The Village Charter School, which opened in 2011 in Boise, could struggle to keep its doors open through next year because of financial problems, says the Idaho Public Charter School Commission.
The school, with 342 students, fell below four of eight standards the commission considers indicators of a charter school’s financial health based on a 2015 financial report: cash on hand, projected enrollment, cash flow and reserve funds compared to overall budget. The commission also said that Village Charter is seeking a $100,000 line of credit. The school also had problems in internal controls.
“Without a substantial increase in funding, it will be difficult for the school to regain its financial footing,” commission staff wrote in a report to the charter commission earlier this month.
The commission has given Village Charter a remediation designation. That means the State Department of Education can divvy up the money going to Village Charter into four equal payments, rather than frontloading the dollars around the time schools open, as the department does with most public schools. The aim is to protect taxpayer money in case a school closes midyear, said Tamara Baysinger, commission director.
The remediation designation can last until the school’s charter is up for renewal in 2018.
The school hit financial problems as it tried to create a second campus for its middle school students last summer, Tony Richard, Village Charter School lead administrator, told the Statesman. But Richard said he believes the school will get enough new students in the fall to bolster its finances and even leave the school with a surplus.
WHEN CHARTERS HIT FINANCIAL PROBLEMS
Charter schools across the state that run into problems often hit financial, rather than educational, obstacles.
North Star Public Charter School in Eagle got into financial quicksand in 2013 as it struggled to pay for a $11.7 million building with a 9.75 percent interest rate. The charter school eventually worked out arrangements to meet the debt and keep the school open.
In 2009, Hidden Springs Charter School worked out an agreement for Boise School District to take over the high-performing school after it ran into problems meeting loan conditions from its lender.
Many of these kinds of issues among charter schools grow out of school staff historically not trained in the business and construction side of running a school and because charter schools get little money for building or leasing structures.
If Village school leaders aren’t certain they’ll have the dollars to complete the 2016-17 school years, Richard said, the school won’t open in September. Shutting midterm would force parents to scramble for places to put their children. “I wouldn’t … do anything to harm kids,” said Richard, who once served served as principal at Canyon Spring High School, an alternative school in Caldwell.
The Village Charter School opened in 2011 at 219 N. Roosevelt St. with 234 students in kindergarten through eighth grade. But school officials needed a larger space for its middle school for 2015 as the school’s enrollment was projected to grow to 380 students.
The school leased a building at 420 S. Orchard St. and rushed to get it ready for the influx of new students. Among the tasks was installing a fire sprinkler system at an initial estimated cost of $30,000 to $40,000. The project hit an unexpected problem of having to move plumbing around irrigation pipes, which drove the cost to $118,000, Richard said.
On opening day, just 312 students showed up, drastically cutting the amount of state dollars the school got for operations, which includes paying 17 teaching staff, Richard said.
By year’s end, the school was in the red $167,000 and had to pull $125,000 out of its reserves, leaving it still more than $40,000 in the hole.
TRIPLE-CHECKING THIS FALL
When Village Charter gets its money for next school year, some of those dollars will be used to cover last year’s expenses, Richard said.
Richard said the school is planning for 358 students in the fall and is triple-checking to make certain the students attend and avoid last year’s opening-day drop.
If all the students show up, the school will have about $2 million, more than it needs for the year, Richard said.
Richard thinks the school will get back on track and end up with an $87,000 reserve fund at the end of the year.
The discussion between The Village and the Charter School Commission has been appropriate, said Terry Ryan, Idaho Charter Schools Network CEO. The network is an advocacy group for charter schools.
He backed Richard’s plan not to open if the school can’t be assured it has money to operate for the 2016-17 school year.
“If you get in a financial (problem), you can’t afford to take care of kids,” Ryan said.
What is a charter school?
A charter school is a public school funded with state taxpayer dollars, but generally with the freedom to experiment and try alternative approaches to education.
The schools operate under an agreement, or charter, from an authorizing entity such as the Idaho Public Charter Schools Commission or a local school district. The charter outlines how the school intends to educate students, which is typically a different approach than those taken by traditional public schools.
Teachers in charter schools must be state-certified, and students are required to take the same state assessments as students in traditional public schools.