Lawmakers want to keep all-charter school district out of the red

Florida lawmakers have mounting concerns about the finances of a rural district that recently converted its long-struggling public schools into the state’s first all-charter system.

In recent weeks, state House committees have heard multiple perspectives on Somerset Academy in Jefferson County.

Community representatives said the charter network worked to earn their trust. Students said they’re happy with a new culinary lab. Somerset officials highlighted the new teacher pay plan, the most generous in the state.

But there are complications. And many of them have to do with the finances of the school district, now staffed with a skeleton crew.

House Education Appropriations Chairman Manny Diaz, R-Hialeah, had representatives from Somerset and its management company, Academica, take questions at the end of a committee hearing this week.

They described a tricky transition. They said the charter schools have taken out multi-million-dollar loans while they wait for federal funds. They’ve poured millions of dollars into capital expenses, from technology upgrades to new buses. And they’ve overdrawn accounts when the district was slow to hand over state funds.

In the years leading up to the charter takeover, the Jefferson County district hemorrhaged hundreds of students and millions in funding. It went through two rounds of emergency state intervention. Several committee members asked why the district wasn’t doing more to help the charter schools manage the transition.

“What services are the Jefferson County School district actually providing to Somerset?” asked the vice chairman, Rep. Byron Donalds, R-Naples.

“They are providing fingerprinting, although they have not always been available for that. And I believe that’s all,” answered Alina Chester, Academica’s budget director. “They’re a flow-through for the money.”

Charter school officials also raised questions about that “flow-through” function. Alma Martinez, Academica’s CFO, said the schools faced delays getting their normal operating funding from the state. The money has to come through the district. The charter schools have also borrowed nearly $5 million while they wait for Title I funding. The schools have to apply anew for the federal program, which supports low-income students in high-poverty districts.

But the charters won’t be able to receive funding directly until their application to form a Local Education Agency gets approved. Charter school officials said they expect that will happen soon.

Once the Jefferson charters become an LEA and receive federal funding, their contracts stipulate they will hand over $50,000 to the school district.

But lawmakers have previously noted that payment won’t close a nearly $172,000 shortfall in the revenue the district makes from the 5 percent management fee paid by the charters. Since Somerset took over, the district’s main expenses are salaries and benefits for its elected superintendent, five school board members and one administrative assistant.

“The district on its own, which is not providing services to the kids, looks like it might be a liability,” Diaz observed in a brief interview after the hearing.

Last month, Diaz noted lawmakers have struggled to get a clear accounting assets the district held before the charter schools took over July 1. For example, they’ve received conflicting information about property the district owns. Right now, Somerset operates an elementary, middle and high school on one campus. The district could sell some remaining real estate, and use the proceeds to help balance its books for the next few years.

Hundreds of families have fled the Jefferson County schools for home education, private schools and neighboring counties. Somerset officials hope to attract some of those families back to Jefferson public schools. If they do, the revenue from 5 percent management fees will increase, and finances for both the school and the district will improve. But even if Somerset succeeds, that won’t happen overnight.

“We don’t want to see a district — they’ve been in the red before — go back into the red,” Diaz said.

Livi Stanford contributed to this report.

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