My public records request revealed that no capital outlay funds were returned after the Florida Department of Education (FLDOE) showed seven Duval Charter schools as closing between 2015 and 2020. No capital outlay funds were recouped in spite of the Florida statute 1013.62 that says:
(5) If a charter school is nonrenewed or terminated, any unencumbered funds and all equipment and property purchased with district public funds shall revert to the ownership of the district school board, as provided for in s. 1002.33(8)(d) and (e). In the case of a charter lab school, any unencumbered funds and all equipment and property purchased with university public funds shall revert to the ownership of the state university that issued the charter. The reversion of such equipment, property, and furnishings shall focus on recoverable assets, but not on intangible or irrecoverable costs such as rental or leasing fees, normal maintenance, and limited renovations. The reversion of all property secured with public funds is subject to the complete satisfaction of all lawful liens or encumbrances. If there are additional local issues such as the shared use of facilities or partial ownership of facilities or property, these issues shall be agreed to in the charter contract prior to the expenditure of funds.
Action item: Write your elected state representatives and ask why they didn’t put more protections in place before they voted yes on HB 7097 in 2020 forcing us to give part of sales surtax to charter schools on a per student rather than a needs based formula. Clearly more protections were needed since no capital outlay funds were returned (according to the public records request) when charter schools closed. 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 1301 of HB 7097:
(b) The resolution must include a statement that … the revenues collected must be shared with eligible charter schools based on their proportionate share of the total school district enrollment.https://flsenate.gov/Session/Bill/2020/7097/BillText/er/PDF
The newly approved KIPP charter school has requested to be a feeder school so it doesn’t have to wait the two year probationary period to get our sales surtax money. My understanding is the school district has the ability to deny that request. If they approve the request, then all other schools will get a smaller percentage of the sales surtax money since the allocation is based on a percentage of the school’s enrollment to total enrollment.
According to a DCPS website $922,541.99 is the sales surtax share for the charter schools in 2021 so far. I hope going forward the website will give us more information. I assume that number is the dollar amount for January to March since sales tax returns are normally filed quarterly and the sales surtax began January 1st of this year.
Please encourage your elected school board representative or sales surtax citizen oversight committee member to demand that the school district make the website report this information:
- How much of our sales surtax money did each charter school get?
- What provisions are in each charter school contract that will allow the school district to recoup the funds, the equipment, and the facility purchased with our sales surtax dollars if the charter school should close?
- Date the charter school closed if it isn’t still open or the date it quit receiving funds
- Reason the charter school isn’t receiving funds other than a closing. Examples are listed in Florida Statute 1013.62 and include financial problems or inadequate student achievement.
- How much, if any, of our sales surtax dollars was recouped when the charter school closed?
My public records request asked why the seven Duval County Charter schools (that had been receiving state capital outlay funds) quit receiving them.
Many other charter schools closed before they had been open 2 years, which is the usual probationary period before a charter school can receive capital outlay funds under 1013.62. The two KIPP schools in the list of seven charter schools that closed didn’t exactly close; they merged with another KIPP school. I wonder why. Was it so they could more easily share money? Was it because merging them protected them from losing funds due to a bad grade? According to Florida Statute 1013.62, the capital outlay funding will stop for a couple of reasons including not meeting these requirements:
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.
The other five charter schools on the list are shown as closing for various reasons including financial insolvency and declining enrollment.
The public records department of the Duval County Public Schools (DCPS) made me pay $151.44 before they’d look for the information. Don’t you think the information should be readily available? The Florida Department of Education (FLDOE) abdicated responsibility even though it was the state legislators that forced these dollars to be given to charter schools with inadequate safeguard provisions within the state law. The FLDOE responded to my public records request:
The Duval County School Board serves as sponsor of charter schools and would be the appropriate resource for information on school closures in the county. You may contact Mr. Eugene Hays, Director of Charter Schools, Duval County School at firstname.lastname@example.org to find the reasons the listed charter schools closed.
I continue to wish the school board or citizen sales surtax oversight committee would create better safeguards for our sales surtax money that is going to charter schools that may close. It’s a travesty that the state legislators passed HB 7097 in 2020 forcing us to give our sales surtax to charter schools without proper safeguards.
The dollar amount being reported on the FLDOE website (as shown below) as received includes PECO funds which (I think) in some years the state legislators gave it all to charter schools and none to the neighborhood or magnet schools. These are the seven charter schools I asked about:
|total $ rec’d||school #|
|318,575||160601||KIPP VOICE ELEMENTARY SCHOOL (closed 2017)|
|515,118||161341||MURRAY HILL HIGH SCHOOL (closed 2015)|
|21,161||165531||VALOR ACADEMY OF LEADERSHIP MIDDLE SCHOOL (closed 2016)|
|149,650||165581||KIPP JACKSONVILLE K-8 (closed 2018)|
|22,327||161381||SOMERSET EAGLE HIGH SCHOOL (closed 2016)|
|279,440||165501||Somerset Preparatory Academy (closed 2015)|
|418,464||161181||SIATECH (SCHOOL FOR ACCELERATED LEARNING AND TECHNOLOGIES, INC) (closed 2020)|
The Florida statutes 1013.62 (4) say capital outlay funds can only be expended by charter schools for these reasons:
(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) Payment of the cost of the opening day collection for the library media center of a new school.
I asked the FLDOE: Is there any provision to pay the taxpayer back if the building is sold?
Section 1013.62 (4) F.S. states, “If a charter school is non-renewed or terminated, any unencumbered funds and all equipment and property purchased with district public funds shall revert to the ownership of the district school board. The reversion of such equipment, property, and furnishings shall focus on recoverable assets, but not on intangible or irrecoverable costs such as rental or leasing fees, normal maintenance, and limited renovations. The reversion of all property secured with public funds is subject to the complete satisfaction of all lawful liens or encumbrances. If there are additional local issues such as the shared use of facilities or partial ownership of facilities or property, these issues shall be agreed to in the charter contract prior to the expenditure of funds.”
I asked the FLDOE: Do related party rules apply so that our sales surtax money can ONLY be used (directly or indirectly via lease payments to a related party) on items mentioned in 1013.62(4)? In other words, can related parties use our sales surtax money to repay loans? It seems that charter schools are setting up related party entities to skirt the rules of 1013.62(4) that bar capital outlay funds from being used to repay loans. Is that legal?
Capital outlay may be used to purchase, construct or lease a facility. The sponsor [the school district] has fiduciary responsibility as it holds the contract with the governing board of the charter school.
Write your elected school board member (or maybe all seven school board members) and ask:
What protections are in place to recoup our sales surtax dollars WHEN a charter school closes? Please deny any charter school applications whose charter contract doesn’t clearly lay out the charter school’s plan to allow the school district to recoup the sales surtax dollars and the assets it purchased when the charter school closes.
You might ask how that can be done when the sales surtax money may be used to make lease payments to an organization that is related to the charter school? That raises this question: are charter schools setting up shell companies to skirt the rules? If yes, what can be done about their effort to defraud the taxpayer?
References and other articles of interest
As for a breakdown, Florida schools did earn perfect scores as far as accountability. That’s because the publicly-funded charter schools must abide by Florida’s Sunshine Law with open meetings and records, and the schools are subject to audits. But the state gets slammed for allowing for-profit entities to run charter schools and for allowing charter school boards to contract with private management contractors. NEA leaders, meanwhile, say the poor performance of charters nationwide shows how the concept has ultimately failed to meet expectations.https://floridapolitics.com/archives/296109-nea-issues-florida-failing/
Governments at all levels have failed to implement systems that proactively monitor charter schools and hold them accountable. A 2016 report from the Center for Popular Democracy documents waste, fraud, abuse, and mismanagement of charter school funds, totaling more than $216 million.https://www.nea.org/resource-library/state-charter-statutes
For the last two decades, Florida has been a laboratory for school choice policies: alternatives to public education like privately-run charter schools and taxpayer-funded scholarships to private institutions. Diane Ravitch argues that’s not something to celebrate or emulate. Ravitch is a historian, advocate and former assistant education secretary under Republican President George H. W. Bush. She once believed charters, vouchers and standardized testing could improve public school education. “I came to realize that the privatization movement was a continuation of a decades-long campaign by right-wingers who hated public schools, which they derisively called ‘government schools,’” she wrote of her personal evolution in her new book, Slaying Goliath: The Passionate Resistance to Privatization and the Fight to Save America’s Public Schools. “I renounced my own past views and determined to expose the well-funded smear campaign against American public schools and their teachers,” she wrote.https://www.wlrn.org/education/2020-01-27/in-new-book-national-education-historian-calls-florida-model-of-lawlessness-and-greed