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INVEST Collegiate Consortium, Inc. d/b/a INVEST COLLEGIATE – Transform and d/b/a INVEST COLLEGIATE – Imagine Board of Directors OPEN MEETING MINUTES Meeting Date: April 16, 2015 6:30pm Location: INVEST COLLEGIATE – Transform Directors Present: Kate Alice Dunaway, Kari Jolly, Linda Comer, Patricia Robinson, Fred Deaton Advisory Board Members Present: Dr. Antoinette Ellison (for Transform), Jennifer Townley (for Imagine) 6:30 p.m. Kate Alice Dunaway calls the meeting to order. Welcome to all board members, advisory board members and public guests in attendance. Kate Alice Dunaway reads the Mission Statement and the Conflict of Interest Statement. Ø Head of School Report: Transform o Dr. Ellison presents the Head of School report for Transform Ø Head of School Report: Imagine o Jennifer Townley presents the Head of School report for Imagine Ø Presentation of Head of School Evaluation/Review o Linda Comer presents the Head of School Evaluation tool Ø Nominating Committee Appointments o PROPOSAL by Kate Alice to appoint herself, Fred Deaton, and Patricia Robinson to the nominating committee. o Motion by Kari Jolly to appoint Kate Alice, Linda Comer, and Patricia Robinson to the nominating committee. Second by Linda Comer. o Vote § In favor: Patricia Robinson, Linda Comer, Kari Jolly § Opposed: Kate Alice § Silent: Fred Deaton Ø Minutes from 2/12/15 Open Meeting o Motion by Linda Comer to approve February Open Meeting Minutes. Second by Kari Jolly. o Vote § Unanimous approval. Motion carried. Ø Minutes from 2/12/15 Closed Meeting o Motion by Linda Comer to approve February Closed Meeting Minutes. Second by Kari Jolly. o Vote § Unanimous approval. Motion carried. Ø Corporate Structure Update o Lisa Valdez presents a corporate structure update. § She and Kate Alice met with DPI to discuss the corporate structure presented at our last meeting. DPI was not confident about the LLC concept in in that they are not sure that such a structure is allowed by the general statutes. § Lisa explains that we have two options: • Option One: Proceed with the proposed corporate structure that includes a separate 501(c)(3) non-­‐profit corporation for each school and the management/property holding arm of the organization. We will need approval to transfer the charter from Invest Collegiate Consortium to the new non-­‐profit corporation that would be formed for each of Transform and Imagine. We will need to form a new non-­‐
profit and establish new board of directors for each school and for the management/property holding arm. • Option Two: Maintain status quo. All charters will continue to be held by Invest Collegiate Consortium. § Lisa states that her advice is to proceed with the new corporate structure to create walls between the different entities. Or, she advises that if we choose to keep all the charters within Invest Collegiate, we need to ensure that there are checks and balances in place to maintain control. § Kate Alice expresses concern about the flow of money from the state to the individual entities that hold the charter. o Motion by Kari Jolly that Invest Collegiate move forward to restructure the corporate model to add six individual non-­‐profit corporations to hold the charters for and operate each INVEST COLLEGIATE school in accordance with the outline provided by legal counsel. Second by Patricia Robinson o Discussion: § Kari Jolly explains that she thinks this structure is important to maintain independence among schools and brand Invest Collegiate. § Fred Deaton asks what control the parent organization would have over the 6 schools. Lisa Valdez explains that the parent organization would have a management agreement and a licensing agreement with each of those 6 schools. Two members of the parent board would also be members on those local boards. She suggested that a supermajority would also be required for certain critical actions such as a lease termination, management agreement, licensing agreement or amendment of bylaws. § Kate Alice states that she is comfortable with our current model. She also believes the increase in the size of the board from 5 members to 7 will allow better representation across our current schools. § Patricia Robinson asks about the timing for the proposed corporate structure. Lisa responds that the timing issue is finding board members for Charlotte and Asheville. This might not take place in time for financing for the bond transaction. Kari explains, however, that this will not necessarily delay closing the bond transaction. § Vote: • In favor: Patricia Robinson and Kari Jolly • Opposed: Kate Alice Dunaway, Linda Comer, Fred Deaton § Motion fails, therefore corporate organizational status will remain as it currently stands. Linda Comer suggests that we table any remaining discussion for another meeting. Ø Facilities Update for the Transform Purchase o Pete Lash explains that in light of the new Imagine expansion, the Transform campus purchase is important for us. Our next steps are: § Commit to the contracts § Agree that Beacon Partners will pay any costs incurred if the building does not close, with the understanding that Invest Collegiate will pay those costs back or they will be built into our existing debt. § Pay the architect and Civil Engineer to begin working. o Kari asks if Pete can share the new construction estimate o Pete says he will send out the price sheet from the contractor. Ø Amendment to Imagine Lease—Pete Lash o Pete Lash explains that we have two and a half months to complete the Imagine expansion. We need to attain a building permit before we can begin expansion. We do not have a firm price because the architectural drawings have not been completed. Pete also adds that the estimate includes current rent and the projected expansion amount. If the board approves that amount, he will be not charge any additional amount. o Kari asks for an estimate of what additional rent might be. Currently the base rent for Imagine is $30,000 and we pay $3,000 in additional rent. Additionally, under the current lease, we have a deficit which will transfer over to our permanent campus and asks Pete to outline the deficit in more detail. §
o Pete responds that the rent from Biltmore Farms for the space is fixed at $6.00 a foot for 3 years. The additional expenses include the cost of the up-­‐fit work and the 8% interest that is accruing on the deficit. If we do nothing, at the end of next year’s lease term, we will have a deficit of $510,000. If we do the expansion with the $575,000 up-­‐fit cost, then the total deficit would be reduced to $316,000. o Jennifer Townley expresses her support for the Imagine Expansion. She explains that families are excited about the opportunity and that she needs to know an answer soon in order to successfully meet the enrollment demands. o Motion by Kari Jolly that Invest Collegiate Imagine proceed with the expansion. Second by Linda Comer o Discussion: § Kari Jolly asks Jennifer Townley is she feels comfortable with the projected enrollment in the space she will have. Jennifer says she is. Though it will be tight, she is confident she can make it work. § Kate Alice reminds everyone of the difficulty we have had locating a permanent campus site in the Asheville area. § Kari asks the board to look at the budget holistically, keeping in mind that we would like to keep our debt between 15-­‐20% with regard to total revenue. Right now, our personnel expenses are 64%. Our debt the first year will be 18%. This leaves us with around 13% for everything else. Will that model allow us to meet our mission to create exemplary schools of choice? § Kate Alice responds that the first 3 years of any charter school are challenging for financial and facility reasons. We do have to spend a larger part of our budget on facilities and leasing. After year 4, those numbers will change. When Imagine moves to a permanent campus, it will be a K-­‐12 school. She asserts that it cannot be paid for with 400 children. It can only be paid for with a minimum of 900-­‐1000 children. She is comfortable knowing that Jen has built a successful model at Imagine. § Linda asks Kari if she is confident that we can make the numbers work. § Kari responds that she is, but she wants the board to be aware of our financial situation and how deeply it hinges on enrollment. She trusts Jen and the foundation she is building at Imagine. § Vote • Unanimous approval. Motion carries. Ø Transform Campus Purchase Update o Michael Braun explains that we are at a point where the board needs to make a decision to move forward with the Transform campus purchase. The analysis comparing the projected enrollment and the money available for debt service demonstrates that this is still a good decision. Interest rates are slightly up from January, but we will lock-­‐in an interest rate over the next three months. The next step is for the board to authorize the working group and Pete Lash’s development team to work on the transaction so that financing can be prepared. o Kari asks what we need to do to make closing happen by June 30th. Ø
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o Michael says that the delay is the building permit, which probably cannot be issued until July or August. o Dr. Ellison expresses her desire to move forward with the Transform expansion. Transform will be at maximum capacity for 6th, 7th, and 8th grade, and will need to move forward with high school. o Motion by Kari Jolly that Invest Collegiate move forward with all haste to release the architect and Beacon Partners to move forward with the campus purchase with closing by the end of August. Second by Patricia Robinson. o Discussion: § Dr. Ellison asks, with a closing date of August, we will have a move-­‐in date that is timely? Michael Braun says yes. o Vote: § Unanimous approval. Motion carried. Budget Report and Review: Transform o Kari Jolly provides a general overview of the Transform budget. o Dr. Ellison states the budget and cash flow will be tight next year. If we are providing the majority of our resources in personnel, there will not be much left for other items. o Kate Alice expresses a desire for the board to take more time exploring the budget, especially in light of the expansion and the purchase. She suggests a special meeting in May to look at the budget. Budget Report and Review: Imagine: o Kari Jolly provides a general overview of the Imagine budget. o Jennifer Townley adds that she had recently paid a significant invoice with RDS which will be reflected in lower surplus in the budget report. 2015-­‐2016 Employee Contracts for Transform o Dr. Ellison explains that she is making changes and thinking creatively about staffing within the budget. o The board collectively decides to table the employee contracts for the May board meeting. 2015-­‐2016 Employee Contracts for Imagine o Jennifer Townley presents the 2015-­‐2106 employee contracts for Imagine. o Motion by Patricia Robinson to approve Imagine employee contracts presented for the 2015-­‐2106 school year. o Discussion: § Linda asks if there are any major changes. § Jennifer responds that the only changes are small increases in salary. o Vote § Unanimous approval. Motion carried. Ø Closed Session o NC General Statute 143-­‐318.11(a): A public body may close a session for the following purpose: to establish, or to instruct the public body’s staff or negotiating agents concerning the position to be taken by or on behalf of the public body in negotiating (i) the price and other material terms of a contract or of a proposed contract for the acquisition of real property by purchase, option, exchange, or lease; or (ii) the amount of compensation and other materials terms of an employment contract or a proposed employment contract. o Motion by Linda Comer to enter close session. Second by Fred Deaton. o No discussion. o Vote § Unanimous approval. Motion carried. Ø Open Session (Note this motion occurred in closed session.) o Motion by Kari Jolly to move into open session. Second by Patricia Robinson. o Vote § Unanimous approval. Motion carried. Ø Head of School Employment Contracts o Motion by Kari Jolly to approve the 2015-­‐2016 employment contracts for Jennifer Townley and Antoinette Ellison in accordance with terms outlined in closed session. Second by Patricia Robinson. o No Discussion. o Vote § Unanimous approval. Motion carried. Ø Future meetings: o June Board Meeting: June 11, 2015, 6:30pm at Imagine o Special Meeting to address the budget—May 20, 2015. 1:00pm at Transform Ø Adjournment o Motion by Fred Deaton to adjourn. Second by Kari Jolly. o No Discussion. o Vote § Unanimous approval. Motion carried. Respectfully submitted by Patricia Ryan Robinson, board secretary