RVC: Teetering on the brink of financial ruin?

The writing is on the wall. Ross Valley Charter is not financially viable. It is time to take a good long look at what the drastic difference between projected and realized enrollment means for the future of the school.

RVC projected a total enrollment of 222 students in their charter petition, which the State Board of Education approved after our district and county denied it largely due to financial unviability. The charter’s numbers have fallen a whopping 45% below their projections, far beyond the 25% level of decline which should trigger a material revision to ensure it has a sound financial budget, yet the State has declined to require one.  When the school opened on August 23rd, their total enrollment was 131. As they did all throughout summer, the charter claimed they would have new applicants and continued new interest. And yet, their enrollment has actually declined by an additional 5% during the first 3 weeks of school. At this time, they have only 124 students, almost 100 students less than projected. As a result, Ross Valley Charter is in a dire financial situation.

For 124 children, the charter receives less than one million dollars in ADA for the year. Based on the charter’s July financial report, the monthly payroll costs are $92,000, which is a yearly cost of $1.1 million. This means that the ADA is insufficient to cover the payroll costs, let alone the rent, subsidizing free and reduced lunches, office expenses, legal fees and all the other costs associated with operating a school. The charter opened its doors $400K in debt, including $130k in personal loans. They have already spent almost all of the $250K loan from the CDE they deposited in July. By our estimates, the charter will be out of money by March.

At their last board meeting, they stated they will not be able to make payroll in October without going further into debt and approved seeking additional short term personal loans of up to $100,000. These loans are meant to cover costs until the school receives a check from the CDE in October. However, here's the rub, the CDE sends three checks throughout the year. The first is based on a final enrollment projection given in July and the second two are based on actual attendance. The check that is coming to the charter school next month is based on 172 students, the number that the charter gave the CDE in July. However, the remaining checks, arriving in December and the spring, will be adjusted based on the actual attendance numbers released next month causing the school to be drastically underfunded later in the year.

On top of all that, the charter’s Memo of Understanding with the State Board of Education requires the charter to have reserves of at least 5% or 55K.  The charter does not have this cash and thus is already in violation of the MOU.

Charter enrollment has been consistently overstated and has persistently declined. Its finances are depleting. Hard earned taxpayer money is being wasted on a school that will not survive. Charter students will have their education interrupted when it fails. The truth about RVC's finances needs to be acknowledged and the State needs to intervene. The current situation is irresponsible and unfair to all of the children and tax payers in Ross Valley.