The September Board meeting was heavy with finance!
The Board reviewed the 2021-22 Year End Close Out, which will be finalized by our outside financial auditor. We ended the year almost exactly as anticipated, with a deficit that was made up for by our PPP loan forgiveness and a planned Endowment draw. Over the years, we have followed our Strategic Plan 2017-2021 and worked to support more economic diversity among our families with Indexed Tuition as well as increased our compensation and benefits for our strong and deserving staff. The increased expenses of COVID (facilities upgrades, additional staff, additional supplies and utilities) further increased our reliance on the endowment and grants (totalling over $400,000 for last year). We are grateful to have these funds to support our families and staff.
Review the 2022-23 Revised Forecast
The Board looked over the projections for this current year. We were expecting to run at a similar deficit. While this is somewhat expected and intentional as we work to implement the past Strategic Plan by supporting more families with Indexed Tuition and paying our staff a better wage, we worried that the increased expense and the resulting annual deficit would not be sustainable. With the downturn in the stock market, our endowment has taken a big hit and without additional funding, we were going to be in a tough place. Thankfully, our Business Manager, Barb Beckwith, had pursued the Employee Retention Tax Credit program.
Employee Retention Tax Credit (ERTC)
This federal program has the goal of providing a tax credit to businesses who were able to keep people employed and stay in business during the pandemic despite the government mandated restrictions. This applies directly to Hilltop, as we did have a disruption in programs and had to limit some services due to the government-set COVID restrictions.
The ERTC program provided a calculation for how much a business would qualify for based on total number of employees, reduced if you had received a PPP loan, increased if you provided healthcare for employees. Based on these criteria, we submitted our calculations to our payroll firm, Paychex. We paid Paychex $7,000 to analyze our data and amend the necessary tax returns, hoping we would qualify for at least $100,000 in tax credits. We waited for over 4 months before hearing anything and much to our astonishment and delight, ended up getting much more: $765,000!
We are thrilled to have this additional influx of money to support families, staff, and students now and into the future. With the ERTC funds, our priorities are, support of staff, support of our mission and strategic priorities, including Indexed Tuition, and sustainability of the school into the future. Specifically, we will be able to:
- Cover the projected deficit of over $300,000 without having to take a draw from the endowment.
- Give our devoted staff, who have continued to serve our students and families through these difficult years, a significant and impactful “retention bonus” for their years of continued service and persistence through a particularly difficult time in the teaching profession.
- Support continued Montessori professional development by providing transportation, lodging, and food for all staff to attend the annual American Montessori Society conference held in Boston this coming March.
- Invest the half that remains into our endowment, which has lost more than $500,000 in the past year.
Our school is fortunate and grateful to have had Charlie and Sue Snyder support us by building our endowment. It was the impressive pulling together of the community in the push to move our school to our current campus and to further fundraise for the Arts Barn that inspired them to give generously and enable us to have an endowment. The endowment – a valuable resource that many schools of our size do not have – has served to sustain us during times that might otherwise have diminished the capacity of the school to support families and staff, and possibly even keep our bills paid and our doors open. By replenishing some of the losses the market has had, we will be able to continue to sustain our school and help it thrive well into the future.
Embarking on the Strategic Planning Process!
Do you have insights to share about the future of HMS? What are we doing well as a school community, and what could we improve in the coming years? We would love to hear your opinions! The Board of Trustees is embarking on a new Strategic Planning process. The 2017-2021 Strategic Plan has expired and many of the goals have been accomplished! We are looking for a group of parents to help us develop the plan for the next 5-10 years of Hilltop Montessori School! Please consider joining the conversation as a Parent Stakeholder. This will entail 1-3 meetings in person or online (attend one or all meetings) with HMS Board Trustees on the Strategic Plan Committee.
We respect your capacity and we will not waste your time or energy with busywork.
To volunteer as a Parent Stakeholder, email Juliette Carr at [email protected]