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City charter school financials deemed dire

By Staff | Oct 24, 2019

The fiscal challenges of the city of Cape Coral’s municipal charter school system will come back to the Cape Coral City Council on Monday.

City Manager John Szerlag will give a presentation on how the Cape Coral Charter School System is currently unsustainable and that, according to data from Stantec, will be below the 5 percent fund balance requirement by 2024, rendering them unsustainable as the system will be losing money.

Lee County School District Superintendent Dr. Greg Adkins advised that the School District would accept charter school students – but not the buildings – should the charter schools cease to exist.

The city is responsible for the debt service on all Charter School buildings, which carry $61.2 million in debt including principle and interest According to Economic Development Director Manager Ricardo Noguera there is no suitable adaptive reuse for the Charter School buildings.

The city established the Charter School System in 2005 to enhance the quality of life and the education of the children in the city. However, the city has had to subsidize the schools to help it balance the books, as debt service is the primary problem.

Szerlag will say it is not a viable option for the city to pay $3.2 million per year or $61.2 million for empty school buildings.

Szerlag will recommend:

n A long- term loan that may turn into a subsidy contingent upon revenue and expenditures going out more than 10 years from now;

n Pay all or a portion of $3.2 million in debt service via either a dedicated millage or General Fund budget. With a millage, in today’s dollars $1.5 million per year equals $15 per year for a home valued at $150,000. $3 million per year equals $30 per year for the same home;

n The city will enter into an agreement where the city either takes over or outsources the functions of administrative staff costs associated with Fleet Management, Building Maintenance, Finance/ Procurement/Budgeting, Human Resources, IT, and Recordkeeping. The cost to outsource to Charter Schools USA would be about $1.5 million;

n Continue to work with the Lee County School District to explore possible new partnerships as it relates to the city’s charter school system;

n Conduct future COW meetings for Council direction as the situation progresses.

The Lee County School System Superintendent Gregory Adkins and Szerlag have discussed the possibility of the district acquiring the charter schools. Adkins said that while the Lee schools could accommodate, it would not be in their best interests to purchase the buildings, as rehabbing them would be cost prohibitive.

Council also will discuss future uses of FEMA reimbursement revenues.

Among the previously discussed issues will be assisting the City’s Charter Schools with Athletic Field(s) construction Estimated $3 million to construct athletic facilities at the Oasis campus; funding additional median improvements and sidewalks throughout the city; funding a Seawall Hardship special assessment program; assistance with funding a new fleet facilities building; and funding additional disaster reserves with the rest of the FEMA reimbursement.

The city has received $9,797,585 to date and expects to receive $6,183,411 over the next 24 months. It is appealing a denial of $1.2 million, meaning an expected total reimbursement of $17,181,718.

The workshop meeting will begin at 4:30 p.m.

The Cape Coral City Council also will hold a special meeting at 3 p.m. to discuss a pay rate increase for council office employees.

The supporting materials do not show what Council is looking to pay employees with in its offices however the backup material references an employee pay study that compares city wages to those paid in other cities.

Council also will get a presentation from the city’s Youth Council on the progress of its first Fall Gala the special meeting.

Both meetings are open to the public.

City Hall is at 1015 Cultural Park Boulevard.