BVP board keeps PPP loan; officials blast move

BVP board keeps PPP loan; officials blast move

CUMBERLAND – Officials this week criticized Monday’s decision by the board of directors at Blackstone Valley Prep Mayoral Academy to keep a Paycheck Protection Program loan of more than $4 million based on “economic uncertainty.”

One of those officials was Mayor Jeffrey Mutter, who is on the board for BVP and was one of three members, along with the school’s founder, former mayor and current Lt. Gov. Daniel McKee, and Lincoln Town Administrator Joseph Almond to vote in favor of sending the money back.

McKee and Mutter were part of a unanimous vote at an April 4 meeting to apply for a PPP loan of up to $10 million through the CARES Act, a move Mutter this week said was “almost perfunctory” in getting the school in line for possible available aid.

At that April meeting, he said, there was a brief mention that one of the sending districts hadn’t made its third quarter payment. He said he learned afterward that the sending district was Cumberland. A late payment such as that one should never have been used as part of the case to say that BVP’s finances are uncertain, he said, adding that the town was dealing with its biggest tax anticipation note ever at the time but was obligated to pay no matter what.

“We were worried about cash flow,” he said.

BVP is not facing a revenue shortfall and has not seen layoffs, said Mutter, and there are no proposed reductions.

“That’s why I supported giving the money back,” he said of Monday’s vote.

He added that he couldn’t see the charter school taking advantage of a program that some closed businesses in town wouldn’t be able to take advantage of. Also problematic, said Mutter, is the fact that Cumberland schools are slated to lose $1 million in state aid this year, with 25 to 35 people potentially losing their jobs, while BVP was projected to get an increase.

“There’s no doubt that the optics are terrible,” he said. “There’s no data to suggest that they need the money.”

BVP isn’t looking at using reserves to fill budget gaps, isn’t considering using fund balance, isn’t looking at losing a lot of positions, and isn’t worried about losing a big chunk of state aid, he said. If any of those were the case, he could potentially see allowing this loan to go through. Monday was the deadline for the board to vote on whether to keep the loan.

In a statement Tuesday, Bridget Gadoury, external affairs officer at BVP, said that the charter school, “like every organization, especially small businesses and nonprofit organizations, faces extraordinary economic uncertainty during these times.”

When the PPP was announced, BVP pursued the loan program following all guidelines and regulations, she said. The board voted on April 4 to apply, and the application was subsequently approved by the Small Business Administration.

“BVP’s Board reconvened on May 18, affirming the application by voting to keep the loan,” she said.

With the PPP loan, borrowers are eligible to have most or all of the money borrowed forgiven if they meet certain parameters.

Gadoury said, “Rhode Island schools and municipalities are going to be facing enormous economic hardship in the coming months. As a state, it is essential that we bring in as much federal support as possible for our students’ benefit.”

Gadoury offered three key considerations on this situation:

• Any federal assistance to Rhode Island benefits all of Rhode Island. This loan is protecting Rhode Island jobs and investing in the Rhode Island community;

• The state of Rhode Island is evaluating how to use $1.25 billion already allocated to the state, and the school expects that some of that funding will be to support education in Rhode Island. “BVP would never expect any school system to give back much-needed funding,” said the school.

• “BVP is aware that Congress is currently debating additional stimulus packages that could include money for support of states, cities, towns, and municipalities. Clearly, if that comes to fruition, some of that funding could very well support public education. Again, BVP would never expect Rhode Island or any city or town to give back much-needed federal dollars.”

She added, “All federal funding that comes to Rhode Island, no matter the program, benefits the entire state. Ultimately, BVP remains hopeful that the state will obtain additional federal dollars to support public education in these gravely uncertain times.”

Almond made the motion Monday to send the money back, and Mutter seconded it.

Almond said the loan matter came up originally on the premise that the school could run out of money. He said he had reservations, not being sure that the school qualifies, but board members were told then that the money could always be sent back.

Based on the limited information available at the time, said Almond, he agreed to move forward with the application, but the guidance has since evolved to add more clarity. The short explanation, he said, is that officials can no longer testify that the application is the same based on need. It’s now based on potential future needs, but “all what-ifs,” he said, which is “not the purpose of this loan,” but instead it should be an immediate need that needs to be resolved now.

BVP’s budget is currently slightly in the black, he said.

“I’m the sort of person that if I sense caution or even an optic of how something looks, it concerns me,” he said. “There’s a border between legal and optics, so I don’t think anyone did anything illegal. At the time, they applied, it was perfectly legitimate.”

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Mutter said he feels strongly that if BVP wants to be considered a public school, as its leaders have repeatedly said, they “can’t apply for these funds. If you want to be recognized as public, then you’re a public school,” and it’s not appropriate to fall back on nonprofit status to obtain government money meant for others.

Jeremy Chiappetta, CEO at BVP, said it’s “the optics of preventing teacher and staff layoffs when we had money to protect Rhode Island jobs” that he’s focused on. The matter of the cash on hand seems irrelevant given the unknowns of the upcoming state budget process.

“Giving the money back doesn’t help Cumberland,” he said.

He also answered Mutter’s points on other struggling businesses and the local school district.

“We remain optimistic that the Rhode Island state education system will receive additional federal support, and when that happens we won’t be asking any community to return federal funding as every Rhode Island job matters now.”

Mutter said Cumberland, which has made great strides in achievement, is seeing nearly $3.5 million in follow-the-student money pass through to BVP each year under the current education formula. Now, “because of a funding formula that thinks Cumberland is more affluent because of a revaluation,” the top-performing district is losing $1 million in aid.

“There’s no way that’s right,” he said.

School Committee Chairman Paul DiModica said the fact that “BVP would even attempt this stunt” is “outrageous.” As sending districts in Cumberland, Lincoln, Central Falls and Pawtucket continue to fund the school at huge levels, he said, “BVP is burning the candle at both ends. Give the money back,” he said.

Former Cumberland School Committee member Bill Dennen noted that guidance from the SBA is that nonprofit hospitals do not qualify for PPP loans if they receive more than half of their funding from public sources. There is no guidance specific to charter schools yet, he said.

Almond said that the hospital ruling happened since the original application, and he relied on that new information in making his vote Monday. BVP’s public funding is probably close to 90 percent, he said.


As a Cumberland taxpayer I demand that BVP return that money with the hpoes that it gets redistibuted to small businesses that have had to close. This story clearly states that no one has lost jobs and this is for the "future." No, wrong. perhaps the US Attorney for RI should look at this to se if it is fraud.
If the money is not returned I ask Mayor Mutter to keep Cumberland's share of its contribution for this year.
What a moral lesson for BVP stduents, hey let's take the money even though we don't need it and others do.

When asked to weigh in on Cumberland’s RICAS success in December of 2018 Mr. Chiapetta told the Providence Journal that Cumberland’s success shows that it’s “not how much you spend, but how you spend it.” Or don’t spend it apparently. BVP took money from the Paycheck Protection Program and is not using it to protect paychecks. The program isn't for the future Mr. Chiapetta, it is for today. It is to protect jobs that are under direct threat today, not those which might be under threat tomorrow.

“Giving the money back doesn’t help Cumberland.” That’s an audacious statement. I’m sure some businesses in town would disagree. We can definitively say that having it sit in your bank account isn’t helping anyone in Cumberland, or anywhere else. If you “remain optimistic that the RI state education system will receive additional federal support” then why do you need $4M of federal paycheck protection funds sitting in your bank account today? Remember, It’s not much you spend, but how you spend it.

The officials at BVP should be ashamed of themselves. In a time where people have been out of work, struggling to pay their bills, here is an entity that did not need the money, and refuses to give it back? Corporations like CVS have returned the money. As an act of good will to small businesses who are in desperation, do the right thing and give the money back. Think of others - remember the adage, "We are in this together".