Financial Update: 2020-2021 Treasurer’s Report Dear Citizens of the Blue Hill Peninsula, We provide this update of the financial affairs of George Stevens Academy to all the citizens of our community. We believe that the academy is a cornerstone of the educational and cultural activities in our community, and we hope that this information will help to expand our joint efforts to maximize the educational opportunities for high school students within the seven sending towns and beyond. The academic year ending in June 2021 was unique in many ways. It resulted in educational challenges as well as unexpected financial opportunities. Federal COVID programs provided grants to offset increased operating expense related to the pandemic. Facilities were modified to maintain distance between people, computers were upgraded, internet hotspots were provided to students in need, course curriculums were revised, and individual tutoring was provided to ensure that none of our students were left behind. It was truly a remarkable effort by the faculty and staff to create an entirely unique hybrid education for 303 students. In addition, investment markets recovered after a steep decline in the spring of 2020 and brought forth extraordinary gains in the value of the endowment. Although these gains will not increase operating income immediately, over time, the endowment draw, which is based upon a three-year trailing average, will increase. One of GSA’s most important initiatives during the past year was the formation of the Secondary Education Financial Planning Advisory Committee, which met regularly. This new committee provided a forum for discussing the cost of education and the tuition level set by the Maine Department of Education for town academies. In addition, the committee considered ways to improve cooperation, communication, and governance between the sending town elected officials and the trustees of GSA. It was through this organization of 19 people—two elected officials representing each of the seven sending towns, two superintendents, and three GSA trustees—that the successful request for supplemental tuition was shepherded. The request for the first year of a two-year step up in tuition was approved through special town warrants or normal education budget approvals by an overwhelming margin of 67%, 1,003 votes in favor of the request versus 485 opposed. There were several changes in the Business Office last year. In December, the academy accepted, with great reluctance, the retirement of Fred Heilner, who had served as Director of the Business Office for 28 years. Fred had managed single-handedly the accounting, human resources, budgeting, and facilities operations with remarkable skill and exceptional dedication. It was hard to envision the management of these areas of responsibility without Fred. However, the academy was very fortunate to engage the consulting services of Rachel Grivois (Accounting Services of Maine, LLC) and 6
Celebr ation of Giving
Board Treasurer Jim Crawford
Marcie Bowden ‘91 to manage the transition to a new accounting system, including new statement and chartof-accounts breakdowns. Also, after an extensive search, Seth Brown (Maine Maritime Academy, MBA, and Assistant Professor, Husson University School of Business) was hired as Director of Finance and Operations. In addition, Christie Snow ‘90 transitioned from Admissions to the Business Office to provide greater depth and expanded resources for finance, accounting, and human resources. A new accounting system will enhance financial controls and management information systems. Another significant change that occurred last year was the transfer of the investment management of the endowment assets to Harpswell Advisors, a firm specializing in nonprofit investment management. The endowment investment performance over the past ten years had been competitive with comparable benchmarks, but was not outstanding. The blended ten-year average return was 7.30% versus the GSA benchmark of 8.40%. Following prudent management practices to change managers periodically, it was decided to make the transfer. The value of the endowment increased 25.4% from $6.7 million as of June 30, 2020, to $8.4 million as of June 30, 2021. This was exceptional investment performance in line with broad market growth but should not be expected on a regular basis. The spending draw from the endowment for calendar year 2021 is budgeted at $240,000. The consequences of the pandemic were devastating to our community and the nation at large. The administration and the faculty adjusted quickly to the hybrid of remote and in-person learning. Facilities were modified to distance students, improve air quality, establish partitions, upgrade computers, and implement testing, quarantining, and other health requirements. Unexpected COVID-related expenses totaled $309,155 in 2021. Fortunately, receipts from the Federal CARES Act grants totaling $353,839 and the Paycheck Protection Loan of $732,100, which
