re: Runnels School Closing - Not Just High School

Interesting findings thanks for that.

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Keep in mind that while they may be made whole on their property losses, they likely incurred losses of revenue and other operating expenses that may not be covered.

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My understanding is Runnels school had flood insurance for the buildings but not for the contents. There were a lot of losses of books, AV equipment, instruments, computers, etc but it is my understanding lots of private parties stepped up with donations.

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They owed about 1.3 million to related parties and about 2.8 million to unrelated parties. Most of the related parties debt is to "Lynn K. Runnels and Runnels Properties". So someone related was absolutely propping up the school.

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Lynn K Runnels is Dr. Kelly Runnels himself. I have no idea if he has an LLC set up or what to lease the property back to the school or loan the school money. Mr. Runnels claim all along is they have been operating in the red the past 10 years and he has been personally making up the difference all this time. His inability to continue doing so is what led to the initial "plea for help" (a 40% HS tuition increase) which claimed all of the issues were a lack of enrollment and high cost per student in the HS due to AP programs and having to hire certified teachers for HS. "The HS costs $2MM a year to run by itself" was a quote I remember. Which, back then, I was like you have 232 students at an average of $10k a piece so what's the problem? Well, not nearly all of them were paying students...

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7) One last thing, and this may be the most telling of all. They had 2.85M of deferred revenue. My initial assumption is that represents those who prepay tuition in full.

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This is a reasonable number and with roughly 50% of 500-700 people paying 8-16k each you get to roughly those numbers. This explains how far behind they are as of today. Not to mention people who have paid 2-3 years in advance or people who have paid for all of HS in advance (yes there are some). There should be buckets of deferred income for 2021 and beyond. This is a classic example of robbing Peter to pay Paul...

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The "good" news is that, especially if the balance of FEMA money came in, they should be able to sell the buildings and repay everyone their tuition prepayments.

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Yeah I'm not sure what is owed and by whom and when. In order to sell you have to have a buyer and there is a limited market for a property like this. I do find it interesting that the WBRZ story reported the plan is to sell the school in about 2 years. Not sure what happens in two years time other than someone has to pay to keep up the place with no students inside.

Another poster said they would love to see the financials. Depending on how good or bad this ends for the creditors (I'll put the people like myself that prepaid tuition in that category) the financials may well end up as part of public record soon enough in legal proceedings.

I've seen the Sheriff pickup GC's who have welched on progress payments as part of new construction for a few hundred K. The 2+ million that is spent and gone and as yet outstanding is a serious felony size number.

While I'm not happy to be one of the prepaid tuition people who may be SOL on their money, I'm also glad I'm not Kelly Runnels or one of the members of the board.

No cafeteria at runnels

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To do that would destroy the identity of the school he built.

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LOL..what is the identity now ?

If 15% would have left with the changes Brandao was going to implement we wouldn’t be here today. We would have had teachers and staff paying at least a portion of their kids tuition. That alone would have taken care of a lot of this problem. There also would have been new families who would have come in the following couple years because of the leadership of Dr Brandao. He has a stellar reputation everywhere he Hs ever been except for a handful of disgruntled/scared folks at Runnels.

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To do that would destroy the identity of the school he built.

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Well I guess Runnels really proved his point didn’t he. I guess having no school is better than having one run like a business?

The failure of Runnels is just like how all all socialist experiments end. You always run out of other people’s money to spend. There weren’t enough paying people for all of the people who got the free stuff.

I guess their idea of a budget was to look at the general account and see if the balance was positive.

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The failure of Runnels is just like how all all socialist experiments end. You always run out of other people’s money to spend. There weren’t enough paying people for all of the people who got the free stuff.

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but I don’t think the Runnels wanted gov grants (regardless of their accounting mess) considering they were running a private school. Why would someone willingly invite the gov into their private school?

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You keep saying that... yet... the school was taking government grants for operating expenses to the tune of 60K - 80K per year (granted, that's not much compared to a public school, but it is still "something").

Not to mention, he took government money for rebuilding.

Also, the state still has to grant approval to offer state-sanctioned diplomas.

"Private" schools aren't as private as you think they are.

Update

Prepaid tuition families have been sent forms with a release to fill out and mail to get refunds.

It says the refund will take 3 weeks.