ST. LOUIS 鈥 The leaders of Grand Center Arts Academy call their school a city success and a needed school option.
It is the only performing arts charter school in 50度灰视频, offering instruction in theater, visual arts, dance and music.
Since it opened in 2010, it has more than tripled in size. It has achieved relative racial and socioeconomic integration much like a magnet school does, by drawing in students from the suburbs with its course offerings, its location in the heart of 50度灰视频鈥 arts corridor and a sleek renovated arts building, complete with a performance theater, dance rooms and art studio spaces. The school celebrated a 100 percent graduation rate this year.
that the financial costs it took to get to this point have been so great, they threaten the school鈥檚 existence.
People are also reading…
To afford a , rent and costs of running the school, Grand Center Arts borrowed more than $6.3 million from its de facto parent charter school network, Confluence Charter Schools, over the past several years. Those loans are the only thing keeping the school afloat, and officials say they have no expectation that the school will ever be able to repay that debt.
The school of about 720 students will have no sustainable future if school officials don鈥檛 pull off a solution. But the one they have now is not permissible in state law, according to the state.
鈥淚 am worried 鈥 as a board member, as a citizen of this community 鈥 I am worried how we go forward in our present state without some action by this board at some point soon,鈥 said Lance LeComb, a Confluence board member, at a board meeting Thursday.
High financial stakes
Grand Center Arts is an example, albeit a more extreme one, of the high financial stakes charter schools regularly face. Unlike traditional school districts, charter schools 鈥 which are independently run, free public schools 鈥 rely mostly on state funding and do not receive property tax revenue, the lifeblood of many districts.
The financial pressures to remain open and pressures from the state to close when they fail academically are two problems that apply especially to charter schools. A combination of poor academic performance, debt and sketchy for-profit management have taken down charter schools in the past, most notably Imagine Charter Schools, which were mired in $4.3 million of debt before they closed.
Being able to afford a building is especially a challenge for charter schools in Missouri, charter proponents say, because they cannot seek to pass bond issues for capital projects like school districts can. Banks are also more hesitant to give big loans to charter schools, which are considered a riskier investment because they must be reapproved by the state every five years to stay open, said Jeffrey Kuntze, chief financial officer for Confluence.
But Grand Center Arts鈥 situation stands out from other charter schools because it is an arts-focused school, so it has the extra cost of acquiring facilities specifically for dancers, artists and actors, Kuntze said. And while most 50度灰视频 charter schools are elementary schools, Grand Center Arts is primarily a high school, which is more expensive to run.
Adding to the problems is the fact that the school鈥檚 former for-profit management company, American Quality Schools, had projected deficit estimates that turned out to be inaccurate. The Confluence board broke ties with the company about five years ago because of poor performance, but Confluence is still fixing the weak financial and governing structures it left behind.
Grand Center Arts has a reserve of just 3.8 percent, and the school has any reserves only because of its loans. School networks with reserves of less than 3 percent are considered financially stressed.
And the costs will only rise. Starting July 1 next year, Grand Center Arts鈥 annual building rent of $847,100 will rise by more than half a million.
A novel solution
Officials are betting on one solution that could save Grand Center Arts: merging the school with Confluence. Confluence鈥檚 legal team believes that is the only viable option they have to eliminate the former鈥檚 debt that would comply with loan stipulations.
Grand Center Arts is already essentially part of Confluence鈥檚 school network. They are part of the same nonprofit corporation and they share the same governing board and CEO.
But they are still considered separate entities by the state, because they have different sponsors and were founded separately. Confluence鈥檚 sponsor is University of Missouri-Columbia, while Grand Center Arts opened with 50度灰视频 University as a sponsor.
A charter school merger has never been done in Missouri, and state law says nothing about how charter school entities can combine. State education officials have taken that absence of statute to mean that no charter school can legally merge with another.
鈥淭heir attorney has taken a position that it is possible or it could be possible, but we just don鈥檛 see how it is,鈥 said Chris Neale, assistant commissioner for quality schools at the Missouri Department of Elementary and Secondary Education, referring to Confluence.
Kuntze said at the board meeting Thursday that he believes the law has 鈥渨iggle room.鈥
鈥淲e don鈥檛 see a statute that precludes us from merging,鈥 he said.
The board decided Thursday to pursue a plan for a merger, though its next immediate steps to achieve one are unclear. Confluence officials are pleading with the state for a merger. Board members agree they have no other choice.
鈥淚f we don鈥檛 solve this problem, Grand Center doesn鈥檛 survive, and we can鈥檛 serve the kids,鈥 said Board Chair Jose Pineda after Thursday鈥檚 meeting.
Combining schools鈥 performance
A merger between Grand Center Arts and Confluence would do more than just eliminate the former鈥檚 debt.
By absorbing Grand Center Arts, a higher-performing, specialized school, into Confluence, a mix of low-performing, neighborhood-like schools, Confluence would become a school system that mimics 50度灰视频 Public Schools. Like the city school district, Confluence鈥檚 overall state score would get a slight boost by the mere technicality of saying Grand Center Arts is in its same school system.
Confluence Charter Schools have struggled academically since the school鈥檚 inception, failing to meet state standards for more than 14 years.
Last year, the schools met 54.6 percent of state accreditation standards 鈥 a level considered provisionally accredited by the state.
Grand Center Arts, in contrast, met 77.1 percent, which is in the fully accredited range.