Palouse Prairie at a Crossroads

Friends and supporters of Palouse Prairie School,

This is a long message, the key question I have for each of you is near the end.

I'm writing to share progress on the project, and because we have reached a crossroads.

As you recall, we got feedback from the Charter Commission on our Charter in April. There were some revisions to the Charter, but more importantly they asked us to address three issues: budget, facility, and enrollment. We now have in hand a contract to lease a facility to be built by Rob Davis next to the current Silos buildings.

The three issues are really different faces on one problem: the core business challenge of starting and running a school. For purposes of making a budget, the Commission has us use the estimated income of $4400/child enrolled. Bill Rivers and I have worked on the budget multiple times, and with the help of Mary Lang's Moscow Charter School experience. What we find is in agreement with advice we have been given -- to be sustainable a school needs an enrollment of 140 children. That number varies some depending on assumptions like wage levels, cost of facility, or EL consulting contract.

If 140 is a minimum self-sustaining enrollment, the school faces the challenge of how to get there. The Board does not believe that we could credibly expect to enroll 140 kids the first year. Bill and I have each tried opening year numbers ranging from 40 to 75. Most recently we have been focused at 50 in three classrooms on the Silos site.

These small enrollments can be sustained if you add in $150,000/yr Federal start-up grant. This use of "startup" funds to cover operating losses is problematic in that it does not account for how to pay actual startup costs, like buying furniture, etc. It is also problematic to build a budget around funds that have not been secured. We are not sure the Charter Commission will even accept this type of proposal.

The Federal grant runs for three years. Using it as strategy, however, highlights the enrollment side of the problem. If the school starts at 50 children, during the second year in the Silos we could grow to 75 (3 rooms of 25. Not ideal but all the site allows). This is only 1/2 of the numbers needed to be self-sustaining.

If the school continues its third year at the Silos with 75 children, then when the Federal grant ends after year 3, the school will need to close.

If, after two years the school is able to secure and move to a larger facility, enrollment could be larger in year 3. But how much larger? Assume we get 35 more children, making the enrollment 110. That would be a 5 classroom school. For year 4 we'd need to build two more classrooms and add 40 more children. Funding this new facility, and enlarging it is the challenge.

The business to this point will have been losing money, subsidized with Federal grants. If enrollment grows as suggested above, savings each to be used as down payment might be as high as: Year 1- $0; year 2 = $40,000; Year 3 - $80,000 For a total of $120,000. (Speculative, and dependent on good penny pinching).

Because the Board is not confident that this is a responsible strategy without identifying more resources we have decided to not submit a packet to the Charter Commission for the September hearing. Missing this deadline effectively puts the opening date to August 2009.

SUMMARY & CHALLENGE

Assets: A nearly completed charter requiring what we believe to be simple changes and an unsigned lease for a facility at the Silos.
Problem: Grow enrollment fast enough and find a larger facility to keep the school solvent. Find additional cash or donated resources to so the startup grant can be used to fund startup activities.

We need a new vision for how to proceed. It feels like we are close, but the Board is tired and I’m not seeing how to plunge ahead, where to base my faith.

What resource do you have? What insight can you offer?

One answer is you believe this can be done and you are willing to join the Board and figure out how make it happen. We probably need several such volunteers. Another answer is you know a financial "angel" who is willing to make this dream come true. There may be other answers as well.
If there are no significant new developments, the Board intends to disband the Corporation on Sept 30.
Thanks for all your efforts and commitment to this point

Nils for the Board