November 2013 Board of Trustees Work Session Minutes

May 9th, 2014

Board of Trustees Work Session Minutes

Monday, November 18, 2013

Polk Avenue Elementary (Cafeteria)

3:30 PM  

 

Trustees Present: Chair Keith Wadsworth, Vice-Chair Danny Gill, Jimmy Nelson, Cindy Landen, Cheryl Garnett, Terry Fasel

Staff Present:  Superintendent Jesse Jackson, Richard Columbo, Angela Heyward, Marie Cherrington-Gray, Brian Fisher, April Barnhardt, Julio Acevedo, Ken Henson, Donna Dunson, Damien Moses, Stacie Padgett, Gail Quam, Metta O’Bryant, Monty Harrington, Ambica Randev, Karen Moses, Michelle Counter, Lonnie Murphy, Lynn Flood and other Polk Ave staff. 

Others Present: Brenda Brader, Robin Gibson, Anya Zentmeyer

 

I.          CALL TO ORDER                                                          Jesse Jackson, Superintendent

The meeting was called to order at 3:43pm.  We enjoyed a musical performance from the Polk Avenue Elementary Chorus under the direction of Ms. Drossos.  Students also shared their notebooks with the Board. 

II.  FINANCIAL REPORT                                                                      Brian Fisher, CFO 

A.  Monthly Financials

The financial report was provided by CFO Fisher:  Balance sheet total assets down $91,000 from prior month, with significant activity in both cash and accounts receivable.   Total liabilities dropped also.  The net change in fund balance line show the general fund just under $138,000 and food service is just under $37,000.  The statement of operations show the state revenue is tracking with the budget.  Pre-K – slight negative variances but the program is doing well.  Our numbers are typical for this time of the year.  Enrollment is down 13 students from last month system total FTE.  Financial reporting to sponsor – The current administrative code covering financial reporting by charter schools has been amended to include a specific reporting format similar to that of the audited financial statements.  In partnership with PCSB an email was submitted to the state inquiring whether our current consolidated statement would satisfy the new reporting requirement.  Per the state it would not satisfy the requirement at this time.  Donor support for K-support – we should receive the funds soon.  Transportation – FTE survey came in at 99% of what we budgeted.  The only variance is the internal activities for field trips etc., which is missing October activity as of the report date.  Food Services:  Each month has shown progress with a net surplus.  Our commodities are also doing well.  We recently received notification of an additional $25,000 that LWCS will be credited with over the course of the fiscal year.  Federal programs:  Deficit of $131,000 – reimbursements received monthly to supplement our programs.  We have spent 20% at the fiscal year one-third mark and have 80% left to be spent.

B.  Engagement Letter for Audit Services – BKHM

We have been with BKHM since 2004 when we started.  This letter is a two year audit engagement.  They reduced their fees $20,000 last year.  Year one has the same audit fee proposal as FY2013 and year two includes a 4.57% fee increase.  There are no statute provisions that limits the contract period for such services.  This will be presented for your approval this afternoon.

Trustee Fasel:  How are the fees based?  Did the finance committee make a recommendation?  CFO Fisher:  Yes  Trustee Fasel:  How do they determine the fee schedule?  CFO Fisher:  It is based on the number of hours put into the work provided.  Superintendent Jackson:  We could probably go out and bid the audit and find someone that cost less but we have found favor in the work that had been done by BKHM for us over the years.  CFO Fisher:  When LWCS started in 2004, BKHM was one of the few auditors in the state that has Charter School experience and background.  Trustee Fasel:  The document indicates Nancy DiSalvo is our contact person.  CFO Fisher:  Yes, Nancy is the partner responsible for the work reported on our audit annually.

C.  Loan Recommendation – Refinance Bok 2008 Mortgage 

Chair Wadsworth:  I will step aside at this time and Vice-Chair Gill will step in for this part of our Board discussion.  Superintendent Jackson:  Note that Chair Wadsworth also stepped out of the finance meeting for this discussion.  His law firm represents all the banks that we received a proposal from to refinance the Bok loan.  CFO Fisher:  The RFP was sent to five institutions and we have received a response from 4 of the 5.  When we started the Bok project in 2008 we had only one lender interested in us (Horizon Bank – now Bank of the Ozarks).  The Evaluation Committee consisted of:  Staff Accountant Richard Columbo, CFO Brian Fisher, Larry Pitts – Bank of Central FL, Board Attorney Robin Gibson.  We are grateful for the diversity and the value all the banks brought to the RFP process.  We are recommending the Board accept the second proposed option from Citizens bank.  Under this option the rate for the first the first 10 year offering was 2.95% and there was no pre-payment penalty with a collateral amount consisting of a $2M CD on deposit at Citizens Bank.  The Citizens Bank proposal also did not require LWCS to move our deposit holdings.  We prefer to establish our holdings as a separate transaction.  Our first 10 years of the loan has estimated interest expense savings of $7,000 annually which is $70,000 over the ten year period.  If our mortgage sinking fund continues to grow we can do a payoff at the end of 10 years.  This offers us options.  Our transportation debt service will finish in 2018 which will allow us some flexibility to set aside possibly $161,000 annually until we reach the end of the first 10 years.    Superintendent Jackson:  What is the assessed value of Bok now?  CFO Fisher:  When we first started it was assessed at $4.5M million with land, buildings and improvements., but it will be re-assessed before we move forward with the new loan.  Trustee Nelson:  This is good that this will afford us more flexibility in the future.  CFO Fisher:  This will allow us to save more money in the future.  Trustee Nelson:  Will this be at the 11 and 16 year rate?  CFO Fisher:  They quoted us a 10 year term rate using the 7 year schedule which is very known standard discount rate.  Trustee Nelson:  Since we don’t plan on 20 years will we reassess at the 7 and 16 years?  CFO Fisher: We will know at the end of 10 years.  Estimated loan balance of $2,284,000 at the end of 10 years and we can assess the strength of our unassigned fund balance total and the $2M CD as collateral to consider paying off the outstanding loan in 2023.  Trustee Nelson:  The $2M CD is the collateral?  CFO Fisher:  Yes.  Trustee Nelson:  The credit for the CD is being held as collateral?  CFO Fisher:  Yes.  This option to earn interest on these funds is expected to be better than what we have now.  As rates changes we can ladder CD amounts to maximize earning potential without committing the full amount.  This will be an action item this afternoon.

D.  Distribution Plans for 2013-2014 Teacher Salary Allocation

CFO Fisher:  This past spring the state requested $480M go into K-12 budget to support teacher salary.  The documents you have before you represent distribution plans for each school site and identify the class of personnel (the proviso language); criteria for receiving the increase (full-time employees holding a valid teaching certificate and in good standing with the LWCS evaluation process); and the time frame for distributing the salary increase (employee contracts FY13-14) as required to start the flow of funds to LWCS.  As I understand it the funds are supposed to be reoccurring.  The funding for LWCS is based on our blended student FTE level.  If it is not funded in the future by the state then we would have significant budget commitments.  Superintendent Jackson:  I visited with a few folks in Tallahassee and have been assured the funds will continue as we move forward.  Chair Seth McKeel assured me it would be there.  CFO Fisher:  This would only affect the folks on the attached documents which you have received.  Trustee Nelson:  The $480M is the 2013-2014 provisions only correct?  CFO Fisher:  Yes.  Trustee Nelson:  The estimated funding amount we would receive will be about $690,000?   CFO Fisher:  Yes.  Trustee Nelson:  What kind of bind would we be in if the state does not follow through?  Do we have a commitment?  Superintendent Jackson:  This has been passed on to all Districts in the state of FL and affects all public system.  Trustee Nelson:  It is smart for us to consider a caveat, assuming the state does not follow through on its commitment.  Superintendent Jackson:  All Districts would have to have a system to make the adjustment in case the state does not follow through.  Usually it is personnel changes because this would be considered a financial catastrophe in the event the state does not follow through.  Chair Wadsworth:  This is a risk for all of the Districts in FL.  CFO Fisher:  This would be in addition to our current 3 year plan.  Trustee Fasel:  When was our Evaluation System approved?  CFO Fisher:  September.  The Distribution Plan you have received is the same for each school.  After your approval we will submit it to the County to start the flow of funding and devise a disbursement plan to pay the affected staff.  Trustee Fasel:  How does it affect other employees that are not included in this Distribution Plan?  CFO Fisher:  We will have to make other disbursement plan arrangements for Central Staff, bus drivers etc. as a system.

E.  Personnel Changes 

The personnel changes you have received will be presented for your approval this afternoon.

III.  ATTORNEY’S REPORT                                            Robin Gibson, General Counsel

A.  Litigation Update

Attorney Gibson addressed the Board of Trustees – reminder of their role.  The board is responsible to be generally informed.  The Superintendent is responsible for the administration of the system. 

The refinance of the Bok mortgage – We are grateful to all 4 of our local banks who participated in the RFP process.  The system will be immensely better off because of this.  This demonstrates the progress of our system.  When we first got started it was one bank and it was a guaranteed loan.  Now we have four banks competing for us.  Fiscal responsibility has been great!    

IV.  SUPERINTENDENT’S  REPORT                                            Jesse Jackson, Superintendent

A.  MINUTES:  October 21, 2013 BOARD OF TRUSTEES WORK SESSION AND MEETING MINUTES

Presented for review and approval at the November 18, 2013 Board of Trustees Meeting

B.  PRINCIPALS’ UPDATES

Lake Wales High School – Principal Donna Dunson

Thanks to Marion Nelson Funeral Home and Trustee Danny Gill for assisting with the funeral arrangements of our student who recently passed.  The family is very grateful.  We have an IB Meeting tonight.  We sent out over 500 letters.  Our football team won.  We are also doing college day trips to expose our students to different college campuses as they consider their college options.  We are going to UT and FL Gulf Coast soon.  Luke Hiers was offered a scholarship to play at Notre Dame today. 

Edward W. Bok Academy – Principal Damien Moses

We had a robotics competition this past Saturday.  Our boys basketball team won at Denison.  We have a game tonight at Jewitt.  The girls volleyball team play at Lake Alfred.  The upcoming FL Charter School Conference – our entire tech team is presenting.  Our after school tutoring has 116 students.  Ken Suarez from Channel 13 news is coming to Bok tomorrow to do a story on the gadget kids who will be assisting the B Street Center.  Friday is field day at Bok.  Thanks to Bok PTO and Lady Reynolds who put this together.

Polk Avenue Elementary – Principal Gail Quam

Thanks to all our students who shared their data notebooks with us this afternoon.  It was great to see our older students encouraging our younger students.  We have 116 students in leadership roles at our school.  The work on our auditorium begins today.  Great American teach-in is Thursday.  Our Thanksgiving dinner is coming up.  Polk Leadership class visited our school on Thursday.

Janie Howard Wilson Elementary – Assistant Principal April Barnhardt

Title I tutoring is ongoing.  Thanksgiving play is Wednesday at 9:30am.  Turkey Jamboree is tomorrow.  Nicole McClain received a Science grant recently.  We will be using the Bok beach and visiting with our students.  Our Kindergarten Acceleration Program is up and running.  All Elementary schools will perform downtown Lake Wales the 1st Friday in December. 

Hillcrest Elementary – Assistant Principal Stacie Padgett

Wednesday is out 5th grade Catillion.  Thursday is our Thanksgiving dinner.  Friday is Big Hawk Dog Day and dinner will be on the Coach Debbie Knuth Pavillion. 

Dale R. Fair Babson Park Elementary – Principal Kenneth Henson

Congrats to Luke Hiers, he did not play football until he went to Bok Academy.  Our annual breakfast for our County workers was last week – we serve all maintenance and their supervisors.  MidFlorida – Gift of Reading sponsor.  Field day for all grades is this week.  Family Thanksgiving is this Thursday.  Turkey Bowl is tomorrow – it is a great event and the kids are looking forward to it!   

C.  NEXT MEETING DATES 

The December Board of Trustees Work Session and Board Meeting will be December 16, 2013 at Edward W. Bok Academy.  The Work Session will begin at 3:30 PM and the Board Meeting will begin at 5:00pm.

                                                                                                                                                                                                                                                                                                                    V.  OTHER BUSINESS FOR THE GOOD OF THE CAUSE

None

VI.  ADJOURN

Meeting adjourned at 5:00pm

Respectfully Submitted,

Marie Cherrington-Gray, Corporate Secretary

Board Approved:  December 16, 2013

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