Categorized | Education

Hualalai Academy secure through end of academic year

Hawaii 24/7 Staff

Hualalai Academy parents and students were shaken Friday when they received a message from the board of directors chairman detailing financial troubles.

However, a second message issued Sunday by Head of School John Colson calmed concerns that the private K-12 school may have close its doors before the end of the academic year.

According to Colson’s message, acquired by Hawaii 24/7 from a parent, funds secured over the weekend will allow the school to remain open at least through the end of the academic year.

Following are the two messages in their entirety:

Sunday, Jan. 19, 2014

Aloha Hualalai Academy Ohana:

Now that the sting of the Board of Directors’ announcement has settled a bit, I write as Head of School to clarify the announcement and the progress we have made to date.

First, I ask that you look at the situation with an open mind and realize that there is no one to blame for the financial collapse of the school. Over the years, the student enrollment has dropped substantially from a high of 235 to today’s enrollment of 112.

This decline has led to staffing adjustments and annual borrowing from the bank to be able to continue offering a quality independent school program. The collective nature of the annual borrowing over the years has reached the point where lenders have no interest in working with us due to our lack of cash flow.

Consequently, we have tried to turn over as many rocks as we could to see if some lender would work with us. Our final option told us “No” on the 15th of January. The Board of Directors met on the 16th of January and the announcement was made on the 17th to faculty and parents.

The announcement was made in mid-January to give families time to apply to other independent schools that have an application deadline of January 31, 2014 should they so desire.

Our immediate task is to acquire a bridge loan that will allow us to finish the school year in total. I am pleased to tell you that as soon as the financial hardship was made public, several members of the HA Ohana stepped up and either offered cash contributions or bridge loans to ensure we serve the students correctly.

More specifically, we have received over $25,000 in direct gifts and two bridge loans totally $300,000. With this level of support already in hand, we will most definitely be able to finish the year as currently calendared.

Once that is complete, we are committed to looking for that magical gift that would allow us to eliminate the collective debt and cancel the closure of the school. In the last 24 hours we have received contact information for potential donors who might help a special school like HA. I have to tell you it is a long shot but we are committed to trying as it is for the benefit of the students.

For me, this has been very hard as I care deeply about each student and want what is best for them. I would not have come to Hualalai Academy if I did not believe I could help build the school into the finest independent school in Kona. That being said, circumstances have dictated this action for now and with some good old fashioned luck, we may just be able to pull the rabbit out of the hat.

Please join me in doing your best to assist the students as they work to have a highly successful second semester. Tomorrow we celebrate the life and teachings of Dr. Martin Luther King. His teachings taught us to work together and to do so with a spirit of aloha and service to others. Anger and blame will not change anything but positive action has a chance.

Come Tuesday, we need to support the students and faculty in the most appropriate fashion possible. Your cooperation and support is necessary and will be beneficial for all.

If you have questions, please contact me at jcolson@hualalai.org at your convenience. If I don’t have the answer to your question, I will surely get you an answer.

E malama pono,
John (Colson)

Jan. 17, 2014

Dear Hualalai Academy Ohana,

It is with a heavy and sad heart I must share with you that Hualalai Academy must close its doors at the conclusion of this academic year or sooner if we are unable to secure additional funding. We are turning to you, the ohana, to help the school get through this school year.

Before I begin and share with you the entire series of events, I want you to know that as parents of two children who attend this amazing school, my wife and I are devastated. The faculty and Board of Directors have done everything we can and at this point we do not see a miracle on the horizon.

John Colson, the Board of Directors and I have been working on our financial challenge since July 1st of this school year. To begin, please keep in mind that John left a wonderful job at HPA to join us. He believed this school was special and that it could become the premier independent school in Kona.

First, we identified the school needed to cut expenses and reduce overhead. John did this immediately and put the school in a position to be as close to a balanced budget as possible.

Furthermore, the board made the difficult decision of conducting a teach-out for the high school and suspending operation at the end of May 2014. Both of these actions set up our ability to stabilize the school.

Next, we secured funding to fill gaps created by a smaller than usual enrollment to complete the first half of the school year. This temporary loan assisted the school to remain functional, and it allowed John and I the necessary time to meet with the bank and work on our debt restructuring. While the school owns the land, it has also incurred significant debt over the years.

The school campus, both land and structures, has a significantly higher value in comparison to our debt; therefore, based on this, we created a three to five year business plan to improve the school. As a part of the plan, we met with the bank to restructure the loans and refinance the land.

Based on the land value and our plan, we were very confident the bank would approve the plan and assist us with a new financial package. We have been with this bank since the foundation of our school and have a good working relationship with them.

So, with the land asset, John running the school, and our business plan, the meeting went extremely well. The bank gave us positive indications and we were asked to wait. Because of this response, we only pursued one other avenue which was a possible sale of the land to finance our operations. After waiting for two months, we were informed by the bank that not only would they NOT refinance the land, they would not assist us in any other fashion.

During the two month wait, we also met with all of the viable banks in Hawaii to no avail. Additionally, we worked with an investment company from the mainland, explored the option of becoming a charter school with authorities and we have looked for a buyer to purchase the land all with the legitimate expectation that we could stay open and continue to deliver the amazing Hualalai Academy Experience.

As of January 16, with no other viable options for the school, we felt we must disclose our financial situation to you. Thus, we must now work to find transitional funding to complete this school year and assist families as they begin to find other educational options for the 2014-2015 school year. To put our financial situation into perspective, the school needs to raise approximately $3000 per student to make it through the remainder of the 2013-2014 school year.

On behalf of the full board, I thank you for your support of Hualalai Academy and being a part of our ohana. We are now doing everything we can to complete this year, and we need your support and help. To be clear, without additional funding the school year may have to be shortened.

Should you have questions, please contact John at your convenience.

With a heavy heart,
Dr. Matt James
Board of Directors Chairman
Hualalai Academy

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