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Audit re-highlights who-pays issue

December 9, 2016
Cape Coral Daily Breeze

As the Cape Coral Charter School Authority and the Cape Coral City Council decide how - or even whether - to handle the accusations exchanged between Mayor Marni Sawicki and School Superintendent Nelson Stephenson, we agree that an unresolved issue peeks from the pages of the audit report targeted by the mayor.

Specifically, we agree with Mayor Sawicki that fund balances of some $6.7 million should be noted.

We're not certain, however, that the money should 1) be "invested" all or in part, or 2) that it was Mr. Stephenson's responsibility to have done so since it is city that has the authority to invest certain reserve funds, not the superintendent or the Authority.

The question we see is why did City Council, in the last budget year, give its municipal charter school system $100,000 of taxpayer money when the system has excess funds - enough, in fact, that at least one official thinks the money should be invested and earning interest?

The $100,000 beneficence, earmarked as a grant, was presented as kind of a stop-gap measure while council decided how to handle the issue of who, exactly, should pay for major repairs and upgrades as the facilities age.

More than a year after Councilmember Rana Erbrick asked staff to address the issue, the city manger has yet to bring forward a plan to resolve the lease loophole that does not definitively define who pays for what "maintenance."

Some history:

The city of Cape Coral established its charter school system in 2004. The concept was brought forward by then- city manager Terry Stewart, who had seen a similar charter system work well in Pembroke Pines. The municipal system, then only one of two in the state, was intended to provide the children of residents with a public school option at no cost to city taxpayers.

Cape property owners, who had some concerns about the city incurring debt to get the schools built and the system up and running, were assured that the enterprise would pay for itself much as other charter school alternatives must do by relying primarily on state and county per-student funds.

No tax dollars would be used, residents were told - and promised.

The city obtained bond financing, opening its first elementary school in August 2005; another elementary and a middle school in August 2006; and a high school in August 2007.

The city owns the buildings and leases them to the charter authority, which, in turn, makes payments based on the construction debt to the tune of more than $3.4 million per year, plus $1. The authority also is responsible for insurance and maintenence - and therein lies the rub.

The authority budgets "plant maintenance" at a cost of about $84,000 per year but who pays for any big-ticket items such as a new air-conditioning system or a new roof?

The authority, which is pretty much a renter? Or the city as landlord?

Since the $100,000 handout, the issue remains unresolved although the buildings are getting older by the day.

A couple of things.

The plan Councilmember Erbrick asked for to address who should pay for major maintenance projects has not come to council.

It's overdue.

The elected board needs to ask why and demand a recommendation from the city administration.

Council also needs to make two things clear so that staff has an idea of its direction:

One, the taxpayers were promised that they would not subsidize the charter school system - and they should not.

Two, as the recent audit amply illustrates, the charter school system has the ability to uphold that promise through a standard lease agreement, i.e. the "rent" covers costs the landlord incurs, including projected repairs, not merely the "mortgage."

Or the city can designate - and require - that such facility maintenance be a responsibility of the school system.

Either way works for us.

As we have stated on these pages before, the Cape Coral Charter School System is a stellar city success story.

As promised, its four schools provide a second-to-none public school education from pre-K through high school for Cape families who opt for a charter school path.

But also as promised, Cape taxpayers should not have to pay twice for public schools- once to the School District of Lee County and again to the city of Cape Coral.

We urge Council to direct staff to prioritize these leases to address long-term plant maintenance.

The issue may not grab as much attention as "uninvested funds" and "lost interest," but the cost of the city assuming the financial burden for maintaining "its" buildings as is sliding into practice would be substantial.

And that would not only be wrong, it would be a promise broken.

- Breeze editorial

Editor's Note: This editorial has been updated to correct the name of the city from which former city manager Terry Stewart came.



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