This has been perhaps the most bizarre series of events that I’ve witnessed by the DC Public Charter School Board since I first began observing its activities about 20 years ago. Sunday night, at about 10:30 p.m., I was tipped off that the board had scheduled an emergency meeting for Monday evening at 5:30 p.m to consider revoking the charter of Washington Math Science and Technology Public Charter High School.  The notice on the PCSB website provided no additional information.

Then yesterday afternoon documents were added to the on-line announcement supporting the contention that WMST did not have the financial capacity to continue operating.  Apparently, the PCSB has been receiving highly problematic income statements from the school, which led it to hire a forensic accounting firm to study the issue.  The review, as stated by the PCSB, found:

• The school is unlikely to have sufficient cash to meet its March 23 payroll, unless it delays paying many bills due now, such as utilities.
• Even with delaying payables, the school will not have sufficient cash to meet its April 6 payroll.
• The school is forecast to require $833,991 of additional cash between now
  and the end of its fiscal year on June 30, 2018 to cover all expenses,
  including payroll, operating costs, mortgage payments, and required debt
  repayment. This number grows to over $1,164,853 when adding the payroll
  due the current teaching staff in July and August for their work over the
  2017-18 school year.
• The school has a $300,000 line of credit which is presently fully drawn down.
• It currently has no other source of new cash or financing.
• The school’s largest asset is its building. The school has a Letter of Intent
  from a buyer, indicating a possible, but not certain sale. However, the net
  proceeds from the sale, at the current proposed purchase price and after
  closing costs and repayment of the mortgage, is insufficient to cover the
  $833,991 projected deficit.

The reasoning behind calling the emergency meeting is based upon the common school lottery deadlines.  Assuming the board votes for closure last night, the charter has 15 days to ask for a public hearing.  Therefore, the latest this request can be made is March 27th. The PCSB revealed that this hearing will be scheduled before the My School DC announcement of results on March 30th. However, parents have only until March 15th to re-prioritize their school preferences. In addition, although the rankings are made known on March 30th, according to information provided by the PCSB, the lottery is run a week earlier. Following the timeline above, a final decision by the board would come after the lottery has concluded.

So a meeting was arranged for 5:30 p.m. at the PCSB headquarters and a conference line was provided for individuals to call in. There was no live video broadcast available. I am guessing this was because of the short meeting notice. I participated by telephone but it was virtually impossible to hear. Many of the board members who had joined by phone had the same trouble.  It is sometimes astonishing that this school sector spends over $800 million a year and this is how it conducts business.

Scott Pearson, the PCSB executive director, outlined the results of the investigation by the forensic accountant. The rebuttal came from attorney Stephen Marcus representing WMST.  What I could barely make out was that the school was prepared to continue operating primarily with revenue associated with the sale of its permanent facility.  The charter has a signed letter of intent from a buyer.  Mr. Marcus mentioned that the school’s teachers were even prepared to skip being paid on March 23rd if that would help the situation.  But notwithstanding the extremely short notice of this gathering, the charter board members had made up their minds, and the PCSB voted six to zero to begin the revocation proceedings.

Mr. Pearson did remark that WMST now has two weeks to shore up its cash position, and if there was sufficient evidence that this had indeed occurred the charter board could reverse its decision.  Alternately, he offered that if the school thought there was no hope in turning the finances around that it could relinquish its charter now so that parents could make other arrangement for their children’s education next term.  He added that if the PCSB’s final decision was closure, the charter board was prepared to provide a loan to allow it to continue going through June.

The money problems at the charter appear to be tied to decreasing enrollment, which has gone from a high of 333 students during the 2013-to-2014 school year to 228 pupils currently.  WMST also has consistently failed to meet its enrollment targets. The charter board, in its preparation for its 20 year review of the school that was to be presented at its monthly meeting next week, states that the decreasing size of the student body “has to do with many factors including an increasingly competitive high school environment, a sub-standard facility that the school is seeking to change, and disruptive nearby construction projects.”

The PCSB executive director hinted that the charter was going to have difficulty even reaching its current enrollment in the fall, based I believe on My Schools DC data.  Moreover, with the vote yesterday it appears that the school’s fate is sealed.  I don’t see why parents would not start trying to move their kids now.  But if the charter will continue to teach until the end of the year,  it seems that this presents more time for WMST to find additional revenue.  I have been in similar situations with each of the three charters I have volunteered with as a board member.  It is a harrowing and difficult place to be, but there is almost always something that can be done.