Broward charter schools expected to win $108 million settlement

Sun-Sentinel | By Scott Travis | June 17, 2024

Broward charter schools are expected to collect a $108 million windfall after successfully arguing that they were shortchanged out of money from a referendum passed years ago.

The School Board agreed April 16 to resolve legal battles with charter schools but didn’t reveal the dollar amount. Final approval is expected to happen at a meeting Tuesday.

The money is related to a referendum voters approved in 2018 for teacher pay, safety and security and mental health. Several charter school operators sued the School Board in October alleging the district failed to adequately share with charter schools the $455 million collected from the referendum over a four-year period.

The School Board agreed at the time to pay larger charter schools $4.6 million for safety and security, but not a proportional share of what was collected.

“Charter schools are pleased this matter has been resolved,” Shawn Arnold, a lawyer for several charter schools, told the South Florida Sun Sentinel.

Charter schools expected to get a large share of the money include:

•  Ten schools operated by Charter Schools USA, including six using the name Renaissance, would get a total of $26.9 million.
•  The 24 Broward schools named Somerset Academy would get about $25.4 million.
•  The three charter schools operated by the city of Pembroke Pines would get about $13.6 million.
•  The charter high school owned by the city of Coral Springs would get $4.5 million.

Another large provider, Franklin Academy, is expected to get millions as well, but the details weren’t included in Tuesday’s agenda.

“Franklin Academy will be included in the settlement, but our executed settlement agreement hasn’t been submitted to the District yet, so it did not make it onto the agenda for tomorrow’s meeting,” Scott Sznitken, executive director for the schools, said in an email to the Sun Sentinel.

The $108 million expense comes at a time the school district is facing a tough budget year, due to declining enrollment and the loss of federal COVID relief dollars. The district has been discussing closing schools to save money.

The proposed settlement is higher than the $80 million a lawyer with the state Department of Education estimated the School Board owed during a March meeting. That’s largely because the School Board is agreeing to pay interest for past years, as well as make the payment in installments over three years.

The School Board was in the midst of trying to settle the lawsuit when the state Board of Education ruled in March that the district was out of compliance with state law. Although there was no law in 2018 that specifically required districts to provide referendum money to charter schools, several appeals courts ruled in favor of charter schools suing with other districts, saying they were owed a proportional share.

As a result of that lawsuit, Palm Beach County schools have paid, or agreed to settle recently with 45 charter schools for $54.9 million.

The state Board of Education ordered Broward to settle the matter quickly, resulting in a larger payout than most board members had hoped.

“There was no negotiation. They told us we had to pay whatever,” Board member Debbi Hixon told the Sun Sentinel.

Board member Allen Zeman voted against the proposed settlement in April and told the Sun Sentinel he’ll likely vote no again. Most other board members supported the measure last month.

“My biggest concern was being directed by a government agency to resolve a lawsuit that was between two parties,” Zeman said. “We have a right to due process and in the end settle it or have a judge look at it. We were directed by the Department of Education to pay in full and pay immediately.”

Ben Gibson, chairman of the state Board of Education, disputed in April that the state was intervening in a lawsuit.

“I reject the notion that this board doesn’t have the authority to act,” Gibson told the Board of Education. “If that were the case, anyone could usurp our authority just by filing a lawsuit. I reject that.”

The $67 million in principal will be paid using referendum dollars approved by voters in 2022, which replaced the 2018 referendum. Voters agreed to pay $100 per $100,000 in assessed property values. That will mean less money from this pot for the areas identified in the referendum: teacher and employee supplements, school security and resource officers and mental health counselors.

Hixon said referendum collections in recent years have come in higher than expected due to rising property values. She said she’s hopeful that will continue and employees won’t have to get a smaller supplement than they’ve gotten this past year. For the 2023-24 school year, most employees got supplements that ranged from $500 to $12,000.

Hixon said the School Board is not allowed to use referendum money for interest, so that $41 million will come from the district’s general fund.

Under the proposed settlement, the School Board would pay $31.9 million by July 10. On July 10, 2025, the School Board is expected to pay $35.9 million. Then a year later, in 2026, the School Board would make its final payment of $40.4 million.