Last updated on October 25, 2023
*Correction: A previous version of this article reported that The Foundation has collected $2 million in actual cash toward the capital campaign and that is not correct. The $2 million figure is what the Foundation currently has remaining in confirmed pledges thus far. They have collected $2.8 million in cash and as of this date, they will collect a total of $3.3 million in cash by the end of this calendar year through confirmed pledge commitments. We apologize for the error.
By Kristin Fox
Recent state legislation has opened the door for public funding for charter school buildings for the first time in North Carolina. The adoption of House Bill 219, known as the Charter School Omnibus Bill, allows counties to allocate capital funds to charter schools. This legislation has prompted the Summit Charter School located in Cashiers, North Carolina to come before the Jackson County Board of Commissioners with a request for a $2.5 million dollar loan for the expansion of the school.
The requested funding includes the construction of a new 15,000 square foot high school building separate from the school’s existing facilities but remaining on the 33-acre campus of the Summit Charter School. The new building will include traditional classrooms, a science lab, a learning kitchen, rooms for individualized education, an outdoor courtyard, administrative offices, and a large commons area.
With this new facility, Summit will transition the current high school building into the school’s new middle school building and will add a pavilion for middle school lunch and assemblies. By transitioning the middle school into the original high school building, Summit also opens up classroom space for the lower grades.
At the October work session of the board, Summit Charter School Head of School Kurt Pusch made the loan request on behalf of the school and the Summit Charter School Foundation, Inc. (The Foundation). Pusch attended the work session with members of The Foundation, Sarah Jennings, Chairman, and Rob Hunter, Treasurer.
The Foundation is a separate 501(c)3 that owns the property on which Summit Charter School is located, and that raises funding to support Summit Charter School.
At this week’s regular meeting of the board, the loan request was on the agenda; however, no action was taken on the item due to lack of a quorum. Chairman Mark Letson was recused from the charter school business because of conflict of interest as he also serves on Summit’s board of trustees. With only two board members physically present at the meeting, no vote could be taken on the loan request. The meeting was recessed until October 24 when the majority of the board sitting can vote on the issue.
Summit Charter School is a North Carolina tuition-free and non-profit public charter school, first authorized by the State Board of Education on March 15, 1997. Since 2019, Summit Charter School has experienced 28% growth in enrollment and as a result, the school has reached its current facility capacity.
For the 2023-24 school year, Summit has 300 students currently enrolled, with 8 of its 13 grades at full capacity. This year, the school increased its enrollment by 57 new students. While enrollment has increased across multiple grades, middle school in particular has seen a significant increase over the past two years.
The construction of a new high school building will expand the school’s facility capacity to support current and future enrollment growth at Summit Charter School, as well as support the growing population of Jackson County.
The charter school serves students predominantly from Jackson County but also from Macon, Transylvania, and Swain Counties.
Summit is committed to funding the full cost of the new construction through private donations and foundation and corporate grants. For this purpose, in August 2023, we publicly launched a capital campaign, and to-date have raised $4.8 million toward a $6.5 million campaign goal. Our goal is to have commitments totaling $6.5 million by August 2024. Of the $4.8 million raised to-date, we have received $2.8 million in-hand, and the remaining $2 million in pledges. Fundraising efforts for the expansion are led by the Summit Charter School Foundation, a 501(c)3 that raises private funding to support Summit Charter School.
On behalf of the school, Pusch made the funding request to the board for a loan in the amount of $2.5 million that would help bridge the school’s cash flow through the construction project. Pusch made it clear to the board that it is the school’s intent to fully repay the loan and carry the full cost of the construction.
“Summit Charter School Foundation is debt free, and it’s our intention to stay debt free, but we do seek a loan from the county to help bridge the cash flow through this project,” said Pusch.
If granted the school’s expectation is to repay the loan within three years. The Foundation also anticipates paying all necessary closing costs associated with the loan as well as monthly interest on the loan as to be defined and agreed upon in the terms of the loan agreement.
The expected interest rate will be 5.5 percent, which is what the county is currently earning on its savings.
“It really is up to this board if the goal is to keep the county whole, meaning not to cost the county any money,” said County Manager Don Adams. “The loan would cover the closing costs, attorney fees and things of that nature. It would also cover the interest that we currently make on our savings which is about 5.5 percent.”
Adams emphasized that Summit’s request is different than funding requests from the public school system and the community college, as the charter school is asking for a loan rather than a grant request for funding.
“What makes this a little bit different is that it’s a loan request, and I do think that potentially allows you as a board to separate this from the other priorities from the public school and community college for the simple fact that the school board or the community college aren’t coming to you to ask for a loan, they are asking for a grant,” said Adams.
When asked about the potential risk associated with loaning the money to Summit, Adams said the loan would be secured with a deed of trust and promissory note on the property.
Once the board decides what action it wants to take on the school’s request, the first step will be to give the county manager the authority to hire a local real estate attorney; the county’s attorney does not do real estate law. The closing attorney would be hired to complete the title work, set up the loan documents and promissory note.
“This is a new topic and new type of discussion for the board of commissioners,” said Adams. “It’s really a new discussion for any county in the state of North Carolina, because this is a new law that has been passed. Up until this year and this new law, counties were not allowed to fund capital needs for charter schools; we just didn’t have those conversations.”