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Attorneys negotiating amount School District owes charters


A month after a judge ruled the School Board owes five charter schools in the county more than $2.5 million, the School Board has yet to say whether it will appeal the decision.

Meanwhile, $1,000 a day in additional interest charges on the debt continues to accrue, according to one charter school official – money that will ultimately come from taxpayers.

The School Board has held two inconclusive meetings to consider fighting Circuit Court Judge Paul Kanarek’s unequivocal decision in favor of the charter schools.

It seems board members are waiting to see details of a proposed agreement now being hammered out that will tell them exactly how much they owe.

Judy Stang, the board’s executive administrative assistant, said attorneys for both sides are negotiating a final agreement with specific numbers for interest and damages.

“I think we're just waiting to hear” from the attorneys, she said. The School Board has scheduled a meeting for July 20 to discuss an appeal. The next court hearing is set for July 24.

Jacksonville attorney Shawn A. Arnold, who represents the charters, said the hearing will provide an opportunity for both sides to discuss a date for a final hearing and respond to court questions and discuss damages.

The money the district unfairly shorted the charters came from a four-year property tax that began July 1, 2013, and ended June 30, 2017. It is a 0.6-mil levy that takes 60 cents for every $1,000 assessed property value.

The charters claimed – and the judge agreed – they should have received 12 percent of the tax revenue, an amount equal to the percentage of students attending charter schools in Indian River County, not the flat 5 percent the School District paid them.

“The court finds that the plain language of [state law] . . . supports the plaintiffs’ position,” Kanarek’s June 13 order states.

The charters are due about $2.55 million in withheld tax revenue, along with other money.

State law allows districts to be charged penalty “interest at a rate of 1 percent per month calculated on a daily basis on the unpaid balance,” which comes to more than $720,000 so far in the charters’ case. In addition, the district will have to pay the charter schools’ legal fees. Arnold said those fees are “well north of $100,000.”

Amy Banov, president of the board of Sebastian Charter Junior High, recently addressed the School Board, telling the board members that interest is accruing at a rate of $1,000 every day the board dithers and does not pay what is owed.

“I am not inclined to give up the interest,” North County Charter’s Business and Financial Director Ken Miller said at the time of the decision.

Before going to court, charter school leaders tried to negotiate with the School Board and district staff to get a settlement and were stonewalled. Then, as all district-sponsored charter contracts require, they sought mediation.

“Mediation was a waste of time,” Miller said in June. “We told the mediator we would consider not charging interest [if they settled] and the district came back with: ‘We’re offering you nothing.’”

The charters next took their case to the Department of Administrative Hearings, but the administrative judge determined she did not have the authority to interpret state law governing distribution of tax revenue to charter schools.

The charters then filed the case in circuit court where they prevailed.

Karl Zimmermann, a board member of the Indian River Charter High School, urged the School Board to abide by the judge’s ruling instead of prolonging the expensive dispute.

“I think it's time for us to move together,” he said. “I think we have common goals.”

At least one School Board member feels the same way.

“To appeal Judge Kanarek’s decision would be throwing good money after bad ... Let’s fund classrooms, not courtrooms,” said Shawn Frost at the time of the ruling. But the board as a whole has yet to comment on whether it will appeal.

Arnold said this is the first time this particular legal argument has been heard in this judicial circuit, and Judge Kanarek's ruling in favor of the charters sets precedent within the circuit. However, it does not serve as precedent elsewhere in the state, he said. Instead, it could be persuasive in other court hearings.
If the School Board were to appeal and the case ultimately wound up at the State Supreme Court, that ruling would serve as precedent statewide.