Debt won’t derail us, charter school says
Vail, CO Colorado
AVON ” Big donations, relentless fundraising and careful planning are keeping Stone Creek School alive for next year and the long haul, its leaders say.
While the charter school isn’t out of the financial hole it found itself in last December, it’s definitely bought some wiggle room, and it’s in no danger of closing. Its board of directors has made significant progress in paying off debts gathered in its first year of operation.
The school has racked up close to $150,000 in donations ” more than $90,000 of that handed over by families within a week of learning of the debt. Fundraising events have brought in thousands of dollars as well ” their Kentucky Derby alone netted $75,000, board president Kevin Kromer said.
So far, 15 debts to vendors have been paid off, an amount adding up to $169,000. A big hurdle was the school paying money it owed for its modular trailer building, which allowed the school to refinance its loan with Wells Fargo.
“I think we’re progressing very well,” said New New Wallace, a mother of two girls at Stone Creek. “We’re climbing out of our financial hole steadily.”
Still, the school owes about $260,000 to about 26 different groups, an amount they want to cut in half next year and pay off fully by 2009. The school is also paying off a line of credit to Wells Fargo and will make payments on its $1.2 million school building.
Earlier this year, Stone Creek disclosed a series of financial missteps that had gone unchecked since the school opened and put the school behind in bills. Expenses started dwarfing the money coming in, and they were soon looking a monster debt in the eye.
The school overestimated its enrollment numbers, which means it received more state funding per student than it should have, according to Randy DeHoff, executive director for the Colorado Charter School Institute.
At first, Stone Creek received money for 250 kids, while only 151 were actually enrolled. Stone Creek was denied state funding for December and had its funding severely cut through May to make up the money.
The rest of the debt comes from leftover building expenses, teacher salaries and everything else you need to run a school. There were also unanticipated construction costs and about $400,000 in grants and fundraising that were budgeted for but never came in.
The total debt started around $1.8 million, although about $1.2 million of that is the cost of the school building. While financial troubles are common for startup schools, the situation was made worse by inexperience and poor communication in the beginning, board members have said.
Despite the financial troubles, strong word of mouth praise have significantly increased the school’s enrollment ” to 238 for next year, which is a conservative number, Kromer said. The school wants to avoid over estimating as it did last year.
Still, more students mean more money, and the state is actually increasing the amount they’ll pay per student.
Overall, next year will be a challenge, but it won’t involve the shock and panic that parents felt this year. “We still have a lot of financial problems in terms of debt, but it’s under control and managed,” principal Betsy Hill said. “We won’t have a lot of money, but we aren’t worried about surviving.”
Charter schools are destined for full-time fundraising, and next year won’t be an exception. The school board is developing a calendar of fundraising events for next year to stay organized and make sure parents don’t suffer from fundraising fatigue.
Staff writer Matt Terrell can be reached at 748-2955 or firstname.lastname@example.org.
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