Jul 20, 2008

Report questions funding plan for science academy

Foster City City Council to review construction of a charter high school

By Neil Gonzales / Bay Area News Group

A business plan for the proposed Magnolia Science Academy leaves serious questions whether the proponent can raise the funds to build the charter school on city-owned land, according to a Foster City staff report.

"The lack of a credible financing plan is a major deficiency in the business plan" submitted by the Southern California-based Magnolia Educational & Research Foundation, the report said.

On Monday, Foster City council members will review the report as they consider whether to continue reserving four acres of a 15-acre site south of the Government Center for a public charter high school.

The foundation is trying to convince the council to keep open the undeveloped four acres near Foster City Boulevard, which might otherwise become part of a larger residential and commercial project.

The foundation is also seeking approval of a charter petition for its academy from the San Mateo Union High School District. The district board is expected to take up that matter in August.

The academy would open in September 2009 and expand over time to 800 students in sixth to 12th grades.

The campus would go up in two phases - the first costing about $5 million and the other $7.7 million, according to the staff report.

But the costs are preliminary and "probably underestimated" given that no design has been done yet and the proposed construction is for modular buildings - which would be counter to the city's call for permanent structures in the Civic Center area, the report said.

The report then expressed doubt about the foundation's plan to finance the construction using loans with an interest rate of 7 percent.

"It is unclear in the plan if the foundation has the credit to obtain these loans," the report said. It "is also unclear if these loans would be sufficient to cover the actual costs of constructing the school."

Joseph Hurmali, the foundation's chief executive officer, admitted Thursday that the report is "a little bit discouraging."

But Hurmali remains confident that the foundation can secure the needed funding from the state and private companies to build the academy, he said.

The foundation has raised $4.4 million so far to open new schools and will soon receive another $1 million, he said.

The foundation already runs three schools successfully and is set to open three more in September, he said.

"All our schools are financially sound," he added.

The council will also look over a letter of support for the proposed academy from the Foster City High School Foundation Inc.

The Magnolia organization supports "many of the things we support - science, math, small classes and project-based learning," said Phyllis Moore, president of the local group.

The academy would eventually help address a projected rise in the student population, Moore said.

The San Mateo-Foster City School District is bracing for an enrollment increase of nearly 170 students this fall.

Given "the possibility of even more children coming in, this would be an opportune time to look at increasing some classroom space in Foster City," Moore said.