Financial projections for the agricultural science school show that the academy would operate at a deficit for the first four years.
The Global Impact STEM Academy will open in August at a temporary home on Clark State Community College’s Leffel Lane campus with 75 freshmen. Enrollment would increase each year until it reaches the target of 600 students in 9th through 12th grades.
“The first couple years are going to be, I think, very difficult because of the low numbers we’re going to be starting with,” said Ed Leventhal, chair of the Global Impact governing board. “But hopefully years three and four and year five, we’re going to be financially viable based on, I think, 600 students.”
Opening recruitment efforts will ramp up in mid-April. After that, enrollment projections call for the addition of about 125 to 150 students each year until the full student body of 600 is reached in 2018-19.
With 75 students, a February budget for the school’s operations shows a $177,000 deficit in 2013-14, according to documents obtained by the Springfield News-Sun. In the second year, with around 200 students, the school would end the year with a $678,000 deficit.
“I think any time it comes to school funding, I’m concerned,” said Leventhal, who is also a Springfield board of education member. “But I think the critical issue is our ability to roll out a quality product that will be able to recruit and retain students, and that (if) we would be able to recruit and retain students, we would be OK financially, based on state reimbursement.”
Those projections are only preliminary numbers, and the budget for fiscal year 2014 — which begins in July — is in progress, said Scott Gooding, the school’s treasurer contracted through the Educational Service Center of Central Ohio. They were presented to the board in February.
“Once we have finished the work for the fiscal year ’14 budget, we will have a better idea of what the fiscal year ’14 year-end numbers will be,” he said.
Those projections include some of the nearly $600,000 in pledges for operating money the school has procured, but not a recently-received $300,000 donation from the Ohio State University.
That donation would cover the first year’s deficit, although Gooding says he is still working to clarify if the donation is for operations and if there are any restrictions. But in year two, when the school increases to 200 students, the gap between projected revenues and expenditures is about $500,000.
Despite the financial projection, the Global Impact governing board decided in February to open this August, declining to vote on a recommendation from interim Director Carl Berg to delay until 2014. Berg cited finances as a factor in his recommendation.
It takes about 325 students for the science, technology and engineering school’s operations to start to break even. At that point, the initial projections of the school’s finances show a deficit of just under $19,000.
That’s projected to happen in 2015-16.
Board member David Estrop, superintendent of the Springfield City School District, has proposed skipping the 200-student year and moving straight from 75 students in year one to 325 in year two.
“I think opening in the fall of ‘13 with 75 students and the ramping up the next year to near 300, I’m confident that we can make that work,” he said. “We have a very good nest egg to start with thanks to the help of a lot of people locally and the funds we received from the state of Ohio and the funds we received from Ohio State.”
Sen. Chris Widener, R-Springfield, the driving force behind the school, has said in previous statements to the News-Sun that the start-up funds available to the Springfield STEM school are four times that of similar schools. Widener declined to be interviewed by phone for this article but offered to answer e-mailed questions. A second request to arrange a phone interview was not answered.
In February, Widener presented his own budget projections to the board that cut expenses by more than $400,000. It is unclear how he planned to do that, but he cut spending for teaching staff, purchased services and supplies for teachers, administration and support staff.
Gooding and Berg said they made their projections based on their experiences in education and believe they are accurate.
“I think we can stand behind the numbers that we have based on the assumptions that we put into it,” said Gooding.
The school will either have to increase revenues through more state aid for more students or more external donations or cut expenditures to close budget gaps.
“I think the key to this will be an increasing number of students,” said Berg. “I’m hoping to have 125 to 150 additional students in the second year.”
Berg said the estimates for staffing and expenses are in line with what the program needs to be successful as a STEM school, which traditionally offer smaller class sizes, hands-on, project-based learning and internship and early college opportunities.
Gooding said other STEM and charter schools he has worked with have “ongoing annual contributions” to help fund operations. Leventhal said the school may seek grants.
One STEM school Gooding has worked with, which the Global Impact school has frequently cited as an inspiration and resource in planning, is Metro School in Columbus. Metro started with 100 freshmen students, then increased by 100 students each year until enrollment reached 400. The school had a waiting list each year and had no problems recruiting students.
Another area STEM school, Dayton Regional STEM, operates primarily on the per-pupil state aid but a small percentage of the budget is covered by external sources like donations and grants. Dayton STEM has also met its enrollment goals, going from 76 students the first year to 430 this year, with plans to grow to around 650.
For Global Impact, recruiting more students and thereby increasing state aid isn’t as simple as just enrolling the kids. There’s also the matter of space.
Board members looked at five potential sites for the school’s first year while securing funds and executing renovations at its permanent home at the former South High. Most of those sites couldn’t accommodate more than 100 students, said Berg.
“None of them would be capable, as I know it, to handle the 300,” said Estrop. “Clearly the goal is to give us a little over a year to get South ready.”
Global Impact has $333,333 on hand for renovations, with an additional $316,000 pledged. Global Impact’s estimates to renovate three floors of South High School for 600 students range from $6 to $9 million. Officials planned to use matching contributions from the Ohio Facilities Construction Commission for the project, but those dollars aren’t available until the school has shown three years of enrollment growth.
“I still have some concerns about the constructions funds, the renovation funds, the building completion,” said Berg. “And I will until I see all the money sitting in the bank and we can start the process of going out for bids.”
OSU President Gordon Gee has committed to helping with fundraising.
The budget projections are constantly in flux and are only a snapshot of the information available at that time, said Gooding, although board members and administrators acknowledge the school’s first years will be tough financially.
“There’s still a whole lot of moving parts,” Gooding said.
Earlier this week, the school hired its founding director, Josh Jennings, and will begin recruitment for staff and students soon.
“It’s a great plan, I love the plan,” said Berg. “It’s just unfortunate that we can’t have 150 students to start with.”
The Springfield News-Sun has followed the Global Impact STEM Academy from its beginning, bringing you the latest news about the developing school first.
By the numbers
75: enrollment goal for year one
125-150: students added each year following
$600,000: Donations pledged and received for operations
$650,000: Donations pledged and received for construction
$6 to $9 million: Estimate to renovate three floors of South High
600: Total enrollment goal in 2018-19
$177,000: Deficit projection in fiscal year 2014
$678,000: Deficit projection in fiscal year 2015
$300,000: Additional donation received from Ohio State not included in the projections