1 of 21

So, You Want to Buy a Building? ��Ten Steps to Take Now to Get You on the Path to Ownership!

Dr. Jennifer Stackhouse, Ed.D. – Executive Director, Portland Village School

Doug Miller - Board Treasurer and New Home Committee Member

David Robertson – Principal / Owner, LRB Public Finance Advisors

Courtney Dausz – Attorney, Foster Garvey P.C.

1

November 4, 2024

2 of 21

So, You Want to Buy a Building?

PART ONE – Long-Term Goals
PART TWO – Financing Considerations
PART THREE – Operational Information
PART FOUR – Build the Team

2

November 4, 2024

3 of 21

The PVS Story

Founded in 2007
Has grown to over 400 students
The first home was a leased, former church
The search for the new home lasted for many years.

3

November 4, 2024

4 of 21

Our New Home - just in time for fall 2024!

5 of 21

��PART ONE – Long-Term Goals�

Step 1 – Create a strategic plan

Understand how building ownership might support the mission of the school
Put together a fact-finding team

Identify staff and board responsibilities.
Get support from qualified professionals - especially real estate agents specializing in commercial/institutional properties

5

November 4, 2024

6 of 21

In the case of PVS, the available buildings required the school to move to a new neighborhood

It’s important to Understand Your Context

6

7 of 21

��PART ONE – Long-Term Goals�

Step 2 – Get your charter agreement in the best possible position

Relationship with authorizer
Term of charter

PVS story of our 10 year charter agreement journey

Authority to purchase and borrow

Intercept agreement

7

November 4, 2024

8 of 21

��PART ONE – Long-Term Goals�

Step 3 – Work to fund a nest egg

Land acquisition will be the greatest cost

The path to ownership will look different for different sized schools
The local context is important - know your zoning!

Renovation costs can vary greatly
Certain up front costs like engineering, architect & permitting
Having $1M is an excellent goal
Fundraising campaign for unrestricted donations

8

November 4, 2024

9 of 21

PART ONE – Long-Term Goals

Small group breakout:

How close is your organization to these goals?
What barriers do you have to overcome and who can help?
What initial steps can you take?
Who needs to be looped in?
When will you work on these goals?

9

November 4, 2024

10 of 21

PART TWO – Financing Considerations

Step 4 – Be ready to manage any increases in financing and operational costs

Increasing enrollment --> new faculty | admin (charter cap?)
Absorbing debt service payment (relationship to existing facility costs, i.e. existing debt, rent or lease payments)
New facility expenses
Bonds can pay for ALL project costs / reserves / no equity

10

November 4, 2024

11 of 21

Pro Forma – Financial Projections

11

November 4, 2024

Fiscal Year	2021	2022	2023	2024	2025
Enrollment	411	423	421	425	425
Average Per Pupil Revenue	9,183	9,387	11,357	11,961	12,323
Average Per Pupil Expenses	7,475	9,480	10,408	9,064	7,881

Revenue
Local Sources	$112,925	$41,334	$600,218	$555,070	$616,189
State Sources	3,343,115	3,562,995	3,736,425	4,216,154	4,554,379
Federal Sources	318,488	290,302	445,029	312,600	66,826
Miscellaneous	-	76,295
Total Revenues	$3,774,528	$3,970,926	$4,781,672	$5,083,824	$5,237,394

Expenses
Instruction	$1,820,160	$1,726,917	$3,124,603	$1,836,674	$1,911,417
Support Services	1,207,552	1,537,536	1,257,284	1,688,200	1,452,523
Community Services	44,628	426,555	-	327,535	135,166
Lease Payment		319,157
Total Expenses	$3,072,340	$4,010,165	$4,381,887	$3,852,409	$3,499,107

add back lease payment		319,157	339,060	345,841	176,379
Net Income		279,918	738,845	1,577,256	1,914,666

Debt Service				$325,250	$634,183
Debt Service Coverage				4.85	3.02

Unrestricted Fund Balance	$2,190,039	$1,960,486	$2,314,740	$2,700,000	$3,980,483
Pro Days of Cash on Hand	260	178	193	256	415

12 of 21

PART TWO – Financing Considerations

Step 5 – Conduct Cost Analyses

Possible analysis of the cost to the district to support charter school vs. amount the district retains
Debt capacity analysis
Financing variables to determine your construction budget
What debt service payment is manageable – ratios…

12

November 4, 2024

13 of 21

PART TWO – Financing Considerations

Questions and Small group breakout:

Do we want to increase enrollment? Can we increase enrollment?
Do we have other fundraising opportunities? (Renting space? After care?)
How to consider ability to make bond payments? Replacing rent with bond payment?
Construction budget wish list vs. needs list… ;o)
Implementing multi-year financial projections.

13

November 4, 2024

14 of 21

PART THREE – Operational Information

Step 6 – Collect organizational documents and track certain data

Charter agreement, bylaws, vendor agreements
Operational data
Academic information
Competition

14

November 4, 2024

15 of 21

PART THREE – Operational Information

Questions and Small group breakout:

What information do we already have and what do we need to gather?
Who has the information or where can we find it?
Who will collate the information into a usable format?
How can we adjust our systems to track that information?

15

November 4, 2024

16 of 21

PART FOUR – Build The Finance Team

Step 7 – Engage your financing team early

School staff and board members
Real estate agent: understands local markets
Financial advisor: fiduciary to the school
Bond counsel: drafts bond documents / provides tax-exempt opinion
Borrower’s counsel(s): represents school on legal matters
Underwriter / Director Lender: sells bonds to investing public / buys bonds
Conduit Issuer: issues the bonds on school’s behalf (while charter schools are non-profits, they cannot issue tax-exempt bonds directly)
Trustee: handles all the money

16

November 4, 2024

17 of 21

PART FOUR – Build the Implementation Team

Step 8 – Organize school staff to support operations so the executive director can focus on the new home process

Staffing

Step 9– Make a plan for getting the right people - may need competitive bids!

Staff and board
Realtor team
Project manager
Identify other professionals (architect, engineers, etc.)
General contractor

17

November 4, 2024

18 of 21

PART FOUR – Build the Team

Step 10 – Strengthen your community �

Develop your community communication pathways
Lessons from PVS - goldilocks communication
Prepare for social emotional impacts on team and school

Develop grit
Cultivate resilience
Nurture sustainability

18

November 4, 2024

19 of 21

PART FOUR – Build the Team

Questions and Small group breakout:

How close is your school on building the financial, school and board teams?

What skill sets are missing, what needs to be developed and refined?

How ready is the school for the Executive Director to be doing two jobs at the same time?

How can we support that process in the building?

What does your communication pathway look like?

What needs to be developed and who can help with this?

How does your community support social emotional factors and what will need to be cultivated?
What is your timeline? Plan backwards.

19

November 4, 2024

20 of 21

20

November 4, 2024

Questions?

21 of 21

21

Questions?