To the editor:
In a May 24 LCN article (“Lincoln Academy expects dip in boarding enrollment,” page 1), Lincoln Academy claimed that the school’s boarding program is highly profitable, and that any financial difficulties have been caused by unpredictable changes in the boarding market. Neither is true.
Lincoln’s financial difficulties have not come about overnight. They are the result of poor choices and financial mismanagement on the part of the Lincoln Academy trustees and school administration dating back to the original decision to build an expensive dorm. Starting a boarding program to address declining local enrollment was a reasonable response; the problem was choosing the most costly and risky approach by going into significant debt to build a large dorm.
Struggling to meet enrollment and financial projections in recent years, the trustees consistently chose to ignore the warning signs. They made matters worse by allowing the school administration to overspend and expand with little accountability to this community, the school’s mission, or to the financial health of Lincoln Academy. The fact that Lincoln is now having to cut three administrative positions, reduce staff capacity in the mathematics department, and consider eliminating classes with small enrollments is not only due to next year’s decline in boarding enrollment. It is due to multiple years of mismanagement.
The current situation at Lincoln stands in sharp contrast to the one depicted by board President Chrissy Wajer in her June 18, 2017 statement:
“Lincoln Academy’s financial outlook is strong.” She then went on to speculate on how LA will use the years of budget surplus funds she was anticipating.
From the start of the boarding program, the Lincoln Academy trustees and administration have never fully accounted for its costs. They failed to include a share of the normal costs of running a school – administration, custodial, facilities, transportation, athletics, etc. Instead, they only included direct expenses of the boarding program and the cost of a handful of extra teachers for the incremental students.
The school administration claims that the boarding program has contributed a cumulative three-year “surplus” of $2.5 million to Lincoln Academy. If the boarding program paid the same tuition that local towns pay to educate our children, that three-year surplus is less than $500,000. While the school has benefited from this net income, remember that this represents an annual return of less than $170,000 on the $7 million dorm debt.
Regarding the coming year, LA interim Head of School Nancy Starmer is quoted in the LCN article as saying that the projected 75 boarding students for next year will “net” the school $500,000. Bear in mind, this does not include a proportional share of normal education costs for the boarding students either. When these costs are included, then the effective tuition payment for a boarding student is an amount 10 percent less than the tuition paid by local students, leaving no net surplus.
The irony is that the LA trustees and administration have long derided local students as “costing the school money,” while the boarding program is held up as a financial success. LA has frequently pointed out that the school spends more per student than the state-mandated tuition paid by the local towns. As reported in the LCN on Nov. 15, 2017 (“LA asks AOS 93 towns for additional financial support”), a group of LA board members attended a Great Salt Bay School Committee meeting to ask local towns to contribute additional funds beyond the state-mandated tuition rate. Trustee Karen Moran was quoted as saying the state-mandated tuition is “woefully inadequate compared to the actual cost” of educating students.
Now the trustees appear to be creating a new narrative for themselves: that future financial challenges should be expected, not because of poor decision-making in the past, but because of declining boarding-student enrollment.
The fact that competition is rising in the world of boarding schools has been clear for years, long before the LA program started. As the number of domestic boarding students has declined, traditional boarding schools started competing in the international market that LA was targeting. Competition for foreign boarding students became even more fierce when the Chinese boarding market started to decline, following the path of other countries.
These concerns about competition, and accounting for all costs of the boarding program, were brought to the LA trustees’ attention before they voted to put the school into substantial debt to build the dorm, yet they chose to ignore them. Even in the face of these growing concerns, the trustees continued to back overly optimistic budget projections for the boarding program in order to justify overspending on the part of the administration.
In a statement published with the May 24 LCN article, interim Head of School Nancy Starmer says: “Thanks to a couple of new planning tools Lincoln Academy is now able to be more proactive …” This implies that the LA trustees have not had an analysis of the costs of the boarding program. That would be a shocking admission if true, which it is not. The board of trustees has had the tools to understand the finances all along; they have simply chosen to ignore anything that challenges their preconceived notions.
The school’s auditors have flagged the deteriorating finances year after year in a letter accompanying the audit report. The trustees ignored these warnings.
When I was treasurer of Lincoln Academy, I worked closely with school Chief Financial Officer Helen Telfer to create new tools to get the trustees and administration to understand how the choices made by the board were putting the school in fiscal jeopardy. These new tools were dismissed.
Finally, the school submitted its finances to a National Association of Independent Schools analysis, which brought up concerns. Again, the trustees ignored this warning.
While it is somewhat encouraging that the school seems to be finally looking at its finances, there is, as yet, no evidence that they have learned from their past, or even understand that their choices have put the school in jeopardy. These same people continue to make decisions for Lincoln Academy’s future.
For over 200 years, Lincoln Academy has been an integral part of our community and a critical institution in our town. In spite of the school leadership and the loss of many good faculty and staff over the past few years, a talented group of dedicated faculty continues to educate and inspire our children. It is for the sake of our children, faculty, and greater community that I can’t stand by and let this misinformation about LA finances go unchallenged. The LA Board of Trustees has failed in their fiduciary duty. It is time to bring accountability to Lincoln Academy, which can only be achieved by changing the rules by which the board of trustees governs itself by having a majority of the trustees elected by the towns of AOS 93.
Rob Nelson
Newcastle
