Concord's Capital City Public Charter School Files For Bankruptcy

CONCORD, NH — Concord's only public charter school, after burning through more than three-quarters of a million dollars in taxpayer funds while only operating for two school years, has filed for bankruptcy.

According to the filing, posted in U.S. Bankruptcy Court in Concord on March 22, the Capital City Public Charter School owes vendors, utilities, its landlord, and even the Small Business Administration a combined $229,273.55. The filing comes after the school, which was founded in 2018 by Stephanie Alicea of Boscawen, as a school for public service teaching, surrendered its charter to the state in February after an audit found nearly $154,000 in questionable disbursements and unsupported federal reimbursements from the school's federal grant.

The school received around $758,000 in both state and federal funds during its three-year history while educating around four dozen students during two years of operation.

ALSO READ:

• Part 1: Concord School Surrenders Charter After Financial Accounts Probed
• Part 2: Audit: $154K In Questionable Disbursements At Concord School
• NH Attorney General Eyes Financials At Concord Charter School

According to the filing, the school owes money to 15 different entities.

The largest debtor is Namdar Realty Group of Great Neck, New York, the owner of the Steeplegate Mall, which is owed $84,000. In the filing, the school said its address was still at the mall but admitted it was more than four months behind in rent.

The Small Business Administration is owed $81,000 and is named as a Schedule D creditor — or an entity that has first dibs at claims against secured property.

OneSource Security of Merrimack, which provided security and alarms at the school, is owed nearly $26,000. The Internal Revenue Service is owed $9,615 in back taxes while Unitil is owed nearly $8,000. Easter Heat Pump Mechanical of Manchester is owed more than $7,800. Two dispute resolution companies in Manchester, Ducharme Resolutions and Durham Resolutions, are owed a combined $6,800. A CPA in Manchester is owed nearly $2,600 while the city water department and fire department are owed more than $1,000 combined. Comcast is owed $925.

The school reported $137,480 in assets including $100 in cash, $2,100 in accounts receivable, and $10,000 in deposits and repayments — a security deposit with the mall. Another $125,280 in assets are reported including furniture, computers, iPads, rolling displays, and other items.

The bankruptcy filing did not include the nearly $129,000 in unsupported federal grant reimbursements and questionable reimbursements — tens of thousands of dollars in cash withdrawals and money spent on personal usages like plane tickets, food, Uber rides, and other items by the school's founder.

The bankruptcy filing comes about a month after the board of trustees, in a letter to supporters and students that was posted on the school's Facebook site, called the financial distress reported in the press "overstated." The trustees, which include state Rep. Caroletta Alicea (D-Boscawen), the founder's mother, who also received repayments of $14,550 for loans even though neither the school nor its audit could explain what the money was spent on, said they stood by the "good faith intentions" of the school's administration and staff.

"If mistakes were made, they were honest mistakes made while learning how to operate a school," the note stated.

Other trustees signing the paperwork included Kasai Mumpini of Concord, Stephanie Carter of Concord, John Scannell of Tilton, and Lavina Jackson of Greensboro, North Carolina.

An investigation of Stephanie Alicea's criminal and court history found she had been arrested on domestic violence and stalking charges and involved in civil complaints or violations more than two dozen times between the late 1990s and four years ago. She was sued by a credit union for defaulting on a car loan.

Other reports online found Caroletta Alicea had been sued in court a number of times between the early 1990s and 2019 — including failing to pay an oil company, fighting a recovery service for four years on credit card debt, and owing tenants a repayment of a security deposit. She is also the co-founder and vice president of Granite Bay Care Inc., since 2007, which operates in Maine. According to online records, the Granite Bay Care, which she co-founded with Mumpini, has been sued for fair labor standards and other issues in state and federal courts.

The NH GOP called on Caroletta Alicea to resign her house seat a request she has ignored.

The New Hampshire Department of Education does not perform background checks on charter school founders or trustee members to find out if they have criminal records or financial problems before doling out hundreds of thousands of dollars although there is a thorough and consistent vetting process to create charter schools in the Granite State. The department also does not know how the state money, about $535,000, was spent, because it does not have access to audits or accounting by the school for this information. The New Hampshire Attorney General's Office Charitable Trust Unit is investigating the school's finances.

Tyler Gouveia, a communications specialist with the education department, said it had no new update about the school.

Kate Giaquinto, the director of communications for the NH AG's Office, said the trust unit "continues to review" the case but has nothing new to report.

Peter Tamposi, an attorney hired by the school to navigate the bankruptcy process, did not return a call requesting clarification on some of the issues with the filing before publication.

Gov. Chris Sununu, at a news conference in March, was asked what should be done to keep better track of charter school funds and whether or not there should be background checks for future charter school founders — since the state had just lined up $46 million in new federal grants to create more charters for at-risk students in the state.

Sununu was indifferent about background checks, saying one school or individual did not define a process or finding. But the State Board of Education or the Legislature would need to address the issue. Sununu also commended both the state board of education and the education department for getting on top of the Capital City Public Charter School financial issues early.

"This was a very unfortunate event," he said. "(The state board and education department) did not leave it behind. They turned over every stone. If it wasn't a surrender of the charter, it would have been withdrawn — which would have been the appropriate action to take."

Some legislation has been proposed to deal with the issue of schools failing to file proper records like financial information and is making its way through the legislative process.

HB 442 updated a current state law requiring districts to file information with the state including public charter schools or lose potential future funding. SB 81, a bill about charter schools using school district facilities, included a requirement to adopt and implement a code of conduct and administrative rules for charter schools.

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