Reply to Emergency DCPCSB meeting re Washington Math Science Technology high school

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]In my opinion, WMST was a solid school but could not overcome the purchase of its current site on Bladensburg Rd.[/quote]

A truly horrible location![/quote]

Candid question: What's wrong with the location? Did they own it rather than lease it? Is that common among charter schools? 
Haven't there been arrangements where a different charter takes over the building and students of closing charters? Could that happen here? Or might another charter be interested in the space?

[/quote]

They owned the building. Some charters own their building (see also LAMB, BASIS) others lease.

THeir address is 1920 Bladensburg Rd NE. It's a non-descript building surrounded by light industrial buildings and warehouses.

They will need to sell the school's building to settle their debt, and they supposedly have a buyer who will supposedly pay $9M for the site. Unlikely any other charter can afford that.

The school has a short window of time to come up with a plan to get out of their financial crisis. That could involve being taken over by someone else -- too soon to tell. [/quote]

Thanks! 
Another candid question: Are charters for-profit? If their debt is less than $9M, who pockets the difference?[/quote]

All charters in DC are non-profits.

The school has a mortgage on the property that would need to be settled first in the event of any sale, and they don't have a contract, just a LOI.

Here's what the PCSB staff said about their finances:

"After receiving a series of troubling financial updates from the school, DC PCSB hired accountants from a forensic accounting firm to independently review the school’s finances. The firm has been working cooperatively with the school since
February 26, reviewing the school’s financial condition in detail.

The firm has produced a series of weekly cash flow forecasts (Attachment A) through the end of the 2017-18 school year. These forecasts find that:

• 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. [b]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.[/b]

The source of the school’s financial distress is a steadily declining enrollment without commensurate expense reductions. The school enrolled 351 students in 2012-13 and enrolled 228 at this year’s audit."

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