Strapped for cash
Einstein Academy programs could face closures without new funds
Barring a significant influx of cash before the end of the year, school leaders are unsure of the fate of all the Einstein Academy programs next year, including a Santa Clarita Valley elementary school.
The options have been limited by ongoing financial concerns within the nonprofit charter management organization for Albert Einstein Academy of Letters, Arts and Sciences, Inc., school officials said.
Currently, AEALAS Inc. operates three schools under charters approved by the Acton-Agua Dulce Unified School District: the Albert Einstein STEAM Academy in Valencia, the Albert Einstein Agua Dulce Partnership Academy in Agua Dulce and the Albert Einstein Odyssey Academy in Beverly Hills.
“The schools executed a reduction in force in September, a paring down of services in October and an appeal for funds in November,” CEO Maggie Ford wrote in a March 13 email to parents and staff. “Beginning in
October, one month after the start of school, a concern about cash has been discussed at each board meeting.”
The organization has struggled financially for years since it first opened its charter school campuses under a different CEO and different Board of Directors.
“When I started on the board two years ago, not counting the bond debt, there was about $2 million in debt,” current board President Joel Hopkins said at Thursday’s AEALAS Inc. Board of Directors meeting. “When the new CEO came in, when new board members came in, that didn’t mean that that $2 million in debt evaporated. We were in such a roll paying it down. We had gotten it down to $1.5 million, and then when we were applying for a new charter we got it down to $750,000 to $800,000.”
But this budget and cash improvement ended last year when the William S. Hart Union High School District Board of Trustees unanimously denied the Albert Einstein charter serving students in grades seven to 12 due to the charter school’s finances and governing structure.
“The charter was pulled, all that revenue went away, people started pulling their kids because there wasn’t a K-12 experience, and you just can’t run a school without money,” Hopkins said.
The loss of the Hart district charter, as well as declining enrollment numbers at the organization’s other charter schools, have continued to exasperate AEALAS Inc.’s financial situation this year.
“We lost half our revenue this year,” Ford said at Thursday’s Board of Directors meeting. “Our high school students were almost half, and then STEAM lost 125 students and Beverly Hills lost about 125 students— all in total, we lost almost 675 students year over year.”
Outside Funding
At the beginning of the school year, the AEALAS, Inc. board began working with an outside investor to support the ongoing operations of the organization’s schools. According to Hopkins, this investor was a “national, if not worldwide, charter management company.”
Due to a nondisclosure agreement, the board could not share the details of the deal, which was expected to be finalized in December; however, at the start of the new year, the investor “went silent,” leaving AEALAS, Inc. looking elsewhere for funding to remain open for the remainder of the school year.
“We can finish this year if we successfully secure a cash infusion from a funder, investor or other sources. If we do not, we will not,” Ford wrote in a March 13 email to parents and staff. “We are doing the best that we can to communicate in a continuously changing climate.”
However, before Thursday’s board meeting, AEALAS, Inc. secured funding from Charter School Capital, a charter financing company and finalized a fiscal stabilization plan with the Acton-Agua Dulce school district so it could remain financially viable and keep its campuses open until the end of the current school year.
As of now, it is unknown whether the organization will have enough funding and enrollment to open its schools to students next year.
“We will be paying bare bones, but remaining operational,” Ford said. “This plan for survival assumes that we don’t pay anything except critical expenses like payroll, utilities and things like that. We look at every month where we are. Every month the hole gets a little bit deeper and because of that, there may not be enough revenue (for next year), it just depends on enrollment.” Payroll and furloughs As AEALAS Inc. was talking to investors and funders to support its operations, the organization was also struggling to pay its staff and employees for their work at the beginning of March.
On March 2, AEALAS, Inc. announced that it intended to switch spring break from the first week of April to the week of March 5 to “coincide with the cadence of the funding cycle” so it could pay its employees.
However, after announcing the change to the schools’ employees, the teachers chose to defer their week of pay to a later pay period so the schools’ schedules could remain the same.
During the same time, the organization furloughed its hourly employees and administrative staff for the rest of the school year. Classroom teachers are now using Rosetta Stone to teach foreign language and parents are working together to pick up administrative duties and clean up the campuses.
“This team has pulled together in a really difficult time,” Ford said. “I know this is an emotional time… I know you’re mad at me, but it hasn’t stopped you from helping out. I do see you all every day, and I appreciate the work, and I know it’s hard, but this is a family and sometimes families are mad at each other, but we still love each other.”
Charter petition
With an uncertain future, AEALAS Inc. is looking at two ways to support itself in the future: an outside investor and the opening of a new charter school.
On Tuesday, leaders of Albert Einstein presented a new charter petition to the Hart district for a STEAM Academy at the same location of its previous 7-12 charter school.
“The idea of getting the high school is so we could get more students because, quite frankly, I believe a lot of the students left because there wasn’t a K-12 experience and there wasn’t a high school,” Hopkins said.
If approved, the charter would allow students from Agua Dulce to move into the Hart district charter, and it would allow for a potential expansion to a K-12 campus. It would also allow AEALAS, Inc. to sell its vacant building in Valencia to the newly formed STEAM Academy organization and board.
But the future of this charter is uncertain as the Hart Governing Board has about 60 days to approve or deny the petition.
“We have a plan to operate through the end of the year,” Ford said. “Beyond that, we have until April 13 to get to that next place… If we can get through June 6 and we can accomplish that, the next step will be looking into next year.”