The school's finances were much worse than have been described, the news release said, including a debt to the IRS of more than $100,000 in unpaid payroll taxes. The IRS has put a lien on two pieces of school property, both houses on Broadway. Enrollment growth has also been overstated, largely through adding numbers expected from the costly addition of a sixth grade to the school next year. The school enrolled 245 during the 2007-2008 school year, 60 during 2009-2010 [reflecting the impact of the lower school added to the new Episcopal Collegiate School], 79 during 2010-2011, and was expected to be in the low 90s [with the new grade] during 2011-2012.
Tuition fell more than $800,000 short of covering operating expenses this year and a five-year plan estimated closing that gap only to about $500,000. The school has a single major benefactor who's covered shortfalls in the past, but "The Vestry felt it was not financially prudent to rely on one donor for the next five years to fund the school." The major supporter is, my sources say, Dan Moore and his wife Mindi, parents of two children at the school. They are recognized on the school website for a $100,000 gift last year, but have made other, much larger gifts. The school reportedly told the church of a five-year commitment of similar private support, but without a guarantee of the funds.
The vestry said it had tried without success to get budget information and, though Headmaster Fred Niell told press this week he was "shocked" at news of closure of the school, he shouldn't have been shocked that he wouldn't be working there next year. The vestry said the school board had not renewed his contract for the next school year.
“Given the large dependence on a single donor, the lack of a budget for the 2011-2012 school year, whose fiscal year begins July 1, 2011, and the precarious nature of the school's financial status, the Vestry was greatly concerned about the school closing during the course of the upcoming school year,” Kay Stebbins, senior warden of the Vestry, said. “That scenario would have been the worst possible outcome for the students, faculty, and staff of the school, and the Vestry wanted to do all in its power to protect against that bad ending. While the timing of the closing is unfortunate, it is immensely better than a mid-year closing of the school.”
There's been talk that the school might seek to re-establish itself elsewhere, but the space provided by the church will be hard to match. The school pays debt service on two buildings owned by the church, but has been unable to pay for 18 months a small fee for a large amount of additional space provided by the church at no charge.
I'd heard about this this morning and had called Niell for comment. He has not returned my call.
UPDATE: Cathedral School supporters are stirring up quite a fuss, with an e-mail campaign directed at the vestry and other activities. A man who refuse to identify himself but who said he worked on the financial plan for the school called to say that the vestry had many facts of the school's situation wrong and that more details would be forthcoming. I'll report them when and if they arrive, if a name is attached.