Sussex County Delaware

GCS Loses Loan,
School is Closed

 
Education ...

DOe Denies Request
to Operate School

The Georgetown Charter School's struggle to survive ended on Wednesday, March 27, 2002, following the loss of a $600,000 loan from local business owners and a decision by the Delaware Department of Education not to run the school through the end of the year.

Administrators for the first-year Laurel elementary school told parents in a letter on Tuesday, March 26, that the loss of the loan would force the school to close at the end of the day on Wednesday. The loss of the loan leaves the school again with a projected deficit of more than $1 million by the end of its first year.

DOE officials, caught off-guard by the school's sudden closing announcement, told GCS officials in a meeting on Wednesday morning that they could not run the school through the end of the year because they don't have the authority to do so.

In a press release on Wednesday, the DOE said that GCS board members advised the DOE that they had substantial liabilities in excess of their current cash resources and would close the school and liquidate its assets at the close of the school day on Wednesday.

In addition, the release said that GCS directors requested that the DOE operate the school through the end of the year and assume the school's $1.2 million in debt. In exchange, the DOE said that GCS officials offered to discuss the possible surrender of the school's charter.

DOE officials reacted cooly to that idea, saying it would require unprecedented legislative action. DOE officials said the only options remaining for the students would be to register in the public school district in which they reside or pursue private school or home schooling.

The school had been trying to stay afloat since new board members discovered last November that the school was staring at a large operating deficit due to the use of operating funds to purchase land for a permanent site in violation of its charter.

According to the GCS letter to parents on March 26, the final blow came when business owners withdrew their loan offer after learning in a fact-finding meeting on Friday, March 22, that there would be no collateral to back the loan because the state could take the school's 14-acre site.

In the fact-finding meeting, school officials admitted they knew about their financial problems last November when new board members took over.

Those problems weren't revealed, however, until February, when the state placed the school under formal review after learning of the projected deficit and the school's inability to meet its payroll.

Following that revelation, parents and school officials worked feverishly to save the school. In addition to the loan offer, they also held fund-raisers such as bake sales and carnivals to raise operating money.

The loan would have allowed the school to remain open until April 16, and the school had presented a plan that would have added an hour to the school day to save money by allowing the school the finish the year in May instead of June.


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