[This transcript was generated automatically from audio using AI and hasn't been reviewed by a person -- it can contain mistakes, including plausible-sounding sentences that were never actually said. Treat it as a starting point, not a verbatim record.]

[0:00] Thank you, Senator. School of Finance of Thordy. It's Tuesday, August 11, 2020, this and
[0:09] I'm tomorrow, March 3rd and we'll take care of the authority and we'll just briefly introduce those who are
[0:18] on the authority. I'm going to give some fear in here and then shout out.
[0:23] Thank you, Deputy Carl, Executive Director and the Governor's Office of Finance and Budget,
[0:27] and we will talk about authority.
[0:30] Scott Jones, Deputy Superintendent of Operations, Utah State Board of Education, Secretary
[0:35] to the Authority.
[0:37] Excellent.
[0:38] Thank you.
[0:40] All right.
[0:40] First item on the agenda is approval of the Minutes.
[0:44] Any discussion or opinions on the amendments?
[0:48] If no, I'll take motion. Motion to approve the minutes.
[0:53] Do I have a second? I'll second.
[0:56] Any discussion on the motion? Hearing none, all of them are saying aye.
[0:59] Aye. Aye.
[1:01] Any opposed? Motion passed unanimously. Thank you.
[1:06] Item number two, resolution 2026-
[1:10] and chamber.
[1:11] And that's me.
[1:15] So this is tree side charter schools application to the Utah charter school
[1:19] finance authority. This is a non-inhance transaction. So they are not requesting the moral obligation
[1:25] of the state and it's an unrated bond. So this will be a little bit, I feel like we haven't
[1:31] seen very many non-rated bonds for a while. We've got the school here. Their business manager
[1:38] is Red Apple Financial. Clint B. Singer from Roundtable is here and he's the municipal advisor
[1:44] to both schools today, Treeside and B.I.B. Account. The underwriter on this transaction is Raymond
[1:51] James, Farrow's counsel, Brandon Johnson, and then the bond counsel is Eric Hunter. And your
[1:58] memo is wrong and I apologize. We had a change part way through issuer's counsel is not Gilmore
[2:04] belt, or a keratin, and so on, US bank is the trustee on this transaction, so what we're
[2:12] looking at here is about 15 million in tax exempt bonds, and these bonds will be repaid
[2:18] with a bullet payment, a balloon in year eight, or in year ten, and that's based off of
[2:29] a 25-year amortization. Part of the reason why schools do this is to lower their cost of
[2:35] their interest rate by pricing to a shorter maturity and give them a lower cost on their debt.
[2:43] With the expectation that they get to refinance in four or five years, which is what they're
[2:48] expecting the call date to be on these bonds. A little bit about the school. They've been operating
[2:54] for a few years now and over the last couple of years they've had a little bit of how should I say
[3:05] this and there's a little movement at the school so they had a dispute with their developer of
[3:11] their property that started a couple of years ago and that led to them leaving that facility here
[3:16] this last year. The new they're leasing a facility currently before they build the facility that these
[3:23] bonds will build and they will have a permanent home for the foreseeable future.
[3:29] So that's kind of the plan. There was just a little bit of a dispute with the landlord,
[3:34] and partially, you know, you see those developer releases increasing in cost. There were some
[3:39] disputes over some of the property tax associated with that. And so getting out of that, I think
[3:46] is a better situation for the school. They did have a large payment to exit that lease
[3:52] that came off with their their financials on the last fiscal year and so that saw a big drop in
[4:01] their cash. We'll see that later on in kind of the stuff we're looking at. But all of that's
[4:06] important context for some of the things that you'll see that you saw in the memo,
[4:11] enrollment declines in the last year. So if you look the 25-26 school year saw a pretty significant
[4:18] get the client an enrollment for a school this size,
[4:21] especially like a 20% drop in enrollment.
[4:25] And that drop in enrollment was from moving facilities
[4:29] and not being in the same facility
[4:31] and not having a long-term home.
[4:34] So they're expecting the 26, 27 enrollment
[4:38] to be about the same as last year
[4:40] and then hoping that once they're back into
[4:42] their long-term permanent facility,
[4:45] they'll be able to get back up above
[4:47] of the enrollment numbers that they had before.
[4:52] And they'll have a little bit more room at this new facility
[4:56] than they did at the last one.
[4:57] So that will allow them to potentially
[4:59] grow enrollment over time.
[5:01] But the pro forma just shows them getting back up
[5:03] to about 450 students, which is about where they were operating
[5:07] before, but proficiency rates a little bit below
[5:12] the local district, crotol school district.
[5:14] so I should have said this is down in South Park Provo up against the mountains a little bit,
[5:20] and that's the area that they serve. The school has a five-member board with some backgrounds in
[5:27] business management, real estate, and military leadership, marketing, and the arts and communications.
[5:34] Ms. Rachel Brunson, services director, and that's Rachel right there, and she has a Master of Arts
[5:42] an administration from SUU, some endorsements from SUU for education and then a BS and
[5:47] element education from Utah State University. School has some of the policies we like to
[5:53] see but not necessarily all of them so there's some things that they would benefit from having
[5:59] some additional policies in place.
[6:03] So a standard financing but again not seeking credit enhancement
[6:07] from the authority on this transaction, so no moral obligation here, but fixed rate bonds for
[6:13] the short term that they have been, four to five years, called with the intent of refinancing once
[6:19] they've got a little bit more stable enrollment and bringing their cost of financing down in four to
[6:25] five years.
[6:28] So you've seen some variations in their budgeting to their actual performance over the
[6:34] years, really indicative of the things that have been kind of going on at the school.
[6:40] A drop in their cash position in 24, 25, they're expecting that to increase in the next
[6:48] next little bit. The number here for 25, 26 is a little bit different because it's all, this
[6:55] is an automated financials for 25, 26. So it looks a little bit higher than it was because there's not
[7:01] restricted funds, restricted cash pulled out of them.
[7:07] Fun balance, again, similar story dropped because of that payment to the developer, but, you know,
[7:14] I think they would expect that if they were able to get back to that operating level, which, you know,
[7:20] that's the real question about whether their enrollment gets back up to where they were historically operating or not on this.
[7:27] debt coverage ratio, so I put this as a 2025, but if you look at other years in the last
[7:37] little bit, they've been able to meet their least adjusted debt service coverage.
[7:41] Now, if you take that net operating revenue that they were able to achieve in 2025 and carry
[7:51] that forward, they're pretty close to break even on this future debt.
[7:55] So not too far off from being able to handle this.
[8:00] They're FY26 numbers, look, even better than that.
[8:04] So I think even at their level that they're at for enrollment,
[8:08] they should be able to manage this.
[8:11] It's tight though.
[8:12] And I think that's what you would kind of expect.
[8:15] So the chart on page six kind of shows the difference
[8:18] between the two levels of net revenues.
[8:22] So if you see the 25 net revenues,
[8:24] they're just under the expected future debt service and if they keep going up to 2026 levels,
[8:30] unaudited levels and they'll be able to meet the debt service on this. So,
[8:36] debt burden will be higher to start out and that's just a function of how small the school is.
[8:42] It's about 15 million bonds but that's a lot for a school center, 400 students. That's pretty small
[8:48] especially compared to a lot of the schools we've seen lately. That requires them to
[8:54] higher operating margins because in order to meet that debt service you have to put more
[9:00] more of your money's going out of the classrooms and into the debt payments. So scale and adding
[9:06] students will help them to divert more money away from debt into the classroom and allowing
[9:13] to get lower operating margins but their performance based off a 25% operating margin which is
[9:21] 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%.
[9:31] So they're well above the benchmark but because of the high debt burden that's necessary for them.
[9:39] 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.
[9:48] So, again, we've got our professionals looking at this or
[9:54] Harrington and Sutcliffe and Eugene is on.
[10:00] I can't see his name.
[10:02] Well, there he is. Eugene is online, acting as special
[10:06] issuers counsel and then Eric Hunter is from Chapman and
[10:10] Cutler on counsel to the school.
[10:13] So, that's my report on
[10:23] I just asked just the status of the dispute in the past all then resolvers. I think they'll be carried into it.
[10:35] 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.
[10:42] It's in, yeah, most of their situations in the school and it's building, but completely
[10:49] done with, and the school is, doesn't have any contractual obligations nor is it in the building.
[10:56] You're not going to be haunted by proper cash in those, right?
[10:58] Yeah, very, very good questions, and of course, I can answer this.
[11:03] The divorce is fine.
[11:05] I don't want to question.
[11:07] So I seem to remember there was some concerns with previous line board about
[11:11] in shared space is that right that they have like another tenant
[11:17] both of your building or something that was at the pretty ceiling?
[11:21] Yeah, that would have been a pretty bad house.
[11:23] Okay, so yes, I know some of the issues that you have with that previous
[11:28] developer and I'm glad you've been able to exit that because it sounded like it was a great
[11:33] solution.
[11:39] Questions?
[11:40] Questions?
[11:41] Chair, Scott?
[11:42] Yes.
[11:43] So, where exactly is the new building being built?
[11:46] I'm just curious, actually,
[11:48] where exactly, how far away from the old building
[11:51] against process?
[11:53] It's probably been a mile.
[11:56] What we're at, we're at the old Nobel campus right now
[11:59] and we're in an office building,
[12:01] which, you know, telling parents
[12:03] you're gonna move to an office building,
[12:04] you're gonna lose students, right?
[12:06] So right now we're in an office building
[12:08] and our current landlord,
[12:09] board. He had a building for sale that's in the same kind of area but it's a stand-alone
[12:17] building and it's on 7 acres and so we would be able to do a lot. So it's 2.35 East,
[12:23] 1600 South and Probe. Exactly. And so we found this building that was on the same property
[12:31] but it's a stand-alone building. It has a 7 acres total and it used to be an old Sears
[12:38] call center, but I'm done a lot of research on it and it's stable and ready for us to
[12:44] basically just get up the inside and make it to school.
[12:48] Great, so lesson if I may, Chair. Lessons learn from the previous side and the previous
[12:54] building is there's some issues with, you know, students being dropped off and things like
[12:58] that. So whenever there's a new construction project, how are you guys feeling about, you
[13:03] know, the input or throughput of the student, safe, you know, drop off points, those types
[13:09] of things too, you know, I mean, what else is going on around you? That was kind of
[13:14] one of the key things that I experienced in visiting Treeside at the location, you know,
[13:20] few times. So how is that going to come together in the sense of, you know, the safety of the
[13:27] kids and making sure that, you know, drop off points are secure and all that. Does that
[13:32] That makes sense.
[13:33] Let's compare.
[13:34] Yes.
[13:34] Yes.
[13:35] We're actually a current building
[13:38] or a half that is an office building
[13:39] is furlough away from the new building.
[13:43] So what is the new construction with the concept?
[13:46] And we've actually, it's kind of nice
[13:48] that there's a lot of parking area and asphalt area.
[13:52] We've had the best pickup and drop-off
[13:54] we've ever had in the last eight years.
[13:56] It's so nice.
[13:58] So we're the Novel Campus Community.
[14:01] There is Rocky Mountain University that's a couple of buildings down, but what we really
[14:08] liked about it is it's very, very quiet, quiet area, and there isn't the concern that
[14:15] we have of our last building where they're coming off of the road going down in the
[14:20] United States.
[14:23] We were coming off the station, it's kind of in an area where there's no huge traffic
[14:30] problems and even though we're in an office building, the nicest thing about being here is not
[14:36] worrying about student safety getting in and out of cars, etc. Yeah, that's a good thing. So
[14:42] sometimes good things come out of bad things. So I appreciate that and thinking of the kids and the
[14:48] selection of the site. So thank you, Chair. That's all I have. Thank you. Other questions?
[14:55] I'm just curious on how you're moving my hand.
[14:59] Take it.
[15:09] 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.
[15:31] We're doing very well with our math residency.
[15:33] We actually got a total certificate from the state saying
[15:36] that we made a 30% increase in growth.
[15:40] So it's coming up the pike.
[15:42] As the students are moving out.
[15:46] When we're looking at the location, I work on problems,
[15:48] so I'm just curious.
[15:51] Well, we're further north, but still, okay, I see you there.
[15:56] And that's the new building, is that a pad for us,
[15:59] 255 each.
[16:00] 16, seven pounds.
[16:01] okay let's do it yeah let me explain okay cool okay and we was just
[16:08] sudden based on what Scott said is that we we were able to walk across to
[16:14] the building from our current building with our teacher yesterday and we're
[16:17] like we can just walk across the road and we're not worried about anybody hitting us
[16:21] that's really so no problem no problem at all
[16:26] I don't know what that's good.
[16:28] All right, any other questions?
[16:30] We'll just look one more under the policies
[16:32] that you can filter any plans on putting.
[16:36] All season plans for the budgeting and investment.
[16:39] He's since taken on more debt.
[16:42] Okay, speak of that.
[16:44] Yeah, no way.
[16:45] Yeah, as we do this process,
[16:47] I do think it's anticipated that we can introduce
[16:50] to the school and explain before.
[16:53] and the school uses red apples as a business manager,
[16:56] so I think one of the advantages that they can also have
[16:59] perspective in schools 50 and for schools in the state now.
[17:02] So I think you'll expect to see, you know,
[17:04] in policies that are mentioned to be updated
[17:07] and represent my practices.
[17:10] It's cool, you know, as I'm always building it, right?
[17:13] So sometimes those policies come along
[17:15] as you take that on and, you know, need to do that.
[17:18] So by being at least before, up until now,
[17:22] that probably is also a part of just any sort of policy
[17:26] or if you could represent school, you know,
[17:29] position debt.
[17:30] I mean, yes.
[17:31] Could I also mention, we had a board
[17:34] that was there for a long time,
[17:35] and like a three or four number board,
[17:37] and they'd been there for like eight years,
[17:40] going through a lawsuit on legal staff,
[17:42] and they were quite tired.
[17:43] And now we have a board consisting of,
[17:47] you can be pictured, so she's come on,
[17:49] she started that with us during the whole legal student,
[17:51] and now we have a solid board of students, parents,
[17:57] families at the school that are on the board as well.
[18:00] She has the experience, but she's also been trying
[18:04] to help me write policies, write new things
[18:07] that are going on, such a good working board
[18:12] that's ready to serve new adventures.
[18:14] All right, then we have a question from the committee.
[18:23] If not, you're reading it.
[18:25] Make sure you're counsel.
[18:28] Good afternoon.
[18:29] Nice to see everyone.
[18:31] We reviewed the application and the related materials.
[18:36] The application is in order.
[18:38] The project is eligible under the authority's policies and statutory scheme.
[18:46] 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.
[19:07] But just highlighting that as a somewhat, you know, unusual back pattern.
[19:14] And then with respect to documents, there's a new set of indenture and loan agreement
[19:21] being put in place, a new bond issue, and those documents contain all the standard provisions
[19:27] that we would look for for authority policy compliance.
[19:34] So no no concerns to raise from our perspective as issue or council.
[19:44] And Eric, the resolution authorizes the bonds without printed enhancement to finance the
[19:51] acquisition and improvement for a charter school facility in Provo and funded debt service
[19:56] reserve and paid cost to the issuance.
[19:57] The resolution establishes parameters of maximum principal amount of 18.5 million, maximum maturity
[20:06] date of 40 years, interest rate of 9%, and maximum discount of 5%. And authorizes the members
[20:16] of the board to finalize the bond terms and enter into the bond documents.
[20:23] All right, there are no other questions.
[20:27] I will entertain the motion.
[20:30] All motion to a firm's resolution, 2026.10, they're operating the shins that sell
[20:39] churchful bonds for true side, charter school.
[20:43] Do I have a second?
[20:44] Second?
[20:46] Any discussion on the motion?
[20:48] During that, all of the papers say aye.
[20:51] Aye.
[20:52] Aye.
[20:53] Any opposed?
[20:56] All right, that motion passed unanimously.
[20:58] Thank you.
[21:00] Congratulations.
[21:01] Thank you.
[21:03] I did give you the answer.
[21:05] Thank you.
[21:07] Thank you.
[21:08] Thank you.
[21:09] Thank you.
[21:09] Thank you.
[21:09] You're welcome.
[21:12] Thank you.
[21:17] Resolution 26.
[21:19] Okay.
[21:23] Okay. Compilates of interest disclosure, the science corporate trust is engaged with
[21:30] the school and I'll make fun of them later because there's something to make fun of.
[21:40] We've got, again, B.I.P. Science and Technology Academy, they came before the authority a few
[21:46] years ago for a transaction and I thought it was my way back through my files. I was like,
[21:51] oh, this was like last year, but it was like five years ago for something like that, which
[21:56] yeah, right? That's what I thought.
[21:59] So it's been a few years since they've been before the authority. So at the time they were
[22:04] expanding to more parades and they were, I think previously only as operating as a high school
[22:11] and now they're operating as a K-12 school,
[22:15] so they've expanded their operations
[22:17] and they would like to continue expanding
[22:20] their operations into a new campus.
[22:22] So that's what we're looking at here.
[22:23] We've got the business manager, Mr. Pulpana.
[22:28] Is that right?
[22:29] Perfect, okay, I nailed it.
[22:33] So Clint Beesinger from Roundtable here
[22:36] is the municipal advisor and then Brandon Johnson
[22:40] as Bauer's Council, Cruz and Associates, I believe Michael Lambert is online, and then
[22:46] Bond Council, Gilmore Bell with Issuer's Council, Eric Hunter from Chatnet Color.
[22:51] So this transaction, again, will be about $28 million in tax exempt bonds, the enhancement
[22:57] is requested on this, and the school has a BA1 rating from Moody's on this transaction.
[23:04] So, they currently operate in the Sandy area, and they'd like to move into a new facility
[23:10] in Saratoga Springs, where everybody wants to move because that's where everybody's
[23:16] moving.
[23:16] So, build a new school campus down there.
[23:20] This debt will be amortized over roughly 40 years, likely carry a five to seven year call
[23:27] feature to allow them to, you know, refinance in the future if that becomes
[23:33] decided. So, the school has been a really high performing school in the state
[23:39] and has won a bunch of awards for having some really great academics and some
[23:45] really sharp kids, especially on the stem side. That's what they're known for. So
[23:51] they've got a really strong weight list. They've drawn a lot of that weight list
[23:55] down to increase their enrollment to where it is now.
[23:59] You know, they went from 293 kids back in 21, 22 to 893.
[24:04] So, added 600 kids over the last few years, and they're kind of expecting to
[24:10] double in size over the next five years when we see them again maybe in five
[24:15] years. So, a lot of new kids, and most of that growth will come
[24:21] 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.
[24:31] And that's kind of their future.
[24:34] You see their proficiency here just above Canyon's and statewide averages in 2025.
[24:41] A little bit less impressive than the last time they came on.
[24:45] I think that's just a new students and bringing them up the speed and up to their standards.
[24:50] So that's still impressive to beat canyons and Utah averages for their students.
[24:58] So the school employees Hanuffy Ogus as the executive director and he has various different
[25:08] backgrounds.
[25:09] 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.
[25:21] So it's a good management team overall got some of the board members online, including I know Marcy Houseman on there.
[25:31] And then, yeah, the school has most of the policies we like to see except no formal policies on debt and our investments.
[25:44] So again, BA1 rated, the bulk of this will go towards the construction.
[25:50] The bulk of the financing will go to fund the new Saratoga Springs campus, but there will be a small renovation.
[25:57] and you may not remember, but they had a second floor that they left vacant when they renovated
[26:04] their facility or moved into the new facility back in 2020-2021 when they were last here,
[26:14] and they'll use a $1.5 million to create more space there that they can enroll more students at the
[26:20] So, Moody's noted a couple of credit strengths, including, as I said, in their high performance
[26:28] and unique model as a STEM school, solid operating performance with good coverage on existing
[26:36] debt and growing liquidity.
[26:39] They were all demographics, you know, that should allow them to hit their growth trajectories.
[26:44] 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.
[27:03] I think that's a valid thing to suggest.
[27:06] Yes, so we'll move on to some of the things you'll notice.
[27:13] The budgeting has been really strong over the last several years with revenues generally
[27:18] coming in very strong with expenditures most years less than what they budgeted.
[27:25] So I think you can't really look at some of those big years where they're adding several
[27:32] hundred students and expect them to decrease expenditures.
[27:36] but some years they were really close to that even though they were adding students.
[27:40] So I think a really impressive job doing their budgeting over the last of the day.
[27:47] Increasing cash position.
[27:49] Despite, you know, it looks like 2025 they had a really strong days cash on hand,
[27:54] but when you only have 233 or 30 students or 290 students,
[27:58] and you increase your expenditures,
[28:01] you're going to drop on that days cash on hand figures.
[28:04] 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.
[28:19] Again, strong and I don't see any concerns with their fun balance.
[28:24] That's what I'm saying.
[28:25] They're liquid.
[28:27] Debt coverage, the schools really going to need the enrollment growth in order to make
[28:35] this work.
[28:37] And right now, they're not able to cover their debt service on new debt without enrolling
[28:43] new students, but the new growth is not huge.
[28:48] They only need a couple hundred students at the new campus in order to break even.
[28:51] 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.
[29:03] So historically they've had really strong coverage and their pro forma coverage is expected to be really strong.
[29:10] So that burden ratio will be elevated in 2027 before they actually bring on the new students.
[29:20] And so that's it looks higher in that year.
[29:23] But I think from the authorities perspective, the standards allow you to say,
[29:28] what are the last three years, the forward looking three years, do they substantially meet this?
[29:34] Is there an expectation based off of every other factor that we think they'll meet this?
[29:38] And I think, from my analysis, there is an expectation that they would meet this.
[29:43] So it would be difficult if they didn't meet their enrollment targets,
[29:48] which is the real concern.
[29:49] I think for most of these schools going into these growth modes is,
[29:54] will they be able to achieve enrollment?
[29:56] And that really comes down to the demand profile and how strong a school is.
[30:00] 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.
[30:29] and improve that, that operating margin even really quickly.
[30:34] Current ratio is strong.
[30:35] So I think the real concerns are not with the school's operations,
[30:41] and if the school is a really high performing school,
[30:44] both from a financial perspective,
[30:47] and from an academic perspective,
[30:49] the real question is on the enrollment side,
[30:52] and will they be available to your students in a fast growing area.
[30:56] So, Chapman and Cutler as issuers counsel again and Gilmore Bell's bond council, a couple,
[31:03] I guess, I did say I was going to beat up on Zion's a little bit here, so I'll beat
[31:06] up on Zion's on continuing the disclosure.
[31:09] You'll notice if you look at their report on continuing disclosure, they had a few fairly
[31:15] late filings and those filings were the result of sending the information of the trustee and
[31:22] not following up with the trustee that they would get it posted.
[31:25] Now, ultimately, the school's responsibility,
[31:28] but I think it was a pretty good effort by them
[31:31] to get everything in time.
[31:32] So that's a little bit about why they have
[31:35] the continuing disclosure, misses that they did.
[31:38] I think it would be important to kind of stress that,
[31:42] ultimately, it's the school's responsibility
[31:44] to get that done, but check them on their business partners.
[31:49] Yeah.
[31:50] I would say the process isn't done until you've gone
[31:53] on Emma and their alternatives there and you know I think I would emphasize that that is a critical
[32:02] responsibility and should be just going on on on the trustee even though you they are partners
[32:09] that you've been on. Look as big banks we're just easy target. What was that?
[32:16] All right questions
[32:17] it's perfect. Well,
[32:22] maybe could you just go and it was being
[32:24] bound to help that not be a pattern? I guess
[32:30] in the future, just because it is, like my old compliance
[32:35] or the investment advisory that was big deal too.
[32:40] On the continuing disclosure? Sure, yeah, I think it's
[32:43] stated noted the school actually did provide everything to the trustee on time,
[32:46] so the weakness here was this trustee missing the day
[32:52] I think this is clearly on the schools where we are, between the professionals in place
[32:57] and increased awareness, schools are in line full of, you know, revealing that, absolutely
[33:04] 200 percent.
[33:06] So I want to make sure investors have accurate information.
[33:09] Particularly when this is called as a history of such good news to disclose, it's not
[33:13] like they have to confess bad things, so I think there's really a focus on this as there
[33:19] has been the last handful of years or so.
[33:24] And I think, fortunately, in my fluid conversations
[33:28] with designs like Trust Group, they also
[33:30] have improved their protocols to try
[33:32] to make sure they're getting permission out of them
[33:36] as well.
[33:37] The wear of it all, for instance, is a very valid,
[33:40] very fair concern.
[33:43] And thank you.
[33:45] Any other questions?
[33:47] Just on the legal bond documents, we're being reviewed.
[33:53] Are there any concerns?
[33:55] Because it looks like it's still in a month for doing practice.
[33:59] But you know it's done before it gets this far,
[34:02] so I just wanted to check on that.
[34:04] I think there are always influx until we actually go to cell bonds.
[34:09] So there's still going to be...
[34:11] Yeah, there's still going to be influx up until then.
[34:13] but I think I defer to Erick on his review for the issue.
[34:19] Yeah, the thing that I'm out of place or any no concerns for that.
[34:24] I've reviewed the documents and the application that's here.
[34:28] I was in there, I think it seems.
[34:29] Okay, three.
[34:32] Oh, let's see, Bond calls me.
[34:34] Yeah.
[34:35] I mean, I don't know this time.
[34:36] Okay.
[34:38] This resolution is going to offer us the authority that she
[34:41] bonds in the amount of national exceed $32 million by $500,000, which shall mature later
[34:48] than December 31st, 2016-07, with an interest rate of national exceed 6.5 percent per
[34:54] annal.
[34:55] It also authorizes the authority to execute and deliver a first supplemental trust indenture,
[35:01] bond purchase agreement, a first amendment to loan agreement, and any other documents
[35:05] required in connection with the issuance of these bonds.
[35:08] The resolution further decimates the school as a fall-finding charter school under the
[35:13] Abroad Expredent Enhanced Program and decimates the Abroad Expredent Enhanced Program as well.
[35:22] Finally, the resolution provides for public hearing on issues with bonds which will take place
[35:26] at 1 p.m. on August 1.
[35:29] Thank you.
[35:31] All right.
[35:32] If there are no further questions, let us all make it to the same motion.
[35:36] Motion to approve Resolution 2026-11,
[35:41] present enhanced issuance to bond issuance to be high of charter school.
[35:47] Well, second.
[35:49] It's any discussion on the motion.
[35:52] Any time in all in favor say aye.
[35:55] Aye.
[35:56] Any opposed?
[35:58] All right.
[35:59] That motion passed to you.
[36:00] So congratulations.
[36:06] Thank you.
[36:08] Thank you.
[36:09] You have a table for that.
[36:12] You love boring meetings.
[36:14] Thank you so much.
[36:15] Thank you.
[36:16] Thank you.
[36:16] We'll be right back in a month for the few.
[36:18] So there you go.
[36:19] Twenty-first.
[36:19] Is that the name?
[36:20] Last night.
[36:21] That was the number.
[36:23] Twenty-first.
[36:24] That's the number.
[36:25] That's the number.
[36:26] That's the number.
[36:27] That's the number.
[36:27] Twenty-first.
[36:28] Yeah, we have to work on it.
[36:30] Awesome.
[36:31] All right.
[36:36] All right.
[36:37] I'm for review and discussion of the back.
[36:40] We were well or scored on the long time.
[36:45] Well, Aaron.
[36:47] Yes.
[36:48] Aaron Aaron.
[36:51] Oh, we keep looking at this and making it.
[36:56] So I think that Diana has sent out
[37:00] but the red line and clean copy of some most recent version.
[37:06] So maybe we can walk through some of the points.
[37:12] Under the definitions, you'll see that renovation needs, needs, and it's life.
[37:19] Because we just left that as a placeholder.
[37:21] We wanted to have that discussion in case the authority does want to define that term.
[37:28] It's used in the statute, but it seems from our meeting last time that renovation needs
[37:36] was one of those areas that was a little big.
[37:41] If you recall, we had the one school that had the leaking roof and, you know, is that a
[37:48] renovation need?
[37:49] 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.
[38:03] What does the authority want it to mean?
[38:05] Do you have any suggestions on what the definition should include or should end?
[38:12] the
[38:16] hang up in our last meeting was the statute, the previous statute said that new charter schools
[38:27] and what was the urgent facility needs had a priority that was removed. I think the priority
[38:37] was removed not the urgent facility needs. So maybe renovation needs means facility needs,
[38:49] you know. I mean, as I was thinking about it, and this is just me, but I clearly wouldn't want
[38:56] the charter school to go and complete this repair, and leave students because the heavenly kingdom,
[39:01] right? I mean, that seems like something that should be taken care. But
[39:08] So what kind of thing shouldn't include the sense we're defining in terms of what it seems like we're trying to
[39:16] chair
[39:17] I can jump in I don't think we're suggesting that we need to add a definition of statute sense
[39:23] that the fund is to be used to meet school building construction and renovation means
[39:27] So I don't think it has to be we don't have to define it
[39:30] Even though it's just you know make a decision on a case by case basis or that case by application basis
[39:36] We really just added that in case it's something you want to address, but we're not suggesting
[39:40] it be, that you define renovation needs because you may limit it, and we may inadvertently
[39:46] limit what renovation needs are if you add a definition.
[39:49] You really let's just discuss the point, we can easily delete it.
[39:53] It's not required to be included.
[39:54] How is the GSEM?
[39:58] Make new again.
[40:02] They define renovation as make new again.
[40:07] So like if it's a weeky roof, you make it new again, if you, yeah, so it's just a distinguishing
[40:16] factor from not using money to build something new, it's to make new again.
[40:28] Yeah,
[40:31] I don't, I don't, I don't have a strong runes that, oh, I went back and looked
[40:38] at the code too, and so what you try to do, I'm putting parameters on the, on expenses
[40:49] is related to startups. So,
[40:54] the way I looked at it, I went back and looked and tried to
[40:59] run through scenarios. I know that it's been nice to have some flexibility to do the
[41:05] stable things anyway. Because there's some weird stuff that comes up. But you're like,
[41:11] you're not out of that, but we have some flexibility across it. So I get that. I sort of really
[41:18] because I'm sure this really takes
[41:20] actions in this case.
[41:23] Yeah, we're really repairs, I think
[41:25] is what it does.
[41:27] The statute says renovations, but I,
[41:29] you know, I would take that to name
[41:31] repairs, certainly if that means
[41:34] making it new again, that would be
[41:36] repair. But you know, I think we
[41:38] run the risk if we define it,
[41:40] potentially limiting what you can
[41:42] do in a specific or a certain
[41:44] In addition, when you say, like, we're y'all wanting for the addition.
[41:49] Well, we, we do, because I think the whole thing is, is both renovations and expansions
[41:56] are allowed.
[41:57] So, I don't really see the necessity in defining and limiting this in that way.
[42:03] Yeah.
[42:04] So my logic, claiming back to why the fund was created and wanted to use for, it's created
[42:11] to do construction and renovation or for expansion and then limiting the
[42:20] expenditures to additions or expansions but for acquisitions or
[42:25] constructions of a facility. So I would think if they're using it we want
[42:34] favorite going to, if it's an expansion situation or a new school. We're not
[42:46] just going to occur very naked crying, right? Or these are the same things.
[42:52] Like, most of them is supposed to be catered to like new expansion, right?
[42:58] Right. They don't have access to any pulsing news. These are new schools that don't have
[43:03] So, a lot of them, or I mean, yeah, like, for example, John Hancock was one of the schools
[43:12] and they've been around since, like, 2000, you know, so they're doing an expansion and
[43:18] do people mountain, and so this was to help group that, not the bulk of that was being funded
[43:26] by a fondly-issued, but the authority heard.
[43:34] 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.
[43:43] You can always amend the rule later if we need to.
[43:45] And I think the authority can always, if you think priority needs to be given, you can always make those decisions, right?
[43:51] Was it? Yeah, yeah. I mean, if we don't have to approve every school that comes, right?
[43:57] Because we can say that this is a revolving loan fund and we make decisions based off of
[44:02] whether this is the advantage of all schools who will come through the revolving program
[44:09] and we have to think about how that long-term operation works.
[44:14] Yeah, because if it's a loan, if you're expanding or creating something new, you're going to
[44:20] generated, renovated, pay for the hours,
[44:23] and it's just your cover of a gig on a nine-person thing.
[44:26] If you're not having a role in whatever,
[44:28] then that's a different to a different situation.
[44:31] But Scott, you probably, since this has been with you guys,
[44:35] being a main thing.
[44:38] But yeah, just real quick, the history behind it.
[44:41] And we're turning over to school construction,
[44:44] oversight to the FCM, per legislation from the last session.
[44:48] but there was an emphasis on distinguishing between repair and renovation because back in the
[44:55] day, some charter schools were, you know, build versus
[45:00] 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
[45:29] to renovate, right, as opposed to building a new one, or, you know, and that's where
[45:35] the loan came in, right, the startup funds of, and a lot of times with loans, it's that
[45:42] case, they need to renovate or, you know, increase the functionality of the building.
[45:47] Now, that's really where that term came from, right, wrong, or indifferent to school construction
[45:52] and we know that that was the different and sheet factor between a repair and a renovate,
[45:57] right? It's more of a, renovates more leaning towards cosmetic, increasing functionality,
[46:03] where a pair is something immediate that broke that needs an immediate fix. And typically repairs
[46:12] are smaller in scale than a renovation because renovations are expanding the functionality of the
[46:18] building, so I don't know, I hope to help. I'm not necessarily stuck on that we have to define
[46:24] renovation, but that's just where it comes from that whole discussion in the school construction
[46:31] realm, I guess.
[46:36] Is
[46:38] we paired in here? I just see the innovation.
[46:45] And in the code, it says to meet school building construction and renovation needs and pay
[46:53] for expenses related to the start-up of the new school or the expansion of an existing
[46:57] school.
[46:58] So some buildings might need renovation to expand.
[47:02] They're expanding and you're expanding to a building that already exists, but in order
[47:07] There are two increased class capabilities to bring more students in.
[47:12] They need to renovate that particular building.
[47:15] So it's not a repair.
[47:17] It's a renovation.
[47:19] Like behind in their Sandy facility.
[47:22] Yeah.
[47:22] I mean, you could probably define that as a renovation.
[47:25] I mean, you know, they've got the space already.
[47:29] They're not building any space.
[47:30] And it's not that they're repairing it.
[47:32] It's just renovating it to increase the functionality of the existing building.
[47:37] Yeah, yeah, no, I did it. Yeah, it's like the prison, the prison right, because I just
[47:44] closed it. The one who got some, they're trying to do an expansion, but to do the expansion,
[47:49] they have to increase the size of the cafeteria. Yeah, that's a good example of renovation
[47:57] versus a repair. Yeah. I find not putting in that. Yeah, I'm fine. I'm fine.
[48:18] I just, that's
[48:18] the historical perspective of school construction application of language, I guess. So you'll just
[48:27] Just take number 4 out, if you don't believe it in their own sense.
[48:33] And then one thing that Erin and I have been discussing is whether subsection 10 be removed.
[48:44] It refers to this charter school closure reserve account under section 59 at 307.
[48:52] And we recommend removal because frankly I don't think the authority has any control over
[48:56] that fund, that reserve account, and it kind of exists whether it's in rule or not.
[49:05] But Scott, I'd love your input on it and just wait, you.
[49:11] Yeah. Sure.
[49:13] Chair. Okay. Yeah. Okay. Yeah. Through the chair.
[49:20] Yeah. The AG's right. I mean, you know, I don't see the authority controlling the
[49:26] 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.
[49:40] 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.
[49:54] but I don't disagree with the attorneys on taking it out.
[49:58] You know, yeah, we don't control it.
[50:01] However, you know, for situational awareness that in the instance of the charter school closing,
[50:07] you know, and I don't have the exact tier steps, you know, like, okay, this first and like, you know,
[50:15] salaries first and then debt and then, you know, it's all spelled out in there.
[50:21] 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.
[50:33] So, you know, representative Lowry back in the day helps set this up so that because it is what it is.
[50:41] as if they default and they close and they default on the loan,
[50:46] that's just less money readily available for,
[50:50] you know, other charter schools to use, right?
[50:52] So, um...
[50:53] Well, it can actually push and stop.
[50:55] Sure, yeah, sure.
[50:57] So, I mean, the reverse is...
[51:01] Yeah.
[51:02] There, though, right?
[51:03] Like, in the charter school reserve account code,
[51:06] it does allow a school longer closure to cover some of the deaths through
[51:12] there. So that part is already encoded in that section. Right. So needed to be
[51:18] circular. Right. Yeah. That's the exact. Yeah. Yeah. Okay. Yeah. I see that. Yeah.
[51:24] Yeah. Good point. Yeah. There's a flip side to it for sure. So I'm
[51:31] supportive of what you guys are suggesting just because it's already there as
[51:34] as an option for a closure.
[51:37] Yeah, really, I think we added it here initially,
[51:39] just sort of give everyone notice that it exists,
[51:44] but it exists, whether it's in the rule or not.
[51:47] So, because we would keep it 11 and 12,
[51:50] yes, and that would also enable that to be an option.
[51:54] Right, yeah.
[51:56] Then we added to what just for information versus,
[52:00] we took the board of education's old rule,
[52:02] and just get a statement as they changed it.
[52:04] So that what is currently tampered or in reserve camp was in the board of
[52:08] stations, who regarding the account, what is now
[52:12] fine. And they have control of that.
[52:14] They have control of that. That's right. We don't.
[52:16] So that's right. Yeah, still exists. It's still available.
[52:19] In this position, you know, I think that's part of the reason, you know,
[52:25] I mean, take names out of it. This position would be the bridge, you know,
[52:28] and if there was closure, it could advise the authority on what the dispensing
[52:34] of debt was and you know from the charter school closure account so yeah I see that as a value
[52:42] ad and having a position from the USBE service the secretary because then it you know they can
[52:50] communicate I will it as long as I'm doing this you know it should that it should that occur
[52:58] where the school closes, we could lay out all the details and advise the authority on
[53:05] the replenishment of that loan, if it gets, you know, if they close, etc.
[53:10] So I guess my question maybe for the authority would be as number 12, then sufficient to understand
[53:19] and his blood, his work pertains to this body is when we would do a write-off of the
[53:26] problem, because that's where we control, you know, where we're just over the loans.
[53:34] And we would want to note that rigorous process that had been followed, including happening
[53:39] the reserve account before we did a new write-off strike, because, you know, Diana would be doing
[53:45] the write-off.
[53:46] 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.
[54:07] So, what if we just suggested that we consult with the board of education to see if they're
[54:14] getting sure that everything comes before we write. I think that would be great.
[54:19] That force is us to connect back in and see if they have anything on their side.
[54:25] Right. Because we don't know what we, if I may, chair. We don't know what we don't know. I mean,
[54:29] there's going to be, what we've seen with closures is a variety of how much that they have,
[54:34] or little because they just didn't you know they open like for two months and then stopped and so
[54:41] there wasn't a lot you know so you're going to get potentially varying amounts of death and
[54:50] you know all the different things I mean maybe you know they've been behind on payroll for months
[54:55] and you want to pay the teachers out of their contracts or you know so that doesn't lead much
[54:59] to tap into. So, and
[55:08] then other than what is what you see, we just have one minor change.
[55:14] So, in 9B, we would just remove related to the, because it's in the ether bacteria sentence.
[55:22] We don't want to use it.
[55:24] or it says expenses related to the start-up we would take out related to the
[55:32] same thing.
[55:46] I'm not sure about say I go to a pre-pricing for American prep right
[55:50] now, but you have any questions for me. Many meetings, buildings, churches. There are lots of non-long
[56:54] And Aaron's been making those changes as we go, so if you want to see it, we can share
[56:58] it.
[56:59] Well, we have to worry about it.
[57:01] So let's see if we send it to the identity of the downstream, yes, because it didn't.
[57:07] Yeah.
[57:08] That's what I'm sure you're naming other changes, and I'll send you.
[57:12] And
[57:16] Chair, I'm going to have to drop off because I've been meeting with regarding aligning
[57:22] funding for the Alpine split, you know, for, yeah, I'm sorry, that's why I'm not, you can
[57:31] have any other,
[57:35] no, I read it.
[57:37] I appreciate they are putting it in the backups and it all makes sense to me.
[57:42] and I appreciate the just you know clarity on renovation all that you know it all makes sense.
[57:47] Okay all right well then I'm wondering about right here.
[57:50] Yeah very well written rule. So are you good with motion and putting forth the motion?
[57:57] Motion to approve the rule? Well second. Any discussion on that? Hearing none. All in favor say
[58:14] and we will be back for that, that's the big deal.
[58:20] Any other?
[58:21] No, I will.
[58:22] I think most of them to occur.
[58:24] I want to motion to occur.
[58:26] I think Mayer.
[58:28] My name is Jordan.
[58:32] Thank you.
[58:32] Thank you.
[58:33] Thank you.
[58:35] You're welcome.
[58:36] Thank you.
[58:36] What's that?
[58:37] Yeah.
[58:38] Awesome.
[58:39] Thank you.