Our Challenge and Our Opportunity
Like many public charter schools in Colorado, SVCMS must self-fund its operations and facility costs through Per Pupil Revenue, money otherwise used for instruction at traditional public schools. Building a permanent facility is a real challenge for many charter schools and is a process that can take many years or even decades to fulfill. Some districts are willing and able to provide vacant facilities to their charter schools or include their capital needs in public bond proposals. However, most charter schools must seek more expensive private financing to build their permanent facilities.
In the fall of 2016, voters approved the St. Vrain Valley School District’s $260.3 million bond proposal. Although the district declined to include a facility for SVCMS in this bond issue, they did offer a 10-acre parcel, surrounded on three sides by city and county owned open space, as a site for the school’s permanent facility and farm school operations. SVCMS hired an architecture firm to develop an initial site plan for the parcel in 2017, which included a 54,000 square foot facility, outdoor learning and play areas, a two-acre farm, adequate parking lots, and a city-mandated detention pond. Estimates from both the architecture firm and district officials put land improvement and construction costs at $20 million.
Securing private lending for the total amount of this project may not be possible. Conversations with private market financers indicate that they calculate loan amounts or the debt service on a project as a percentage of PPR enrollment, usually ranging from 8-17% of the total PPR. SVCMS expects a projected enrollment at build-out of 400 to 450 students. Using these debt ratio calculations, SVCMS would only qualify for between $3 million and $8 million in total debt capacity, with the most likely scenario of 20% of total construction costs coming from the private sector. As such, SVCMS will be unable to construct its permanent facility solely with private market funding and will need significant financial assistance from the district or large capital campaign donations from private donors and foundations, which are rare.
The SVCMS Board of Directors and Head of School continue to work towards securing facility financing, with their sights set firmly on the end-goal of building a permanent facility. In the short term, some property improvements will be undertaken that will allow SVCMS to move some educational programs to the site while also beginning farming operations there.