McDuff QALICB2, Inc and JAKS appear to me to be real estate investors.

A recent audit revealed that Kipp paid $850,000 in rent to JAKS in that audit year. (ref 6) This bond is being done partly to give money to Chartrand and Baker. (ref 1) Jason Gabriel’s office in 2019 interpreted “shall” to mean “doesn’t have to” in order to help the charter school industry including Chartrand and Baker or so it appeared to me. The city council and the school board need to be skeptical of the Office of General Counsel opinions when it comes to the profit motivated charter school industry.

I assume the bond will be repaid with lease payments funded by our sales tax dollars.. I continue to wonder if the voters understood that Jason Fischer co-sponsored HB 7097 which took away the school board’s ability to protect our sales tax dollars going to charter schools when they voted for him in the last election.

Please see references below which back up my fact claims. 

Begin forwarded message from school board member in response to my inquiry about the authority of the citizen oversight committee:

Hi Susan,

For you reference, the SB policy outlining the role and responsibilities of the Oversight Committee can be found here: https://dcps.duvalschools.org/site/handlers/filedownload.ashx?moduleinstanceid=12486&dataid=70317&FileName=Chapter%209%20-%20School%20Community%20Relations%20and%20Interlocal%20Agreements.pdf

 Policy 9.66

Please note that the Oversight Committee does not have the authority to approve or deny plans. They provide monitoring and oversight and then report findings back to the SB.

Charter schools may use their funds for any/all allowable uses defined in FL Statute. This is the same statute that Charters have already been using to guide Capital funds; this should be a familiar process for Charter schools.

As is current practice, the state essentially circumvents the local school board to provide direct oversight of the Charter school system and this process will not be an exception. If there is misuse this would be reported like any other discrepancy in spending of capital funds through the District to the State DOE.

I hope this is helpful.

———- Forwarded message ———

From: Susan
Date: Tue, Nov 24, 2020 at 1:39 PM
Subject: Has the state legislature left the local elected school board with any options to protect our sales tax money going to charter schools?
To: Senator Gibson <gibson.audrey.web@flsenate.gov>, <BEAN.AARON.WEB@flsenate.gov>, <clay.yarborough@myfloridahouse.gov>, <cord.byrd@myfloridahouse.gov>, <jason.fischer@myfloridahouse.gov>, <tracie.davis@myfloridahouse.gov>, <wyman.duggan@myfloridahouse.gov>, <angie.nixon@yahoo.com>

To the Duval Legislative Delegation,

I urge you to please pass a bill to provide protections for our sales tax dollars in the event the charter school receiving our sales tax dollars should close.

Are there any options for the local school board to put restrictions on the money going to charter schools? A charter school and its affiliates are seeking a bond which I assume they plan to repay with our sales tax money so this is an urgent question. Link to the ordinance that the city council will soon be voting on:  https://jaxcityc.legistar.com/LegislationDetail.aspx?ID=4663688&GUID=5172AF95-34C2-4EA5-B3CD-67405B8D9A31

1. Under state law, would the school board be allowed to require clawback provisions to recoup our sales tax dollars if the charter school closes or the building is sold?
2. The Oversight Committee must monitor the expenditures but do they have any authority to withhold funding? The Oversight Committee was an extra layer of protection that was included on our ballot. Our Duval ballot included the words:

“with expenditures based upon the Surtax Capital Outlay Plan, and monitored by an independent citizens committee”

References

1. Excerpt from an email I received from a city official regarding 2020-627:
Yes, the loans in (ii) and (iii) repay loans from Chartrand and Baker. 

2. Florida Statute 1013.62(4) A charter school’s governing body may use charter school capital outlay funds for the following purposes:
(a) Purchase of real property.
(b) Construction of school facilities.
(c) Purchase, lease-purchase, or lease of permanent or relocatable school facilities.
(d) Purchase of vehicles to transport students to and from the charter school.
(e) Renovation, repair, and maintenance of school facilities that the charter school owns or is purchasing through a lease-purchase or long-term lease of 5 years or longer.
(f) Payment of the cost of premiums for property and casualty insurance necessary to insure the school facilities.
(g) Purchase, lease-purchase, or lease of driver’s education vehicles; motor vehicles used for the maintenance or operation of plants and equipment; security vehicles; or vehicles used in storing or distributing materials and equipment.
(h) Purchase, lease-purchase, or lease of computer and device hardware and operating system software necessary for gaining access to or enhancing the use of electronic and digital instructional content and resources; and enterprise resource software applications that are classified as capital assets in accordance with definitions of the Governmental Accounting Standards Board, have a useful life of at least 5 years, and are used to support schoolwide administration or state-mandated reporting requirements. Enterprise resource software may be acquired by annual license fees, maintenance fees, or lease agreement.
(i) …

3. The legislature forced us to give our sales tax dollars to charter schools on a per student basis with HB 7097.  It begins on line 1291:
https://www.flsenate.gov/Session/Bill/2020/7097/BillText/er/PDF
Quote from the bill HB 7097 beginning at line 1332:

Surtax revenues shared with charter schools shall be expended by the charter school in a manner consistent with the allowable uses set forth in s. 1013.62(4). All revenues and expenditures shall be accounted for in a charter school’s monthly or quarterly financial statement pursuant to s. 1002.33(9). The eligibility of a charter school to receive funds under this subsection shall be determined in accordance with s. 1013.62(1). If a school’s charter is not renewed or is terminated and the school is dissolved under the provisions of law under which the school was organized, any unencumbered funds received under this subsection shall revert to the sponsor. [inadequate clawback provisions for encumbered funds]

4. Florida statute 1013.62(1) (a) To be eligible to receive capital outlay funds, a charter school must:
1.a. Have been in operation for 2 or more years;
b. Be governed by a governing board established in the state for 2 or more years which operates both charter schools and conversion charter schools within the state;
c. Be an expanded feeder chain of a charter school within the same school district that is currently receiving charter school capital outlay funds;
d. Have been accredited by a regional accrediting association as defined by State Board of Education rule; or
e. Serve students in facilities that are provided by a business partner for a charter school-in-the-workplace pursuant to s. 1002.33(15)(b).
2. Have an annual audit that does not reveal any of the financial emergency conditions provided in s. 218.503(1) for the most recent fiscal year for which such audit results are available.
3. Have satisfactory student achievement based on state accountability standards applicable to the charter school.
4. Have received final approval from its sponsor pursuant to s. 1002.33 for operation during that fiscal year.
5. …

5. The bond is getting money to repay Chartrand and Baker for the money they loaned Kipp AND to build a new charter school on Golfair.  I am indeed making the assumption that this bond is going to be repaid with our sales tax money based on the way the ownership of previous buildings were structured and the wording in 2020-627. I believe the following

  • 1. the bond money will go to repay Chartrand and Baker and to build a new charter school
  • 2. the building will be owned by a real estate investor
  • 3. KIPP will use our sales tax money to rent the space from the real estate investor

Here is the link to the 990 for  MCDUFF QALICB 2 https://projects.propublica.org/nonprofits/organizations/474726810/202040239349301004/full The reason I call them a real estate investor is because they describe themselves on their form 990 as follows: “Briefly describe the organization’s mission or most significant activities: HOLD, DEVELOP AND MAINTAIN, AND RETAIN FINANCING AS NEEDED FOR THE REAL ESTATE…”

Here is the link to KIPP where they say they expect to pay $1,163,370 in rent to JAKS and McDuff QALICB 2 in 2020: https://www.kippjax.org/wp-content/uploads/2019/12/FY-2020-Budget-KIPP-Jacksonville-Schools.pdf

Here is the link to KIPP 2019 audit: https://www.kippjax.org/wp-content/uploads/2019/12/KIPP-JACKSONVILLE-K-8-SCHOOL-FINAL-2019_AUDIT.pdf Especially interesting is page 25 and 26.

6. Link to KIPP audit:

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