Ensuring the future of St. Edward’s
A bold initiative to ensure the future of St. Edward’s School – and keep the barrier island’s premier educational asset from hitting the financial wall two years from now — has been undertaken by two prominent board members, Lorne Waxlax and Ron Edwards.
The pledge drive, for what is called the Pirate Fund, is aimed at raising more than $15 million to retire the remaining $15.3 million of an $18 million debt incurred in the school’s massive 1999 capital improvement effort — construction that, like so many other projects in Florida, was undertaken in the glow of growth with the gloss of easy credit.
So far, nearly $5 million has been raised for the Pirate Fund in less than three months. The Waxlax signature sales pitch to island residents: “There are 98 doctors with 167 kids in St. Ed’s School. If we didn’t have that school, we’d be driving to Orlando and West Palm Beach for medical treatment.”
The capital improvement campaign launched a decade ago gave St. Ed’s a new middle school, a fine arts building, the Waxlax Center for the Performing Arts and Oglethorpe Hall, an administration building. Science labs were also added, and improvements were made to nearly all the existing buildings in both the Riomar and the Moorings campuses.
“They did a great job building the buildings, they have a wonderful physical plant there now,” Waxlax explains. “But we still have the debt.
“At this time there can be no doubt that the prudent course for the School should have been to collect all of the money to build the facilities before committing to their construction,” the two board members wrote in a joint email to Vero Beach 32963.
“However, that is not what happened and we are faced with the responsibility to meet the financial obligations of the School or risk the loss of the middle and upper school facilities to foreclosure.”
“We want to take the debt off the school’s hands,” says Waxlax. “Running a truly excellent school, and continuing to improve it, is not easy. They shouldn’t have to worry about the debt.”
In this environment, running an excellent school is challenge enough without the financial overhang from flusher times. St. Ed’s is going through a period of introspection.
Falling enrollment, declining donations, increased aid to financially strapped parents, and competition from public schools and lower cost Catholic schools are causing the school to take a hard look at itself as an independent school in a slow-growth — or no-growth — community.
The weakened economy and families moving out of the area due to job changes — along with a lack of families moving in — are blamed for an anticipated continuing drop in enrollment.
Waxlax says enrollment numbers, which peaked at 940 several years ago and dropped to 845 last year, now are projected to be 780 in the fall, and may continue to decline. “I think it will be lower than that, as the economy doesn’t seem to be bottoming out.”
The cost of sending a child to St. Edward’s is not inconsequential. Tuition for the upper school last year was $22,100, plus $600 for tuition insurance and a one-time fee for a tablet laptop computer of $2,400 plus a $400 deposit. There are also annual outlays in the hundreds of dollars for uniforms and books.
Meanwhile, a glaring opening yet to be filled is head of school. Bruce Wachter, a longtime faculty member who was associate head of school and head of the upper school, has been serving as interim head of school, and says he is happy to continue in the post.
“Given the timing of when the search began, it is a distinct possibility that we will have Bruce Wachter as Interim Head for the coming school year,” says former college president and recently appointed St. Ed’s board member Brian Barefoot.
“We’ve had nearly 50 potential applicants,” Wachter says. So far, none has been selected for the coming fall. “Searches typically last at least a year.”
In this environment, Barefoot, Waxlax, Edwards and others are focused on how St. Ed’s presents itself to an increasingly competitive academic marketplace.
“Brand equity is critical,” says Barefoot. “You have to market your brand: what is the St. Ed’s advantage? What is the product that we produce? Why should the best and the brightest go there? If there’s not an advantage, no one’s going to go there.”
Maintaining that advantage – and giving Vero Beach an advantage over other communities in recruiting the medical and other professionals that make Vero a special place – is the objective of the Pirate Fund campaign, which set out in January to raise $15.5 million in pledges.
Key to the drive’s success is the clause that the pledges are conditional on enough being raised to pay off the entire debt; the pledges are void if that goal isn’t reached.
“People are reluctant to contribute to pay off an existing debt,” says Edwards. “If you can only pay off part of the debt, that doesn’t solve the problem.”
The capital construction loan is costing the school $1.2 million in principal and interest payments each year. “They have enough money to pay the debt until mid-2011, so we have some time,” says Waxlax. “Hopefully this recession will end soon and we can speed things up.”
“Since the school operates on a breakeven cash flow basis excluding debt service, there are no sources of funds to repay the debt other than future gifts from concerned supporters of the School,” Waxlax and Edwards said.
Waxlax emphasized that the Pirate Fund will operate completely separately from the school. In the statement, Edwards and Waxlax say the autonomy and conditions of the Pirate Fund address a past reluctance on the part of would-be donors to retire the debt.
Donors will elect a board to manage the fund, which will exist under the auspices of the Indian River Community Foundation. The Foundation will provide investment management and administrative services regarding the fund.
Each year, the school must meet the criteria of the Pirate Fund board before receiving funds for that year’s debt payment. If the pledge drive doesn’t reach its fund-raising goal of $13 million by the end of 2010, the pledges expire.
John’s Island has long been known as a huge source of support for Indian River Medical Center. Beyond that, the residents there tend to give strongly to the arts, with Riverside Theatre and the Vero Beach Museum of Art major recipients of the community’s largesse.
Last Friday, Waxlax had both breakfast and lunch meetings there, talking with prospective board members in hopes of engaging them in his cause. Waxlax and Edwards are on a mission to boost awareness of the school’s significance beyond those who actually attend the school and their families.
“People just don’t realize how important it is in the community,” Waxlax says. “I’m sure if they had at the top of their list those 98 doctors whose kids are in St. Ed’s, they would get on board.
“The typical doctor is very interested in education and often they don’t want to send their kids to public school, and they don’t want to send their kids away to boarding school either. If it weren’t for St. Ed’s they wouldn’t live here. They’d live somewhere else.”
While Waxlax and Edwards focus on the long-term, this is not an easy time for the St. Edward’s family.
Last week, the athletic director roles at the middle and upper schools were merged – at one point in the school’s history there were three directors, including one for the primary school.
“Sports participation is important to a lot of people, and frankly it’s justified,” says board member Waxlax. “A chunk of the kids’ education is participating in sports: competing on an individual basis in tennis or golf, or with a team in lacrosse , soccer, football of basketball. St. Ed’s has to educate the whole child, so athletics are in addition to academic excellence.”
Cutting out an athletic director was a difficult decision, says Wachter. He adds that it was a prudent and necessary one. Doug Booth, the outgoing Upper School athletic director, is “a multi-talented director,” Wachter says, adding that he has found a position in education in Texas for next year.
Wachter says there have been no cuts to St. Ed’s “core program,” and that the school “is committed to preserving the academic excellence for which it is known.”
As attrition occurs in administration, the school will continue to “consolidate” posts, Wachter says. As it is, nearly everyone on staff plays multiple roles at the school. “This isn’t a place that just runs from 8 in the morning til 3 in the afternoon. If you come here any night but Sunday, you’re going to see people here. There’s always something going on.”
He cites as an example tennis coach Christopher Thoft-Brown who watched his team win the first round of regional championships 7 to 0, and fifteen minutes later, transitioned into his role as band director. “He got on the stage and led a 200 person strong instrumental group.”
“We need to have the staffing that supports our program appropriately without taking away the quality of our program,” says Wachter. “We are a school that focuses on the whole child. That means more than just a premier academic program. There are the arts, volunteerism, athletics, character education, any number of things that are part of the St. Ed’s experience.”
Finding strategies for the school’s future has been an intensive focus for St. Ed’s.
“We’ve had a lot of focus groups on each issue, and we have a consultant working on a teaching plan. We’ve had parents, faculty members, students, trustees and the administration trying to find out what everybody is thinking, what the school is going to look like five years from now,” says Waxlax.
“We have task forces that have been appointed to look deeply into the options and opportunities and the challenges coming at us. And we’ve had some good discussions,” he says. “As we look at these problems and look into the future, one thing is very clear: the St. Ed’s advantage is academic excellence. What can we do without doing any damage to academic excellence?”
The effort to find a financial answer to this challenge is being led by Waxlax and Edwards.
Edwards, president and CEO of Evans Properties, a Vero-based citrus company, has long served the St. Ed’s board of trustees as treasurer, and heads the school’s finance committee. He is expected to take the role of chairman of the board later this year.
Waxlax was executive vice president of the Gillette Company. He is currently a director of B.J.’s Wholesale Clubs and Clean Harbors Inc., a waste management firm. Both men are fathers of St. Ed’s students or alumni.
The school’s debt problem began a decade ago when the school borrowed the $18 million for capital improvements. Then, cost overruns forced the school to dip into the more than $12 million in pledges. “They spent $20 million, so it had to come out of the money that was paid in pledges,” Waxlax says.
Now, he says, “Ron and I have been trying to get people to make conditional pledges that will not become binding until we get enough money to control the debt.
“The debt’s interest rate is 4.1 percent,” he goes on. “So long as we can earn more than 4.1 percent on the money that is pledged, we’ll be able to pay off the debt as payments come due, and have money left to give to the school endowment.
“Today’s economy makes that look difficult, but recessions do not last forever, and this one also will end.”
Platitudes about bright futures notwithstanding, graduation time at St. Edwards School is bittersweet this year. Board member Barefoot points out that today’s seniors face the possibility of becoming the first generation to fare worse economically than their parents.
A Wall Street veteran, Barefood says the big question is how St. Ed’s should react to the slow- or no-growth reality. “The point of view of local business people is that Vero is anti-growth. That may or may not always be the case. But if that’s true, in terms of sizing the school to the market, do we need to change?” he asks.
Talk of eliminating the Riomar campus, now the lower school, has surfaced over the years, says Waxlax. “We’re investigating everything,” he says. “Consolidating the school in the southern campus is not a new subject. It’s one of the things we’re looking at now and let’s face it, in this economy you don’t want to miss anything. But everybody loves that campus. ”
Barefoot, who last year ended a sevenyear tenure as president of the highly regarded business-oriented Babson College, questions whether fundraising efforts have tapped into the most generous pockets of island donors, and he wonders why not.
Further, he looks at alumni as a strong potential donor pool; St. Ed’s typically gets high marks from sentimental graduates who stay on in Vero, and would likely support the island’s signature independent school.
The school needs to cultivate those grateful for their education there, so that even their success in higher education doesn’t override the foundation the school laid for them in childhood and adolescence.
“The college experience competes with secondary school for donor dollars later on,” he says. “In high school, you’re going to appreciate certain teachers, whether they’re at Vero Beach High School, Andover or Choate. Part of the challenge at any school is to engage their students, and make sure their parents felt their children got supported.
“At some point, you want them to say, ‘If it weren’t for St. Ed’s…’ They will give St. Ed’s credit and hopefully they give you some recognition, some of their time, talent and treasure. Treasure? That means money. That’s your goal from the alumni.”
As for burnishing St. Ed’s image to more aggressively seek students, Wachter says the school is increasing marketing efforts in the form of radio and print advertising and mailings to homes in St. Lucie and Martin counties.
Wachter points to recruiting efforts in Martin County, where The Pine School, a K-12 school with about half the student body, and with similar goals, claims around 500 students with similar education goals.
In St. Lucie County, there is John Carroll High School, a Catholic school that draws significantly from Vero, and Lincoln Park Academy, a highly regarded magnet school with rigorous academic standards. Peggy Anderson, a former principal of Lincoln Park, was named as Wachter’s replacement as head of upper school, in part to attract some top-performing St. Lucie County students who know of her excellent reputation.
In Vero Beach, both Vero High’s AP program and Sebastian High’s IB program offer rigorous academic challenges, and both schools have large athletic programs. Indian River Charter School offers a fine arts curriculum in art, dance, theater and music; and a golf curriculum for players and those interested in golf-related careers, in addition to its core curriculum. Its proximity to IRSC facilitates dual enrollment classes that count towards the AA degree at no cost.
“Let’s set up a test,” suggests Barefoot. “Let’s compare St. Ed’s to the competitors in the marketplace, and we’ll see what the advantage is, if any. Competition is a good thing. It makes everybody the best they can be.”
One area of potential growth for St. Edward’s comes in recruiting international students. Wachter says the school is stepping up efforts in Asia, Europe and South America, specifically in Spain and China, to double its current enrollment of foreign students to 40.
But a more aggressive recruiting effort comes with its own challenges. The school needs to become more selective in admissions, Barefood says. “Right now, the perception is, if people express an interest in St. Ed’s, they get in.
“Perception becomes reality,” says Barefoot.
“If the Ivys or the Babsons or the Kenyons don’t see St. Ed’s as a great school, then an applicant coming from St. Ed’s who has a 3.5 GPA, great board scores and excellent recommendations isn’t going to be competitive with a student from a secondary school whose reputation is stronger.”
Currently, two-thirds of applicants to St. Ed’s are admitted; most matriculate, and those who don’t generally cite the high tuition as the reason.
With the applicant field thinning, it becomes harder to hew to tougher admissions standards and still maintain a tuition base needed to sustain the campus economically.
But it is critical – not just to St. Ed’s, but perhaps even more to the community – that the school succeed.
“We need to explain to the generous people of this county why they should pledge $15-plus million to free the school from its debt,” says Lorne Waxlax. “St. Edward’s is a very valuable asset to all of the residents in Indian River County. It is a great school, with an even greater future.”
