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‘No support’ for Council ‘takeover’ of school Authority board

By Staff | Apr 28, 2017

A proposal to have City Council assume the responsibilities of the Cape Coral Charter School Authority is likely off the table, at least for now.

Councilmember John Carioscia, who spoke in favor of a city takeover at Monday’s joint workshop meeting, said a lack of Council support has killed the idea that ran parallel to the city administration’s recommendation that the municipal system become an in-house department using city staff services.

Only Carioscia, Mayor Marni Sawicki and Councilmember Marilyn Stout spoke in favor of the concept, with Stout saying such a restructure made sense only if Council agrees with the staff recommendation to bring the operation of the four-school system under the city’s umbrella.

“As far as the council taking over, that ship has sailed,” Carioscia said in a telephone interview. “There’s not enough support.”

The session between the elected board and the Council-appointed school governing authority, whose makeup is defined by ordinance, was called in follow up to concerns the city has about the school system’s financial sustainability.

City Manager John Szerlag was directed to compile “best practices” recommendations after an earlier analysis by the city projected the school system would head into the red in a few years and was being “implicitly subsidized” by municipal tax dollars because it did not reimburse the city for all of the administrative costs incurred.

That “Best Practices Analysis for Charter School Staff Services” report included 57 best practices recommendations, including requiring the school system to use city resources, designating the charter schools as a department of the city for financial, personnel, technology, record keeping and risk.

Carioscia, who previously asked for an investigative review of findings in an internal audit report into school operations, said he is disappointed in Council’s reaction to the report as there are numerous issues that need to be addressed.

“This is out of control,” he said, adding he thinks some on Council are afraid to deal with the emotion-fraught controversy properly in an election year.

“That’s wrong,” Carioscia said. “I think if it wasn’t an election year and they didn’t want to upset the block voting out of the charter schools, it might have gone another way.”

And that way should have been the city assuming the duties currently performed by the school governing board as the buck ultimately stops with Council, not the Authority.

“I still believe strongly that the City Council should take over the governing board,” Carioscia said. “If we’re going to be held politically accountable, then we should take it over and make sure things are done right.”

He pointed to city staff’s best practices analysis, which states the school system is not self supporting because it does not fully reimburse the city for the cost of providing staff services. The system was intended to wholly pay for itself with available per-student funding as do non-municipal charter schools.

“Enough is enough,” Carioscia said. “Either we run it the way it was set up or I would consider long and hard whether we should give dollars to the charter school. The taxpayers are paying once for district schools and once to the charter schools.”

Stout said, upon further analysis, the charter school Authority and the system’s administration should be given an opportunity to review both the city’s best practices recommendations and its proposed next year budget, which came under fire Monday. If passed as-is, that budget would require $2.4 million in school system reserves to fund.

Stout said she spoke with a member of the Authority board following Monday’s workshop. She added she got a lot of her questions answered, including why the Authority agreed to a “without cause” contract separation with the former superintendent after he declined a contract extension, and why the working budget for next year includes expenditures in excess of projected revenue.

It actually would have cost $5,000 more in salary and bonus, if Nelson Stephenson had stayed, than it cost to pay four month’s severance, Stout said, adding that she agrees that Stephenson had become the focal point of criticism by some on Council.

“I think that was a good decision,” Stout said of the contract termination with severance.

The explanations she received clarified a lot of things about the school Authority’s thought process, she added.

“I feel good about the governing board moving forward,” Stout said. “I would have made the same decision. There is a very good possibility this will be worked out, I have faith they will work it out.”

She is not in favor of Council moving to assume the duties of the school governing board at this time.

“No, I would certainly give them the opportunity to work with the best practices, to come up with a budget that does not take a lot of money out of their reserves,” Stout said. “I think they can work things out because what they put in their (budget) request was beyond the needs; it was the wants. It was if they had all kinds of money, what would they do. I think they can make some decisions without using the reserves.”

The school system has more than $5 million in its reserve accounts.

Councilmember Jessica Cosden, who also is Council’s liaison on the Charter School Authority and the school governing board chair, said there is much to mull and she has a number of questions.

She also has one clarification.

“We do not have a $2.4 million budget deficit,” she said of the school system’s working budget. “We have a $2.4 million shortfall if we do everything on our wish list this year. We have not gone through the budget to decide what we are going to do.”

The Authority’s first budget discussion came Friday and, due to time constraints, was limited to about an hour and a half.

“There are various things we can look at,” Cosden said. “It (misinformation) makes us look like we’re in this dire situation but we’re not. We have about $5 million in reserves and even if we had a $2.4 million shortfall – which we don’t – we would still open in the fall.”

Cosden said her questions concern the cost-of-services numbers computed by the city. The city’s “implicit subsidy” is the difference between the administrative fees the system currently pays and amount the city maintains is the actual cost of providing services received.

For example, the city numbers include both wages and benefits, Cosden said, adding she wants an explanation as to why benefits are part of the charge-backs.

“These employees are there anyway and have benefits anyway,” she said.

Cosden said she also wants an explanation of how the staff hours were computed.

“I’ve been thinking about the subsidy amount because how much of the work is city-initiated rather than charter-school initiated?” she said.

The City Attorney’s Office performs a lot of work, for example, but it is city-initiated to protect the city, not done necessarily for the school system.

“I’ll be asking how the numbers were computed,” Cosden said. “It seems inflated.”

The school Authority, which did not receive the report until after its Friday meetings, will review each recommendation, she added.

According to a memo sent by Szerlag to interim school Superintendent Jacquelin Collins Wednesday and copied to members of Council, the actual cost of providing city staff support services to the Charter Schools is just over a half million dollars per year. He now proposes to keep the administrative charge-back fee about the same as the district is now paying.

“Although actual costs to provide City staff support services to the Charter Schools is $511,000, I have instructed our Finance Director to charge the school system $289,000,” Szerlag wrote. “Of course, the salient reason for doing this is the long-term economic sustainability of the Charter Schools.”

Meanwhile, city staff will take the 57 best practices recommendations and categorize them into three categories – no cost to implement, capital and operating and management costs to implement, and the hiring of additional personnel to implement.

The city will take a look at the numbers on its end.

“The budget I develop for the City of Cape Coral is considered by Council in September and takes effect October 1, 2017,” Szerlag wrote. “Should revenues be sufficient to cover not only Cape Coral’s needs, but also those of the Charter School to implement best practices, I will include costs thereof as an expenditure to the City of Cape Coral. It may be that we cannot hire all five personnel as recommended in the analysis, but perhaps we can begin to make a start and work on accommodating more best practices.”

If applicable, capital and operational costs greater than $5,000 can also be considered, he added.

Szerlag also clarified what, exactly, the city’s intent would be if the charter school system were to become a city department.

“Although mentioned at the April 24 Committee of the Whole meeting, it is worth reiterating what it means to have the management sleeve of the Charter School system be treated as a department of the City,” Szerlag said. “It means that you have access to all staff departments and will follow our protocols. It does not mean that City management will tell you how to run the school system; nor will we tell you what to budget. The management of the City of Cape Coral is responsible for instilling a culture of professionalism throughout the organization, and I know you and your principals want the same kind of culture.”