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City looks to help subsidize charter schools

By Staff | Oct 29, 2019

At the rate the Cape Coral Charter School system is going, it will be financially unsustainable in five years, potentially jeopardizing the hundreds of jobs and thousands of students who work at or attend the schools, City Manager John Szerlag told the Cape Coral City Council Monday.

The charter schools have been called one of the real gems the city has, with the high school named one of the best in the nation.

However, the municipal system has two ongoing financial issues. One is the lease agreement between the system – which is required to maintain the buildings – and the city, which borrowed the money to build them. The other is that the schools have not managed to reach full capacity, meaning the system is not receiving funds for those empty seats.

When the charter school system was founded by the city in 2005, it was verbally agreed that the city – i.e. Cape Coral taxpayers – would not subsidize the schools.

Szerlag said at Monday’s council workshop, though, that there was no ordinance or resolution addressing this and so no prohibition to overcome.

Council and Szerlag drafted a tentative long-term plan that would have the city subsidize the schools annually at around $1.6 million and take over the management of some of its needs such as IT and human resources. In the meantime, the city would also look into restructuring the leases.

The subsidies would continue until 2038, when the schools would become free and clear. The charter schools would then pay back the subsidies until 2050.

Jacquelin Collins, superintendent of the Cape Coral Charter Schools, said it was a great first meeting.

“The city is very supportive of the charter schools and wants to work together with us and make the school system stable for as long as possible,” Collins said. “Revenues don’t keep up with the cost to operate, give raises and, in the future, we’re going to need support.”

Szerlag has contacted Greg Adkins, superintendent of Lee County Public Schools, who said in the event the charter school system failed, Lee County would take the 3,150 students into district schools and disburse them throughout the city. The district would not, however, purchase the schools, as they are too small for the district’s needs.

The city would still have to pay for these buildings, costing it more than $61 million as the schools aren’t of much use for anything else, officials said.

A model produced by Stantec showed the schools will fall below the 5 percent threshold in reserves in 2024 and begin to lose money in 2025, necessitating the subsidy.

There was discussion on how it would be paid, either through the General Fund or through a specific millage similar to the earmarked tax for General Obligation Bonds issued to pay for city parks.

Most on council didn’t like the idea of another property tax, but supported the idea of subsidizing the charter school system, as the city already subsidizes Coral Oaks Golf Course and Sun Splash Family Waterpark. Councilmembers Jennifer Nelson and John Gunter made that point during council discussion.

Newly appointed Councilmember Lois Welsh suggested private help for the schools and opening up the buildings for other events and said she liked the city taking over secondary functions.

“Additional revenue from a public/private partnership might help, such as naming rights. I like the idea of taking over some of the administration as it will free up our educators to educate,” Welsh said.

The issue will be addressed again at future council workshop meetings, when they can get into more detail about the plan.

The charter schools issue spilled over into the discussion on how to use the $17 million in FEMA reimbursements the city expects, as some were wary of building a new athletics field complex on the Oasis school campus if they didn’t know exactly what the future holds for them. Council also wasn’t sold on starting a seawall hardship special assessment program.

There was consensus on funding for median improvements, lighting and sidewalks as well as to replenish the city’s disaster reserves and assistance on funding a new fleet building to replace the current one.