Charter school to research federal loan relating to COVID-19 pandemic

By Chris Mannara
Staff Writer

Following a special meeting on April 5, Pagosa Peak Open School (PPOS) will wait to apply for a governmental loan pertaining to the COVID-19 pandemic.

The loan, entitled the Paycheck Protection Plan (PPP) is a loan from the U.S. Small Business Administration (SBA) that helps businesses keep their workforce employed during the COVID-19 pandemic.

The PPP, according to the SBA’s website, is for any small business that employs less than 500 employees, private nonprofits or 501(c)(19) veterans organizations that have been affected by COVID-19.

This loan would be fully forgiven if funds are used for things such as: payroll, interest on mortgages, rent and utilities, according to the SBA’s website.

However, at least 75 percent of the forgiven amount must be used for payroll, according to the SBA’s website.

Payments on the PPP loan would be deferred for six months, the SBA’s website notes.

During the meeting on April 5, PPOS School Director Angela Crossland explained that PPP is just one of many ways the federal government is trying to assist.

Along with the PPP loan, PPOS could also pursue two other financial relief funds under the Coronavirus Aid, Relief and Economic Security (CARES) Act, she explained.

 PPOS could qualify for the Emergency Education Relief Fund, Crossland noted.

This is a program that features $3 billion given out to each state’s governor, Crossland described.

“The governors can decide for grants, for schools, higher education, emergency child care facilities all can get those,” she said. “It would be up to our governor to decide which way he is going to divvy up our money.”

Another method of relief is the Education Stabilization Fund, which features $14.5 billion, Crossland explained.

“This will actually be given out to the schools through Title 1 and we are a Title 1 school and we qualify for some of those funds when they come down,” she said.

The PPP loan would give out $359 billion to small businesses, Crossland noted.

“I think as a charter school we are a 501(c)(3). We qualify for the payroll protection plan act and it will cover two-and-a-half months of payroll,” Crossland said. “It starts as a loan out to us at about 1 percent interest and the first payment wouldn’t be due for 60 days.”

However, PPOS may not qualify for the PPP loan because the school could be classified as a government entity and not a nonprofit, Crossland explained.

“It really is unknown, but if we were going to take that risk, we should apply early,” she said.

If PPOS were to qualify for the PPP, the school might be giving up the other two funds, Crossland noted.

“We might be giving up that possibility and I’d like some time to investigate that,” she said.

Applying for this funding source as a nonprofit but also applying for another loan, for example a USDA loan, as a school could “interrupt” other funding sources PPOS is looking at, she added. 

“My biggest concern is that we’re giving up other funding sources by taking that funding source,” she said.

PPOS board member Mark Weiler explained that he believed the school should apply.

“If indeed it impinges on any other federal government program, it’s not designed to do that,” Weiler said. “It’s designed specifically to ensure continued employment in small enterprises.”

Weiler suggested that PPOS apply for the PPP loan and allow the lending institutions to make the determination as to whether or not PPOS qualifies for the funds.

Later in the meeting, PPOS board member Bill Hudson explained that there are about 30 million businesses that could qualify for the PPP loan.

“I think this program was established to help small businesses that are not able to pay their employees because of being shut down or because of economic damage that’s been done by the various public health policies that have been passed in the various states,” Hudson said. 

According to Hudson, PPOS is not in the position where it has been shut down as classes are still in session online.

PPOS also still has per pupil revenue coming in, he noted.

“I don’t think this program was intended to help a government entity and I think we’re a government entity,” Hudson said. “I’m hesitant to rush into an application that could damage our chances to get our USDA loan, that could damage our chances to get these other funds that were meant specifically for schools like ours.”

Following further discussion, Hudson made a motion that Weiler, Crossland and PPOS Business Manager Chenni Hammon do some research on the PPP loan program and discuss the item again at the board’s next meeting on April 13.

That motion passed unanimously by the PPOS board.

In other business

The PPOS board also approved a resolution at the April 5 meeting that allows for electronic participation in school board meetings.

chris@pagosasun.com

This story was posted on April 9, 2020.