Charter school financial woes resurface
The perennial thorn in the side of Prosser Creek Charter School – its $3.5 million debt – may lead to the revocation of its charter by the school board, even though the board approved the renewal of the school’s charter April 10.
The process of creating the memorandum of understanding – which will be included with Prosser Creek’s charter if approved – between the charter school and Tahoe Truckee Unified School District has led to more questions about Prosser Creek’s financial solvency.
School board President Pat Gibbons-Johnson said the charter school’s budget is simply “not adding up.”
In a meeting last Thursday, the school board and district staff went as far as to say Prosser Creek was in violation of California Education Code, stating Prosser Creek has “failed to meet generally accepted accounting principles, or engaged in financial mismanagement.”
Prosser Creek administrators have been given until Aug. 7 to cure their violation of education code or else the school’s charter will face revocation.
However, Prosser Creek Executive Director Jayna Gaskell said it’s the essential elements – the addendum tagged on to the charter by district staff and the school board – that are to blame for the school’s current fiscal problems.
The essential elements, which require Prosser Creek to remove out-of-district students from its charter by July 1, 2004, and sell its Union Mills site in order to balance its budget, are the root of Prosser Creek’s newest financial woes, Gaskell said.
The charter school is currently trying to refinance its debt, and the essential elements will prevent Prosser Creek from maintaining the “covenants of the loan,” Gaskell said. Out-of-district students, she added, constitute two-thirds of the charter school’s enrollment.
“The district has required us to get rid of two-thirds of our revenue,” Gaskell said. “There is no one in their right mind who would agree to refinance a loan under those terms.”
Also, in the wake of Tahoe Truckee’s $1.9 million in budget cuts, Prosser Creek has asked the district for a $2 million-plus financial contribution in order to help make the charter school balloon debt payment next year, Gibbons-Johnson said.
“This was a surprise to us, because we’d done all these budget cuts and they let us know [about needing the financial contribution] so late in the game,” Gibbons-Johnson said. “We were hoping they’d be able to balance their budget by selling the site and without the out-of-district kids.”
The budget Prosser Creek administrators submitted to the district is only balanced due to the assumption that the district will purchase seven of the charter school’s portables for $485,000 and loan the charter school $1,584,000, said district consultant Terri Ryland in her presentation at Thursday’s meeting.
The revenue accounted for in Prosser Creek’s budget has not been offset as an expenditure in the district’s budget, she added.
“PCCS has refused to enter into the MOU without significant financial contribution from the district,” according to Ryland’s presentation.
Gaskell contended that Ryland’s numbers and statements are “way off.”
“How can you say we refused to sign a final MOU when we had never received a final MOU from the attorneys,” Gaskell said. “We’re still in the process of forming [an MOU].”
The deadline for the memorandum of understanding, which is still incomplete, has been extended by the school board numerous times from the original May 25 due date. Through the duration of the drafting process, the disagreements in the formation of a final document had been chalked up to “minor details” by both the district and charter school.
The school board will meet Aug. 7 at 4 p.m. in the district boardroom to decide whether Prosser Creek has cured its violation of education code or face revocation.