For months after federal agents raided the offices of a Los Angeles charter school network, seizing documents and electronic records, the Celerity Educational Group tried to overhaul its image.
The nonprofit cut financial ties with its parent organization and replaced its chief executive. It launched a rebranding effort to distance itself from allegations of financial wrongdoing that have hovered for more than a year.
But in a sign that all is not well, the charter management organization made the decision last week to close one of its seven schools in Los Angeles County: Celerity Rolas, in Northeast L.A.
In a letter to parents, Nadia Shaiq, the group’s CEO, said that Rolas had been unable to attract enough students to justify the costs of keeping it open.
“Closing a school is always a disappointment for our entire community,” Shaiq wrote. “But keeping the school without the enrollment necessary for a balanced budget would threaten the overall health of our other schools, impacting students, parents and employees.”
A spokesman for Celerity did not respond to requests for comment.
Rolas’ closure means that several hundred students will be forced to find new placements — and without much time. The first day of school in the Los Angeles Unified School District is Aug. 14, and many of the deadlines for enrollment lotteries at the most sought-after charter schools have passed. Celerity’s leaders have encouraged families to switch to its school in Glassell Park, Celerity Octavia.
The closure is the first public sign that Celerity is under considerable financial strain.
In the aftermath of the January 2017 raid and news that the FBI was investigating the nonprofit and questioning its employees, Celerity was thrown into turmoil. The State Board of Education refused to renew two of its charter schools, and although both schools were able to reopen under different names, the network said some its families never came back.
At Celerity Rolas, an elementary and middle school split between two sites — one in Eagle Rock and one in Highland Park — the school needed 435 students to break even, according to the organization’s correspondence with the state. But only 309 students enrolled last year.
The loss of students meant less funding from the state. Meanwhile, the organization’s legal fees were rising.
Facing investigations by federal agencies and L.A. Unified’s Office of the Inspector General, the group hired the law firm Gibson Dunn to aid it during the inquiries and help it separate from its founder, Vielka McFarlane, a target of the investigations. Celerity has also continued to pay a separate firm that specializes in charter school law.
The group’s most recent financial projections show that while its individual schools are bringing in more money than they are spending, the organization that manages them is on less firm ground.
An L.A. Unified analysis described the fiscal condition of the group as weak. Within a year, the nonprofit’s expenses are expected to exceed its revenue by $826,000. Out of its total budget of $5.3 million for the coming school year, the group expects to spend more than $500,000 on legal fees alone.
Last month, the organization’s board voted to hire a consultant — Aristos Strategies, run by City Hall lobbyist Gustavo Valdivia — to recruit students and boost enrollment.
Some of the decline, though, may be beyond the group’s power to address.
In her message to parents, Shaiq attributed some of the enrollment loss to demographic shifts in Northeast L.A., writing: “Unfortunately, Highland Park and Eagle Rock are transforming and have declining populations of school-age children.”