Windrush School Enters Bankruptcy, Gets $250K Matching Pledge
Threatened with imminent closure because of a large bond debt, El Cerrito's Windrush School entered bankruptcy today, Friday, and secured a $250,000 matching pledge from an anonymous donor, the school said.
Photos
New hope for keeping Windrush School open at least the rest of this year has been kindled by an anonymous donor's pledge to match any additional donations up to $250,000, school head Ilana Kaufman said Friday afternoon.
At the same time, the school's petition to enter Chapter 11 bankruptcy was granted by the court today, the school said in a letter posted on its website. The bankruptcy gives Windrush temporary protection from creditors, but Windrush must demonstrate to the Bankruptcy Court on Oct. 7 that it has enough pledges to keep the school operating until June, the letter said.
The school administration and trustees dropped a bombshell Tuesday night when they told the staff and parents that the school may have to close Oct. 28 because of a large bond debt and dropping enrollment.
The private, progress education-oriented school has begun an emergency fund-raising drive, saying it needs to have $900,000 in pledged support by Oct. 7. Kaufman said $300,000 in pledges has been raised so far, and that every additional dollar up to $250,000 will be matched by an anonymous Bay Area resident.
"It just bowled me over," she said of the matching pledge. "It's so exceptional."
What the 35-year-old school calls "an unprecedented fiscal crisis" stems from a drop in enrollment and the debt on a $13 million bond incurred in 2007 to build the new middle school/library building and refurbish the gym.
Enrollment dropped from 259 students when the bond was issued to 165 today, causing a drop in tuition income. The trustees found they could not continue making payments on the debt and asked the bondholders to restructure the deal, the trustees said in a letter sent to parents Wednesday.
The bondholders declined to agree to terms that the trustees said were necessary and said they would move to seize the school's property, which is collateral for the loan, their letter said. Entering bankruptcy would block a court-sanctioned seizure of school assets by creditors, the letter said.
The comments section of the Patch story about Windrush on Wednesday has become an ongoing forum for debate and pleas for support as well as criticism and praise for the school and those in charge.
Update 4:30 p.m., Friday: In a news release this afternoon, the school said it is "hearing from parents and guardians, alumni, alumni families, faculty and staff, friends and relatives who are filling out pledges. Together, the community is confident that the school can reach its goal to finish the school year." It also provided a link to the donation pledge form at www.windrush.org.
Deborah
4:49 pm on Friday, September 30, 2011
Wow! What a generous offer! Question... how do pledged donations work? Is the money only taken in if the school indeed stays open through the end of the school year? Or only if there is a serious restructuring of the board/administration that made the financial decisions that got the school into this predicament? I would really hate to see parents lose any more money - where it just goes into the black hole of debt or lawyers for the bankruptcy. This is all such a sad and frustrating situation.
Christine Alonso
9:35 pm on Friday, September 30, 2011
Deborah,
the pledges are safe from the bankruptcy and they are only due if the school remains open. However, they are put into the same hands that shepherded us into this situation. At this point, the Board and administrators are unchanged, but so far their judgement has been shamefully inadequate and they have been operating without transparency. Clearly much more than money will be required in order to Save the School.
Deborah
10:53 pm on Friday, September 30, 2011
Thank you, Christine. Indeed it sounds as though a huge amount of money is only a temporary fix - and doesn't resolve any underlying issue... not even the financial issue of paying off the bond-debt.
Caroline McCall
10:53 pm on Friday, September 30, 2011
Beating up on the school leadership is not going to help any of the families, faculty or staff at Windrush.
Here is an alternative perspective. The board of the 2006-07 school year committed the school to a huge debt to finance a building. In retrospect, the board made this decision based on poor data, the same data that every other private school was using. When the recession hit Windrush families, the board decided to expand the tuition assistance budget in order to help families stay at the school. Perhaps this was a bad decision - at the time it seemed like the right thing to do. Those families were supported with ever increasing tuition assistance, and new families were given significant assistance as well. In the last 4 years, tuition assistance rose from 12% of tuition revenue to 25%. I dare say that is pretty generous. Over 50% of Windrush families received tuition assistance last year. In order to protect the program and faculty/staff salaries, the board decided to use reserve funds to support the expanding tuition assistance while paying interest on the bond. At the time, it seemed like the right decision. No one knew the recession would last this long.
The tuition increase letters sent to all parents in 2008, 2009 and in 2010 included the fact that the school would be operating in a deficit the following year. The board presented the school's financial situation 2 times in early 2011and told parents when it made the decision not to pay the 7/1/11 bond interest.
K-Man
7:20 am on Saturday, October 1, 2011
If you are in fact the board chair, I think that you should seriously consider resigning and placing a new, more credible person (ideally with real financial management experience) in your place. This has not worked out. Even if the money is raised, do you think that the community has any confidence that the numbers work to get through this year? Consider the following two questions:
1. As Windrush's enrollment fell, why did the cost structure keep going up, up, and up? (See your Form 990s) Nobody was minding the store and paying attention to basic business principles.
2. How in good conscience could you accept full tuition payments from families this spring knowing full well that there was no real plan for getting through the year that the families were paying for? (And the economy and bond explanations don't really work -- lots of schools are holding enrollment and the $900K you need to get through this year is even more than the $700K bond payment.) Taking money when you knew that you had no likely way to deliver the service is well beyond irresponsible.
I am sure that you are a good person and really want the best for Windrush, but you simply didn't have the skills to manage the situation with which you were faced. It's time to get some people into the right roles at Windrush who have some credibility -- that's the right thing to do for the school. It's still probably going to be an ugly outcome, but give the school a fighting chance.
Deborah
1:17 pm on Sunday, October 2, 2011
I appreciate your being willing to share "an alternative perspective".
I'd be very interested in seeing more details and timelines of the boards' decisions. I understand it would be hard for any board member to post on here their side of the story. However I think the WR community deserves a written outline or verbal presentation of decisions made, reasonings, and timelines that are accurate. Otherwise we are dependent upon the comments that are being made here for our only information.
High staff turnover is usually not a good sign at a school. Did the board look into this? Did they do exit interviews (from comments, it sounds like they didn't.)? Did they decide to make staff retention a priority when they saw so many leaving? And if so, what steps did they take?
Did the board consider or look into other reasons families were leaving WR or why enrollment fell besides the economy? Did they look at other similar small private schools in the area to see if WR was in line with what they were seeing? (from comments, it sounds like they didn't.)
Deborah
1:18 pm on Sunday, October 2, 2011
cont.
Did the board have staff representatives that attended parts of their meetings? While the Head of School represents staff, it is also very beneficial to hear directly from staff. (From comments it sounds like they didn't.)
While private schools want to give generous financial assistance, that needs to be balanced with the finances of the school. Sometimes tough decisions need to be made to keep the overall school running well. What was considered with this decision?
What checks and balances are in place at this school? Between the Head and the Board and the other stakeholders (parents, staff, students, donators)? If there were none, was there any discussion of hiring someone to help them get the school back on track?
So many aspects that should be in place and transparent to all the stakeholders.
Tom Chesterman
3:35 pm on Monday, October 3, 2011
"The board of the 2006-07 school year committed the school to a huge debt to finance a building. In retrospect, the board made this decision based on poor data, the same data that every other private school was using. "
It is unclear to me - and may never be clear - whether it was a decision based on poor data or a poor decision that did not take into account risks and the economy. The basic question of whether to expand or build was always one that Windrush grappled with, but previous trustees and heads deliberately chose a different path. And it probably doesn't matter any more, at least not for the students and teachers who will suffer the most here.
Screwed
11:55 pm on Friday, September 30, 2011
Although the board did present the financial situation twice, they were scheduled at inconvenient times and they refused to send out the presentation with th figures to those who could not attend ( most of the families could not attend).
Miso
1:38 am on Saturday, October 1, 2011
freeloaders need not apply. why couldn't we have recruited more students from families with the ability to pay full tuition? the values of progressivism should not be confused with the sole purpose of welfare for those who cannot afford to pay in full. that is what got us all resentful of the situation - making promises to those who are hopeful yet could not pay full tuition, and shouldering the burden on a dwindling number of families who could pay full tuition - it is just not a fair system. Economic diversity is not the only criteria for a progressive educational philosophy.
Jane Doe-icus
8:24 am on Saturday, October 1, 2011
The parents are not suffering from mass amnesia. There was NEVER any notice provided to the parents that Board intended to default on the $350,000 July interest payment.
Upset parent
12:02 am on Saturday, October 1, 2011
It's futile to defend the board's past decisions at this point. As they say the proof is in the pudding and complete financial failure proves that the board failed the Windrush community miserably. Please do not hide behind the recession while other area independent schools are doing well. I and other like minded families will gladly give till it hurts to support the school, but only with the stipulation that the head resigns and the board is reorganized to provide proper checks and balances.
Matthew Kelleher
9:42 am on Saturday, October 1, 2011
I completely agree with "Upset Parent" and "K man". The Board and Executive chose a path over three years that resulted in this eventual outcome. To allow tuition to increase beyond the means of many families during these difficult times and dramatically increase assistance put the school; at risk by lowering enrollment. Did the Board grant raises to staff during this time period ? The current leadership does not have the skills or background to continue to manage the school should it be bailed out. Any funds committed to saving this situation should be contingent on a new Executive and Board being put in place. The current Board's secrecy; lack of communication skills; obvious mis-management; lack of required financial expertise make them ill suited to continue.
Joanne
10:08 am on Monday, October 3, 2011
Some of the staff had a freeze on salaries during part of this time, which probably helped a tiny bit.
SFNewYorker
12:59 pm on Saturday, October 1, 2011
I agree that the current leadership should step down whenever the timing is most beneficial for giving WR a fighting chance to survive. Another suggestion would be for the head of school, if she were to continue in her role, to volunteer to reduce her absurdly high salary significantly as a demonstration of her willingness to do whatever is required to get through the current crisis. Something tells me, however, that she simply does not have it in her to do this.
concerned community member
3:44 pm on Saturday, October 1, 2011
As a fellow East Bay resident and neighbor, I am also concerned for Windrush's community. In this time of immediate crisis, detailed data and financial acuity will need to be guided by compassion, transparency and trust in order to make the difficult and necessary decisions that are awaiting the school.
The Windrush School's Revenue bond (8/2007) and notice of default (7/2011) are public material, and these are accessible by the Municipal Securities Rulemaking Board (EMMA) http://emma.msrb.org
The Bond default was reported by ubmitter's Contact Information
Company: Wells Fargo
Name: TERESA DONOFRIO
Address: 625 MARQUETTE AVE
City, State Zip: MINNEAPOLIS, MN 55402
Phone Number: 6126671229
CALIFORNIA STATEWIDE CMNTYS DEV AUTH REV WINDRUSH SCH (CA)*
CUSIP: 130795JY4 *
Dated Date: 08/15/2007
Maturity Date: 07/01/2037
Interest Rate: 5.5 %
Principal Amount At Issuance: $13,000,000
Initial Offering Price: 100
sam rothschild
11:49 pm on Saturday, October 1, 2011
Putting aside the past for a moment, the question is what is in the best interests of our kids? Can the school actually operate at break-even even if the bond debt is restructured somehow? From what I have read and heard, revenue has fallen sharply, and these events will put a cloud over enrollment for years to come. And the combination of operating expenses to meet certification requirements and debt service payments (even assuming some restructuring) are just too much to overcome. Parents should be careful to ensure financial viability, even during the remainder of the school year, before committing more dollars that could otherwise pay tuition elsewhere. And the board and head, who have acted incompetently at minimum, should resign if the school were to continue. It's not unreasonable to think parents should save their money for tuition elsewhere (a terrible thought - double tuition) and the school should use its efforts to quickly help place students in other schools.
EClover
12:36 pm on Sunday, October 2, 2011
From what I have heard, unfortunately, the head has asked other local independent schools not to engage in discussions with WR families who ask for information about applying. While I can see both sides, I feel like that would be forcing people to go down with the ship, particularly since a spot in a public school at this point is not a given at this point in the year.
Deborah
12:58 pm on Sunday, October 2, 2011
If this is truly the case, that would be highly unethical. I don't see both sides to this particular issue. While WR may want and need to keep its students, it is unethical to prevent them from looking elsewhere.
Jamie Oliver
3:18 pm on Sunday, October 2, 2011
Dear Colleague Heads of School:
....(too big for posting)
If we cannot raise the amount needed to fund operations through the end of the school year, then the Board has no choice but to close the school as of October 28, 2011. While the school has funds to continue operations after that date, the Board has concluded that it would be better to close the school as of October 28th if we cannot complete the school year because doing so will ensure that students speedily transition to new schools and allow them to begin the integration process.
What I need from you:
To that end, if you are a K-8 school, I have no doubt you have or will begin receiving inquiries from Windrush Families. So that Windrush and I have time to raise funds, I have to ask you to not discuss enrollment with any Windrush family until Octiber 11, 2011. On October 10th, I will reach out to all of you to update you on the status of the School and our students. If Windrush does need to close at the end of October, I will work with all of you to place Windrush students. If there is a mid-year transition process, I need it to be student-centered, orderly and well managed. That can only happen in direct partnership.
As you can imagine, this is a very demanding and challenging time for me in my role. I thank you for your understanding and support.
Sincerely,
Ilana
--
Ilana Kaufman
Head of School
www.windrush.org
510.970.7580 x205
Deborah
9:52 pm on Sunday, October 2, 2011
Unethical. It's one thing to ask parents (with the understanding that the parents have the right and power to choose differently) to hold out, if they can, until a certain date to see if enough funds can be raised. But to go ask that of other schools, who are in more of an "authority" position to do something like this, just seems wrong to me. And rereading her phrasing.. it's not even a request, it's sounds more like a demand "I have to ask you to..." vs "if possible, would you..."
mr. potato head
8:10 am on Tuesday, October 4, 2011
If you have access to a copy of this letter would you be willing to scan and make available? Thanks.
Jamie Oliver
3:19 pm on Sunday, October 2, 2011
from SF Chronicle:
"Why are you shutting down the school?" a worried fifth-grader asked Kaufman.
Kaufman pulled the girl in for a hug and then looked her in the eye.
"We're not shutting down the school," she said.
That answer was deceitful and dishonest and it seems that is the way that the parents have been treated in this situation. so sad, but honesty is the BEST policy. This mess was hidden for far too long. Heads should have rolled long ago, now it's too late.
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/09/29/MNUV1LBD96.DTL#ixzz1ZfKKGzaf
Jamie Oliver
3:31 pm on Sunday, October 2, 2011
on windrush website the welcome letter from Ilana Kaufman says
"Excellence, Authenticity, Inspiration, Community Engagement, and Sustainability characterize our school."
Shall we take this apart a bit...seems like not everyone has been following these guiding values.
ExWindrusher
10:32 pm on Sunday, October 2, 2011
I hope someone has siezed her hard drive and padlocked her door. I'm sure she's busy shredding and deleting as we speak. We have seen she can look a fifth grader in the eye and tell a bald faced lie.
ExWindrusher
10:51 pm on Sunday, October 2, 2011
Given that the school is very unlikely to extend past this year, even under the best scenario, it would seem that immediate savings could be gained by ditching the adminstrative overhead and letting the teachers run things from here on out, with just the front office help they need to get the teaching done. Cut, cut, cut expenses immediately if you're serious about keeping the school open till june. Seems like to-heave expensive administration would be the logical first thing to cut, if you're serious about doing whats best for the kids and parents.
Gathering Data
12:03 am on Monday, October 3, 2011
Someone seems to have created an exit survey for Windrush families who have left Windrush. If you'd like to share your thoughts (and/or if you know other parents who have left WR you could send the link to), please do so:
http://www.surveymonkey.com/s/7BKH5SP
Virginia D
9:51 am on Monday, October 3, 2011
who developed this survey- what are the responses being used for?
Gathering Data
12:13 am on Monday, October 3, 2011
There also seems to be an exit survey for teachers and staff who are no longer there:
http://www.surveymonkey.com/s/7H7SRFN
EduFan
8:08 am on Monday, October 3, 2011
If there is a way to carry forward the mission of Windrush, separating the mission from the facility (if it can't support the facility) is the way to go now, maybe moving Windrush to another facility that it can afford, using the facility in another way that supports the community (education or another open minded idea), like using the facility as a solution to the Portola middle school location problem, it's time to look for solutions now that the past is untenable. I think the past thinking of Windrush + Windrush campus is untenable, people need to get beyond that.
Ira Sharenow
11:36 am on Monday, October 3, 2011
According to the bond documents in 2011 and 2012 the debt service payment is $715,000, as there are no principal payments. From 2013-2037 the payments are about $970,000 per year. The total payment from 2008-2037 is $27,710,086.11.
“The 13,500 square foot addition will provide an interim library, seven new classrooms, and supporting circulation area that includes a new lobby for the gymnasium. The new building will allow the School to increase its enrollment from 260 to 347 students”
Astrid Broberg
10:19 am on Monday, October 3, 2011
I agree..people/parens need to decide what is important...is it the buildings which WR most likely can,t afford t stay in or is it the school itself..the idea behind this school...like you say it,s mission...portola could be reduced to fit into the existing WR buildings and the City might be able to save money by not having to build a whole new school and we would have a new safe school for our middle schoolers which might just help make neigborhood parents more interested in keeping their kids in public school beyond the elementary school years
Christina Slamon
2:08 pm on Wednesday, October 12, 2011
Is the anonymous donor going to honor their pledge? Is there any other information about this? Any strings attached etc??? I'm assuming this is part of the 800 K that was raised to keep the school open through the end of the year.