The Echo

                                                                                                                                                               

April 9, 2013

Message to Students, Teachers, and Parents

From Frank McIntosh, President Pencader HS Board of Directors:

At our last board meeting we announced that there was a distinct possibility that we might have to declare bankruptcy in accordance with the laws of the State of Delaware.  This revolved around the fact that we did not have the money to pay the teachers the deferred payments they earned.  Teachers work ten months per year but get their salary paid out over the course of 12 months.  It was these last two months that we could not cover.

Under normal circumstances, we would have received an allocation from the state on July 1 and could have used this money, in part, to pay the teachers’ salaries.  This practice is not uncommon whether it is a school district or a charter school.  Because our school was closed by the Department of Education (DOE), we will not be receiving this allocation and thus do not have the funds to pay the teachers.

This budget was submitted this summer to DOE and accepted, even though they understood the deficiency.  Never the less, they allowed us to operate knowing that we could not pay teacher salaries, if the school was closed.  They gave us a check mark on financial solvency in our “under review” process which was a signal to the new board that at least that piece of our operation was OK in the eyes of DOE.

Recently the Board was questioned about what we did regarding the financial situation.  It was suggested that we knew the situation and did nothing.  While the current board had nothing to do with the budget, we did review the situation.  It was clear to us that there was nothing we could do other than keeping the school doors open.  With careful management we had the funds to complete the school year.  By the time the new board was in place (January 2013) there was practically nothing we could do about the budget.  Most expenses were cast in stone, i.e. teachers’ salaries, busses, rent etc.  The few expenses that were not locked in would have little impact on the shortfall.

We have suggested forcefully to the state that the moral imperative is for DOE or the state to fund the remainder of the teachers’ salaries that they rightfully earned.   Further, we indicated, that by doing so, the students would be able to graduate from their own high school and that the underclassmen would receive the credits they earned from their Pencader classroom teachers so that they could be applied to their new high school.

The first answer from DOE was there was no money available to address this issue and that it was our (the board’s) responsibility to take care of the problem.  This answer was unacceptable and we pushed on.  At the close of yesterday’s meeting with DOE, they told us that there were some people they could talk to and would do so.  This was a welcome change in attitude.  We are waiting for their answer.

In the meantime, we met with a bankruptcy attorney on Monday, April 8 and reviewed our existing options.  We still do not know what we will do.  Closing the school is a serious matter and we do not take it lightly. 

We have asked our accounting people to review additional possibilities to better understand the financial fallout from various scenarios.  At this time, we do not see closing the school on April 30^th but it still remains a possibility.  It is likely that we will have to close the school at some point after that but we do not yet have all the data we need to make a decision.

I am aware that all of you are anxious about the situation and are seeking clarity.  You have all the information that I have at the moment.  We want to do what is best for the students, teachers, and parents.  From this point forward I will give you a weekly update and sooner if circumstances warrant.                                    

Pencader Business and Finance Charter High School does not discriminate in employment, admittance, educational programs, services or activities based on race, color, national origin, sex, age, or disability in accordance with state and Federal laws. Questions about Title IX may be referred to: Richard Gesner, PENCADER BUSINESS AND FINANCE CHARTER HIGH SCHOOL, 170 Lukens Drive, New Castle, DE 19720, Telephone (302) 573-7760.