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In 2015, the State of Texas docked Edgewood Independent School District $200,000 in funding after trustees paid departing Superintendent José Cervantes $400,000, double his annual salary.
State law gives the Commissioner of Education power to reduce a school district’s funding by the amount that a superintendent’s severance payment exceeds one year’s salary and benefits. But the relevant section of the Texas Education Code doesn’t apply to charter schools, a Texas Education Agency spokesman said Monday.
The loophole means IDEA Public Schools, the state’s largest charter operator, will not be penalized for a $900,000 severance payment to ex-CEO and co-founder Tom Torkelson, whose annual base salary and incentive pay paid by the charter network was $475,000.
Torkelson also was paid roughly the same amount for his work with nonprofit IPS Enterprises, a 501 c(3) nonprofit formed in 2016 to support IDEA’s expansion into other states, according to a Travis County court filing from a 2017 case involving IDEA and Attorney General Ken Paxton.
If a traditional school district’s board paid a severance package of $900,000 to a superintendent making $475,000 annually, that district would be docked $425,000 in state funding, according to state law.
Torkelson resigned from his CEO post in April and the board named JoAnn Gama his successor. On May 29, IDEA Public Schools released Torkelson’s separation agreement and most recent employment contract.
In a letter to the charter network’s funders and leadership team members last Friday, board Chair Al Lopez said the $900,000 payment to Torkelson equaled approximately what he was paid in salary and performance bonus in 2019. However, that total was paid by both IPS Enterprises and IDEA Public Schools.
The entire severance payment will be paid by IDEA Public Schools, the spokesperson said. The payment will be covered by funds already budgeted under Torkelson’s prior employment contract with funds from both public and private funding as well as cash reserves.
In his work with IPS, Torkelson was charged with leading the charters’ expansion outside of Texas, according to an IDEA Public Schools spokeswoman. In addition to IDEA’s large network of Texas campuses, the charter network also operates three hubs with both an elementary and secondary school in Louisiana and plans to open two hubs in Florida in 2021 and 2022.
IPS does not receive state funds and Torkelson is no longer employed by IPS, the spokeswoman said.
IDEA Public Schools, which enrolls about 50,000 students in Texas and about 13,600 students in San Antonio, received $487 million in State funding for the 2019-20 school year.
A 2018 Legislative Budget Board document indicates that from 2013 to 2017, Texas school districts bought out 141 superintendent contracts for a total amount spent on severance payments of $18.3 million. The average buyout was a little more than $125,000. The State penalized districts $1.8 million for excessive severance in those five years.