09-08-2015 Informal Meeting-Campus Charter

The School Board of Brevard County, Florida met for an informal meeting with Campus Charter School on Tuesday, September 8, 2015, at the Educational Services Facility, 2700 Judge Fran Jamieson Way, Viera, Florida. Notice of the meeting was advertised in the Florida Today newspaper on Wednesday, September 2, 2015, followed by corrected advertisement on Tuesday September 8, 2015. The affidavit of publication with a copy of the ad attached is filed in the Affidavit File in the Board Office.

Opening Exercises
1. Opening Exercises

Minutes: Chairman Kneessy called the meeting to order at 2:00 p.m.

Roll Call
2. Roll Call

Members Present:  Misty Belford, John Craig, Amy Kneessy, Karen Henderson and Andy Ziegler.

Pledge of Allegiance
3. Pledge of Allegiance

Minutes: Chairman Kneessy led the Pledge of Allegiance.

Order of Business
4. Opening Remarks - Stephanie Archer

Minutes: Stephanie Archer, director of the Office of School Choice explained the purpose of the meeting and introduced Jennifer Murtha of McGladrey.
7. McGladrey's Update Report - Jennifer Murtha and Laura Manlove


Ms. Murtha and Laura Mangrove from McGladrey reviewed the summary of results of McGladrey's report on specific areas of concern regarding Campus Charter School.  They said that the school had provided them with additional documentation since their original report dated August 19, 2015, and the report was updated as of September 7, 2015. the review focused on specific areas of concern identified by the District:

  1. Issuance of loans using School Funds
  2. Availability of cash to pay payroll and payables
  3. Nature and allowability of the administratr expenses
  4. Governance of the School in accordance to the School's bylaws; and
  5. Related party transactions

The Board had questions about the two loans.  There is a 1.2 million dollar loan and a $24,000 loan. Mr. Bistline clarified that the 1.2 million dollar loan is the one that the school guaranteed when the management company took it out. The management company did not pay, therefore sending the responsibility back to the school. Mr. Bistline said that in a "nutshell," the biggest concern is the deteriorating financial condition of the school.  Ms. Murtha said that issue # 5 is probably the biggest concern and the most difficult to overcome.

8. Campus Charter School Update - Shawn Arnold


Shawn Arnold, attorney for Campus Charter, began by saying that beginning October 1, thirteen percent of the fee will not be going to the management company.  The school has  looked at the value of the service that were being provided by the management company  The cash flow will improve dramatically. In the issue of the rent, he has spoken to the lender and the bank is very interested in working with the school to come up with a plan for them to take ownership of the building.  They are not going to pay the rent which goes to Cedars who is in default of the loan; however the management company wired that money out in September regardless and they are trying to get that money back. He said though even with these changes, the cash flow will increase significantly and the financial condition of the school will improve.

The Board had many questions regarding clarification of the loans. The property is in foreclosure and currently belongs to Cedars.  Cedars purchased the property and rented the space to the school.

Mr. Bistline said that they need to get a forbearance agreement with the bank. More discussion ensued.

The Board wanted to see a revised budget. Mr. Arnold said that he could get them one in two weeks. The Board wanted to know what kind of safeguards would be put into place to make sure this didn't happen again.

Mr. Arnold said that there will be new board members.

Mrs. Kneessy asked District staff what they think of their plan. 

Mrs. Archer said she doesn't think we would be worse for wear if we gave them maybe 40 days.

Mr. Bistline feels they have a good chance of working it out. He said they certainly owe the District a corrective action plan as well as the amended budget; but they have been very responsive. They need to keep the Board informed every step of the way.

9. Request for Formal Hearing - Harold Bistline


The Board is the one that needs to ask for the Formal Hearing, but Mr. Bistline does not recommend the Board asking now; perhaps at the next Board meeting.


Closing Remarks
5. Closing Remarks

Minutes: In conclusion, the Board decided to allow Campus Charter to provide the corrective action plan and the revised budget and the outcome of the discussion with the bank. It will be brought back the second Tuesday in October to see if the plan is doable.

6. Adjournment

Minutes: Chairman Kneessy adjourned the meeting at 3:03 p.m.

For further details pertaining to this meeting, please refer to the published video on the School Board of Brevard County's website (www.brevardschools.org).