MEETING OF THE GARRETT COUNTY BOARD OF EDUCATION
Oakland, Maryland 21550
Tuesday, January 10, 2012
Part I – Call to Order
Mr. Tom Carr, President, called the monthly meeting of the Board of Education to order at 4:02 p.m. Also in attendance were Mrs. Charlotte Sebold, Vice President; Mr. Rodney Durst, Dr. Donald Forrester, and Mrs. Cynthia Downton, associate members; and Mrs. Sue Waggoner, Interim Superintendent of Schools. The meeting was held at the Board of Education central office.
Mrs. Waggoner presented a PowerPoint presentation on the reconfiguration of grade levels. Information provided included the plan to maximize personnel and provide the best programs for students, scheduling factors, proposed class schedule, enrichment class schedule, and lunch schedule. During her presentation, there were many questions and comments from the public. Mr. Carr suggested moving into public comment.
Part II – Public Comment
Mr. D. Liverance, Ms. Shelley Argabrite, Ms. Christina Ervin, Ms. Rebecca Sines, Ms. Rebecca Gordon, Ms. Angel Simms, Ms. Patty Smith, Ms. Julie Chapman, Mr. Daniel Fike, Ms. Darla Tice, Ms. Pauline Wilson, Mr. Anthony Andrews, Ms. Connie Harvey, Mr. Jim Miller, Dr. Jennifer Rankin, Ms. Ardra Sharpless, Ms. Elizabeth Hebden, Ms. Sherry Spencer, Ms. Jill Horner, Ms. Tracy Jenkins, Ms. Kathy Meagher and Ms. Teresa Durst spoke during the public comment segment of the meeting.
Part III – Election of Officers
In order to conduct the election for president of the Board of Education, Mr. Carr relinquished the chair to Mrs. Waggoner who asked for nominations. Mr. Durst nominated Mrs. Sebold. Upon a second by Mrs. Downton, the Board of Education unanimously approved Mrs. Sebold as president. Mrs. Sebold then assumed the chair and thanked everyone for the vote. She then asked for nominations for the vice presidency. Mr. Durst was nominated by Dr. Forrester. Upon a second by Mr. Carr, the Board of Education unanimously approved Mr. Durst as vice president.
Mrs. Sebold addressed the Board and the public. She recognized the difficult position the Board of Education is facing. She thanked those present for attending the meeting and voicing their concerns. She assured the public that their concerns have been heard and the Board will take them into consideration when making decisions keeping the education of the students of Garrett County as the primary focus. She also explained that there is a process in which decisions and actions on those decisions need to be followed. Mr. Durst added that he has been exposed to a lot of school systems and there are not many better than Garrett County.
Part IV – Executive Session
Upon a motion by Mr. Carr, seconded by Mr. Durst, the Board of Education unanimously agreed to move to executive session at 6:38 p.m. in accordance with Public Law 4-106 and Section 10-508 of the State Government Code for the purpose of discussing personnel matters affecting one or more individuals including emergency coaches, volunteer coaches, and a field trip requests.
Mrs. Barbara Baker, Assistant Superintendent, Mr. Keith Harvey, Director of Human Resources; Mr. Larry McKenzie, Director of Finance; and Commissioner Gregan Crawford, Ex-Officio member, were present during all or part of the Executive Session.
Part V –Re-Opening of Public Session
The Board reconvened in public session at 7:52 p.m. Student Board Member, Elizabeth Sines, joined the meeting at this time. Mrs. Sebold led a moment of silence after which Ms. Sines led the assembly in the Pledge of Allegiance. Mr. Durst stated that he said a silent Protestant prayer in the name of Jesus.
Part VI – Acceptance of Agenda
Mrs. Sebold stated that the Grade Level Reconfiguration action item will be deleted from the agenda. After Board discussion, she explained, it was decided that the Board would like to have all the information to pass along to the parents. She announced that a special Board of Education meeting will be held on Tuesday, January 17, 2012 at Southern Middle School. Public session will not begin until 8:00 p.m. due to parent/teacher conferences being held that evening. Upon a motion by Mr. Carr, seconded by Dr. Forrester, the Board of Education unanimously approved the agenda as amended.
Part XI – Public Comment
Ms. Beth Friend spoke during the public comment segment of the meeting.
Part XII – Personnel Recommendations
Mrs. Waggoner recommended approval of the following personnel matters:
· Emergency Coaches: Amber Bernard, Head Softball coach, SH, Step 1, $1,645.00
Cindy Garlitz, Mock Trial Advisor, NH, Step 1, $970.00
Jaron Hawkins, Head Boys’ Track Coach, NH, Step 2, $1,926.00
· Volunteer Coaches: Josh Armstrong, Assistant Wrestling Coach, SH
Jarrod Glotfelty, Assistant Freshman Basketball Coach, SH
Tim Osselburn, Wrestling Coach, NH
Joe Shaffer, Assistant Wrestling Coach, SH
Ardra Sharpless, Bowling Assistant Coach, SH
Melvin Sines, II, Assistant Softball Coach, SH
Steven Skipper, Assistant Baseball Coach, SH
Robin Spiker, Bowling Coach, SH
· Field Trip Permission Requests: Northern Garrett Ski Club
Killington Resort, Killington, VT
February 2 – 5, 2012
Tim Yoder, NH
Upon a motion by Mr. Carr, seconded by Dr. Forrester, the Board of Education unanimously approved the superintendent’s recommendations.
Part VII – Announcements
· January 16 No School – Martin Luther King, Jr. Day
· January 17 Three-hour early dismissal
· January 17 A & S Meeting
· January 18 7:00 p.m. Friendsville Elementary Public Hearing (FV)
· January 25 7:00 p.m. Weather Make-Up Date
· January 19 7:00 p.m. Kitzmiller Elementary Public Hearing (KZ)
· January 23 7:00 p.m. Weather Make-Up Date
· January 24 7:00 p.m. Dennett Road Public Hearing (SH)
· February 1 7:00 p.m. Weather Make-Up Date
Part VIII – Approval of Minutes
Upon a motion by Dr. Forrester, seconded by Mr. Carr, the minutes of December 13, 2012 were unanimously approved as amended.
Part IX – Continuing Business
Mr. McKenzie presented information on the financing aspect of the energy audit performance contract, which was approved by the Board at the December 13, 2011 board meeting. He provided the Board with a packet of documents from Bank of America, the recommended financing company. Mr. McKenzie explained to the Board that he has sought legal advice from Edmund J. O’Meally, Attorney at Hodes, Pessin & Katz, P.A.
Mr. McKenzie informed the Board that the Board of Education will be borrowing funds from Bank of America in the amount of approximately 4.2 million to fund the capital items for the Performance Contract. He informed the Board that the shortfall for FY13, relative to the operating budget, is not related to this issue.
Mr. McKenzie first reviewed the proposal which included the summary of terms and conditions. He pointed out that over the next year, while the project is being fulfilled, the funds will be held in an escrow account with escrow agent, Deutsche Bank National Trust Company. The loan is structured as a tax-exempt equipment lease purchase agreement. The equipment and project scope consists of various energy conservation measures including outdoor lighting, interior lighting, HVAC controls and electrical upgrades. The estimated project cost is $4,192,786. The rate on the funds being borrowed is 3.14% which is approximately $300,000 less than the projections made in the cash flow analysis which was presented at the December meeting. Johnson Controls used 3.9% for the December presentation in an effort to be conservative. The first payment will be due in January 2013 and payments are due semiannually.
Mr. McKenzie explained that the Board will have to determine who the opinion of counsel will be for the Board of Education in regards to the financing. Action will have to be taken on this item and Mr. McKenzie is recommending Mr. O’ Meally, Attorney at Hodes, Pessin & Katz, P.A. The opinion of counsel provides that the Board of Education is tax-exempt, the Board has authority to enter into the agreement, and that the lease purchase was dully executed with the members of the Board having a full awareness of the financing agreement details. The proposal also includes environmental initiatives which have been taken by the Bank of America.
Mr. Durst asked what happens if utility cost increase at an astronomical rate for whatever reason. Mr. John Cavanaugh, Johnson Controls, was present in the audience and entertained Mr. Durst’s question. He explained that Johnson Controls guarantees that the rate of consumption will be reduced by 30% but Johnson Controls does not control the market rate. He explained that if rates were to increase, the value of the 30% savings would be higher but the Board still has to find the funds to pay the utilities for the other 70%.
The next document reviewed by Mr. McKenzie was the template of the Equipment Lease/Purchase Agreement document. The agreement will be entered into by the Garrett County Board of Education and the Bank of America. He explained that the document refers to an “Acquisition Fund Agreement” and this pertains to the funds which are being held in escrow by the Deutsche Bank National Trust. It will be held there until Johnson Controls finishes segments of their work and it has been agreed that it is time to pay them. He continued through the Equipment Lease/Purchase Agreement in detail. He informed the Board that the tentative closing date will be January 19, 2012 and the lease term is 180 periods, should the Board decide to act on it. There would be appropriations made each year through the budgeting process based on the lease schedule for each year’s payments.
Mr. McKenzie informed the Board that the agreement will be entered in the state of Maryland. And for purposes of the agreement, Johnson Controls will be the “Vendor”. He reminded the Board that they approved a Performance Contract with Johnson Controls at the December meeting. He added that the agreement states that the Board has a right to enter into this contract and that the Board is in good financial standing. It also states that entering into this agreement the Board will continue its existence and during the proposal process the Board complied with Maryland law. He informed the Board that the Bank of America wants to be assured that the Board of Education is financially sound and the Board of Education’s financial statement will be provided to the Bank of America on an annual basis. The agreement states that as a lessee, this equipment is needed. By signing the agreement, the Board will be agreeing to make the payments.
The agreement details the lease of the equipment, the continuation of the lease terms and non-appropriation. Mr. McKenzie discussed in detail the conditions to lessor’s performance. He shared that there will be a 5% late charge if rental payments are not made. The rental payment will be a current expense on the financial statements. The rental payments are unconditional and if the savings aren’t realized from the upgrades, the bank must be paid first and then the Board will have to go to Johnson Controls for the difference based upon the signed performance contract between the Board of Education and Johnson Controls. Mr. McKenzie informed the Board that there is a prepayment clause with this agreement which states that should the Board decide to pay the financing off early, there will be a penalty. The Board will be responsible for 102% of the outstanding principle. He explained the delivery, installation, and acceptance of equipment stated in the agreement. There is a process which determines when payments will be drawn down to pay Johnson Controls. The invoices have to be approved by Mr. Jim Thomas, Director of Facilities and Maintenance, as well as Bank of America. The agreement states that the Board is responsible for maintaining the equipment. Should the Board not maintain the equipment properly, Bank of America has the right to come in and have the equipment maintained and then bill the Board for payment of the maintenance. The Board owns the equipment and Bank of America will be first in line to repossess the equipment should there be default in payment. The equipment is considered personal property. Mr. McKenzie reviewed the agreement in regards to liens, taxes, other governmental charges and utility charges. The agreement states that the lessee shall maintain insurance on the equipment and inform Bank of America of any damage which occurs to the equipment. He pointed out we currently carry a liability insurance policy which covers $1,000,000 per occurrence and $2,000,000 in the aggregate. The aggregate amount, per the agreement, needs to be increased to $3,000,000 and will cost an additional $220.00 per year. The agreement currently states that the liability umbrella coverage should be at least $5,000,000. The Board currently has liability umbrella coverage in the amount of $1,000,000. Bank of America has agreed to reduce the liability umbrella coverage amount to be in line with the current Board policy. The increased coverage would have cost $5,500 per year. This change will be made in the final agreement. Johnson Controls will provide a surety bond. The Board of Education and Bank of America will be included on the bond. The amount of the bond will be 4.192,786. If there are any issues relative to the vendor agreement between Johnson Controls and the Board, the agreement stipulates every effort should be made to work through the issue with Johnson Controls. Regardless of the outcome, the Board is still liable to Bank of America. He explained that any net proceeds from any insurance claims will go toward paying off equipment and remaining proceeds will go to the lessee. If there is an insufficiency in net proceeds from a claim, the Board is still responsible. For insurance purposes, the claim should be made so that the equipment can be made whole again. He explained the importance of using replacement costs for insurance purposes as opposed to acquisition costs.
Mr. McKenzie informed the Board that the agreement cannot be altered without the approval of Bank of America. He also informed the Board that the agreement states that if the Bank of America so chooses, it can sell the financing to another company. In the event that it does sell the financing, the Board of Education will receive a letter stating where future payments should be mailed. Mr. McKenzie explained that the lessee’s right, title, or interest cannot be assigned. He informed the Board that there is a ten day grace period for late payments and that the Board will be in default immediately if the insurance is not maintained. He shared the acceptable means of communication between the Board of Education and Bank of America which include registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile transmission.
Mr. McKenzie reviewed in detail the attached exhibits of the agreement which consisted of the equipment schedule, payment schedule, form of authorizing resolution, form of incumbency and authorization of certificate, form of opinion of counsel, form of acceptance certificate, form of self-insurance certificate, form of bank qualification certificate, form of notice and acknowledgement of assignment, and form of acquisition fund and account control agreement.
Mr. McKenzie reviewed the form authorizing resolution with the Board. He expressed that this is the most important document. It states that as Board members, there is an understanding of the documentation presented and that this is a $4,192,787 financing agreement between the GCBOE and Bank of America. He stated the following directly from the resolution.
Section 1. “Approval of Documents. The form, terms and provisions of the agreement are hereby approved in substantially the forms presented at this meeting, with such insertions, omissions and changes as shall be approved by the Lessee or other members of the governing body of the Lessee executing the same, the execution of such documents being conclusive evident of such approval; and the Interim Superintendent of Schools of the Lessee is hereby authorized and directed to execute, and the Director of Finance of the Lessee is herby authorized and directed to attest and countersign, the agreement and any related Exhibits attached thereto and to deliver the agreement (including such Exhibits) to the respective parties thereto, and the Interim Superintendent of Schools of the Lessee is hereby authorized to affix the seal of the Lessee to such documents. “
Section 2.Other Actions Authorized. “The officers and employees of the Lessee shall take all action necessary or reasonably required by the parties to the agreement to carry out, give effect to and consummate the transaction contemplated thereby (including the execution and delivery of Acceptance Certificates and any tax certificate and agreement, as contemplated in the agreement).”
Mr. McKenzie discussed Section 3, No General Liability.
Section 4. Appointment of Authorized Lessee Representatives. “ The Interim Superintendent of Schools and Director of Finance of the Lessee are each heregy designated to act as authorized representatives of the Lessee for purposes of the agreement until such time as the governing body of the Lessee shall designate any other or different authorized representative for purposes of the agreement.”
Mrs. Waggoner explained that Mr. O’Meally advised that Mr. McKenzie go step by step through this process since it is new to everyone. Discussion ensued. Mr. Cavanaugh informed the Board that Bank of America is one of the three major funders for this type of transaction. Mr. McKenzie confirmed that the 3.14% interest rate was by far the best proposal received.
Mrs. Waggoner informed the Board that two local banks had also been approached regarding the financing of this project. The banks stated the interest rate they would present could not compare to the 3.14% offered by Bank of America. Mrs. Waggoner stated that this option is the only hope we have of making any type of capital improvements of this nature in the near future due to funding.
Mrs. Waggoner stated that the opinion of counsel is a very serious matter with tremendous ramifications for Mr. O’Meally and his firm. Mrs. Waggoner and Mr. McKenzie explained that once the resolution has been signed, it is binding to the financing of the $4,192,787 at a rate of 3.14%.
There was concern about who should sign the documentation. Because Mr. Carr served as President during this process, the Board agreed that Mr. Carr will sign as President of the Board of Education for this project.
Mrs. Waggoner recommended the approval of Mr. Edmund O’Meally, Attorney, and his firm, Hodes, Pessin & Katz, P.A. to provide the opinion of counsel. Upon a motion by Mr. Durst, seconded by Mr. Carr, the Board of Education unanimously approved Mr. Edmund O’ Meally, Attorney, and his firm, Hodes, Pessin & Katz, P.A. to provide the opinion of counsel.
Mrs. Waggoner recommended the Board’s approval of the Resolution authorizing the execution and delivery of an equipment lease/purchase agreement between the Garrett County Board of Education and Bank of America. Upon a motion by Mr. Durst, seconded by Mrs. Downton, the Board of Education unanimously approved the Resolution between the Garrett County Board of Education and Bank of America.
Mrs. Waggoner recommended the Board’s approval of the financial proposal as presented by Mr. McKenzie. Upon a motion by Dr. Forrester, seconded by Mrs. Downton, the Board of Education unanimously agreed to accept the financial proposal as presented by Mr. McKenzie.
All documents discussed in regards to the financing of the performance contract have become part of the January 10, 2012 minutes.
Mrs. Sebold thanked Mr. McKenzie for his work on this project.
Part X – Board Business
Ms. Sines reported that she is continuing to work on the projects she reported on in December. She informed the Board that there was a GCASC meeting last Saturday and they reviewed Mr. McKenzie’s five-year plan slide slow presentation. She also reported that they discussed how they would like to move forward with lobbying day.
By consensus, the Board elected to maintain the regular meeting time as the second Tuesday of each month, beginning at 4:00 p.m. to move immediately into executive session, with public session to reopen at 5:30 p.m. Due to the retirement of Mr. Robert Watson, Board Attorney, as of December 31, 2011, the Board has chosen to discuss with Ms. Miriam Sincell the interest she has expressed for serving as the Board Attorney. The outcome of the discussion with Ms Sincell will be discussed at the January 17, 2012 meeting. The Board will continue to retain the services of Rodeheaver & Associates as auditor for the current year.
Mrs. Sebold asked Board members to select committees on which to serve for the current year. By consensus, the following were assigned for the 2012 calendar year:
|Health Advisory Committee||Dr. Forrester||Mrs. Sebold|
|Hickory Env. Ed. Center Advisory Committee||Dr. Forrester||Mrs. Sebold|
|Multicultural Advisory Panel||Mr. Durst||Mrs. Downton|
|Wellness Council||Mr. Durst||Mr. Carr|
|Food & Nurtition Advisory Council||Mr. Carr||Mrs. Downton|
|Fine Arts Advisory Council||Dr. Forrester||Mr. Carr|
|Advisory Committee for Work Force Prep.||Dr. Forester||Mrs. Sebold|
|Advisory Committee on Education||Mrs. Sebold||Mrs. Downton|
|Ethics Panel||Mr. Durst||Dr. Forrester|
|Calendar Committee||Mrs. Downton||Dr. Forrester|
|Master Plan Steering Committee||Mrs. Downton||Dr. Forrester|
|MABE Budget & Planning||Mr. Carr|
|MABE Legislative Committee||Mr. Durst||Mr. Carr|
|MABE Conference Program Planning||Mr. Carr||Dr. Forrester|
|MABE Federal Relations Network||Mr. Carr||Mr. Durst|
|MABE Nominating||Dr. Forrester||Mr. Carr|
|MABE Resolutions||Dr. Forrester||Mrs. Sebold|
|Charles Willis Memorial Award||Dr. Forrester|
|Legal Services Association||Dr. Forrester||Mr. Carr|
Mr. Carr attended an LSA meeting yesterday. He reported that the first case went before the Labor Relations Committee involving Hartford County. He added that there was also discussion on the speculation regarding what might occur during the legislation session.
Mr. Carr also updated the Board with information on an upcoming case in which the result could be that it is the Board’s responsibility for providing paid counsel for students who are up for expulsion. He also informed the Board that the State Board received a grievance from an employee, which was submitted late, and the Board accepted it anyway.
Mr. Carr informed the Board that the Speaker of the House and the Speaker of the Senate will support the counties enforcing Maintenance of Effort. It is feared that retirement will be pushed back as well. He advised the Board that teachers are taxed 7% for their retirement which is put into the general fund for one to three years.
Mr. Durst informed the Board that there has been discussion on universal pre-k, without any financial support. He pointed out that it will not be income based. He also reported that there is 300 million dollars plus for school construction funds. The only issue is the lack of capability for the local match. The county match for Garrett County for FY13 is 54/46. For FY14, it will be 50/50.
Mr. Carr added that the foundation funds are being considered for a 1% increase. He stated that it may not be beneficial due to the wealth formula. Mr. McKenzie informed the Board that he has not computed the impact of the 1% increase. He also reported that he heard a Triple AAA report stating that gasoline will be over $4 per gallon this summer.
Mrs. Waggoner informed the Board that there was not any support for the loss limitation from PSSAM due to the concern with Maintenance of Effort. Mr. Durst stated that it is understood downstate that Garrett County is one of the hardest hit counties. Discussion ensued regarding the loss limitation. Last year the loss limitation was 6.5%. This year it is 11.53%. Mr. McKenzie informed the Board that in order to get it to 6.5% , the increase in funds would be approximately 1.1 million dollars. Mrs. Sebold stated she will talk with some people at the PACE meeting regarding the loss limitation.
Mr. Carr, contact person for the Superintendent search, informed the Board that the superintendent vacancy has been posted on the MABE website and he provided the superintendent search brochure to all the Board members. He informed the Board that people interested in applying can download an application on line or request a hard copy. He stated that there was an article on the front page of The Republican and he is working on having it published in the Cumberland Times News. The posting will also be placed on the AASA website. Education Week is asking $1,500/week for the posting to run and was is felt that if too expensive. The applications will be submitted to MABE. Interviews will begin on March 21. They will be held out of the county. The second round of interviews will be held the third weekend in April. The finalist will be in Garrett County on May 16, 17 and 18. This will allow time for the applicants to be interviewed by the focus groups. The focus groups will then respond to the Board with a “thumbs up” or “thumbs down.”
Mrs. Sebold reported that the Advisory Committee on Education will meet on Monday, January 30, 2012 at Garrett College in the board room. Discussion ensued in regards to the ACE Committee and the best way to address their concerns.
The Board members updated their ethics forms.
Part XIII – Information Items
In addition to the public comment letters regarding reconfiguration of grades (Pk-4, 5-8, 9-12) and the December 2011 Attendance Bulletin, the Board also received the following information items:
a. Garrett County Public Schools Annual Report 2010-2011 and Education Superlatives
b. January School Activities Calendar
Part XIV– Adjourn
Upon a motion by Mr. Carr, the Board adjourned the meeting at 9:37 p.m.
|Mr. Charlotte Sebold||Sue F. Waggoner|
|Approved: January 17, 2012|