Poor financial management was the primary reason a long-standing Jeffco charter school needed to ask the district for a $150,000 loan last December, but school officials feel confident that Collegiate Academy has a bright future ahead.
“Our staff rallied to support difficult decisions to reduce spending,” said Collegiate Academy Principal Chris Becker. “While layoffs and the wage reduction taken by all employees were not easy decisions, the dedication from within our staff as well as our parent community has been tremendous and does give us the certainty and confidence in a bright future that was less clear in November.”
“We got creative and worked with teacher leadership to find solutions that allowed us to minimize layoffs and reductions to course offerings by consolidating teacher course loads and expanding our ability-grouping model,” Becker said.
The new budget of the K-12 charter school includes $150,000 in cuts including the layoffs of 2.5 full-time teachers and the loss of the K-6 Spanish specials class.
“This is a very painful adjustment for them,” said John Peery, Jeffco Schools charter school liaison. “They are adjusting for three years of reductions in one semester.”
The school found itself in serious financial straits in the fall because it had not “adjusted to the financial circumstances they found themselves in,” Peery said. They made a number of very poor financial decisions over a three-year span and a cluster of bad decisions before school started, he said.
Three years ago, schools around the state found themselves facing a budget crunch as state funding and tax revenues declined. State per-pupil funding for Jeffco neighborhood schools and Jeffco charter schools dropped $761 per student, from $7,070 in 2009-10 to $6,309 in 2012-13.
To address the funding cuts, the Jeffco Board of Education cut programs and salaries and added furlough days, while drawing some money from reserves to minimize the cuts to the neighborhood schools. Other Jeffco charter schools also cut salaries and reduced staff and programs.
Collegiate Academy mainly spent down the money in their reserves to maintain the same staffing and programs they had, Peery said. At first, education job money from the federal stimulus package covered some of those cuts, but the stimulus money was temporary.
Becker said the school furloughed some teachers for two years after funding dropped, but noted that the school’s commitment to small class sizes “tempered those reductions, making state layoffs and resulting increases in class size a difficult decision.”
Becker also pointed to losses in the school’s food service program as another factor in the budget, partly due to a increase in free and reduced lunch students as a factor.
Hiring decisions also contributed to the financial problems, Peery said.
Last June, Collegiate Academy’s board of directors dismissed their administration and hired a whole new group. The new director reduced student fees, turned off a credit card system that led to thousands of dollars in uncollected fees, and “instituted a variety of changes that negatively impacted the school’s ability to maintain its current program,” according to board documents.
It was the perfect storm, Peery said.
“Decisions made by charter Boards of Directors and the administrators they hire can cause the financial situation at a charter school to change rapidly. Since the school has the authority to create their program, hire staff, and determine compensation for the staff, decisions that are made that are not consonant with their finances can turn a situation negatively very quickly,” Peery wrote in an email about Collegiate Academy's requested loan to the Jeffco Board of Education.
Jeffco Schools provides legal training, including fiduciary responsibility, for charter school Boards of Directors each year but the training is voluntary and not all members attend, Peery said.
“While hindsight is 20/20, and it is always worthwhile to question and learn from past decisions, we feel confident that the school's leadership acted in good faith over the past several years and sought to balance academic and financial concerns in their decision-making,” Becker said.
Collegiate Academy’s director resigned in October, only three months after taking the position, and the financial director, who subsequently took over, resigned a month later, at which point Becker and vice-principal Gus Johnson stepped into leadership roles.
The charter school has borrowed approximately $52,000 of the $150,000 loan so far, and is committed to using as little of the $150,000 as necessary,” Becker said.
“With prudent budgeting and positive news from the state and county regarding 2013-14 school funding, we are confident in the school's ability to repay on time, if not early,” Becker said.
“What people need to know about the loan is that the budget office and I are monitoring it closely and taking it seriously,” Peery said. “We feel the school will make the necessary adjustments and do ok next year.”
Per-pupil funding is the same for Jeffco neighborhood and charter schools, Peery said.
All Jeffco charter schools also receive a portion of the district's mill levy funding. Funding from the mill levy override that was passed last November, plus money from two previous overrides will provide an additional $247 per pupil for charter schools.
State law does not require Jeffco Schools to share the mill levy funds with charter schools, Peery said, but it has been the district’s practice to do so.
Money from 3B, the bond passed in November, will be allocated to charter schools on a needs basis, as is also the case with neighborhood schools.
Charter schools receive 100 percent of the state’s per-pupil funding, Peery said. There are a few chargebacks. Two percent goes to cover central administration costs, including the charter school liaison office, superintendent and Board of Education.
There is also a chargeback for English as Second Language (ESL) programs because the district provides ESL services to the charter schools. The other chargeback is for special-education support. Special-education support is a hybrid program, and the charter chargeback supports district-wide programs, like Fletcher Miller, and special education legal support for charter schools.
Likewise, some per-pupil funding in neighborhood schools is used to cover central administration, ESL and special education costs.
Charter schools also qualify for grant funding not available to neighborhood schools.
Comments