Town Council asks AG for review of Blackstone Valley Prep loan

Town Council asks AG for review of Blackstone Valley Prep loan

CUMBERLAND – The Cumberland Town Council, in a resolution approved last week, is opposing Blackstone Valley Prep’s action to accept a $4 million Paycheck Protection Program loan and asking the Office of the Attorney General to review the circumstances surrounding the loan and to take action if required.

Councilor Stephanie Gemski said what BVP’s executive board did to take a loan designed for small businesses was “wrong and downright shameful,” noting that the mayoral academies have been unaffected by the impacts of the pandemic in the form of layoffs or program cuts.

Many have applied and did not receive a PPP loan, she said, and accepting a loan designed to keep people working was a “flagrant disregard and slap in the face” to those who didn’t receive it.

The council voted 5-2 to approve the resolution, with Council President Craig Dwyer and Councilor Mike Kinch voting no. Kinch indicated significant agreement with Gemski on the inappropriateness of accepting the loan, calling it a “complete mistake” and saying the “PR was horrible,” though he questioned whether the matter should be sent to the AG.

Dwyer, meanwhile, ripped into his colleagues prior to the vote on the resolution, noting in response to Gemski’s assertion that the PPP funding has run out that there’s still significant funding left. Dwyer said the resolution would have been “a lot softer” without the part asking for a review by the AG. Though Gemski said BVP needs to decide whether it’s a business or nonprofit, Dwyer said he thinks the school could be covered under both definitions.

Dwyer brought up the issue of race, saying the majority of the students at BVP, including more than 400 from Cumberland, many from his and Gemski’s districts, are in minority populations. While the makeup of the school is largely minority, here were “seven councilors of Caucasian descent” saying to those students, “you know what, you guys don’t deserve this.”

“I’m sorry, I just can’t take part in that,” said Dwyer. Especially with what’s going on with race relations in the country right now, he said he’s “not in favor of going for anything that would harm any student.”

Gemski disagreed that this has anything to do with race, saying it’s all about a school wanting to be classified as a business instead of a nonprofit. She said this situation is wrong, and it’s very clear that it’s wrong.

Councilor Bob Shaw said he was uncomfortable with race being brought up when the schools were set up to service students based on free and reduced lunch. Cumberland schools will continue to give millions of dollars to BVP to keep it going for local children, he said.

Councilor Lisa Beaulieu said she found Dwyer’s remarks “pretty offensive and disappointing,” saying this clearly isn’t an attack on children but criticism of adults for accepting funds they didn’t need. She said mayors on BVP’s board who represent the students in the school voted to send the money back because there was no real loss to the community.

Mayor Jeffrey Mutter, who originally voted to return the money, said his vote had nothing to do with race, saying all of those on the board are there to support excellence in education.

Gemski thanked Mutter for voting against keeping the money.

Kinch said officials should talk to the federal delegation about getting changes made on the criteria for the PPP loan. There could be another spike in the virus and a whole new round of loan funding, he said, and schools should not benefit like they’re businesses. This was a “large misstep” by BVP, he said.

BVP CEO Jeremy Chiappetta said this week that it’s important to note that Forbes stated that there is still $120 billion remaining in PPP funding, meaning the school didn’t take any money from local businesses.

“BVP brought federal dollars to Rhode Island to protect Rhode Island jobs,” he said. “Almost all of our 300 staff members live in Rhode Island, with nearly a third living in our sending districts of Central Falls, Cumberland, Lincoln, and Pawtucket.”

In a statement last month, a BVP spokeswoman cited economic hardship and financial uncertainty as reasons for pursuing the loan, saying Rhode Island schools and communities are going to be facing enormous economic hardships in the coming months and it’s essential to bring in as many federal dollars as possible. Bridget Gadoury also noted how more federal money was expected to come to municipalities in the next round of funding.

Councilor Scott Schmitt gave a succinct summation of why he was voting for last week’s resolution, saying what BVP’s board did “stinks” and that “this is not what this program was made for.”

Shaw agreed with Gemski that if “this goes nowhere it goes nowhere,” but he felt an obligation to at least raise the concern. He said he also thought it was important to send the matter to the AG’s office. It’s nothing personal against BVP, he said, but leaders of the school made a bad choice that was ethically questionable.

In a June 16 letter to General Assembly leaders from Rhode Island charter school leaders, including Chiappetta, the group took issue with a provision in the state’s supplemental budget “to claw back” federal PPP funding from charter schools.

“First and foremost, we believe we did the right thing by applying for these funds,” they said. “We all believed we had a fiscal responsibility to protect our students, our teachers and Rhode Island jobs during these unprecedented times.

“At this moment, we also believe we have done the right thing for the state of Rhode Island’s fiscal woes as we have accessed federal funding that will allow you to plug the state’s deficit,” they added. “We are grateful we made the decision not to return the money like some organizations did, as it would have forced you to make greater cuts elsewhere, impacting other Rhode Island organizations.”

The group noted that they don’t know yet whether the PPP funding will end up being a grant or a loan, and they may not know for several months.


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“We did the right thing by our students, our teachers and the state; in return all we ask is that we be held revenue neutral and treated equitably from a funding standpoint going forward,” they said. “There are so many unknowns right now with regard to future federal stimulus money. We ask that you recognize these unknowns and that there are potential scenarios where additional federal monies could come to Rhode Island to support cities and towns that we may not be able to access.

“Again, we are only seeking fair and equitable funding and do not want to be fiscally punished for trying to protect Rhode Island jobs. We are certainly happy to answer any questions you may have and respectfully ask for your consideration of our position.

Comments

If BVP is allowed to keep the 4 million dollars, the school should return monies paid by the sending districts back to the districts. Each district should receive a percentage of return based on what they pay per pupil to attend.

BVP taking this money is wrong and violates the spirit and intent of the PPP funding. I applaud our Town leadership for pursuing this, and if BVP gets to keep the funds, then the above Post is what we should do. As I said in a previous post, fine moral lesson for the BVP students.