Praised Pembroke Pines charter schools face `financial urgency’

From afar, Pembroke Pines’ charter schools look like a parent’s dream, with small classes, high marks and active family involvement.

But the finances propping up the dream remain shaky.

The system of more than 5,000 students faces a $2.1 million shortfall, leading Pines commissioners to declare a state of “financial urgency” this week in hopes of renegotiating their contract with the teachers union.

“Eventually, if we continue on the same path, we will run out of money,” said the city’s controller, Aner Gonzalez.

But even if the city gets what it wants from the teachers, it still must find another $1.4 million to close the gap.

“The buck is apparently stopping with our educators,” said Jamie Daniels, chief negotiator for the Pines charter schools in the Broward Teachers Union, “instead of the people who put them in this situation.”

The system of seven campuses began modestly in 1998 with two centers, one for kindergarten through fifth grade and another for kindergarten through third.

The push came as Pembroke Pines leaders felt the Broward School District wasn’t building schools fast enough to keep pace with the growing number of families in Broward’s now second-most populous city. The City Commission oversees the schools, and City Manager Charles F. Dodge is superintendent.

The schools found popularity among parents and celebrated the success with expansion through 2003. Pines financed construction with some $100 million in bonds.

Today, the system includes four elementary school campuses, two middle school campuses and a high school. Nearly 11,000 children sit on the waiting list for what school observers call Florida’s largest city-run charter system.

But signs of financial trouble have crept into the system over the years.

Pines dipped into reserve funds to help balance the budget several years in a row, dwindling the savings. Financial statements show that in 2007, the schools had about $1.2 million extra in the bank for a system that ran on a $37 million budget.

A resurgence of cash came in 2008 after the school district repaid money Pembroke Pines had been seeking for operations and McKay scholarships, Gonzalez said. That left the city with about $4.8 million.

But those newly revitalized reserves could find themselves cut short again.

Pembroke Pines leaders expect declines this year in two significant state funds — one for operations and another for construction. In past years, the operating dollars went up, while the construction dollars fluctuated.

The last time construction money met Pembroke Pines’ debt payments for building the schools was 2001, staff said. The figure dropped for several years until 2006, when staff estimates the payment left the city $2.5 million short.

That number has since increased some, and in 2009 it left Pembroke Pines short $1.6 million.

The city made up the gap with a range of programs, Gonzalez said, including renting out school facilities on weekends, fundraisers and money from after-school programs. When those didn’t bring in enough, they dipped into reserves.

But this year, both construction and operations funds are down.

School districts also feel the pain of less money from Tallahassee. But they have local taxes to help make up the loss.

Charter schools don’t tax. So a financial blow means pulling from reserves or getting creative.

Pembroke Pines’ struggles are echoed at other public charter schools.

As more charter schools open, the amount of state construction dollars given to each school dwindles, said Tim Kitts, who founded the Bay Haven Charter Academy in the Panama City area.

“It’s diluted the capital outlay amount tremendously,” said Kitts, chairman of the advocacy committee for the Florida Consortium of Public Charter Schools. “And those charter schools in the early part of the decade that stuck out their neck are getting a smaller piece of the pie and are really struggling.”

Some cities have backed off the idea of creating their own charter school systems.

“It’s one of those things we would love to do,” said Port St. Lucie Mayor Patricia Christensen, whose city once considered opening its own charter schools. “But one of the reasons we didn’t do it was financial.”

In Pembroke Pines, the sheer size of the charter system makes the roller coaster state fluctuations seem that much larger.

The ever-changing state dollars also make it tough to plan for the future, said Octavio Visiedo, the former Miami-Dade schools superintendent who later helped start Chancellor Academies. He consulted with Pines when the city began its system.

“You can’t do a long-term plan,” Visiedo said. “You just can’t.”

Pembroke Pines’ recent school budget began with a deficit of $2.6 million. Commissioners brought it down by adding two fees: a $5 surcharge on embroidered uniforms and a $280 activity fee for students at the elementary school chartered with Florida State University.

But that still left them about $2.1 million short, prompting Tuesday’s vote of financial urgency.

Dodge said the schools are run as efficiently as possible. But with dwindling state dollars and no help from the school district, the savings have to come from within, he said.

However, he welcomed any ideas the teachers union might bring. “If they have other areas they feel could be a savings to reduce the deficit that we have placed before us, we will listen to them,” Dodge said.

Daniels worries Pembroke Pines is unfairly depending on teachers. “He’s balancing his budget on the back of his teachers and the backs of the kids who go there,” Daniels said.

One way to recoup money: Getting the Broward School District to share a part of the local tax dollars it collects for construction. Broward has the option to share those dollars, but so far, the school district hasn’t given any to Pembroke Pines.

In turn, the city filed suit in 2007, contending the district’s ignoring of the Pembroke Pines charters had reached the point of “abject refusal.” The city hopes to receive from $1 million to $2 million each year from the district.

At a recent hearing before Broward Circuit Judge John Bowman, Pembroke Pines argued that the charter schools should participate in the district’s budgeting.

The school district’s counsel replied that Pembroke Pines gets state dollars, and the local taxes were for the School Board to do with as it liked.

Ultimately, even if the judge rules against Pembroke Pines, Visiedo said the ruling should answer the question of where the charter schools stand with the districts. “I think that is such a fundamental question it needs to be resolved,” Visiedo said.