California charter schools, much like regular school districts, are required to retain cash reserves of 3-5% to ensure operations during times of financial uncertainty. PCS set their own target reserves at an admirable 17%.
The 2007/8 projected cash flow for Pacific Collegiate School shows an ending balance in June 2008 of $1,519,426 in cash reserves, or 40.8% of the operating budget.
Source: PCS June 2008 Board Packet
The 2008/9 projected cash flow for Pacific Collegiate School forecasts an operating budget of $4,080,903, ending June 2009 with cash reserves of $1,866,595, or 46% of the operating budget.
Source: PCS October 2008 Board Packet (removed from PCS website week of 10/6/08)
The PCS governing board’s first obligation is to the financial health of its charter school. On numerous occasions, including the Town Hall forum on October 21st, the board has had the opportunity to share the full extent of that health with its community. Again the board reiterated its 17% benchmark for cash reserves, but declined to confirm in public that the actual reserves will approach 50% by June 2009. It is deceptive to withhold that information when the parent community comes together with tremendous concern about the future of their school.
We call upon PCS leadership to state for the record the actual size of the reserve today, both in real dollars and as a percentage of operating expense.
Why should we care? Money received from the State of California for the operation of public schools is intended to be spent on “these kids, this year”, with a modest 5% reserve required. In addition to the money PCS receives from the state, they ask for $3,000 per child, per year from their parent community, with the explanation that it costs $8,000/year/student to provide a PCS education. The annual fund drive target is about $650,000. The fund supports rent, repair, maintenance, teacher bonuses, student support, school supplies, professional development, activities and technology services. [Source: PCS Annual Report] Today, the PCS cash reserves are equivalent to more than two years of the annual fund drive, and roughly equal to the required cash reserve of the entire SCCS school district.
It boils down to two simple questions:
What is the source of the reserve? What is the intent of the reserve?
Public school finances are a matter of public record. Every taxpayer and parent donor has a right to know how these funds are accumulated and spent.