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: May 20, 2015 1:00pm 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) Others Present: Lisa Valdez, board attorney Ø 1:00 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 Meeting Minutes o Motion by Kari Jolly that Invest Collegiate approve minutes from 3/21/15, 4/16/15 including open and closed minutes, and 5/5/15. Second by Linda Comer. o No discussion. o Vote § Unanimous approval. Motion carried. Ø Change in Agenda o Motion by Kari Jolly that we advance the discussion with regard to Beacon Partners to occur following the closed session attorney consultation prior to Transform budget discussion. Second by Linda Comer. o No discussion. o Vote: § In Favor: Linda, Patricia, Fred Deaton § Opposed: Kate Alice § Motion carries. Ø IC: Imagine Performance Framework o Jennifer Townley describes the three parts of the performance framework: operational, financial, academic. It is not publicly posted like the N.C. Report Cards are, but we can publish a one page document of positive aspects of the framework and respond with changes or suggestions based on our performance. o At this time, we did not meet standard in two areas: (1) school using data for inform practice (2) school monitoring withdrawal rates in monitoring enrollment stability. If we could show the comparison in the ADM that would help us meet the second standard. We did not have an academic portion because we did not have test scores. o In future, we should make the following changes: §
§
Attach Head of School report in the minutes Include more discussion about data in the meeting minutes Ø Imagine Budget Overview o Per the agenda, the board reviews the April 30th Budget Report and the Federal Budget Report for Imagine o April 30th Budget Report: § Jennifer Townley presents the Imagine April 30th Budget Report § We currently have a surplus of a little over $12,000. § Note that the full band salary is pulled from the Imagine budget, which is $22,000. § We are currently not showing any revenue from SCOPES on the budget, but there will be revenue indicated in July. o Federal Budget Report § Kari Jolly presents the Imagine Federal Budget Report § Motion by Kari Jolly that Invest Collegiate adopt the April 30th, 2015 budget report, including the federal, state and local budgets for Imagine. Second by Patricia Robinson. § No discussion. § Vote • Unanimous approval. Motion carried. Ø Proposed 2015-‐2106 Budget for Imagine o We need to have a budget approved by the end of June so that Acadia North Star can present it to the state at the beginning of July. o This budget is based on the assumption of 710 students o Linda asks if this is based on any other assumptions. o Kari explains that this budget is based on assumption of rent of $880,000 or less and also a 2% increase in funds from the state for exceptional children and per pupil funding. o There is no federal money reflected in this budget, but there will be before we are finished. o Kate Alice asks about enrollment. She wants to have flexibility so that if our enrollment is 10% less than projected, we can still make ends meet, or have 10% of enrollment on a waiting list. o Jennifer Townley responds that she feels very comfortable about enrollment and has 70 children on the waitlist. o Motion by Kari Jolly that Invest Collegiate adopt the 2015-‐2016 budget to begin in July as proposed. Second by Linda Comer. o Discussion: § Kate Alice states that she understands there may be minor changes to the budget. However, if we still have major changes to make, perhaps we should wait until the next meeting to adopt the budget. o Vote: § Unanimous approval. Motion carried. Ø IC: Imagine Ratify Lease Agreement o The board decides that since we have not seen the lease amendment, we will table this item until our next meeting. 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, o
o
o
option, exchange, or lease; or (ii) the amount of compensation and other materials terms of an employment contract or a proposed employment contract. Motion by Kari Jolly to enter close session. Second by Patricia Robinson No discussion. Vote § Unanimous approval. Motion carried. Ø Open session. (Note this motion occurred in closed session.) o Motion by Kari to return to open session. Second by Linda. o No discussion. o Vote § Unanimous approval. Motion carried. Ø Response to Pete Lash/Beacon Partners o Kari explains that she thought we came to a conclusion about how we are going to move forward. Pete declined to have a representative on the executive committee. My takeaway from that meeting was that we were not prepared to move forward with an executive director at this time. o Lisa Valdez explains that in light of recent events, the board needs to discuss the financial ramifications of that decision. o Kate Alice explains that if Transform purchases the campus just as this building and the land with a bond without doing the other two buildings, constructing the other two buildings in the future will be very difficult. While Transform could purchase this campus without the other two buildings, Transform currently does not have an opportunity to purchase in the lease we currently have. When Pete agreed to move forward with purchasing the campus in November/December, it was the understanding that it was both an acquisition and an expansion. Beacon has no obligation to sell the campus to us at the time. o Lisa Valdez explains that to some extent, Pete has ratified an oral agreement to sell the campus to us by his actions. He has not enforced penalties based on our late lease payments. o Kate Alice also adds that from a response to DPI standpoint, if we are able to demonstrate a balanced budget for the coming school year end show continued growth with the campus purchase a plan to have a 9th and 10th grade, we will be in a stronger position. o Lisa Valdez agrees, stating that DPI will want to see what we are doing differently after the budgetary problems. o Kari asks Dr. Ellison, if we adjusted the class sizes, could we do K-‐12 in this space? Dr. Ellison explains that we could. o Kate Alice again opines that we need an executive director. We have multiple growth issues, a pending construction project and cautionary status letter. I am not personally interested in that position, but we need to find someone to fill it soon. o Motion by Patricia Robinson that Invest Collegiate move forward to create an executive director position for a term of one year and authorize Lisa Valdez to consult with Pete Lash about potential funding for this position with the understanding that the board will work with Lisa to create the roles and responsibilities for the position. Fred Deaton seconds. o Discussion: § Linda expresses her concern about Pete Lash offering us money with strings attached. We do not currently have the funds to hire an executive director. o Vote: § In favor: Patricia Robinson, Fred Deaton, KA Dunaway § Opposed: Linda Comer, Kari Jolly § Motion carries. Ø Petway, Mills, and Pearson o Kari explains that we are voting to execute the contracts for 2015 year-‐end audits. The cost is $7,500 for Transform and $6,500 for Imagine. o Motion by Kari Jolly that IC move forward to execute the contracts for Petway, Mills & Pearson for 2015-‐2016 audit reports and for 990 preparation. Second by Linda Comer. o No discussion. o Vote § Unanimous approval. Motion carried. Ø Rosetta Stone Contract for Transform o Dr. Ellison explaisn that the Rosetta Stone contract will provide a license all students and collegiate leaders. This will help fulfill the mission in our charter to have Spanish three times a week. o Motion by Kari Jolly to ratify the Rosetta Stone contract for Transform. Second by Patricia Robinson. o Discussion: § Kate Alice opines that Rosetta Stone is a curriculum decision which should be made by Heads of School rather than by the board § Kari responds that under our current policies, the board must approve contracts over $5,000. We may amend this policy in June. o Vote § Unanimous approval. Motion carried. Ø IC: Transform Performance Framework o Dr. Ellison explains the framework and the areas in which Transform met and did not meet the standard. o We currently have less than 50% of teacher licensed, but we are working toward that. Dr. Ellison says that the licensure requirement will be met by June 30 in time for the audit. Ø Update from Pete Lash o Lisa Valdez informs the board about her conversation with Pete Lash. If we want to buy the building and not continue with Phase II construction, Pete is ok with that. Regarding the executive director position, he will defer a decision based on funding. He does not have enough information to make a decision now. Ø Transform April 30th Budget report o Dr. Ellison explains that we have been working with Acadia Northstar to clean up the budget. We currently have a deficit of $639,974 o Kate Alice explains some of the reasons for the deficit. § Our budget was based on 650 children, but we only have 555 • $185,000 loss in state funding • $98,000 loss from CMS § deficit in EC children § employees overpaid § combination of overspent items and not being able to regroup from enrollment plus the 20 difference in ADM § Overspending on some line-‐items o Kari explains that we are in a holding pattern except for payroll and utilities. We will receive our last payment from CMS in July that we will use to pay for June bills. We will have to tell DPI that we cannot resolve the deficit by the end of this year. It will be built into next year’s budget. o
o
o
o
Kate Alice explains that her recommendation is that we figure out the bare minimum that we need in order to pay all our debts by June 30th. Motion by Patricia Robinson that Invest Collegiate approve the Transform April 30th budget report. Second by Kari Jolly. No additional discussion. Vote § Unanimous approval. Motion carried Ø Closed Session o Motion by Patricia to move into closed session. Second by Linda Comer. o No discussion. o Vote § Unanimous approval. Motion carried. Ø Open session (Note that this was made and passed in Closed session) o Motion by Linda Comer to return to open session. Second by Patricia Robinson. o No discussion. o Vote § Unanimous approval. Motion carried. Ø Continuance o Motion by Kari Jolly that we continue today’s meeting to Friday, May 22nd at 9:00am via conference call. Second by Patricia Robinson. o No discussion. o Vote § Unanimous approval. Motion carried. Ø Meeting continued at 9:00 am, Friday May, 22nd Ø Imagine Lease amendment o Motion by Kari Jolly that Invest Collegiate ratify the first amendment to sublease agreement for Imagine. Second by Patricia Robinson. o Discussion: § Kari Jolly expresses concern that the amendment does not specify in writing that the total amount of rent plus additional rent will not exceed $880,000. § Kate Alice says that the base rent of $60,000 per month plus the $70,000 of additional rent for 11 months will not exceed this amount. o Vote § Unanimous approval. Motion carried o Kate Alice will request via email additional information and clarification regarding the construction documents and specifics related to construction as well as the budget and a clarification that the total amount to be spent will not exceed $880.000. Ø Operating Agreement o Lisa Valdez explains the Operating Agreement that the board received via email from Brandon Lewisohn. In order for the campus to be purchased by a separate entity, the o
o
o
property must be held by an LLC. We need to approve the formation of the LLC and the adoption of the operating agreement for that LLC. The operating agreement sets forth a member-‐managed LLC managed by Invest Collegiate with the option to become a manager-‐
managed LLC at some point in the future. Motion by Kari Jolly that Invest Collegiate organize Invest Collegiate Transform LLC, an organization designed for the sole purpose of owning real property located at 2045 Suttle Avenue and to execute the operating agreement as prepared and presented by Brandon Lewisohn. Patricia Robinson seconds. No additional discussion. Vote § Unanimous approval. Motion carried. Ø DPI Letter Update o Linda Comer asks for Kari Jolly and Kate Alice to provide an update on the response to the DPI letter regarding our cautionary status. o Kate Alice explains that there was a conference call between herself, Kari Jolly, Robin Narron from Acadia North Star, and Phyllis Pearson from Petway, Mills & Pearson. Robin and Phyllis are going to review our ledgers and determine the best ways to address the issue. We have a conference call next Thursday when they will provide us with their opinion. o Linda asks who will craft the response to DPI. Kate Alice says that the board will work together to craft a response, and once we respond, DPI may respond anywhere from a week to 6 weeks later. Ø Executive Director o Kate Alice presents Dr. Thomas Miller as a potential candidate for executive director. o Lisa Valdez explains that Pete Lash is open to the idea of funding Dr. Miller as an executive director, though he still has concerns about overall leadership going forward. o Motion by Patricia Robinson to enter into negotiations with Dr. Miller regarding the executive director position, terms of employment, job description and salary. Second by Fred Deaton. o Discussion: § Linda expresses concern about whether Dr. Miller has experience working with construction projects, site managements, and contractors. § Kate Alice explains that prior to working for the Office of Charter schools as a consultant for DPI, he was a Head of School for a non-‐profit charter school in the eastern part of the state in the Wilmington area. During his time as principal, they were expanding and constructing a new school. § Kari explains that she thinks he may be a good candidate, but she would like to have the option to pursue opportunities to find other potential candidates. § Lisa Valdez explains that the terms of employment may be up to the board. We can negotiate a short-‐term contract in order to make the transition into the school year. o Vote: § In favor: Patricia, Kari Jolly, Fred Deaton § Linda abstains for lack of information § Motion carries. Ø Employee List for Transform o Dr. Ellison presents the list of employment offers for 2015-‐2016 for Transform. Kari opines that the board needs to approve the employment list now so that Dr. Ellison can move forward to extend contracts. o Kate Alice expresses concern that with potential budget cuts, we may need to make cuts on payroll. o Motion by Kari Jolly that Invest Collegiate Transform offers contracts to personnel in accordance with the recommendation from Dr. Ellison. Second by Linda Comer. o No additional discussion. o Vote § In favor: Patricia, Kari, Linda. Kate Alice § Fred Deaton abstains for lack of information. § Motion carries. Jennifer Townley leaves the meeting Continuance o Motion by Kari Jolly that we continue meeting until May 28 at 8:30pm. Second by Patricia Robinson. o No discussion. o Vote § Unanimous approval. Motion carried. Meeting with Dr. Miller o The Board will have a conference call with Dr. Miller on May 30th from 9:00am—10:00am. o In the meantime, Kate Alice will email his resume to everyone so that the board can draft questions to ask him. The board will also review the latest job description and sent comments to Lisa. o After the conference call on May 30th, the board will invite Dr. Miller to attend the June 11th board meeting in person. Transform Campus Purchase o Lisa will reach out to Michael Braun to update him on our financial situation. o
Ø
Ø
Ø
Ø