Two charter schools are being asked to repay a total of $982,000 to the Savannah-Chatham County (Ga.) district because their 2018-19 enrollments were lower than budgeted.
The Savannah Morning News reports that the school board has voted 8 to 1 to seek repayment from Savannah Classical Academy and Coastal Empire Montessori Charter School, both of which are in Savannah. Savannah Classical Academy will have two years to repay $591,953, and Coastal Empire Montessori Charter School will have to return $390,593 to the district over the next two years.
The Classical Academy's enrollment declined last summer, largely because the Georgia Department of Education put an enrollment moratorium into effect. The Department of Education lifted the moratorium just before school opened, but it was too late to recover from the enrollment decline.
Coastal Empire has to repay funds because its enrollment declined when it dropped a class.
“The negative midterm adjustment proposed for Coastal Empire will wipe out approximately 45 percent of our general fund balance,” says Bill Kovach, CFO for Coastal Empire.
Kovach said the board’s decision to require repayment violates state regulations that call for holding school districts harmless from having to return funds based on enrollment recalculations even if students transfer to other districts.
When the school board discussed the matter at a prior meeting, at least one board member asked why charters don’t seek a short-term loan the same way the school district took out a Tax Anticipation Note when it faced a short-term cash flow issue last fall. But Kovach said charters don’t have the same option.
“I’d like to point out this is a totally different situation,” Kovach said. “Charters don’t have the ability to levy taxes for shortfalls in their operations budget. Charters don’t have the ability to issue short-term notes.”
The state holds school districts harmless because it understands the money has already been spent, and demanding it back would be unfair to the students of the school, Kovach said.
“The monies budgeted were already spent,” he said. “Fixed costs remain the same.”
In 2017 when Coastal Empire faced a similar situation, the school district said the school didn’t have to repay funds, Kovach said.
Board member David Bringman said he wanted the charter schools to understand that the monies will follow the student.
“That funding follows where the students are,” he said. “If this comes before me again, I will vote for those monies to be paid back immediately.”
