State places three charter schools on financial notice

Three Idaho charter schools run the risk of a midyear financial collapse, and are on notice with the state.

Idaho’s Public Charter School Commission has issued notices of fiscal concern to Blackfoot Charter Community Learning Center in Blackfoot; Syringa Mountain School in Hailey; and The Village Charter School in Boise.

Syringa Mountain
Hailey’s Syringa Mountain School, a K-6 school serving 131 students, is one of three schools on notice with the state. School officials say there is no possibility Syringa Mountain would close in the middle of a school year.

The three schools received more than $4.1 million in state funding in 2015-16, and the recent notices won’t affect how much taxpayer money they receive for 2016-17. But it does affect the state’s payment schedule.

Instead of receiving the bulk of their state funding at the start of the school year, the three schools will receive equal payments throughout the year. The reason: If a charter school closes in the middle of an academic year, the state has no way of recovering its money. Taxpayers, meanwhile, have to shoulder the added education costs when students transfer from the failed charter school to a solvent school.

“It’s not intended to be punitive in any way,” charter school commission Director Tamara Baysinger said. “But the taxpayers are protected.”

A 2013 state law established the notice of fiscal concern. This is the first time the commission has issued three notices in the same year, but Baysinger downplays that fact. “It doesn’t strike me as a huge change in the number of schools about which we have concerns.”

Here’s a closer look at the three schools on notice:

Blackfoot Charter Community Learning Center. The commission estimates the school will end 2015-16 with a $197,000 loss, and faces a $55,000 cash flow shortage for July.

The K-8 charter school serves nearly 500 students, and its enrollment has grown rapidly in recent years. As a result, the school’s state funding has increased, exceeding $2.1 million for 2015-16.

Despite the infusion of state dollars, the charter commission says the school’s financial health has “declined.” Citing a 2015 audit, the charter commission noted the school carried more than $3 million in debts, and has been trying to consolidate its loans and negotiate an increased line of credit.

School administrator Fred Ball did not respond to a request for comment.

Syringa Mountain School. The K-6 charter’s financial position is “extremely precarious,” Baysinger wrote in the June 14 notice. The 2-year-old school has relied heavily on fundraising to make ends meet — and while Syringa Mountain’s fundraising efforts have been “admirable,” the commission isn’t sure the efforts are sustainable.

Enrollment numbers are another concern. Syringa served 131 students in 2015-16, qualifying for $696,000 in state funding. But even a projected enrollment increase of 20 students is unlikely to ease the financial pressure, the commission says.

In a letter to parents and supporters, Syringa Mountain board members said there is no possibility the school would close midyear. Enrollment has increased, officials say, and the school is ending 2015-16 with $20,000 in the bank. “We will increase enrollment at the pace that makes sense for our community while raising funds, grant writing, and securing long-term financial contributions,” board members wrote.

The Village Charter School. Five years after opening, the K-8 charter ended 2015-16 with a $167,000 loss. The charter commission and school officials agree on one source of the school’s financial problems: $90,000 in cost overruns on a building renovation project, which forced the school to spend down savings.

However, the commission and the school disagree on the prognosis for the future.

The school anticipates 2016-17 enrollment of 373, up from 325 in 2015-16. According to a briefing prepared in advance of the commission’s June 9 meeting, “(Commission) staff is concerned that the projected increase is unrealistic and optimistic budgeting will lead to increased financial strain.”

Tony Richard, The Village’s administrator and principal, says the school has hired a new controller with a charter school background, and has implemented new spending controls. “We remain solvent, and the future does look bright even using conservative enrollment numbers for the fall of 2016,” he said.

The Village received close to $1.5 million in state funding in 2015-16.