QUESTION PRESENTED: May a school district agree to allow a municipality or nonprofit organization that is operating more than one school within a municipality to commingle funds from the various schools and allocate or redirect a percentage of those funds from one or more schools in order to fund the operating deficit at another school.

SHORT ANSWER: Yes. There is no law or constitutional provision that prohibits the District from agreeing in the charter to allow funding flexibility, including the option of redirecting funds from one school to another school with an operating deficit.

DISCUSSION: Section 1011.69(2), F.S., sets forth the degree of flexibility that Districts may exercise in the allocation of funds to its individual schools. The statute requires that no less than 90 percent of the funds generated by all schools in the district be sent to the schools as a whole, and that 80 percent of the funds generated at any particular school must go to that school. Within the remaining 20 percent of funds, districts have flexibility to redirect funds from one school to another school. However, balances from the required 80 percent allocation must be retained at the school for the principal’s use.

In conjunction with the statutory voting requirements for conversion to charter school status, all five Lake Wales public schools have submitted applications to the Polk County School Board for conversion to charter status. The schools would be operated as a system of charter schools with a lead-in curriculum culminating with Lake Wales High School. The operating entity is a Florida not-for-profit corporation known as Lake Wales Collegiate School System, Inc:

Three of the five schools are presently being operated by the District at a deficit. The charter applications adopted the figures provided by the District for the schools. The five-year projections for the charter system’s operation show the same three schools operating at a deficit. The charter system intends to fund the deficits in the same manner as the District; by a transfer of a portion of the funds generated by one or more schools to the schools with an operating deficit.

CONCLUSION: Section 1002.33, F.S., allows districts to receive applications and contract with municipalities and nonprofit entities for the purpose of operating public schools provided certain specified statutory criteria are met. Specifically, Section 1002.33(3)(b), F.S., provides for public schools to apply to the district to become conversion charter schools. Provided that it is addressed in the charter and all charter school statutory provisions are met, there is no statutory or constitutional prohibition that would prevent the District from agreeing to allow the operating entity to exercise funding flexibility, including the type of flexibility which would involve the above-referenced allocation of funds.

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