Ross Montessori School Joint Board Meeting – RMS Board and Mark Ross Montessori Foundation Board September 22, 2014 Ranch House Conference Room River Valley Ranch In Attendance: Ross Montessori School Board: Shelly Sheppick (President), Yuani Ruiz, Greg Mohl (Treasurer), Carolyn Williams, Mark Kavasch (VP), Alan Cole (Secretary), Mark Gotfredson, Sarah Oates – quorum met Not present: Gella Sutro Mark Ross Montessori Foundation Board: Robin Cole (President) Ann Cerrone (Secretary/Treasurer), Lisa Raleigh, Rachel Hahn (VP) – all members present Also present: Head of School Sonya Hemmen, Attorney David Myler, Director of Development Tricia Williams 5:30 Call to Order A joint motion to move to Executive Session to discuss ongoing land issues passed unanimously. Board returned from Executive Session at 6:20 pm. Foundation Board member Anne Cerrone introduced a series of motions regarding the land purchase to be voted on by the Foundation Board and RMS Board as appropriate. Motion #1: The Foundation shall proceed with the purchase of the 2.73 acres (2 parcels) on Hwy 133 from Frieda Wallison’s LLC for a $1,250,000 cash purchase price. Transaction is scheduled to close at Land Title on Monday, September 29, 2014. The Foundation authorizes Robin Cole, Foundation President to sign closing papers on behalf of the Mark Ross Montessori Foundation. In her absence, the Foundation authorizes Anne Cerrone, Secretary/Treasurer, to sign closing papers on behalf of the Foundation. The Ross Montessori School and Mark Ross Montessori Foundation will transfer cash to be held at Land Title for the September 29, 2014 closing. Land Title holds $50,000 of earnest money and credits. The Foundation will advance approximately $885,000 of cash. The School will advance approximately $320,000 of cash: Earnest Money/Credits $50,000 Foundation Cash $885,000 School Cash $320,000 $1,255,000
$1,250,000 will be used to purchase the land and approximately $5,000 for additional closing costs such as title insurance and document/recording fees. The Foundation authorizes Mark Kavasch to secure property insurance at closing. Utility transfers will be coordinated with Frieda Wallison. If necessary, real estate property tax exemption will be filed for this property as already verbally acknowledged and approved by Garfield County Tax Assessors’ office. The School water taps or credits will be transferred to this property as well. David Myler will work with the Town to secure the credits. The Foundation authorizes David Myler, Gella Sutro, and Mark Kavasch to complete these tasks subsequent to closing. The motion was made by Anne Cerrone, seconded by Lisa Raleigh and passed by the Foundation Board unanimously. Alan Cole also made this motion on behalf of the School Board and was seconded by Greg Mohl. The School Board passed the motion unanimously. Motion #2 The Foundation ratifies the Purchase Agreement and related Town of Carbondale Agreement for the 2.73 acres (2 parcels) on Hwy 133. Several documents are in the name of the Ross Montessori Public Charter School but are assignable. The Foundation authorizes its attorneys David Myler and Bill Bethke to prepare necessary documents to assign appropriate agreements and contracts to Mark Ross Montessori Foundation. The Foundation further acknowledges and ratifies three additional contractual obligations with Frieda Wallison and her related entities, the Town of Carbondale and CDOT: A. The Foundation agrees to pay a $500,000 fixed purchase price for all infrastructures up to the purchased land lot line. Preliminary engineering costs up to $42,500 have already been authorized and committed to by the School to encourage Ms Wallison to extend the land purchase contract to September 29, 2014. This $42,500 of costs is a part of the $500,000 and NOT in addition to the $500,000. B. The Foundation agrees to pay for an 8’ asphalt bike path and waterline along the edge of Graceland Ave. Sopris Engineering has estimated this cost at approximately $20,000. C. The Foundation agrees to pay at least $230,000 for its prorated share of access to Hwy 133. The Foundation will pay $230,000 of the first cost increment, Ms. Wallison will pay second in the amount of $70,000 and the Foundation will assume remaining any costs that exceed these amounts. An access permit has been secured with CDOT but will be re-‐reviewed by CDOT prior to construction on Hwy 133.
Therefore, the current financial obligations with Ms Wallison total $2,000,000: $1,250,000 2.73 acre land purchase $ 500,000 Infrastructure to lot lines $ 20,000 Graceland Ave. bike path and water line $ 230,000 Contribution to Hwy 133 CDOT access $2,000,000 It is anticipated that funding for the $500,000, $20,000, & $230,000 will come from local construction financing or USDA financing directly. The Foundation authorizes David Myler, Bill Bethke, Gella Sutro, and Mark Kavasch, yet to be selected General Contractor, and yet to be selected Owner Representative to monitor and follow through on these obligations with Ms Wallison, the Town of Carbondale and CDOT. The motion was made by Anne Cerrone on behalf of the Foundation Board and seconded by Lisa Raleigh. The Foundation Board passed this motion unanimously. Motion #3: Ms Wallison and her related entities entered into a lease for one of the houses located on the property along Hwy 133. Ms Wallison’s original agreement was to terminate all leases associated with the property prior to closing. Due to the dire need for housing by a family, Ms Wallison leased the house, requested and received from the School a waiver from our agreement to terminate the lease. Tenants are aware that the Foundation may be terminating the lease at closing or may continue it on a month-‐to-‐month basis. The Foundation authorizes and strongly encourages Gella Sutro, Dave Myler and Mark Kavasch to pursue termination of the lease as soon as possible after closing. The motion was made by Anne Cerrone on behalf of the Foundation Board and seconded by Lisa Raleigh. The Foundation Board passed this motion unanimously. Motion #4: The Foundation at its last meeting passed a resolution agreeing to incur debt up to $6,400,000 with the USDA Rural Development Community Loan Program at the following terms: $6,400,000 loan, 4.0% interest (or less, but currently locked at 4.0%) over a 38 year term and amortization with an obligation to accumulate one years’ cash reserve of approximately $330,000. Monthly debt service payments will be $29,000/month. USDA requested that the Foundation seek 12-‐15 month construction financing from local banking sources. Over the last month and a half, loan packages have been submitted to 9 financial institutions. The Foundation hereby authorizes and/or ratifies that Mark Kavasch follow through on interim financing if more favorable
terms can be secured through local banking sources or, per USDA instructions, request a waiver from USDA from interim financing and proceed with construction financing directly from USDA. Also, Robin Cole and/or Anne Cerrone are authorized to sign promissory notes with local banks and/or the USDA on behalf of the Foundation. The motion was made by Anne Cerrone on behalf of the Foundation Board and seconded by Lisa Raleigh. The Foundation Board passed this motion unanimously. Motion #5: Due to TABOR Laws and other state statutes, the School cannot incur long-‐ term debt. Ten years ago, at the School’s inception, the School’s attorneys set up the Mark Ross Montessori Foundation to hold real estate and incur long-‐ term debt for the School. The USDA 38 year loan for $6,400,000 is an example of debt the School cannot incur. The legal solution to this dilemma is a so-‐called "TABOR compliant lease" which the School and Foundation attorneys, Dave Myler and Bill Bethke, have drafted and has been reviewed and revised by USDA. The basic lease terms are as follows: The Foundation owns land and school buildings and wishes to lease this property to the Ross Montessori Public Charter School on an ANNUAL basis for rent of $350,000 per year to be paid on a monthly basis to the Foundation (School rent payment = Foundation USDA principal and interest payments, but are a little short for the initial cash reserve which the Foundation will help make up the shortfall). In addition, the lease is considered a "triple net" lease, meaning the School pays rent to the Foundation PLUS the School pays directly all School utilities, insurances, repairs, maintenance, taxes, etc. The Foundation, as landlord, approves this lease with the School and authorizes Robin Cole or Anne Cerrone to sign this lease on the Foundation’s behalf and authorizes Dave Myler, Bill Bethke, and Mark Kavasch to make revisions as necessary and to coordinate with the USDA attorney. The motion was made by Anne Cerrone on behalf of the Foundation Board and seconded by Lisa Raleigh. The Foundation Board passed this motion unanimously. Likewise, the School, as tenant, approves this lease with the Foundation, and authorizes Shelly Sheppick or Mark Kavasch to sign this lease on the School’s behalf and authorizes Dave Myler, Bill Bethke, and Mark Kavasch to make revisions as necessary and to coordinate with the USDA attorney. The motion was made by Yuani Ruiz on behalf of the School Board and seconded by Greg Mohl. The School Board passed this motion unanimously. Motion #6: The Foundation and the School ratifies and approves the work of the Ross Montessori building committee. Specifically: • The selection of Cuningham Group as our lead architect
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The selection of A4 (Michael Hassig) as our local architect The selection of various engineers and consultants necessary to complete blue prints and all related construction contracts/documents The selection of some engineers, architects and consultants who also are employed by Frieda Wallison. All parties acknowledge a conflict of interest but accept this conflict of interest since the subject property is literally surrounded by Ms Wallison’s proposed development, that we will be sharing critical infrastructure and roads and that we have mutual agreements with the Town of Carbondale which all require us to share information and coordinate efforts. Plans, design, diagrams, elevations, site plans, specification produced to date Selection of owners representation (in process) Public bidding process to be administered by Cuningham Group (in process) Tentative construction budgets (enclosed at the Sept. 22 meeting) Tentative construction timeline (enclosed at the Sept. 22 meeting)
The motion was made by Anne Cerrone on behalf of the Foundation Board and seconded by Lisa Raleigh. The Foundation Board passed this motion unanimously. Greg Mohl also made this motion on behalf of the School Board and was seconded by Alan Cole. The School Board passed the motion unanimously. Motion #7: To approve Attorney David Myler’s land contract assignment (enclosed in Sept. 22 meeting). The motion was made by Anne Cerrone on behalf of the Foundation Board and seconded by Lisa Raleigh. The Foundation Board passed this motion unanimously. Greg Mohl also made this motion on behalf of the School Board and was seconded by Alan Cole. The School Board passed the motion unanimously. School Board members Greg Mohl and Yuani Ruiz explained the current interim financing proposal from Municipal Capital Markets through Community Banks of Colorado (the loan servicer). Their assessment was this was a loan made possible through funding from a large private capital group rather than a financial institution. Municipal Capital Markets put forth an offer for a $6.4 million loan at a rate of 2.90% interest rate that resets monthly at 175 points above the 30-‐day LIBOR. The issuance cost would be 1.5% of the loan amount ($96,000). Mark Kavasch mentioned that the school also received a verbal offer CoBank – they would make the loan directly from their funds rather than outside investors. The verbal offer would be more competitive than the one proposed by Municipal Capital, however Mark has received nothing in writing as of the meeting on September 22nd.
Mark has submitted loan applications to eight financial institutions including local banks Alpine Bank and US Bank. No local bank has said yes so far though Mark is still waiting to hear back from ANB. The school board made a motion to approve the minutes from their last meeting on July 22nd. The motion passed unanimously. Development Update – Director of Development Tricia Williams The goal for this year’s Annual Fund is set at $100,000. Tricia passed around a prototype pledge form. She mentioned that there was excitement among the parents who volunteered as Annual Fund class captains. The Leadership Circle reception has been scheduled for October 23rd and invitations will be going out to donors who have given $500 and above in the past year. The goal of the event is to move everyone up to a greater gift. Explanations: The Annual Fund is what pays for your child today. The Capital Campaign is to build our dream for the school. Tricia will be focusing on LYBNTs, donors who gave the year prior but not this past year, trying to ascertain why did they drop off and getting them back on board again. She will work on marketing the school to local families to help boost enrollment. She has a press release ready to roll out as soon as the Foundation closes on the land. In order to have maximum impact for the Annual Fund, the school needs 100% donor participation from board and staff. She is working on a small marketing piece along with this year’s Annual Report. The idea is to give board members, teachers, staff and fans of the school material they can use to spread the word about Ross Montessori School to the community at large. Tricia just submitted the Garfield County Federal Mineral Lease District (GCFMLD) Grant in the amount of $250,000 to support the Capital Campaign and Phase 1 of the new school. She is also pursuing grants from Colorado Department of Local Affairs (DOLA) and Great Outdoors Colorado (GOCO) in conjunction with the Town of Carbondale. She is also reaching out to those few donors who have not fulfilled their Capital Campaign pledge and working with Robin Cole and Lisa Raleigh from the Foundation she has identified select community members to contact who have the capacity to support the school. HOS Update – Sonya Hemmen
GCFMLD recently awarded a grant of $25,000 to the school for a new school bus. The school was unable to use the funds for a new bus due to a funding shortfall but Sonya asked that the School Board move to request that GCFMLD approve the funds for the purchase of an additional previously owned bus for that amount. The School Board moved to approve funds from MLD to purchase a second school bus for $25k with the goal of expanding service to increase enrollment. The motion passed unanimously. The next school board meeting is Monday, October 27th. The Mission and Vision Task Force will be meeting with consultant Janet Thirlby on October 7th.
