Just weeks after the Cape Coral Charter School Authority was criticized for not investing $6.7 million in reserves, a new city-prepared report says the municipal system's costs will outstrip revenues in just a few years.
The financial analysis, prepared after Cape Coral City Council directed city staff to conduct a "best practices" report in the wake of an accusations exchange between the municipal school system Superintendent Nelson Stephenson and Mayor Marni Sawicki, paints a financial picture summed up as "not positive."
The baseline-based forecast provided by City Auditor Margaret Krym shows costs increasing steadily while revenues remain nearly flat, leading City Manager John Szerlag to advise Council that the perceived problem is too big to be solved by the school authority and its administration.
As a next step, city staff will "articulate" the model it prepared, propose ways to fix the budding financial crisis and then ask Council at its next workshop on Feb. 27 whether it wants to "write them a check" or address the projected shortage in another way, Mr. Szerlag said.
School officials, including members of the City Council appointed authority board, feel broadsided by the report.
As well they should.
Their input was minimal, their projections discounted and their role in what should have been a joint betterment effort pretty much ignored.
What's more, their dispute of the city's methodology has credence. Neither the School District of Lee County nor the charter school system used as a template for the city's system apply a years-out projection based on state revenue contributions that remain nearly flat. And the report is predicated on the premise that the authority will budget funds it does not have rather than adjust expenditures before it "runs out of money" by 2021.
A couple of things.
One, it may very well be that there are funding and budgeting issues that need to be addressed. Well and good; they should be. Absolutely.
But if, as Mr. Szerlag states, it's too big a problem for school officials and the authority board to deal with, it's also likely too big for the city's administration as well. Let us point out the city has, since the system's inception, been involved in its financial operations. Council, in fact, approves the system's budget.
Two, the question of whether the process has been tainted by a political agenda has some merit. We have some city officials asking whether a different form of oversight - Council, an elected rather than the existing appointed authority - might not be a "better" structure.
In conjunction with that, we have city staff floating a possible tax subsidy for a system property owners were assured in 2004 would not cost them anything, certainly an entree into a Council takeover of the authority board, much as it assumed the duties of the Community Redevelopment Agency Board. And for the same reason.
Restructuring may warrant a look -but not based on in-house input only driving that option.
We suggest that Council pull politics - and emotion - out of the process. It's time to go out of house and we don't mean more pricey consultants who too often deliver foregone results.
What is needed is unbiased, third-party help with definitive expertise.
First, we urge Council to pull the Charter School Authority into the fact-finding, best practices development process.
Some on Council, led by council members Rana Erbrick and Jessica Cosden, already have called for that.
Endorse that view. Call a joint workshop.
Instruct schools and city staff to put together a small, cooperative team to reach out to other municipal charter systems for some analysis and advice. Pembroke Pines, the much larger municipal system on which the city's system was originally based, would be a good start and Pembroke Pines City Manager and Schools Superintendent Charles Dodge says he would be open to such an outreach.
If budgeting or operational concerns remain, Council should then contact the Lee Clerk of Courts Office and request a memo of understanding for an audit of the city's Charter Authority budget process.
The city has used this service provided by Linda Doggett's office before, most recently a few years ago during its fuel controversy. Other non-county agencies and entities, including the Lee County Elections Office, have turned to the clerk's office when operational questions have arose.
The reports tend to be reasonable in price as the clerk's office performs these audits at cost, comprehensive and objective - something sorely needed right now.
Council and its Charter Authority can decide where to go from there.
It's always a good starting point.
And it's much better than the path embarked upon thus far.
- Breeze editorial