SALT LAKE CITY — The Utah State Board of Education voted unanimously Thursday to uphold the revocation of Capstone Classical Academy’s charter, effectively shuttering the public charter school at the end of the academic year.
In December, the State Charter School Board conducted a three-plus hour hearing on the Pleasant View school’s financial condition and enrollment, voting unanimously to revoke its charter. The school appealed the decision to the State School Board, which appointed a hearing panel made up of board members and a hearing officer.
After a daylong hearing in February, the hearing panel recommended that the state school board uphold the State Charter School Board’s decision to terminate the school’s charter. The charter board found that the school had insufficient enrollment and funding to operate in the short and long term.
The hearing panel concluded that Capstone Classical Academy “is not financially viable when considered under generally accepted standards of fiscal management. ... The evidence demonstrated Capstone continues to operate at a deficit, that enrollment history and projections indicate it would continue to operate at a deficit and be compelled to rely on fundraising during subsequent school years.”
The panel acknowledged the school’s “diligent” fundraising efforts but concluded it will not be adequate to make the school financially viable and the level of fundraising it has had to conduct “is not sustainable.”
According to the report, Capstone Classical Academy is obligated to repay to the guarantor of its lease, Highmark School Development, what Highmark paid to cover the difference between Capstone’s total lease obligation and reduced payments Capstone previously made on its lease and future payments.
Highmark’s guaranty obligation will end on Oct. 1. “At that time, Capstone’s debt to Highmark is projected to be $876,255.24,” documents state.
According to its website, Highmark School Development of Murray develops and finances “safe, code-compliant, permanent school buildings” for private and charter schools. It provides 100% of the capital and development services needed, the website states.
According to the hearing panel report, Capstone Classical Academy’s “substantial obligations” related to the lease of its building, which have been deferred, not released, will come due in 2021, the report states.
According to the hearing panel’s addendum report, “at the end of the 2020-2021 school year, Capstone’s indebtedness relating to prior lease payments at that point would be $1,288,000,” not including interest.
Capstone Classical Academy, which serves grades six through 12, opened the 2018-19 academic year with a focus on classical arts and sciences.
In the past, several State Charter School Board members have complimented the school’s academic program and early success in extracurricular activities such as debate, archery and science competitions.
The school’s enrollment has not met projections, however. In Utah, enrollment drives state funding formulas. Its charter envisioned a maximum of 360 students but enrollment on Oct. 1, 2018, was 160 students.
Typically, a charter high school’s enrollment grows the first three years and plateaus by year four, according to state education officials.
Capstone Classical Academy officials could not be immediately reached for comment.