1 00:00:00,000 --> 00:00:08,920 Thank you, Senator. School of Finance of Thordy. It's Tuesday, August 11, 2020, this and 2 00:00:09,840 --> 00:00:18,200 I'm tomorrow, March 3rd and we'll take care of the authority and we'll just briefly introduce those who are 3 00:00:18,200 --> 00:00:23,120 on the authority. I'm going to give some fear in here and then shout out. 4 00:00:23,700 --> 00:00:27,720 Thank you, Deputy Carl, Executive Director and the Governor's Office of Finance and Budget, 5 00:00:27,860 --> 00:00:28,840 and we will talk about authority. 6 00:00:30,420 --> 00:00:35,420 Scott Jones, Deputy Superintendent of Operations, Utah State Board of Education, Secretary 7 00:00:35,420 --> 00:00:36,280 to the Authority. 8 00:00:37,760 --> 00:00:38,320 Excellent. 9 00:00:38,720 --> 00:00:39,180 Thank you. 10 00:00:40,040 --> 00:00:40,460 All right. 11 00:00:40,640 --> 00:00:43,920 First item on the agenda is approval of the Minutes. 12 00:00:44,200 --> 00:00:47,640 Any discussion or opinions on the amendments? 13 00:00:48,300 --> 00:00:53,040 If no, I'll take motion. Motion to approve the minutes. 14 00:00:53,820 --> 00:00:55,580 Do I have a second? I'll second. 15 00:00:56,100 --> 00:00:59,500 Any discussion on the motion? Hearing none, all of them are saying aye. 16 00:00:59,980 --> 00:01:00,740 Aye. Aye. 17 00:01:01,480 --> 00:01:04,980 Any opposed? Motion passed unanimously. Thank you. 18 00:01:06,120 --> 00:01:09,800 Item number two, resolution 2026- 19 00:01:10,380 --> 00:01:11,920 and chamber. 20 00:01:11,920 --> 00:01:13,140 And that's me. 21 00:01:15,160 --> 00:01:19,480 So this is tree side charter schools application to the Utah charter school 22 00:01:19,480 --> 00:01:25,740 finance authority. This is a non-inhance transaction. So they are not requesting the moral obligation 23 00:01:25,740 --> 00:01:31,420 of the state and it's an unrated bond. So this will be a little bit, I feel like we haven't 24 00:01:31,420 --> 00:01:38,640 seen very many non-rated bonds for a while. We've got the school here. Their business manager 25 00:01:38,640 --> 00:01:44,360 is Red Apple Financial. Clint B. Singer from Roundtable is here and he's the municipal advisor 26 00:01:44,360 --> 00:01:51,160 to both schools today, Treeside and B.I.B. Account. The underwriter on this transaction is Raymond 27 00:01:51,160 --> 00:01:58,120 James, Farrow's counsel, Brandon Johnson, and then the bond counsel is Eric Hunter. And your 28 00:01:58,120 --> 00:02:04,040 memo is wrong and I apologize. We had a change part way through issuer's counsel is not Gilmore 29 00:02:04,040 --> 00:02:12,560 belt, or a keratin, and so on, US bank is the trustee on this transaction, so what we're 30 00:02:12,560 --> 00:02:18,980 looking at here is about 15 million in tax exempt bonds, and these bonds will be repaid 31 00:02:18,980 --> 00:02:29,500 with a bullet payment, a balloon in year eight, or in year ten, and that's based off of 32 00:02:29,500 --> 00:02:35,280 a 25-year amortization. Part of the reason why schools do this is to lower their cost of 33 00:02:35,960 --> 00:02:43,680 their interest rate by pricing to a shorter maturity and give them a lower cost on their debt. 34 00:02:43,940 --> 00:02:48,940 With the expectation that they get to refinance in four or five years, which is what they're 35 00:02:48,940 --> 00:02:54,120 expecting the call date to be on these bonds. A little bit about the school. They've been operating 36 00:02:54,120 --> 00:03:05,680 for a few years now and over the last couple of years they've had a little bit of how should I say 37 00:03:05,680 --> 00:03:11,580 this and there's a little movement at the school so they had a dispute with their developer of 38 00:03:11,580 --> 00:03:16,520 their property that started a couple of years ago and that led to them leaving that facility here 39 00:03:16,520 --> 00:03:23,720 this last year. The new they're leasing a facility currently before they build the facility that these 40 00:03:23,720 --> 00:03:28,740 bonds will build and they will have a permanent home for the foreseeable future. 41 00:03:29,780 --> 00:03:33,720 So that's kind of the plan. There was just a little bit of a dispute with the landlord, 42 00:03:34,280 --> 00:03:39,420 and partially, you know, you see those developer releases increasing in cost. There were some 43 00:03:39,420 --> 00:03:46,920 disputes over some of the property tax associated with that. And so getting out of that, I think 44 00:03:46,920 --> 00:03:52,740 is a better situation for the school. They did have a large payment to exit that lease 45 00:03:52,740 --> 00:04:01,040 that came off with their their financials on the last fiscal year and so that saw a big drop in 46 00:04:01,040 --> 00:04:06,200 their cash. We'll see that later on in kind of the stuff we're looking at. But all of that's 47 00:04:06,200 --> 00:04:10,100 important context for some of the things that you'll see that you saw in the memo, 48 00:04:11,540 --> 00:04:18,140 enrollment declines in the last year. So if you look the 25-26 school year saw a pretty significant 49 00:04:18,140 --> 00:04:21,920 get the client an enrollment for a school this size, 50 00:04:21,920 --> 00:04:24,620 especially like a 20% drop in enrollment. 51 00:04:25,680 --> 00:04:29,600 And that drop in enrollment was from moving facilities 52 00:04:29,940 --> 00:04:31,700 and not being in the same facility 53 00:04:31,700 --> 00:04:34,180 and not having a long-term home. 54 00:04:34,440 --> 00:04:38,120 So they're expecting the 26, 27 enrollment 55 00:04:38,120 --> 00:04:39,940 to be about the same as last year 56 00:04:40,380 --> 00:04:42,340 and then hoping that once they're back into 57 00:04:42,340 --> 00:04:44,680 their long-term permanent facility, 58 00:04:45,180 --> 00:04:47,120 they'll be able to get back up above 59 00:04:47,120 --> 00:04:50,460 of the enrollment numbers that they had before. 60 00:04:52,340 --> 00:04:56,040 And they'll have a little bit more room at this new facility 61 00:04:56,040 --> 00:04:57,380 than they did at the last one. 62 00:04:57,560 --> 00:04:59,200 So that will allow them to potentially 63 00:04:59,200 --> 00:05:01,060 grow enrollment over time. 64 00:05:01,640 --> 00:05:03,940 But the pro forma just shows them getting back up 65 00:05:03,940 --> 00:05:07,180 to about 450 students, which is about where they were operating 66 00:05:07,180 --> 00:05:12,440 before, but proficiency rates a little bit below 67 00:05:12,440 --> 00:05:14,880 the local district, crotol school district. 68 00:05:14,880 --> 00:05:20,560 so I should have said this is down in South Park Provo up against the mountains a little bit, 69 00:05:20,700 --> 00:05:27,280 and that's the area that they serve. The school has a five-member board with some backgrounds in 70 00:05:27,280 --> 00:05:33,300 business management, real estate, and military leadership, marketing, and the arts and communications. 71 00:05:34,160 --> 00:05:42,060 Ms. Rachel Brunson, services director, and that's Rachel right there, and she has a Master of Arts 72 00:05:42,060 --> 00:05:47,720 an administration from SUU, some endorsements from SUU for education and then a BS and 73 00:05:47,720 --> 00:05:53,380 element education from Utah State University. School has some of the policies we like to 74 00:05:53,380 --> 00:05:59,800 see but not necessarily all of them so there's some things that they would benefit from having 75 00:05:59,800 --> 00:06:01,340 some additional policies in place. 76 00:06:03,400 --> 00:06:07,300 So a standard financing but again not seeking credit enhancement 77 00:06:07,300 --> 00:06:13,380 from the authority on this transaction, so no moral obligation here, but fixed rate bonds for 78 00:06:13,380 --> 00:06:19,700 the short term that they have been, four to five years, called with the intent of refinancing once 79 00:06:19,700 --> 00:06:25,440 they've got a little bit more stable enrollment and bringing their cost of financing down in four to 80 00:06:25,440 --> 00:06:25,800 five years. 81 00:06:28,940 --> 00:06:34,800 So you've seen some variations in their budgeting to their actual performance over the 82 00:06:34,800 --> 00:06:40,020 years, really indicative of the things that have been kind of going on at the school. 83 00:06:40,760 --> 00:06:48,080 A drop in their cash position in 24, 25, they're expecting that to increase in the next 84 00:06:48,640 --> 00:06:55,500 next little bit. The number here for 25, 26 is a little bit different because it's all, this 85 00:06:55,500 --> 00:07:01,740 is an automated financials for 25, 26. So it looks a little bit higher than it was because there's not 86 00:07:01,740 --> 00:07:05,680 restricted funds, restricted cash pulled out of them. 87 00:07:07,880 --> 00:07:14,500 Fun balance, again, similar story dropped because of that payment to the developer, but, you know, 88 00:07:14,820 --> 00:07:19,940 I think they would expect that if they were able to get back to that operating level, which, you know, 89 00:07:20,020 --> 00:07:27,160 that's the real question about whether their enrollment gets back up to where they were historically operating or not on this. 90 00:07:27,840 --> 00:07:37,240 debt coverage ratio, so I put this as a 2025, but if you look at other years in the last 91 00:07:37,240 --> 00:07:41,300 little bit, they've been able to meet their least adjusted debt service coverage. 92 00:07:41,640 --> 00:07:51,280 Now, if you take that net operating revenue that they were able to achieve in 2025 and carry 93 00:07:51,280 --> 00:07:55,740 that forward, they're pretty close to break even on this future debt. 94 00:07:55,740 --> 00:08:00,160 So not too far off from being able to handle this. 95 00:08:00,580 --> 00:08:04,740 They're FY26 numbers, look, even better than that. 96 00:08:04,940 --> 00:08:08,760 So I think even at their level that they're at for enrollment, 97 00:08:08,980 --> 00:08:10,520 they should be able to manage this. 98 00:08:11,240 --> 00:08:12,180 It's tight though. 99 00:08:12,620 --> 00:08:15,240 And I think that's what you would kind of expect. 100 00:08:15,460 --> 00:08:18,600 So the chart on page six kind of shows the difference 101 00:08:18,600 --> 00:08:21,520 between the two levels of net revenues. 102 00:08:22,140 --> 00:08:24,300 So if you see the 25 net revenues, 103 00:08:24,300 --> 00:08:30,380 they're just under the expected future debt service and if they keep going up to 2026 levels, 104 00:08:30,980 --> 00:08:35,640 unaudited levels and they'll be able to meet the debt service on this. So, 105 00:08:36,500 --> 00:08:42,220 debt burden will be higher to start out and that's just a function of how small the school is. 106 00:08:42,360 --> 00:08:48,980 It's about 15 million bonds but that's a lot for a school center, 400 students. That's pretty small 107 00:08:48,980 --> 00:08:54,280 especially compared to a lot of the schools we've seen lately. That requires them to 108 00:08:54,280 --> 00:09:00,000 higher operating margins because in order to meet that debt service you have to put more 109 00:09:00,000 --> 00:09:06,980 more of your money's going out of the classrooms and into the debt payments. So scale and adding 110 00:09:06,980 --> 00:09:13,800 students will help them to divert more money away from debt into the classroom and allowing 111 00:09:13,800 --> 00:09:21,040 to get lower operating margins but their performance based off a 25% operating margin which is 112 00:09:21,040 --> 00:09:31,940 higher really than they've been achieving and really higher than most schools by far achieved and the benchmark we like to see is 14%. 113 00:09:31,940 --> 00:09:38,240 So they're well above the benchmark but because of the high debt burden that's necessary for them. 114 00:09:39,600 --> 00:09:48,380 Current ratio looks really good for 2526 because they got rid of their lease obligation but obviously that will change with new debt optimization online. 115 00:09:48,380 --> 00:09:54,100 So, again, we've got our professionals looking at this or 116 00:09:54,100 --> 00:09:59,980 Harrington and Sutcliffe and Eugene is on. 117 00:10:00,500 --> 00:10:01,720 I can't see his name. 118 00:10:02,540 --> 00:10:05,860 Well, there he is. Eugene is online, acting as special 119 00:10:06,380 --> 00:10:10,740 issuers counsel and then Eric Hunter is from Chapman and 120 00:10:10,740 --> 00:10:13,380 Cutler on counsel to the school. 121 00:10:13,660 --> 00:10:16,340 So, that's my report on 122 00:10:23,690 --> 00:10:34,500 I just asked just the status of the dispute in the past all then resolvers. I think they'll be carried into it. 123 00:10:35,100 --> 00:10:42,100 My understanding is that they've made that payment and that settled the dispute and they're no longer in the building, but if the school wants to. 124 00:10:42,100 --> 00:10:49,900 It's in, yeah, most of their situations in the school and it's building, but completely 125 00:10:49,900 --> 00:10:55,600 done with, and the school is, doesn't have any contractual obligations nor is it in the building. 126 00:10:56,040 --> 00:10:58,900 You're not going to be haunted by proper cash in those, right? 127 00:10:58,980 --> 00:11:02,420 Yeah, very, very good questions, and of course, I can answer this. 128 00:11:03,320 --> 00:11:04,720 The divorce is fine. 129 00:11:05,660 --> 00:11:06,980 I don't want to question. 130 00:11:07,520 --> 00:11:11,700 So I seem to remember there was some concerns with previous line board about 131 00:11:11,700 --> 00:11:16,700 in shared space is that right that they have like another tenant 132 00:11:17,400 --> 00:11:20,800 both of your building or something that was at the pretty ceiling? 133 00:11:21,240 --> 00:11:22,960 Yeah, that would have been a pretty bad house. 134 00:11:23,640 --> 00:11:28,240 Okay, so yes, I know some of the issues that you have with that previous 135 00:11:28,240 --> 00:11:33,240 developer and I'm glad you've been able to exit that because it sounded like it was a great 136 00:11:33,240 --> 00:11:33,580 solution. 137 00:11:39,530 --> 00:11:39,950 Questions? 138 00:11:40,350 --> 00:11:40,390 Questions? 139 00:11:41,030 --> 00:11:42,090 Chair, Scott? 140 00:11:42,810 --> 00:11:43,110 Yes. 141 00:11:43,110 --> 00:11:46,630 So, where exactly is the new building being built? 142 00:11:46,910 --> 00:11:48,190 I'm just curious, actually, 143 00:11:48,350 --> 00:11:51,790 where exactly, how far away from the old building 144 00:11:51,790 --> 00:11:53,130 against process? 145 00:11:53,430 --> 00:11:55,630 It's probably been a mile. 146 00:11:56,590 --> 00:11:59,590 What we're at, we're at the old Nobel campus right now 147 00:11:59,590 --> 00:12:01,230 and we're in an office building, 148 00:12:01,230 --> 00:12:03,130 which, you know, telling parents 149 00:12:03,130 --> 00:12:04,550 you're gonna move to an office building, 150 00:12:04,790 --> 00:12:06,170 you're gonna lose students, right? 151 00:12:06,610 --> 00:12:08,290 So right now we're in an office building 152 00:12:08,290 --> 00:12:09,970 and our current landlord, 153 00:12:09,970 --> 00:12:17,610 board. He had a building for sale that's in the same kind of area but it's a stand-alone 154 00:12:17,610 --> 00:12:23,270 building and it's on 7 acres and so we would be able to do a lot. So it's 2.35 East, 155 00:12:23,430 --> 00:12:31,730 1600 South and Probe. Exactly. And so we found this building that was on the same property 156 00:12:31,730 --> 00:12:38,110 but it's a stand-alone building. It has a 7 acres total and it used to be an old Sears 157 00:12:38,110 --> 00:12:44,110 call center, but I'm done a lot of research on it and it's stable and ready for us to 158 00:12:44,110 --> 00:12:47,390 basically just get up the inside and make it to school. 159 00:12:48,150 --> 00:12:54,010 Great, so lesson if I may, Chair. Lessons learn from the previous side and the previous 160 00:12:54,010 --> 00:12:58,630 building is there's some issues with, you know, students being dropped off and things like 161 00:12:58,630 --> 00:13:03,910 that. So whenever there's a new construction project, how are you guys feeling about, you 162 00:13:03,910 --> 00:13:09,250 know, the input or throughput of the student, safe, you know, drop off points, those types 163 00:13:09,250 --> 00:13:14,410 of things too, you know, I mean, what else is going on around you? That was kind of 164 00:13:14,410 --> 00:13:19,950 one of the key things that I experienced in visiting Treeside at the location, you know, 165 00:13:20,610 --> 00:13:27,470 few times. So how is that going to come together in the sense of, you know, the safety of the 166 00:13:27,470 --> 00:13:32,850 kids and making sure that, you know, drop off points are secure and all that. Does that 167 00:13:32,850 --> 00:13:33,410 That makes sense. 168 00:13:33,790 --> 00:13:34,170 Let's compare. 169 00:13:34,330 --> 00:13:34,710 Yes. 170 00:13:34,950 --> 00:13:35,070 Yes. 171 00:13:35,650 --> 00:13:38,210 We're actually a current building 172 00:13:38,210 --> 00:13:39,870 or a half that is an office building 173 00:13:39,870 --> 00:13:43,150 is furlough away from the new building. 174 00:13:43,390 --> 00:13:45,530 So what is the new construction with the concept? 175 00:13:46,770 --> 00:13:48,530 And we've actually, it's kind of nice 176 00:13:48,530 --> 00:13:52,110 that there's a lot of parking area and asphalt area. 177 00:13:52,330 --> 00:13:54,230 We've had the best pickup and drop-off 178 00:13:54,230 --> 00:13:56,090 we've ever had in the last eight years. 179 00:13:56,310 --> 00:13:56,970 It's so nice. 180 00:13:58,310 --> 00:14:01,510 So we're the Novel Campus Community. 181 00:14:01,510 --> 00:14:08,470 There is Rocky Mountain University that's a couple of buildings down, but what we really 182 00:14:08,470 --> 00:14:15,110 liked about it is it's very, very quiet, quiet area, and there isn't the concern that 183 00:14:15,110 --> 00:14:20,590 we have of our last building where they're coming off of the road going down in the 184 00:14:20,590 --> 00:14:21,590 United States. 185 00:14:23,190 --> 00:14:30,350 We were coming off the station, it's kind of in an area where there's no huge traffic 186 00:14:30,350 --> 00:14:36,050 problems and even though we're in an office building, the nicest thing about being here is not 187 00:14:36,050 --> 00:14:42,370 worrying about student safety getting in and out of cars, etc. Yeah, that's a good thing. So 188 00:14:42,370 --> 00:14:48,450 sometimes good things come out of bad things. So I appreciate that and thinking of the kids and the 189 00:14:48,450 --> 00:14:55,590 selection of the site. So thank you, Chair. That's all I have. Thank you. Other questions? 190 00:14:55,590 --> 00:14:59,250 I'm just curious on how you're moving my hand. 191 00:14:59,670 --> 00:14:59,930 Take it. 192 00:15:09,280 --> 00:15:31,320 So we take on a lot of, um, so she had not really disadvantaged students. And, um, so, you know, that lays into it. Um, our new students coming up. So right now, you're just looking at our rice scores, which are 36 great students that are new students coming up. Um, our, uh, the, uh, the, the, the, the, the, the, the, the, the. 193 00:15:31,320 --> 00:15:33,020 We're doing very well with our math residency. 194 00:15:33,340 --> 00:15:36,460 We actually got a total certificate from the state saying 195 00:15:36,460 --> 00:15:38,480 that we made a 30% increase in growth. 196 00:15:40,220 --> 00:15:41,380 So it's coming up the pike. 197 00:15:42,360 --> 00:15:44,020 As the students are moving out. 198 00:15:46,400 --> 00:15:48,520 When we're looking at the location, I work on problems, 199 00:15:48,720 --> 00:15:49,780 so I'm just curious. 200 00:15:51,020 --> 00:15:54,500 Well, we're further north, but still, okay, I see you there. 201 00:15:56,080 --> 00:15:58,460 And that's the new building, is that a pad for us, 202 00:15:59,140 --> 00:15:59,860 255 each. 203 00:16:00,200 --> 00:16:01,520 16, seven pounds. 204 00:16:01,520 --> 00:16:08,620 okay let's do it yeah let me explain okay cool okay and we was just 205 00:16:08,620 --> 00:16:14,500 sudden based on what Scott said is that we we were able to walk across to 206 00:16:14,500 --> 00:16:17,240 the building from our current building with our teacher yesterday and we're 207 00:16:17,240 --> 00:16:21,280 like we can just walk across the road and we're not worried about anybody hitting us 208 00:16:21,280 --> 00:16:26,400 that's really so no problem no problem at all 209 00:16:26,400 --> 00:16:27,880 I don't know what that's good. 210 00:16:28,720 --> 00:16:29,660 All right, any other questions? 211 00:16:30,480 --> 00:16:32,620 We'll just look one more under the policies 212 00:16:32,620 --> 00:16:35,740 that you can filter any plans on putting. 213 00:16:36,360 --> 00:16:38,560 All season plans for the budgeting and investment. 214 00:16:39,020 --> 00:16:40,720 He's since taken on more debt. 215 00:16:42,560 --> 00:16:43,420 Okay, speak of that. 216 00:16:44,000 --> 00:16:44,700 Yeah, no way. 217 00:16:45,220 --> 00:16:46,940 Yeah, as we do this process, 218 00:16:47,320 --> 00:16:50,960 I do think it's anticipated that we can introduce 219 00:16:50,960 --> 00:16:53,540 to the school and explain before. 220 00:16:53,540 --> 00:16:56,620 and the school uses red apples as a business manager, 221 00:16:56,640 --> 00:16:59,180 so I think one of the advantages that they can also have 222 00:16:59,180 --> 00:17:02,020 perspective in schools 50 and for schools in the state now. 223 00:17:02,200 --> 00:17:04,480 So I think you'll expect to see, you know, 224 00:17:04,580 --> 00:17:07,000 in policies that are mentioned to be updated 225 00:17:07,000 --> 00:17:08,420 and represent my practices. 226 00:17:10,360 --> 00:17:13,500 It's cool, you know, as I'm always building it, right? 227 00:17:13,700 --> 00:17:15,580 So sometimes those policies come along 228 00:17:15,580 --> 00:17:18,500 as you take that on and, you know, need to do that. 229 00:17:18,680 --> 00:17:22,420 So by being at least before, up until now, 230 00:17:22,420 --> 00:17:26,600 that probably is also a part of just any sort of policy 231 00:17:26,600 --> 00:17:28,960 or if you could represent school, you know, 232 00:17:29,280 --> 00:17:29,840 position debt. 233 00:17:30,500 --> 00:17:30,960 I mean, yes. 234 00:17:31,280 --> 00:17:34,200 Could I also mention, we had a board 235 00:17:34,200 --> 00:17:35,820 that was there for a long time, 236 00:17:35,820 --> 00:17:37,400 and like a three or four number board, 237 00:17:37,660 --> 00:17:39,220 and they'd been there for like eight years, 238 00:17:40,000 --> 00:17:42,060 going through a lawsuit on legal staff, 239 00:17:42,200 --> 00:17:43,260 and they were quite tired. 240 00:17:43,960 --> 00:17:47,220 And now we have a board consisting of, 241 00:17:47,780 --> 00:17:49,500 you can be pictured, so she's come on, 242 00:17:49,680 --> 00:17:51,940 she started that with us during the whole legal student, 243 00:17:51,940 --> 00:17:56,920 and now we have a solid board of students, parents, 244 00:17:57,100 --> 00:18:00,940 families at the school that are on the board as well. 245 00:18:00,940 --> 00:18:04,860 She has the experience, but she's also been trying 246 00:18:04,860 --> 00:18:07,620 to help me write policies, write new things 247 00:18:07,620 --> 00:18:12,120 that are going on, such a good working board 248 00:18:12,120 --> 00:18:14,480 that's ready to serve new adventures. 249 00:18:14,480 --> 00:18:21,940 All right, then we have a question from the committee. 250 00:18:23,400 --> 00:18:24,760 If not, you're reading it. 251 00:18:25,180 --> 00:18:25,980 Make sure you're counsel. 252 00:18:28,410 --> 00:18:29,150 Good afternoon. 253 00:18:29,950 --> 00:18:30,910 Nice to see everyone. 254 00:18:31,790 --> 00:18:36,210 We reviewed the application and the related materials. 255 00:18:36,830 --> 00:18:38,390 The application is in order. 256 00:18:38,950 --> 00:18:45,670 The project is eligible under the authority's policies and statutory scheme. 257 00:18:46,410 --> 00:19:07,150 We did note as a somewhat unusual feature which is related to the dispute that was just discussed that there was a chapter 11 bankruptcy filing in relation to that dispute with the previous landlord in our understanding is that that's all resolved. 258 00:19:07,150 --> 00:19:13,710 But just highlighting that as a somewhat, you know, unusual back pattern. 259 00:19:14,610 --> 00:19:21,730 And then with respect to documents, there's a new set of indenture and loan agreement 260 00:19:21,730 --> 00:19:27,290 being put in place, a new bond issue, and those documents contain all the standard provisions 261 00:19:27,650 --> 00:19:34,330 that we would look for for authority policy compliance. 262 00:19:34,330 --> 00:19:41,010 So no no concerns to raise from our perspective as issue or council. 263 00:19:44,090 --> 00:19:51,430 And Eric, the resolution authorizes the bonds without printed enhancement to finance the 264 00:19:51,430 --> 00:19:56,130 acquisition and improvement for a charter school facility in Provo and funded debt service 265 00:19:56,130 --> 00:19:57,770 reserve and paid cost to the issuance. 266 00:19:57,770 --> 00:20:06,390 The resolution establishes parameters of maximum principal amount of 18.5 million, maximum maturity 267 00:20:06,390 --> 00:20:16,770 date of 40 years, interest rate of 9%, and maximum discount of 5%. And authorizes the members 268 00:20:16,770 --> 00:20:21,450 of the board to finalize the bond terms and enter into the bond documents. 269 00:20:23,870 --> 00:20:27,030 All right, there are no other questions. 270 00:20:27,310 --> 00:20:28,690 I will entertain the motion. 271 00:20:30,370 --> 00:20:38,270 All motion to a firm's resolution, 2026.10, they're operating the shins that sell 272 00:20:39,750 --> 00:20:42,190 churchful bonds for true side, charter school. 273 00:20:43,170 --> 00:20:43,990 Do I have a second? 274 00:20:44,850 --> 00:20:45,370 Second? 275 00:20:46,670 --> 00:20:48,310 Any discussion on the motion? 276 00:20:48,310 --> 00:20:50,830 During that, all of the papers say aye. 277 00:20:51,390 --> 00:20:51,650 Aye. 278 00:20:52,490 --> 00:20:52,930 Aye. 279 00:20:53,990 --> 00:20:54,630 Any opposed? 280 00:20:56,150 --> 00:20:58,050 All right, that motion passed unanimously. 281 00:20:58,530 --> 00:20:58,990 Thank you. 282 00:21:00,210 --> 00:21:00,850 Congratulations. 283 00:21:01,690 --> 00:21:02,410 Thank you. 284 00:21:03,230 --> 00:21:04,130 I did give you the answer. 285 00:21:05,870 --> 00:21:06,670 Thank you. 286 00:21:07,050 --> 00:21:08,050 Thank you. 287 00:21:08,550 --> 00:21:08,770 Thank you. 288 00:21:09,170 --> 00:21:09,590 Thank you. 289 00:21:09,790 --> 00:21:09,810 Thank you. 290 00:21:09,810 --> 00:21:10,590 You're welcome. 291 00:21:12,430 --> 00:21:13,410 Thank you. 292 00:21:17,650 --> 00:21:18,930 Resolution 26. 293 00:21:19,230 --> 00:21:19,670 Okay. 294 00:21:23,730 --> 00:21:30,950 Okay. Compilates of interest disclosure, the science corporate trust is engaged with 295 00:21:30,950 --> 00:21:36,250 the school and I'll make fun of them later because there's something to make fun of. 296 00:21:40,220 --> 00:21:46,590 We've got, again, B.I.P. Science and Technology Academy, they came before the authority a few 297 00:21:46,590 --> 00:21:51,090 years ago for a transaction and I thought it was my way back through my files. I was like, 298 00:21:51,090 --> 00:21:54,910 oh, this was like last year, but it was like five years ago for something like that, which 299 00:21:56,070 --> 00:21:58,070 yeah, right? That's what I thought. 300 00:21:59,530 --> 00:22:04,010 So it's been a few years since they've been before the authority. So at the time they were 301 00:22:04,010 --> 00:22:11,850 expanding to more parades and they were, I think previously only as operating as a high school 302 00:22:11,850 --> 00:22:14,710 and now they're operating as a K-12 school, 303 00:22:15,110 --> 00:22:17,530 so they've expanded their operations 304 00:22:17,910 --> 00:22:20,170 and they would like to continue expanding 305 00:22:20,170 --> 00:22:21,690 their operations into a new campus. 306 00:22:22,050 --> 00:22:23,870 So that's what we're looking at here. 307 00:22:23,990 --> 00:22:27,670 We've got the business manager, Mr. Pulpana. 308 00:22:28,110 --> 00:22:28,930 Is that right? 309 00:22:29,790 --> 00:22:32,750 Perfect, okay, I nailed it. 310 00:22:33,890 --> 00:22:36,790 So Clint Beesinger from Roundtable here 311 00:22:36,790 --> 00:22:40,110 is the municipal advisor and then Brandon Johnson 312 00:22:40,110 --> 00:22:46,070 as Bauer's Council, Cruz and Associates, I believe Michael Lambert is online, and then 313 00:22:46,070 --> 00:22:50,670 Bond Council, Gilmore Bell with Issuer's Council, Eric Hunter from Chatnet Color. 314 00:22:51,630 --> 00:22:57,950 So this transaction, again, will be about $28 million in tax exempt bonds, the enhancement 315 00:22:57,950 --> 00:23:04,570 is requested on this, and the school has a BA1 rating from Moody's on this transaction. 316 00:23:04,570 --> 00:23:10,550 So, they currently operate in the Sandy area, and they'd like to move into a new facility 317 00:23:10,550 --> 00:23:16,290 in Saratoga Springs, where everybody wants to move because that's where everybody's 318 00:23:16,290 --> 00:23:16,490 moving. 319 00:23:16,890 --> 00:23:19,310 So, build a new school campus down there. 320 00:23:20,500 --> 00:23:27,430 This debt will be amortized over roughly 40 years, likely carry a five to seven year call 321 00:23:27,430 --> 00:23:33,750 feature to allow them to, you know, refinance in the future if that becomes 322 00:23:33,750 --> 00:23:39,850 decided. So, the school has been a really high performing school in the state 323 00:23:39,850 --> 00:23:45,550 and has won a bunch of awards for having some really great academics and some 324 00:23:45,550 --> 00:23:51,770 really sharp kids, especially on the stem side. That's what they're known for. So 325 00:23:51,770 --> 00:23:55,770 they've got a really strong weight list. They've drawn a lot of that weight list 326 00:23:55,770 --> 00:23:58,470 down to increase their enrollment to where it is now. 327 00:23:59,110 --> 00:24:04,090 You know, they went from 293 kids back in 21, 22 to 893. 328 00:24:04,750 --> 00:24:10,050 So, added 600 kids over the last few years, and they're kind of expecting to 329 00:24:10,050 --> 00:24:15,310 double in size over the next five years when we see them again maybe in five 330 00:24:15,310 --> 00:24:21,590 years. So, a lot of new kids, and most of that growth will come 331 00:24:21,590 --> 00:24:30,250 At the Saratoga Springs campus but there will be some at the Sandy campus so they're expecting to continue to increase enrollment at the Sandy campus. 332 00:24:31,590 --> 00:24:34,470 And that's kind of their future. 333 00:24:34,650 --> 00:24:40,410 You see their proficiency here just above Canyon's and statewide averages in 2025. 334 00:24:41,410 --> 00:24:45,190 A little bit less impressive than the last time they came on. 335 00:24:45,190 --> 00:24:50,530 I think that's just a new students and bringing them up the speed and up to their standards. 336 00:24:50,930 --> 00:24:58,630 So that's still impressive to beat canyons and Utah averages for their students. 337 00:24:58,930 --> 00:25:08,490 So the school employees Hanuffy Ogus as the executive director and he has various different 338 00:25:08,490 --> 00:25:09,430 backgrounds. 339 00:25:09,430 --> 00:25:21,010 But I see, you know, coming from Istanbul where he got his teaching a BS in teaching mathematics and I think it's just been a, he was named principal year in 2017. 340 00:25:21,090 --> 00:25:30,590 So it's a good management team overall got some of the board members online, including I know Marcy Houseman on there. 341 00:25:31,710 --> 00:25:43,030 And then, yeah, the school has most of the policies we like to see except no formal policies on debt and our investments. 342 00:25:44,430 --> 00:25:50,430 So again, BA1 rated, the bulk of this will go towards the construction. 343 00:25:50,750 --> 00:25:57,030 The bulk of the financing will go to fund the new Saratoga Springs campus, but there will be a small renovation. 344 00:25:57,030 --> 00:26:04,930 and you may not remember, but they had a second floor that they left vacant when they renovated 345 00:26:04,930 --> 00:26:14,210 their facility or moved into the new facility back in 2020-2021 when they were last here, 346 00:26:14,670 --> 00:26:20,350 and they'll use a $1.5 million to create more space there that they can enroll more students at the 347 00:26:20,350 --> 00:26:28,810 So, Moody's noted a couple of credit strengths, including, as I said, in their high performance 348 00:26:28,810 --> 00:26:36,230 and unique model as a STEM school, solid operating performance with good coverage on existing 349 00:26:36,230 --> 00:26:38,530 debt and growing liquidity. 350 00:26:39,170 --> 00:26:44,710 They were all demographics, you know, that should allow them to hit their growth trajectories. 351 00:26:44,710 --> 00:27:02,910 But they did notice that this is higher leverage relative to similarly rated peers and you know it's hard to take a really high performing school and bring in a bunch of new teachers and new administrators and replicate in new places. 352 00:27:03,530 --> 00:27:06,830 I think that's a valid thing to suggest. 353 00:27:06,830 --> 00:27:13,580 Yes, so we'll move on to some of the things you'll notice. 354 00:27:13,880 --> 00:27:18,540 The budgeting has been really strong over the last several years with revenues generally 355 00:27:18,540 --> 00:27:25,580 coming in very strong with expenditures most years less than what they budgeted. 356 00:27:25,700 --> 00:27:32,660 So I think you can't really look at some of those big years where they're adding several 357 00:27:32,660 --> 00:27:36,600 hundred students and expect them to decrease expenditures. 358 00:27:36,600 --> 00:27:40,500 but some years they were really close to that even though they were adding students. 359 00:27:40,780 --> 00:27:46,900 So I think a really impressive job doing their budgeting over the last of the day. 360 00:27:47,260 --> 00:27:48,760 Increasing cash position. 361 00:27:49,120 --> 00:27:54,120 Despite, you know, it looks like 2025 they had a really strong days cash on hand, 362 00:27:54,260 --> 00:27:58,620 but when you only have 233 or 30 students or 290 students, 363 00:27:58,900 --> 00:28:01,680 and you increase your expenditures, 364 00:28:01,680 --> 00:28:04,140 you're going to drop on that days cash on hand figures. 365 00:28:04,140 --> 00:28:18,940 So that's not unexpected that they were able, but it's impressive that they were able to kind of maintain a really strong gaze cash on hand figure despite their expenditures growing significantly over the last little bit fun balance. 366 00:28:19,480 --> 00:28:24,600 Again, strong and I don't see any concerns with their fun balance. 367 00:28:24,600 --> 00:28:25,220 That's what I'm saying. 368 00:28:25,640 --> 00:28:26,080 They're liquid. 369 00:28:27,860 --> 00:28:35,140 Debt coverage, the schools really going to need the enrollment growth in order to make 370 00:28:35,140 --> 00:28:35,700 this work. 371 00:28:37,460 --> 00:28:43,520 And right now, they're not able to cover their debt service on new debt without enrolling 372 00:28:43,520 --> 00:28:47,460 new students, but the new growth is not huge. 373 00:28:48,100 --> 00:28:51,820 They only need a couple hundred students at the new campus in order to break even. 374 00:28:51,820 --> 00:29:03,080 And I think given that, you know, they're a really high performing school with a great reputation, I think that that shouldn't be too unreasonable thing for them to. 375 00:29:03,480 --> 00:29:10,040 So historically they've had really strong coverage and their pro forma coverage is expected to be really strong. 376 00:29:10,040 --> 00:29:19,760 So that burden ratio will be elevated in 2027 before they actually bring on the new students. 377 00:29:20,080 --> 00:29:23,780 And so that's it looks higher in that year. 378 00:29:23,900 --> 00:29:28,660 But I think from the authorities perspective, the standards allow you to say, 379 00:29:28,680 --> 00:29:34,140 what are the last three years, the forward looking three years, do they substantially meet this? 380 00:29:34,160 --> 00:29:38,720 Is there an expectation based off of every other factor that we think they'll meet this? 381 00:29:38,720 --> 00:29:43,580 And I think, from my analysis, there is an expectation that they would meet this. 382 00:29:43,780 --> 00:29:48,540 So it would be difficult if they didn't meet their enrollment targets, 383 00:29:48,680 --> 00:29:49,780 which is the real concern. 384 00:29:49,940 --> 00:29:53,760 I think for most of these schools going into these growth modes is, 385 00:29:54,020 --> 00:29:55,300 will they be able to achieve enrollment? 386 00:29:56,100 --> 00:29:59,980 And that really comes down to the demand profile and how strong a school is. 387 00:30:00,000 --> 00:30:29,620 Well, they are, how well they execute their strategy. And so that's some stuff that's really hard to know, but that is a, I think, a challenge for the authority looking to approve a school that has credit enhanced debt. The operating margin really, you know, strong and expected, I think, to continue to be strong. And they're, they're expecting that with the increased enrollment, they'll be able to take advantage of some economies of scale. 388 00:30:29,620 --> 00:30:32,880 and improve that, that operating margin even really quickly. 389 00:30:34,080 --> 00:30:35,420 Current ratio is strong. 390 00:30:35,940 --> 00:30:40,520 So I think the real concerns are not with the school's operations, 391 00:30:41,360 --> 00:30:44,520 and if the school is a really high performing school, 392 00:30:44,820 --> 00:30:46,420 both from a financial perspective, 393 00:30:47,000 --> 00:30:49,280 and from an academic perspective, 394 00:30:49,960 --> 00:30:52,220 the real question is on the enrollment side, 395 00:30:52,460 --> 00:30:56,680 and will they be available to your students in a fast growing area. 396 00:30:56,680 --> 00:31:02,880 So, Chapman and Cutler as issuers counsel again and Gilmore Bell's bond council, a couple, 397 00:31:03,160 --> 00:31:06,560 I guess, I did say I was going to beat up on Zion's a little bit here, so I'll beat 398 00:31:06,560 --> 00:31:08,500 up on Zion's on continuing the disclosure. 399 00:31:09,180 --> 00:31:15,180 You'll notice if you look at their report on continuing disclosure, they had a few fairly 400 00:31:15,180 --> 00:31:22,260 late filings and those filings were the result of sending the information of the trustee and 401 00:31:22,260 --> 00:31:25,760 not following up with the trustee that they would get it posted. 402 00:31:25,760 --> 00:31:28,340 Now, ultimately, the school's responsibility, 403 00:31:28,840 --> 00:31:31,100 but I think it was a pretty good effort by them 404 00:31:31,100 --> 00:31:32,520 to get everything in time. 405 00:31:32,880 --> 00:31:35,840 So that's a little bit about why they have 406 00:31:35,840 --> 00:31:38,220 the continuing disclosure, misses that they did. 407 00:31:38,720 --> 00:31:41,320 I think it would be important to kind of stress that, 408 00:31:42,580 --> 00:31:44,500 ultimately, it's the school's responsibility 409 00:31:44,500 --> 00:31:49,020 to get that done, but check them on their business partners. 410 00:31:49,960 --> 00:31:50,080 Yeah. 411 00:31:50,640 --> 00:31:53,880 I would say the process isn't done until you've gone 412 00:31:53,880 --> 00:32:02,080 on Emma and their alternatives there and you know I think I would emphasize that that is a critical 413 00:32:02,080 --> 00:32:09,140 responsibility and should be just going on on on the trustee even though you they are partners 414 00:32:09,140 --> 00:32:14,620 that you've been on. Look as big banks we're just easy target. What was that? 415 00:32:16,640 --> 00:32:17,760 All right questions 416 00:32:17,760 --> 00:32:19,140 it's perfect. Well, 417 00:32:22,580 --> 00:32:24,480 maybe could you just go and it was being 418 00:32:24,480 --> 00:32:30,800 bound to help that not be a pattern? I guess 419 00:32:30,800 --> 00:32:35,900 in the future, just because it is, like my old compliance 420 00:32:35,900 --> 00:32:39,220 or the investment advisory that was big deal too. 421 00:32:40,100 --> 00:32:43,520 On the continuing disclosure? Sure, yeah, I think it's 422 00:32:43,520 --> 00:32:46,660 stated noted the school actually did provide everything to the trustee on time, 423 00:32:46,940 --> 00:32:50,200 so the weakness here was this trustee missing the day 424 00:32:52,160 --> 00:32:57,580 I think this is clearly on the schools where we are, between the professionals in place 425 00:32:57,580 --> 00:33:04,640 and increased awareness, schools are in line full of, you know, revealing that, absolutely 426 00:33:04,640 --> 00:33:05,760 200 percent. 427 00:33:06,220 --> 00:33:09,100 So I want to make sure investors have accurate information. 428 00:33:09,740 --> 00:33:13,220 Particularly when this is called as a history of such good news to disclose, it's not 429 00:33:13,220 --> 00:33:19,540 like they have to confess bad things, so I think there's really a focus on this as there 430 00:33:19,540 --> 00:33:22,100 has been the last handful of years or so. 431 00:33:24,520 --> 00:33:28,040 And I think, fortunately, in my fluid conversations 432 00:33:28,040 --> 00:33:30,840 with designs like Trust Group, they also 433 00:33:30,840 --> 00:33:32,880 have improved their protocols to try 434 00:33:32,880 --> 00:33:36,300 to make sure they're getting permission out of them 435 00:33:36,300 --> 00:33:36,640 as well. 436 00:33:37,740 --> 00:33:40,320 The wear of it all, for instance, is a very valid, 437 00:33:40,580 --> 00:33:41,720 very fair concern. 438 00:33:43,830 --> 00:33:44,630 And thank you. 439 00:33:45,050 --> 00:33:46,530 Any other questions? 440 00:33:47,650 --> 00:33:53,230 Just on the legal bond documents, we're being reviewed. 441 00:33:53,590 --> 00:33:55,310 Are there any concerns? 442 00:33:55,730 --> 00:33:58,990 Because it looks like it's still in a month for doing practice. 443 00:33:59,430 --> 00:34:02,750 But you know it's done before it gets this far, 444 00:34:02,750 --> 00:34:04,150 so I just wanted to check on that. 445 00:34:04,730 --> 00:34:09,110 I think there are always influx until we actually go to cell bonds. 446 00:34:09,570 --> 00:34:11,190 So there's still going to be... 447 00:34:11,190 --> 00:34:13,550 Yeah, there's still going to be influx up until then. 448 00:34:13,550 --> 00:34:19,410 but I think I defer to Erick on his review for the issue. 449 00:34:19,810 --> 00:34:24,110 Yeah, the thing that I'm out of place or any no concerns for that. 450 00:34:24,310 --> 00:34:27,790 I've reviewed the documents and the application that's here. 451 00:34:28,010 --> 00:34:29,250 I was in there, I think it seems. 452 00:34:29,730 --> 00:34:30,890 Okay, three. 453 00:34:32,210 --> 00:34:33,510 Oh, let's see, Bond calls me. 454 00:34:34,650 --> 00:34:34,770 Yeah. 455 00:34:35,150 --> 00:34:36,390 I mean, I don't know this time. 456 00:34:36,830 --> 00:34:37,310 Okay. 457 00:34:38,130 --> 00:34:41,870 This resolution is going to offer us the authority that she 458 00:34:41,870 --> 00:34:48,490 bonds in the amount of national exceed $32 million by $500,000, which shall mature later 459 00:34:48,490 --> 00:34:54,450 than December 31st, 2016-07, with an interest rate of national exceed 6.5 percent per 460 00:34:54,450 --> 00:34:54,830 annal. 461 00:34:55,530 --> 00:35:00,990 It also authorizes the authority to execute and deliver a first supplemental trust indenture, 462 00:35:01,190 --> 00:35:05,650 bond purchase agreement, a first amendment to loan agreement, and any other documents 463 00:35:05,650 --> 00:35:07,810 required in connection with the issuance of these bonds. 464 00:35:08,810 --> 00:35:13,210 The resolution further decimates the school as a fall-finding charter school under the 465 00:35:13,210 --> 00:35:21,110 Abroad Expredent Enhanced Program and decimates the Abroad Expredent Enhanced Program as well. 466 00:35:22,010 --> 00:35:26,130 Finally, the resolution provides for public hearing on issues with bonds which will take place 467 00:35:26,130 --> 00:35:27,570 at 1 p.m. on August 1. 468 00:35:29,210 --> 00:35:30,210 Thank you. 469 00:35:31,390 --> 00:35:31,790 All right. 470 00:35:32,550 --> 00:35:35,370 If there are no further questions, let us all make it to the same motion. 471 00:35:36,350 --> 00:35:40,530 Motion to approve Resolution 2026-11, 472 00:35:41,290 --> 00:35:46,610 present enhanced issuance to bond issuance to be high of charter school. 473 00:35:47,630 --> 00:35:48,750 Well, second. 474 00:35:49,810 --> 00:35:51,550 It's any discussion on the motion. 475 00:35:52,330 --> 00:35:54,290 Any time in all in favor say aye. 476 00:35:55,150 --> 00:35:55,310 Aye. 477 00:35:56,890 --> 00:35:57,410 Any opposed? 478 00:35:58,730 --> 00:35:58,910 All right. 479 00:35:59,030 --> 00:36:00,150 That motion passed to you. 480 00:36:00,150 --> 00:36:01,970 So congratulations. 481 00:36:06,050 --> 00:36:07,010 Thank you. 482 00:36:08,730 --> 00:36:09,690 Thank you. 483 00:36:09,690 --> 00:36:10,870 You have a table for that. 484 00:36:12,770 --> 00:36:14,030 You love boring meetings. 485 00:36:14,530 --> 00:36:15,310 Thank you so much. 486 00:36:15,450 --> 00:36:16,230 Thank you. 487 00:36:16,370 --> 00:36:16,630 Thank you. 488 00:36:16,650 --> 00:36:17,970 We'll be right back in a month for the few. 489 00:36:18,270 --> 00:36:19,010 So there you go. 490 00:36:19,130 --> 00:36:19,570 Twenty-first. 491 00:36:19,810 --> 00:36:20,290 Is that the name? 492 00:36:20,710 --> 00:36:21,270 Last night. 493 00:36:21,990 --> 00:36:23,310 That was the number. 494 00:36:23,770 --> 00:36:23,950 Twenty-first. 495 00:36:24,270 --> 00:36:24,690 That's the number. 496 00:36:25,230 --> 00:36:26,110 That's the number. 497 00:36:26,130 --> 00:36:26,870 That's the number. 498 00:36:27,230 --> 00:36:27,650 That's the number. 499 00:36:27,810 --> 00:36:28,810 Twenty-first. 500 00:36:28,810 --> 00:36:30,710 Yeah, we have to work on it. 501 00:36:30,710 --> 00:36:31,070 Awesome. 502 00:36:31,950 --> 00:36:32,650 All right. 503 00:36:36,530 --> 00:36:37,370 All right. 504 00:36:37,510 --> 00:36:39,930 I'm for review and discussion of the back. 505 00:36:40,610 --> 00:36:43,470 We were well or scored on the long time. 506 00:36:45,490 --> 00:36:47,010 Well, Aaron. 507 00:36:47,630 --> 00:36:47,850 Yes. 508 00:36:48,470 --> 00:36:48,970 Aaron Aaron. 509 00:36:51,530 --> 00:36:56,210 Oh, we keep looking at this and making it. 510 00:36:56,510 --> 00:36:59,910 So I think that Diana has sent out 511 00:37:00,610 --> 00:37:05,990 but the red line and clean copy of some most recent version. 512 00:37:06,750 --> 00:37:09,490 So maybe we can walk through some of the points. 513 00:37:12,140 --> 00:37:18,380 Under the definitions, you'll see that renovation needs, needs, and it's life. 514 00:37:19,220 --> 00:37:21,220 Because we just left that as a placeholder. 515 00:37:21,440 --> 00:37:27,420 We wanted to have that discussion in case the authority does want to define that term. 516 00:37:28,540 --> 00:37:36,580 It's used in the statute, but it seems from our meeting last time that renovation needs 517 00:37:36,580 --> 00:37:39,480 was one of those areas that was a little big. 518 00:37:41,880 --> 00:37:48,700 If you recall, we had the one school that had the leaking roof and, you know, is that a 519 00:37:48,700 --> 00:37:49,420 renovation need? 520 00:37:49,420 --> 00:38:00,380 So, it really was, or this is kind of a placeholder so we can discuss that and maybe come up with what those renovation needs really mean. 521 00:38:03,660 --> 00:38:05,000 What does the authority want it to mean? 522 00:38:05,380 --> 00:38:12,780 Do you have any suggestions on what the definition should include or should end? 523 00:38:12,780 --> 00:38:13,780 the 524 00:38:16,540 --> 00:38:27,200 hang up in our last meeting was the statute, the previous statute said that new charter schools 525 00:38:27,200 --> 00:38:37,200 and what was the urgent facility needs had a priority that was removed. I think the priority 526 00:38:37,200 --> 00:38:48,600 was removed not the urgent facility needs. So maybe renovation needs means facility needs, 527 00:38:49,260 --> 00:38:56,660 you know. I mean, as I was thinking about it, and this is just me, but I clearly wouldn't want 528 00:38:56,660 --> 00:39:01,380 the charter school to go and complete this repair, and leave students because the heavenly kingdom, 529 00:39:01,840 --> 00:39:07,300 right? I mean, that seems like something that should be taken care. But 530 00:39:08,600 --> 00:39:15,360 So what kind of thing shouldn't include the sense we're defining in terms of what it seems like we're trying to 531 00:39:16,440 --> 00:39:16,880 chair 532 00:39:17,500 --> 00:39:22,040 I can jump in I don't think we're suggesting that we need to add a definition of statute sense 533 00:39:23,120 --> 00:39:27,100 that the fund is to be used to meet school building construction and renovation means 534 00:39:27,100 --> 00:39:30,300 So I don't think it has to be we don't have to define it 535 00:39:30,300 --> 00:39:36,240 Even though it's just you know make a decision on a case by case basis or that case by application basis 536 00:39:36,240 --> 00:39:40,600 We really just added that in case it's something you want to address, but we're not suggesting 537 00:39:40,600 --> 00:39:46,120 it be, that you define renovation needs because you may limit it, and we may inadvertently 538 00:39:46,120 --> 00:39:49,080 limit what renovation needs are if you add a definition. 539 00:39:49,840 --> 00:39:53,060 You really let's just discuss the point, we can easily delete it. 540 00:39:53,340 --> 00:39:54,400 It's not required to be included. 541 00:39:54,400 --> 00:39:57,180 How is the GSEM? 542 00:39:58,720 --> 00:39:59,520 Make new again. 543 00:40:02,410 --> 00:40:05,920 They define renovation as make new again. 544 00:40:07,200 --> 00:40:16,900 So like if it's a weeky roof, you make it new again, if you, yeah, so it's just a distinguishing 545 00:40:16,900 --> 00:40:22,260 factor from not using money to build something new, it's to make new again. 546 00:40:28,440 --> 00:40:28,960 Yeah, 547 00:40:31,680 --> 00:40:38,800 I don't, I don't, I don't have a strong runes that, oh, I went back and looked 548 00:40:38,800 --> 00:40:49,840 at the code too, and so what you try to do, I'm putting parameters on the, on expenses 549 00:40:49,840 --> 00:40:52,420 is related to startups. So, 550 00:40:54,650 --> 00:40:59,970 the way I looked at it, I went back and looked and tried to 551 00:40:59,970 --> 00:41:05,350 run through scenarios. I know that it's been nice to have some flexibility to do the 552 00:41:05,350 --> 00:41:11,530 stable things anyway. Because there's some weird stuff that comes up. But you're like, 553 00:41:11,730 --> 00:41:18,190 you're not out of that, but we have some flexibility across it. So I get that. I sort of really 554 00:41:18,190 --> 00:41:20,030 because I'm sure this really takes 555 00:41:20,030 --> 00:41:21,830 actions in this case. 556 00:41:23,290 --> 00:41:25,350 Yeah, we're really repairs, I think 557 00:41:25,350 --> 00:41:27,270 is what it does. 558 00:41:27,490 --> 00:41:29,710 The statute says renovations, but I, 559 00:41:29,890 --> 00:41:31,690 you know, I would take that to name 560 00:41:31,690 --> 00:41:34,130 repairs, certainly if that means 561 00:41:34,130 --> 00:41:36,170 making it new again, that would be 562 00:41:36,170 --> 00:41:38,230 repair. But you know, I think we 563 00:41:38,230 --> 00:41:39,570 run the risk if we define it, 564 00:41:40,630 --> 00:41:42,710 potentially limiting what you can 565 00:41:42,710 --> 00:41:44,490 do in a specific or a certain 566 00:41:44,490 --> 00:41:48,950 In addition, when you say, like, we're y'all wanting for the addition. 567 00:41:49,170 --> 00:41:56,230 Well, we, we do, because I think the whole thing is, is both renovations and expansions 568 00:41:56,230 --> 00:41:56,830 are allowed. 569 00:41:57,110 --> 00:42:03,130 So, I don't really see the necessity in defining and limiting this in that way. 570 00:42:03,790 --> 00:42:03,830 Yeah. 571 00:42:04,070 --> 00:42:11,310 So my logic, claiming back to why the fund was created and wanted to use for, it's created 572 00:42:11,310 --> 00:42:20,550 to do construction and renovation or for expansion and then limiting the 573 00:42:20,550 --> 00:42:25,750 expenditures to additions or expansions but for acquisitions or 574 00:42:25,750 --> 00:42:34,370 constructions of a facility. So I would think if they're using it we want 575 00:42:34,370 --> 00:42:46,510 favorite going to, if it's an expansion situation or a new school. We're not 576 00:42:46,510 --> 00:42:51,510 just going to occur very naked crying, right? Or these are the same things. 577 00:42:52,510 --> 00:42:58,150 Like, most of them is supposed to be catered to like new expansion, right? 578 00:42:58,390 --> 00:43:03,770 Right. They don't have access to any pulsing news. These are new schools that don't have 579 00:43:03,770 --> 00:43:12,290 So, a lot of them, or I mean, yeah, like, for example, John Hancock was one of the schools 580 00:43:12,290 --> 00:43:18,190 and they've been around since, like, 2000, you know, so they're doing an expansion and 581 00:43:18,190 --> 00:43:26,670 do people mountain, and so this was to help group that, not the bulk of that was being funded 582 00:43:26,670 --> 00:43:30,530 by a fondly-issued, but the authority heard. 583 00:43:34,430 --> 00:43:42,830 If I may, I think you say it was just, let's not define renovation at this point, that way we don't get it verbally, limit the authority somehow. 584 00:43:43,390 --> 00:43:45,270 You can always amend the rule later if we need to. 585 00:43:45,690 --> 00:43:51,790 And I think the authority can always, if you think priority needs to be given, you can always make those decisions, right? 586 00:43:51,950 --> 00:43:56,770 Was it? Yeah, yeah. I mean, if we don't have to approve every school that comes, right? 587 00:43:57,530 --> 00:44:02,630 Because we can say that this is a revolving loan fund and we make decisions based off of 588 00:44:02,630 --> 00:44:09,390 whether this is the advantage of all schools who will come through the revolving program 589 00:44:09,810 --> 00:44:14,030 and we have to think about how that long-term operation works. 590 00:44:14,790 --> 00:44:20,810 Yeah, because if it's a loan, if you're expanding or creating something new, you're going to 591 00:44:20,810 --> 00:44:22,870 generated, renovated, pay for the hours, 592 00:44:23,190 --> 00:44:26,470 and it's just your cover of a gig on a nine-person thing. 593 00:44:26,650 --> 00:44:28,530 If you're not having a role in whatever, 594 00:44:28,870 --> 00:44:31,230 then that's a different to a different situation. 595 00:44:31,670 --> 00:44:35,350 But Scott, you probably, since this has been with you guys, 596 00:44:35,510 --> 00:44:37,690 being a main thing. 597 00:44:38,250 --> 00:44:41,610 But yeah, just real quick, the history behind it. 598 00:44:41,850 --> 00:44:44,290 And we're turning over to school construction, 599 00:44:44,510 --> 00:44:48,650 oversight to the FCM, per legislation from the last session. 600 00:44:48,650 --> 00:44:55,910 but there was an emphasis on distinguishing between repair and renovation because back in the 601 00:44:55,910 --> 00:44:59,810 day, some charter schools were, you know, build versus 602 00:45:00,000 --> 00:45:29,880 By and renovate, right? So they might find a building that renovation talks to functionality, right? It's cosmetic. It's functional, whereas repair is fixing something that you already own so that it doesn't violate a safety code or something like that. There was a strong feeling that we had to use terms like renovation, because people were interested in why are you taking over a building that you might, you know, need 603 00:45:29,880 --> 00:45:35,040 to renovate, right, as opposed to building a new one, or, you know, and that's where 604 00:45:35,040 --> 00:45:42,460 the loan came in, right, the startup funds of, and a lot of times with loans, it's that 605 00:45:42,460 --> 00:45:47,720 case, they need to renovate or, you know, increase the functionality of the building. 606 00:45:47,920 --> 00:45:52,140 Now, that's really where that term came from, right, wrong, or indifferent to school construction 607 00:45:52,140 --> 00:45:57,600 and we know that that was the different and sheet factor between a repair and a renovate, 608 00:45:57,820 --> 00:46:03,320 right? It's more of a, renovates more leaning towards cosmetic, increasing functionality, 609 00:46:03,520 --> 00:46:12,540 where a pair is something immediate that broke that needs an immediate fix. And typically repairs 610 00:46:12,540 --> 00:46:18,560 are smaller in scale than a renovation because renovations are expanding the functionality of the 611 00:46:18,560 --> 00:46:24,780 building, so I don't know, I hope to help. I'm not necessarily stuck on that we have to define 612 00:46:24,780 --> 00:46:30,640 renovation, but that's just where it comes from that whole discussion in the school construction 613 00:46:31,400 --> 00:46:32,600 realm, I guess. 614 00:46:36,180 --> 00:46:36,660 Is 615 00:46:38,900 --> 00:46:42,600 we paired in here? I just see the innovation. 616 00:46:45,000 --> 00:46:53,000 And in the code, it says to meet school building construction and renovation needs and pay 617 00:46:53,000 --> 00:46:57,760 for expenses related to the start-up of the new school or the expansion of an existing 618 00:46:57,760 --> 00:46:58,460 school. 619 00:46:58,820 --> 00:47:02,020 So some buildings might need renovation to expand. 620 00:47:02,840 --> 00:47:07,700 They're expanding and you're expanding to a building that already exists, but in order 621 00:47:07,700 --> 00:47:12,840 There are two increased class capabilities to bring more students in. 622 00:47:12,940 --> 00:47:15,060 They need to renovate that particular building. 623 00:47:15,700 --> 00:47:16,500 So it's not a repair. 624 00:47:17,060 --> 00:47:17,920 It's a renovation. 625 00:47:19,160 --> 00:47:21,360 Like behind in their Sandy facility. 626 00:47:22,420 --> 00:47:22,560 Yeah. 627 00:47:22,700 --> 00:47:25,460 I mean, you could probably define that as a renovation. 628 00:47:25,720 --> 00:47:29,160 I mean, you know, they've got the space already. 629 00:47:29,440 --> 00:47:30,480 They're not building any space. 630 00:47:30,860 --> 00:47:32,620 And it's not that they're repairing it. 631 00:47:32,780 --> 00:47:36,380 It's just renovating it to increase the functionality of the existing building. 632 00:47:37,860 --> 00:47:44,380 Yeah, yeah, no, I did it. Yeah, it's like the prison, the prison right, because I just 633 00:47:44,380 --> 00:47:49,020 closed it. The one who got some, they're trying to do an expansion, but to do the expansion, 634 00:47:49,920 --> 00:47:57,820 they have to increase the size of the cafeteria. Yeah, that's a good example of renovation 635 00:47:57,820 --> 00:48:15,040 versus a repair. Yeah. I find not putting in that. Yeah, I'm fine. I'm fine. 636 00:48:18,000 --> 00:48:18,980 I just, that's 637 00:48:18,980 --> 00:48:27,800 the historical perspective of school construction application of language, I guess. So you'll just 638 00:48:27,800 --> 00:48:31,360 Just take number 4 out, if you don't believe it in their own sense. 639 00:48:33,240 --> 00:48:43,060 And then one thing that Erin and I have been discussing is whether subsection 10 be removed. 640 00:48:44,100 --> 00:48:51,220 It refers to this charter school closure reserve account under section 59 at 307. 641 00:48:52,220 --> 00:48:56,900 And we recommend removal because frankly I don't think the authority has any control over 642 00:48:56,900 --> 00:49:03,420 that fund, that reserve account, and it kind of exists whether it's in rule or not. 643 00:49:05,100 --> 00:49:10,420 But Scott, I'd love your input on it and just wait, you. 644 00:49:11,400 --> 00:49:12,300 Yeah. Sure. 645 00:49:13,100 --> 00:49:18,780 Chair. Okay. Yeah. Okay. Yeah. Through the chair. 646 00:49:20,260 --> 00:49:26,720 Yeah. The AG's right. I mean, you know, I don't see the authority controlling the 647 00:49:26,900 --> 00:49:40,500 school closure fund. However, part of it is, you know, there's a tiered approach to the closure of a charter school and, you know, that fund could be used to cover or while what we're trying to say. 648 00:49:40,760 --> 00:49:54,740 Yeah, that basically cover the remaining balance on the loan or, you know, it was not set up exclusively or entirely for that. But, you know, there is some relevance, I guess. 649 00:49:54,740 --> 00:49:58,580 but I don't disagree with the attorneys on taking it out. 650 00:49:58,980 --> 00:50:00,780 You know, yeah, we don't control it. 651 00:50:01,160 --> 00:50:06,140 However, you know, for situational awareness that in the instance of the charter school closing, 652 00:50:07,260 --> 00:50:14,600 you know, and I don't have the exact tier steps, you know, like, okay, this first and like, you know, 653 00:50:15,540 --> 00:50:21,280 salaries first and then debt and then, you know, it's all spelled out in there. 654 00:50:21,280 --> 00:50:32,800 But this is, you know, that charter school closure fund is designed to, because we've had, we have in the past written off loans, or they've defaulted because of closure. 655 00:50:33,600 --> 00:50:41,360 So, you know, representative Lowry back in the day helps set this up so that because it is what it is. 656 00:50:41,360 --> 00:50:46,200 as if they default and they close and they default on the loan, 657 00:50:46,340 --> 00:50:50,020 that's just less money readily available for, 658 00:50:50,280 --> 00:50:52,200 you know, other charter schools to use, right? 659 00:50:52,680 --> 00:50:53,860 So, um... 660 00:50:53,860 --> 00:50:55,680 Well, it can actually push and stop. 661 00:50:55,920 --> 00:50:57,040 Sure, yeah, sure. 662 00:50:57,280 --> 00:51:01,240 So, I mean, the reverse is... 663 00:51:01,240 --> 00:51:01,460 Yeah. 664 00:51:02,060 --> 00:51:03,120 There, though, right? 665 00:51:03,300 --> 00:51:06,080 Like, in the charter school reserve account code, 666 00:51:06,080 --> 00:51:12,500 it does allow a school longer closure to cover some of the deaths through 667 00:51:12,500 --> 00:51:18,560 there. So that part is already encoded in that section. Right. So needed to be 668 00:51:18,560 --> 00:51:24,600 circular. Right. Yeah. That's the exact. Yeah. Yeah. Okay. Yeah. I see that. Yeah. 669 00:51:24,860 --> 00:51:31,500 Yeah. Good point. Yeah. There's a flip side to it for sure. So I'm 670 00:51:31,500 --> 00:51:34,920 supportive of what you guys are suggesting just because it's already there as 671 00:51:34,920 --> 00:51:37,300 as an option for a closure. 672 00:51:37,560 --> 00:51:39,640 Yeah, really, I think we added it here initially, 673 00:51:39,900 --> 00:51:44,640 just sort of give everyone notice that it exists, 674 00:51:44,940 --> 00:51:46,920 but it exists, whether it's in the rule or not. 675 00:51:47,920 --> 00:51:49,860 So, because we would keep it 11 and 12, 676 00:51:50,220 --> 00:51:53,900 yes, and that would also enable that to be an option. 677 00:51:54,260 --> 00:51:54,900 Right, yeah. 678 00:51:56,980 --> 00:51:59,720 Then we added to what just for information versus, 679 00:52:00,160 --> 00:52:01,980 we took the board of education's old rule, 680 00:52:02,800 --> 00:52:04,640 and just get a statement as they changed it. 681 00:52:04,640 --> 00:52:08,460 So that what is currently tampered or in reserve camp was in the board of 682 00:52:08,460 --> 00:52:12,020 stations, who regarding the account, what is now 683 00:52:12,020 --> 00:52:14,140 fine. And they have control of that. 684 00:52:14,240 --> 00:52:16,240 They have control of that. That's right. We don't. 685 00:52:16,360 --> 00:52:19,480 So that's right. Yeah, still exists. It's still available. 686 00:52:19,900 --> 00:52:25,520 In this position, you know, I think that's part of the reason, you know, 687 00:52:25,800 --> 00:52:28,940 I mean, take names out of it. This position would be the bridge, you know, 688 00:52:28,980 --> 00:52:34,180 and if there was closure, it could advise the authority on what the dispensing 689 00:52:34,180 --> 00:52:42,380 of debt was and you know from the charter school closure account so yeah I see that as a value 690 00:52:42,380 --> 00:52:50,480 ad and having a position from the USBE service the secretary because then it you know they can 691 00:52:50,480 --> 00:52:58,120 communicate I will it as long as I'm doing this you know it should that it should that occur 692 00:52:58,120 --> 00:53:05,020 where the school closes, we could lay out all the details and advise the authority on 693 00:53:05,020 --> 00:53:09,560 the replenishment of that loan, if it gets, you know, if they close, etc. 694 00:53:10,100 --> 00:53:19,580 So I guess my question maybe for the authority would be as number 12, then sufficient to understand 695 00:53:19,580 --> 00:53:26,860 and his blood, his work pertains to this body is when we would do a write-off of the 696 00:53:26,860 --> 00:53:33,540 problem, because that's where we control, you know, where we're just over the loans. 697 00:53:34,640 --> 00:53:39,540 And we would want to note that rigorous process that had been followed, including happening 698 00:53:39,540 --> 00:53:45,720 the reserve account before we did a new write-off strike, because, you know, Diana would be doing 699 00:53:45,720 --> 00:53:46,380 the write-off. 700 00:53:46,380 --> 00:54:06,060 So I guess my question is number 12 sufficient for the board to feel good that you know we've done everything we need to, in order to write something on me and kind of encompasses that, but it doesn't really lay out any specific steps or. 701 00:54:07,380 --> 00:54:14,520 So, what if we just suggested that we consult with the board of education to see if they're 702 00:54:14,520 --> 00:54:18,740 getting sure that everything comes before we write. I think that would be great. 703 00:54:19,400 --> 00:54:24,640 That force is us to connect back in and see if they have anything on their side. 704 00:54:25,240 --> 00:54:29,340 Right. Because we don't know what we, if I may, chair. We don't know what we don't know. I mean, 705 00:54:29,460 --> 00:54:34,640 there's going to be, what we've seen with closures is a variety of how much that they have, 706 00:54:34,640 --> 00:54:41,200 or little because they just didn't you know they open like for two months and then stopped and so 707 00:54:41,200 --> 00:54:50,000 there wasn't a lot you know so you're going to get potentially varying amounts of death and 708 00:54:50,000 --> 00:54:55,040 you know all the different things I mean maybe you know they've been behind on payroll for months 709 00:54:55,040 --> 00:54:59,980 and you want to pay the teachers out of their contracts or you know so that doesn't lead much 710 00:54:59,980 --> 00:55:04,260 to tap into. So, and 711 00:55:08,200 --> 00:55:13,680 then other than what is what you see, we just have one minor change. 712 00:55:14,100 --> 00:55:21,400 So, in 9B, we would just remove related to the, because it's in the ether bacteria sentence. 713 00:55:22,200 --> 00:55:23,040 We don't want to use it. 714 00:55:24,420 --> 00:55:31,840 or it says expenses related to the start-up we would take out related to the 715 00:55:32,780 --> 00:55:33,640 same thing. 716 00:55:46,820 --> 00:55:50,680 I'm not sure about say I go to a pre-pricing for American prep right 717 00:55:50,680 --> 00:55:57,340 now, but you have any questions for me. Many meetings, buildings, churches. There are lots of non-long 718 00:56:54,440 --> 00:56:58,560 And Aaron's been making those changes as we go, so if you want to see it, we can share 719 00:56:58,560 --> 00:56:58,720 it. 720 00:56:59,300 --> 00:57:01,160 Well, we have to worry about it. 721 00:57:01,420 --> 00:57:06,960 So let's see if we send it to the identity of the downstream, yes, because it didn't. 722 00:57:07,040 --> 00:57:07,120 Yeah. 723 00:57:08,340 --> 00:57:12,120 That's what I'm sure you're naming other changes, and I'll send you. 724 00:57:12,120 --> 00:57:12,800 And 725 00:57:16,030 --> 00:57:22,610 Chair, I'm going to have to drop off because I've been meeting with regarding aligning 726 00:57:22,610 --> 00:57:31,290 funding for the Alpine split, you know, for, yeah, I'm sorry, that's why I'm not, you can 727 00:57:31,290 --> 00:57:33,810 have any other, 728 00:57:35,970 --> 00:57:37,450 no, I read it. 729 00:57:37,850 --> 00:57:42,190 I appreciate they are putting it in the backups and it all makes sense to me. 730 00:57:42,190 --> 00:57:47,410 and I appreciate the just you know clarity on renovation all that you know it all makes sense. 731 00:57:47,470 --> 00:57:49,730 Okay all right well then I'm wondering about right here. 732 00:57:50,090 --> 00:57:55,650 Yeah very well written rule. So are you good with motion and putting forth the motion? 733 00:57:57,510 --> 00:58:06,330 Motion to approve the rule? Well second. Any discussion on that? Hearing none. All in favor say 734 00:58:14,650 --> 00:58:20,310 and we will be back for that, that's the big deal. 735 00:58:20,470 --> 00:58:20,810 Any other? 736 00:58:21,590 --> 00:58:22,690 No, I will. 737 00:58:22,930 --> 00:58:23,830 I think most of them to occur. 738 00:58:24,910 --> 00:58:25,790 I want to motion to occur. 739 00:58:26,510 --> 00:58:28,330 I think Mayer. 740 00:58:28,990 --> 00:58:31,450 My name is Jordan. 741 00:58:32,210 --> 00:58:32,790 Thank you. 742 00:58:32,990 --> 00:58:33,510 Thank you. 743 00:58:33,910 --> 00:58:34,710 Thank you. 744 00:58:35,830 --> 00:58:36,310 You're welcome. 745 00:58:36,310 --> 00:58:36,470 Thank you. 746 00:58:36,570 --> 00:58:37,030 What's that? 747 00:58:37,190 --> 00:58:37,330 Yeah. 748 00:58:38,470 --> 00:58:38,830 Awesome. 749 00:58:39,650 --> 00:58:40,550 Thank you.