Idaho charter schools struggle with money troubles

BOISE – The Idaho Public Charter School Commission has placed three schools on financial notice.

Blackfoot Charter Community Learning Center in Blackfoot, Syringa Mountain School in Hailey and the Village Charter School in Boise received the notices earlier this month. It was the first time the commission had placed three schools at once on financial notice since the Legislature changed charter school accountability laws nearly three years ago.

The commission has sent financial notices before, but the schools managed to correct their finances before the state had to take action.

Syringa’s financial position is “extremely precarious,” the commission’s notice said. Throughout early 2016, the board discussed concerns with the school’s cash flow and the potential need for an operating or short-term loan.

“Without ongoing, substantial funding from outside sources, this pattern is likely to continue for the foreseeable future,” the letter said.

The letters don’t mean the schools will see a reduction in state funds. Instead, the charter schools will receive state funds on a monthly basis rather than receive the bulk of their funding at the beginning of the fiscal year – which kicked off Friday.

The commission originally flagged the three schools in an annual report – released in February – for failing to meet basic financial standards. The report considers indicators like cash on hand, reserve funds and projected enrollment. In total, seven schools were marked for potential money woes, but only three received the letters.

Charter schools are tuition-free public schools operated by a nonprofit board of directors with much greater financial and academic flexibility than traditional schools. Idaho’s first few charter schools opened nearly two decades ago, and their numbers have grown slowly each year since. Now there are nearly 50 charter schools statewide, with most in the Boise and Nampa areas.

The majority of charter schools that have opened since 1998 have become financially viable. However, nine have closed, with all but one citing money problems.

That’s largely because charter schools are banned from using bonds or levies to help cover facility costs, said Tamara Baysinger, the commission’s director. Instead, charter schools often use 20 to 30 percent of their state funding to cover building costs.

Enrollment can also cause money constraints. State funding is based on how many students are enrolled in a school. Without a consistent and growing student population, a charter school can crumble, which can easily happen in Idaho’s multiple rural regions.

For example, the Village Charter School in Boise projected a net loss of $167,000 for fiscal year 2016, which ended in June. While the school board said it anticipated an 11 percent enrollment bump for the upcoming school year, the state commission said getting 360 students might be a reach.

“Given the school’s historical enrollment pattern, (Idaho Public Charter School Commission) staff is concerned that the projected increase is unrealistic, and optimistic budgeting will lead to increased financial strain,” the commission wrote in its financial notice.