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LEA Merger

Questions and Answers Concerning the Possible Merger of Confluence and Grand Center Arts Academy LEAs - Winter 2017

Confluence Academy, Inc. is a non-profit organization operated by a volunteer Board of Directors. There are two local education agencies (LEAs) that are operated by the organization, the Grand Center Arts Academy and the Confluence Charter Schools. The LEAs have separate charters and separate sponsors. Additionally, as is required by DESE guidelines and normal accounting principles, they have separate financial statements and audits.

The Confluence Board of Directors has been exploring ways to ensure the continued operation of all Confluence schools, including GCAA, without the current financial issues created by having two separate LEAs. If a decision to merge into one LEA is approved, the merger would take place at some point in the year following the decision. A key point is that any merger of the two LEAs is a technical and financial change. The Board of Directors is completely committed to having all the Confluence schools, including GCAA, operate with the same mission as they have since their creation. The Board does not anticipate any real change to the day-to-day operation of the Confluence schools should a merger of the current two LEAs occur.

1. Why are there two LEA’s and why are we looking at possibly merging them?

In 2008-2009, Confluence Academy and Grand Center, Inc. had a vision to open a performing arts school in the Grand Center district. Since Confluence Academy already had an existing charter contract with their former sponsor, Missouri University of Science and Technology (MS&T), there were discussions held to find out if MS&T would be interested in sponsoring a fifth school – Grand Center Arts Academy. When it was determined that MS&T was not a good fit, Saint Louis University (SLU) was brought in to sponsor the school and a second LEA was created.

Confluence’s current sponsor is University of Missouri-Columbia (MU). (It is not common, but several charter schools, including Confluence, have switched sponsors over the years.) The Missouri Department of Elementary and Secondary Education (DESE), Confluence’s external auditors, RubinBrown, Confluence’s bond holders, and the two current sponsors would like to see the arrangement of the Confluence LEA loaning money to the GCAA LEA resolved. Since its founding, GCAA has borrowed more than $6 million from Confluence to meet its annual operating costs, and there appears to be little possibility that GCAA would develop the revenue to avoid future loans, much less be able to pay back existing loans. The reason the accounting firms have recommended merging the two LEAs it such an act will eliminate the existing loan and allow future budgeting to be handled across the full network of Confluence Charter Schools. If the LEAs remain separate, GCAA has to eventually repay the loan amounts.


2. Will GCAA have to close and reopen as a new school if the Confluence and GCAA local education agencies were to merge?

The Board and legal counsel is working with the Missouri Department of Elementary and Secondary Education to design a means of merging the two LEAs without disrupting the current enrollment and management of any of the schools, including GCAA. Whatever steps taken would be technical and not visible in the operation of the schools.

 

3. Will the GCAA Annual Performance Report (APR) scores cease to exist or will it possibly be diluted by the Confluence scores?

In the event of a merger, GCAA would continue to receive an APR score from DESE for the building. APR results will still be calculated and published for individual schools. While GCAA will still maintain its own APR score, its APR score would also be included in the score for the entire Confluence network. This would not be unique to Confluence. For example, Saint Louis Public Schools has high performing schools, such as Metro Academic and Classical, whose APR scores are included in the SLPS overall LEA score.

 

4. Can the Confluence Board of Directors just forgive the outstanding loans to GCAA and let GCAA go out on its own?

Legal counsel and two accounting firms hired to advise the Board of Directors around this issue suggest that the back loans cannot be forgiven. And even if past loans were somehow erased, there remains the reality that GCAA is borrowing more money every year from the Confluence LEA—about $750,000 last year.

 

5. Will a merger of the LEAs take away the uniqueness of GCAA?

No, we do not expect that students, parents, teachers and/or staff will see any changes to the unique character of GCAA. The possible merger of the LEAs is intended to resolve the complex financial issues discussed above.

 

Questions or Concerns
Please send your questions, concerns or comments about the LEA merger to: questions@confluenceacademy.org