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Charter School Wants To Move

SANTA FE, N.M. — Parents, teachers and officials from the Academy for Technology and the Classics charter school touring the B.F. Young school gymnasium recently didn’t like what they saw.

To get to the gymnasium, the ATC group had to cut through locker rooms and down a hallway filled with old coats and canned goods. The gym had holes in the ceiling, a damaged floor and a smell one parent thought was mildew. Old equipment — including stacks of computers as tall as a person — covered most of the gym floor.

ATC governing council president Tannis Fox likened B.F. Young to a “prison.” Reporting to the council Thursday, teacher Jon Seyfried said the tour revealed that there was no kitchen, no sprinkler system and that many classrooms in the building were being used as administrative offices and needed to be renovated.

“There was really nothing positive about B.F. Young the facility committee could point to,” Seyfried said.

But the troubled charter school has to find a new home, according to Fox. That’s the linchpin of a plan to reorganize the school and put it on firm financial footing. ATC’s charter was voluntarily suspended nearly a year ago, after the Santa Fe public school district released a report that detailed several problems with the school’s administration, finances and governance.

All members of the school’s former governing council resigned, and the Santa Fe district took control over the school’s finances. The district agreed to subsidize the Academy’s operations, with a commitment of up to $215,000. The Academy has spent about $100,000 of that money so far.

To get its charter back, the Academy had to fix its management problems and present a plan to get back on its feet financially. Academy officials had planned to move more than 360 students out of the Academy’s current building on the south side of Santa Fe and into the district’s Kaune Elementary School building on Monterey Drive by June 1.

But neighbors in the Casa Linda neighborhood don’t like that idea. Backers of a $6.7 million bond issue that financed construction of ATC’s present building, on Avan Nu Po Road near the Santa Fe Community College, don’t like it either and are threatening legal action against the public school district if it helps the charter move. The district is obligated to offer charter schools space in public school facilities that are not being used for educational purposes.

On Tuesday, Fox will again ask the school board to reinstate the Academy’s suspended charter and let it move into Kaune. For Fox, leaving the Academy’s building on Avan Nu Po Road is the difference between a $230,000 budget surplus for the school and a $60,000 deficit.

“The annual amount of our sublease (on Avan Nu Po Road) is significantly more than the amount we receive from the state for (per student) reimbursement,” Fox said. “We’re digging into our operating budget to pay for our sublease, which means there’s not as much money for operating expenditures, teacher salaries and the like.”

According to a report Fox made to Santa Fe’s school board, in 2006 the county issued two series of bonds to fund the construction of the Academy’s building. These bonds were secured between a mortgage with the county and the ATC Foundation, a nonprofit entity separate from the Academy’s governing council. The Foundation provides support to the school by securing financing, providing equipment to operate the school and to provide continuing education and professional development to the staff, according to the Academy’s site. The school then subleases the building from the Foundation, to which it pays rent.

ATC’s monthly payments on its sublease are $44,500, or about $534,000 annually. However, the per-pupil funding the school receives from the state totals $20,800 per month, or $243,600 annually, according to the report. This leaves the school with a deficit of about $290,400. Fox said the Academy spends about 10 percent of its $2.5 million operating budget to make the payments on the sublease.

Fox said the terms of the lease may have been based on “overly optimistic” projections of the school’s revenue from the state. The school’s plan to build a cash surplus, as recommended by the Santa Fe district in its report on the charter a year ago, would have the school moving to Kaune.

To back up its argument for the move, ATC asked for a legal advice from Albuquerque lawyer Frank Salazar, who said the school is under no obligation to extend the term of its sublease on the building financed by the bond issue. If the sublease expires, Salazar advised, the school would not be liable for rent of the facility.

Salazar also noted that the public school board is obligated to provide the charter school with a building that meets statewide adequacy standards.

Fox said she did not think B.F. Young met those standards. “The point of that statute is to prevent school districts from giving a prison like B.F Young” to a charter school, she said.

Bondholder dispute

But Chris Cervini, a local consultant and spokesperson for Hamlin Capital Management, the New York company that holds the bond for ATC’s building, accused the school of being unwilling to discuss its financial problems with the firm.

Hamlin has expressed willingness to negotiate over the terms of the school’s sublease, but “it seems as if ATC has been hellbent on pushing forward with this Kaune move,” Cervini said.

Hamlin was willing to reduce the school’s lease payments on its present building to $160,000 for the 2012-2013 school year, Cervini said, and also offered to work out a subsequent lease rate to match the reimbursement money the school received from the state.

The company also offered to work with the school to build a cafeteria and was willing to work with the ATC Foundation to give up to 20 teachers a $1,000 bonus for the 2012-2013 school year and another $1,000 bonus for the 2013-2014 school year, he said.

But Fox said the school had not accepted these offers, and could not legally agree to a lease of its building for longer than one year at a time.

The obligation to renew the lease on a yearly basis will only protect the school from liability, should the governing council decide to move, Fox said. If that were to happen, she said it would be the school’s foundation on the hook for the payments.

“They (Hamlin) have the legal ability” to require payment, Fox said.

But Eric Garcia, a member of the Academy’s foundation, said he didn’t think the bondholders would ask for the monthly payments from the foundation should ATC decide to move. The foundation would work with the bondholders to find a new tenant for the building in that event, he said.

But Garcia also said he thought the school should stay where it was. “A lot of people put a lot of sweat and blood into that facility,” he said.

Hamlin’s Albuquerque attorney, David P. Buchholtz, told Superintendent Bobbie Gutierrez and board secretary Barbara Gudwin in a letter last month that actions taken by the district, including controlling the charter school’s finances and offering alternative sites for the school, could provide the basis for a lawsuit because they would harm the firm.

“Taken as a whole, (the district’s) conduct was not justifiable under the circumstances,” the letter states.

Neighborhood school

Meanwhile, Casa Linda resident Peter McCarthy is heading the effort to keep ATC from moving to Kaune Elementary School. McCarthy, who also fought Desert Academy private school’s effort to move into Kaune last year and runs, says the elementary school isn’t suited to older students, who may drive, and can’t accommodate ATC’s more than 300 students.

ATC would need a road looping around the school, a gym large enough for high school students and more land for parking, McCarthy says.

He also said he felt betrayed by board members Steven J. Carrillo and Glenn Wikle, because he thought Kaune Elementary School would be used “appropriately” after their election to the board.

“I really worked for those guys thinking they would protect the neighborhood,” McCarthy said.

Carrillo said B.F. Young, along with Kaune , should be given consideration to house ATC. He said he was opposed to the Desert Academy moving into Kaune, but he did not think he would break campaign promises if the ATC were to move in.

Wikle said he wanted B.F. Young to be considered because he thought the community surrounding it would be “more welcoming” than Casa Linda.

“At the same time, I know (B.F. Young) probably has millions of dollars in deferred maintenance,” Wikle said.

School board president Montaño said he supports ATC moving into Kaune, even though he, too, asked the school’s administrators to consider B.F. Young.

“I had a feeling that the board wanted them to give greater consideration to that (B.F. Young) building,” Montaño said.