TOWER — A financially struggling charter school in Mt. Iron, the East Range Academy of Arts and Science, or ERATS, will be incorporated into Vermilion Country School, effective July 1. The existing school will become a second campus of VCS and will be located in ERATS’ current building in Mt. Iron. VCS will continue to operate its original site in Tower.
The merger is contingent on final approval by the school’s authorizer and state Department of Education, which are charged with ensuring the legal steps for the merger have been properly followed.
ERATS lost its contract to operate the school, effective June 30, for failing to meet the financial, governance, and academic goals in their contract with their authorizer, the nonprofit organization Osprey Wilds. At that point, the school reached out to VCS to inquire about a merger, which would preserve academic options for their students who were looking for an alternative educational program in the Virginia-Mt. Iron area.
The Vermilion Country School Board, which is also authorized by Osprey Wilds, voted to approve the merger at a special meeting on May 14. The ERATS school board voted to approve the merger on May 19.
Highland Bank, which owns the mortgage on the school building constructed in 2022, has approved new lease terms, which are based on estimated enrollment and would be covered through charter school lease aid payments. VCS will not be assuming liability for the mortgage on the Mt. Iron site, and VCS is entering into a three-year lease for approximately half the building space.
VCS board members have been working on the possible merger since February. Both schools serve a similar student population, and VCS now operates a hybrid educational program for students needing a more personalized high school experience, which is expected to benefit many of the current students at ERATS.
The new campus will operate as an independent site but under the academic and governance guidelines in VCS’s contract with their authorizer. The current VCS school board will be overseeing both sites. The current staff at ERATS have been given the opportunity to apply for positions at the new VCS Mt. Iron campus, and VCS expects to have hiring decisions for the new site in place by the end of June.
The merger presents both opportunities and possible risks for VCS.
While VCS will inherit all the physical assets at the Mt. Iron campus, any financial reserves from ERATS will be going to Highland Bank to help pay off the mortgage on the building.
“There will be a short-term impact on our fund balance,” said VCS Board Chair Jodi Summit, “because VCS’s reserves, which are currently close to 30 percent of revenue, a healthy amount, will now be balanced against a much larger amount of revenue.”
But as VCS Director Sam O’Brien explained to the board, increasing the school’s total population from the current 72 students to the estimate of over 150, means the school should be able to build back a healthy fund balance within the first three to four years after the merger.
The VCS board had completed a risk analysis process, considering both short-term and long-term benefits and challenges, and determined the merger was a benefit for VCS, as well as the students being served by ERATS.
The VCS director and financial manager also were able to review all of ERATS financials, and they determined that VCS would be able to operate the site while growing financial reserves. VCS also hired an attorney to review the legal documents and the lease for the building.
O’Brien, who has worked at other charter schools as well as being a charter school finance director, said having enrollment of at least 150 students means better long-term financial stability.
The board determined that short-term benefits include more physical assets and curriculum, more opportunities for professional development for the teaching staff, and more opportunity for teaching staff to collaborate. Long-term benefits include expanding academic programming and options, the ability to hire more teaching specialists who can serve both sites, and a greater chance of maintaining the academic program more than 10 years in the future. Risks considered included the financial exposure of VCS, how the merger would affect current students at the Tower location, and whether or not the school would be able to adequately staff the new campus. The programming at the Tower campus will not be affected by the merger, though some students who live closer to the Mt. Iron campus would have the option of enrolling there, instead of in Tower.
VCS currently serves grades 7-12, and ERATS serves grades 9-12. This will not change next year, but VCS can look at expanding grades at ERATS in the future, though this will require permission from their authorizer and the state.
“There was no backup plan for ERATS students,” O’Brien said. “And these students do deserve an education.” ERATS families have completed surveys and most seem interested in continuing their high school education under the VCS umbrella.
VCS is currently able to offer staff salaries and benefits comparable to neighboring public schools. ERATS had a lower wage structure and did not offer staff health insurance or other benefits. O’Brien said he is confident the school will be able to hire enough staff for the second campus, as well as filling a few open spots at the Tower campus. Employment opportunities are available online at vermilioncountry.org.
Both schools serve students who have not succeeded in a traditional high school environment, as well as students wishing for a more flexible or independent academic program. VCS also offers a hybrid/online program for senior high students who need a more flexible schedule due to work, health, or family circumstances. Charter schools are also able to provide more support for students who require special education services, because charter schools receive a higher reimbursement rate than regular public schools for those services.
VCS board members were expected to sign the legal documents required for the merger at their May 21 board meeting. Osprey Wilds had provided detailed guidelines to VCS to oversee the merger process, which includes almost a dozen discrete steps.