Red Hill School
Before submitting an “intent to enroll” form, families considering RVC should seriously think about how their enrollment in the Charter is contributing to the use of public funds to underwrite such a risky venture with such limited concern for financial integrity. Gambling like this with ALL our children’s education is just not right.
Why isn’t the Red Hill location financially feasible? Because RVC isn’t financially feasible!
Let’s start with Red Hill . . . RVC simply can’t afford it.
Instead of putting their best foot forward on the first round of the bid process (i.e. conducting the comprehensive due diligence needed to put together a solid financial proposal), RVC instead proposed that the lease, once in force, should be contingent upon many different items. Here are just a few of the “contingency” statements from their first bid response (click here for the link to the Bid Document):
- “contingent on successfully completing all CEQA requirements”
- “terminate the lease should any litigation be threatened or filed”
- “contingent on RVC receiving approval … for its proposed ADA, fire, electrical, and safety improvements…”
- “option to terminate the lease prior to occupancy if a currently unforeseen issue makes it prohibitively expensive for RVC to improve and/or occupy the site.”
- “terminate the Lease … if RVC determines in its reasonable discretion that completing all required asbestos abatement related to the Red Hill site will be too expensive.”
- “exempt RVC from local zoning and use permit ordinances”
Other terms also point to RVC’s financial instability:
- RVC asked to reduce the proposed rent by allowing it “to offset from all rent paid under the Lease any expenses or costs it incurs to perform repairs or replacements on the Red Hill site.” In their second bid proposal they merely capped the improvement cost offset at $120,000 a year.
- RVC could not afford to pay the deposit upfront so they asked “to delay the payment of the security deposit until RVC actually occupies the Red Hill site, and reduce security deposit amount to $10,000” and further more wanted the District to “return RVC's $10,000 bid deposit if the parties are not able to agree to final terms”
- Given that RVC did not have a construction timeline or a solid understanding of the permit and approval process, they did not want to “have to pay rent while performing site improvements and repairs required prior to occupancy.”
- They did not want to “comply with prevailing wage laws” or be required to have “earthquake or flood insurance” and asked to “limit RVC's indemnification obligations.”
- Instead of being financially liable for removing any unwanted improvements upon termination of their lease RVC wanted the “option to leave all improvements on the Red Hill site” even if the District did not want certain improvements to remain.
(click here for the link to the second bid document)
And perhaps the most telling of all the proposed terms were these three:
- RVC did not want to have to “provide Proof of Financial Status” before being allowed to commence a major facility renovation to a public asset.
- RVC did not want to commit to a 5 year lease but instead to a 120 day lease through a “term allowing RVC to terminate the Lease at any time during the Term with four (4) months' written notice.” – That means they could simply walk away at any time, for any reason, after just 4 months into the lease.
And finally, the bait and switch clause item #27. This provision gave RVC the right to walk away from Red Hill and occupy another campus for an undetermined period of time (perhaps all 5 years?) if RVC, for any reason (including financial issues) was “not able to complete all improvements and work on the site in time for it to occupy the Red Hill site” before school started.
Here are other concerns about RVC’s finances:
RVC Budget relies on about $25,000 in income from family donations to cover basic education needs (i.e. these funds are not discretionary for enrichment classes but are needed to cover operating expenses). Without parent donations RVC may not be able to pay teachers’ salaries.
- RVC’s petition budget was precarious at best and insolvent at worst even with 220 students. Financial concerns were the cornerstone of both the District and the County’s petition denials. Currently RVC’s Prop 39 request projects attendance at 206 students, 14 fewer than projected in the budget. At approximately $7k each in funding that represents just under $100,000 less income than initially projected in RVC’s petition budget, yet RVC has not presented a revised budget to accommodate this lower enrollment projection.
Conn Hickey, RVC’s financial manager, and Sharon Sagar, while serving as RVSD Trustees:
- Advocated for substantial deficit spending
- Allowed MAP, a district program, to operate its own fundraising campaign, outside of the District Roundtable fundraising agreement, as well as maintain its own unreported, unaudited bank account.
- Neglected to ensure that MAP appropriately filed its annual compliance documentation with the State Board of Education to maintain its Alternative Program of Choice status, ultimately resulting in the program loosing this status once this oversight has been uncovered.