UPDATE: After this story was published in print, New Roots Charter School announced a $200,000 donation from a "local anonymous donor" hoping to help the school dig out from its rather dire financial situation.
“This incredible, inspiring and unexpected gift was made by a donor who wants our school to thrive as a resource to young people and our community,” said Tina Nilsen-Hodges, principal and superintendent. “We are deeply grateful for this breathtaking act of philanthropy.”
The donation accompanies a new outreach plan the school is kick-starting to reach more students after a very low freshman class this past fall. As you can read below, the school had been castigated in December for large debt to the state's teacher retirement fund (around $279,000 in debt as of December), and subsequently placed on probation. The SUNY-Charter Schools Institute further cited financial mismanagement as a reason for the probation decision, as well as pointing out that the school had only enrolled 117 of its 160 student enrollment threshold this year (More on the school's issues below).
School leaders said in a press release that they would be putting $80,000 towards the Teacher's Retirement System before the end of the year, and would continue paying off the rest of the debt over the next few years. According to the school's release, its recruitment plan was reviewed and supported this week by the director of schools and community engagement for the New York Charter Schools Association, Jon Thatcher.
“We have a solid plan and every reason to feel confident, based on over a decade’s worth of experience,” Nilsen-Hodges said. “Being in this school every day and seeing the good work of the teachers and the students and the energy and excitement — all of that is such an inspiration and we want to share it with our wider community.”
Original Story: New York State’s Charter Schools Institute (CSI), which oversees charter schools in the state, has placed New Roots Charter School on probation after charging it with financial mismanagement and failing to meet its minimum enrollment thresholds.
Additionally, the school was charged with admitting students outside of its permissible grade range as a result of its LEAP program, started in 2018, which allowed students younger than high school age to attend preparatory classes at New Roots, as well as failing to submit student performance data and financial statements. Plus, the institute alleges that the school hasn’t paid any of its 2018 invoices towards the state’s Teachers’ Retirement System (TRS), amounting to a debt of around $279,000. Though New Roots administration remains confident in its future, the letter makes it clear that the CSI fears New Roots may not be able to meet necessary financial benchmarks unless the enrollment situation changes significantly. This year, the school’s enrollment is just 117 students, falling well short of its stated 160-student minimum.
“After consulting with the auditors, school staff, and NYS Teachers’ Retirement System staff, the Institute was extremely concerned that the reduced enrollment, and retirement system obligations would make it more difficult for [New Roots] to achieve its academic and financial plans, which ultimately could affect ]New Roots]’s fiscal soundness, and jeopardize [New Roots]’s ability to fully fund its obligations to its teachers’ retirement,” the letter stated.
The memo includes a list of directives to the school that it must fulfill over the next several weeks and months as part of its probation punishment. New Roots, founded in 2009, must provide audited financial statements as of June 30, 2019; a recruitment plan and budget; month-by-month reports of current enrollment and applications received for next year; a “fiscally sound budget” for the current year that deals with the current or lower enrollment and includes at least $80,000 of payments to the retirement system; quarterly unaudited financial reports, annual budgets, annual audits, and accountability reports for as long as the charter lasts; and documents showing the 2020-2021 class meets age and grade requirements.
The memo also contains language that indicates if the school fails to comply with the aforementioned rules, the institute’s board might terminate the charter, effectively meaning the school would likely have to shut down.
Executive Director Tina Nilsen-Hodges acknowledged the low enrollment, blaming a variety of factors including small freshman and graduating classes, as well as losing several students adue to the state’s new vaccination requirements. The school stirred turmoil over the summer when the Board of Trustees eliminated the position of Kris Haines-Sharp, a well-liked and long-serving administrator with the school who Nilsen-Hodges said was in place to help with the potential expansion to include a middle school, something New Roots had applied for in 2018 for 60 students and in 2019 for 40 students before withdrawing. Once the school pulled back its application to become a middle school, Nilsen-Hodges claims the position became unnecessary and was thus vacated, which angered some parents enough to pull their students out of New Roots.
Operationally, the probation doesn’t change much about New Roots’ day-to-day business, it just adds another layer of oversight. According to the school, the goals remain the same: attract more students and educate them. As noted in the state’s memo, though, being placed on probation does make New Roots ineligible for state or federal grants awarded by the Charter Schools Institute.
Nilsen-Hodges, who founded the school and has led it since the beginning, said New Roots was taken aback by the CSI’s decision, but added that the school now has a balanced budget through the end of the school year, as well as a plan to “developed an outreach plan to raise awareness of the school as a free public school high school option for students in the wider Ithaca region.” Nilsen-Hodges also explained that the reason for the missed payments to the TRS was because when the LEAP program was ruled a charter violation, New Roots didn’t receive any of the state money it was expecting to receive for each student. Operating with a thin budget, she said, is something they anticipate, but it also means that when something goes awry, the consequences can be more severe.
“SUNY is monitoring the school’s health and wellbeing during this period of fiscal challenge resulting from unusually low enrollment and unexpected cash flow issues,” said Dr. Jason Hamilton, Chair of the New Roots Charter School Board of Trustees. “The plan will provide our students and families with the assurance that New Roots is doing what is necessary to sustain our school, and that we have a solid plan to grow our school community’s enrollment and resources in 2020-21.”