CEDU Educational Services, the largest private employer in Boundary County, failed to meet payroll Thursday and announced Friday it is going out of business immediately.
The company, which runs expensive academies for troubled teens, is sending its students back to the homes – mostly out-of-state – from which they came, said Julia Andrick, CEDU’s marketing and communications manager in Sandpoint.
About 260 better-than-average-paying jobs will be lost in the Bonners Ferry area, along with some in Sandpoint and a few in Coeur d’Alene, said Kathryn Tacke, regional labor economist for Idaho Commerce and Labor.
CEDU has been in business nearly 40 years and has academies in Vermont and California. But its biggest presence is in the Panhandle, along with most of its 500 employees and 301 students.
“It’s going to be difficult for many of those people to find work in the area,” Tacke said. “They have good skills, but obviously there aren’t many places that hire as many counselors as the CEDU schools, so it could result in some loss of population with people moving out of the Bonners Ferry area.”
The news came as a surprise to Idaho managers of CEDU schools, most of whom didn’t learn they were jobless until 3 p.m. Friday.
“We’ve been mismanaged,” said Alan Millar, a 17-year employee.
“We’ve been struggling to meet our obligations for a while,” said Millar, who oversaw 40 people in the support services department. But, “none of us knew how bad it was until Thursday this week.”
An investment group that bought the formerly family-run company “thought it was about money, but the money is secondary to the service you provide to the kids,” Millar said.
Tuition at CEDU schools was about $5,700 a month. Actress Roseanne Barr and broadcaster Barbara Walters are among the rich and famous who have sent their children to the academies, according to a Spokesman-Review report in 1998.
In a written statement read by Andrick, company CEO Pete Talbott said CEDU had “become financially insolvent and has run out of options for keeping the emotional growth system viable.”
“We have not found any solutions with present or potential investors that would provide us with long-term financing to meet our needs,” Talbott said in the statement. “We anticipate that all our students will be back in the care of their parents in the next 10 days.”
Getting those students home will not be as complicated as it might have been. Many of their parents are in North Idaho for parent-teacher conferences, Millar said.
Last month, CEDU closed its flagship Rocky Mountain Academy in Naples, Idaho. That still left CEDU with two other schools in Idaho: Boulder Creek Academy and Northwest Academy, both in Boundary County’s Paradise Valley. In addition, the company operated a short-term intervention program in North Idaho, as well as ASCENT, a six-week wilderness program, and Milestones, a transition program for students 18 and older in Coeur d’Alene.
CEDU paid a $300,000 settlement in 2002 to the families of two former students who alleged that the staff at Northwest Academy was poorly trained and abusive, according to previous press accounts. There was a riot at the school in 1997.
More than two dozen parents filed lawsuits against Rocky Mountain and Boulder Creek academies in October, alleging misconduct and breach of contract issues, the newspaper has previously reported.
The plaintiffs alleged, among other things, that one boy was forced into a closed coffin in a grave he was forced to dig, and that staff members called students degrading names such as “whore” and “fatty.” They alleged that staff failed to intervene when some students were hazed and beaten by others.
Friday’s announcement is the second major blow to the Boundary County economy in recent years, Tacke noted. The community lost 140 manufacturing jobs when Louisiana-Pacific Corp. closed its Bonners Ferry mill in 2003.
Some of those mill workers found jobs at other mills, some took lesser-paying jobs, some were retrained for other fields and some left the community, she said. The county’s economic situation improved last year, due largely to the growth in tourism and a couple of big construction projects, including a new high school.
But it will be harder to recover from the CEDU loss, she said.
Roy and Debbie Zant expect to be among those who leave.
The couple moved from New Mexico in December, when Roy Zant became academic director of Northwest Academy, which had about 60 students.
They consider themselves lucky to have a financial fallback, since education is a second career for Roy, a retired Marine.
“We’re the fortunate ones,” Debbie Zant said.