Oklahoma City school district sued over increase in charter fees
A charter school organization is challenging an Oklahoma City Public Schools plan to collect hundreds of thousands of dollars more in charter fees.
Families for Excellence in Education Inc. is seeking to block the school district’s plan to raise administrative fees on charter schools from 3% to 5% of their annual state allocation.
The organization, which founded two local charter schools, filed a lawsuit against the school district on Friday in Oklahoma County District Court. The group established Harding Charter Preparatory High School and Independence Charter Middle School, which both operate in Oklahoma City.
The proposed fee increase, which is allowable by law, would take effect for the 2022-23 school year.
A 2% increase would cost tens of thousands of dollars for Independence Charter Middle School and Harding Charter Prep, which has been ranked Oklahoma’s top public high school for the past seven years. The lawsuit argues it would result in “significant loss of income” to both schools.
If the fee increase had applied this year, the school district would have kept about $129,000 instead of $77,000 of Harding Charter Prep’s annual allocation from the state, a difference of about $52,000.
Harding Charter Prep received an initial state allocation of $2.58 million this school year, before the midyear funding adjustment.
Independence received an initial allocation of nearly $1.75 million this school year. A 5% fee would charge $87,434 instead of $52,460, an increase of nearly $35,000.
These increases impact the schools “exponentially” when accounting for other cost increases from the district, said Louis Falsetti, attorney for the charter organization. The school district announced new rent, insurance and maintenance fees earlier this year for charter schools that occupy district facilities.
“If you take $50,000 out of their budget, that’s at least one teacher,” Falsetti said. “That’s the cost of one teacher or more. The same for the middle school, you’re taking $35,000 out of their budget.”
If applied this school year, the school district would have received $775,000 more in administrative fees from its authorized charters collectively.
Entities that authorize charter schools in Oklahoma are legally allowed to withhold a maximum of 5% from the charters’ annual state allocations for administrative costs. Until now, the Oklahoma City school district has charged only 3%.
The school district notified its charter schools of the fee increases during a Feb. 5 charter meeting. Superintendent Sean McDaniel confirmed the change in a letter sent April 23 to charter school leaders.
Raising the annual fees would cover district costs for the time administrative staff spends on charter school accounting, conducting oversight and administering the charter program, according to McDaniel’s letter. It also compensates for reduced student enrollment.
Tulsa Public Schools and the Oklahoma State Board of Education both charge the 5% maximum to authorized charters.
“The district is currently working with each charter as its contract comes up for renewal to incorporate this consistent change which will affect all charter schools equally and give them several years to plan,” the district said in a statement. “OKCPS cannot comment on pending legal matters. We look forward to working through the legal process to find a timely resolution."
The lawsuit argues the district’s reasoning for the increase isn’t specific enough. The organization is requesting an itemized list from the school district, detailing the services and costs that would justify raising administrative fees.
It also argued the district would violate state law by increasing fees to make up for a loss in student enrollment. The charter organization alleged the school district has refused to provide an itemized list, so far.
Based on the Feb. 5 meeting and the superintendent’s letter, the group said it believes the fee increase actually exceeds the district’s costs of services to its charter schools.
State law says these fees can’t be used to profit from authorizing a charter school, only to break even on administrative costs.
“To me, it’s just like any other bill you pay,” Falsetti said. “You want to know how much is in your bill and what it’s being used for.”