According to Kuumba Academy’s June School Board minutes, they were facing a possible loan default from their bank. It appeared the school was in some dire straits based on the minutes. Take a look:
Lynne inquired if the Charter Performance fund is in danger of being reduced further- will follow-up with Kendall Massett to see if she has any additional information
Financial Update, Bernard granted permission to post
DCIC bank consortium- some of the banks may not want to consider a modification of the loan- interest only for the next 12 months with a brief description of the scenario requiring the loan modification
Notifying There if DLHS defaults on July 1 payment
Bernard reviewed the Engagement letter for the FY14 audit and also provided a summary of the conversation with Ed regarding the possibility of a going concern due to the DLHS possible loan default. Audit due to state by 9/30. Board hopes to have this resolved by mid-September. We will also need to articulate the ways that we made reductions to trim down our budget. We need to confirm with Michelle the required reserve amount possible (to cover salary and benefits).
Language to lenders:
Unfavorable circumstances, tenants have defaulted on their loan. Track record, transition, workable solution. . . (lynne will work with Sally to draft)
Sally to follow-up with DCIC to respond in writing to the Line of Credit request so that we have the documentation for our records. We need to outline also that our ask lined up with the DLHS decision to postpone enrollment
Lynne recommends we push TD Bank to see what they can do
There was no July Board meeting, but it looks like things improved in August:
-Awarded $425,000 from the Charter Performance Fund
-Proposed amended budget—rent is significantly higher (1,051,164) due to having rent at CEB and 519
-ending fund balance is $593,275 on proposed budget
Sally makes a motion to approve the July financials for posting, Dr. Coker seconds, all approved
So let me get this straight. The State of Delaware is going to give six priority schools $5.8 million over four years, but after $160,000 (minimum) salary for a new school leader and $50,000 a year for someone to organize the whole thing for each school, that leaves $31,666 a year for each school. This is not including any other financial demands the state would impose upon each school. $31,666 for the six schools in Delaware with very high populations of low income, minorities, and special education students. And they get $31,666 a year. But Kuumba Academy, a charter school, gets $425,000 to essentially save them from a loan default. From the blessed Charter School Performance Fund. It’s obvious which way the wind blows from Dover. Ridiculous! Just call charter school diva Kendall Massett at the Delaware Charter School Network and she will fix all your problems. I didn’t know the “Performance” Fund was a bail-out fund! Hey Kendall, I need a new fridge, can you hook me up?
And to add insult to injury, the July financials they speak of aren’t even listed on their website, and they haven’t had a Citizen Budget Oversight Committee meeting since May of this year. Or at least it isn’t listed on their website. But the beautiful part is they actually list the Delaware state code that requires them to update this information MONTHLY!!!!