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OCN > 2502 > Monument Academy School Board, Jan. 6 and 9 – Board hears bond refinancing, action plan

Monument Academy School Board, Jan. 6 and 9 – Board hears bond refinancing, action plan

By Jackie Burhans

Monument Academy (MA) held a work session on Jan. 6 where it discussed bond refinancing, the proposed high-performance program, and board bylaws. At the Monument Academy (MA) regular meeting on Jan. 9, the board voted on the High-Performance Program (HPP) and heard from the executive director about his action plan.

Bond refinancing discussed

At its Jan. 6 work session, Interim Chief Financial Officer Glenn Gustafson reminded the board that MA has a $27.7 million balloon payment or “bullet” coming due in April 2026 for its 2019 bonds for the East Campus and that it would have to refinance that debt. Although he was initially very critical of this financing, bond underwriters told him it was a very common structure because entities are reluctant to issue 30-year bonds when unsure if a school will succeed. He said this financing structure was an industry norm, although no one anticipated that the market would go from low to high interest as it has.

Gustafson noted that the 2014 bonds cover the West Campus while the 2019 bonds cover the East Campus, and MA is required to account for them separately. Each school is responsible for its own bond. He noted that MA has a couple of alternatives.

MA could pay off the 2019 bond with a longer-term issue of up to 40 years to lower debt service. However, this would not yield much in the way of construction funds. Gustafson noted that MA’s West Campus has a lot of equity. MA could cross-collateralize and use that equity to subsidize the East Campus. MA would not have two sets of bond compliance rules, as only one bond issue would exist. He liked that idea because it fits the “One MA” notion.

MA asked the firm that initially built the East Campus to cost out a new academic wing, athletic facilities, fine arts facilities, and additional cafeteria space. Gustafson noted that the total cost would depend on what MA picked but that it could not afford everything. He said that once MA issued bonds it was locked in for 10 years and could not go back to the market for more money.

Timing-wise, Gustafson said MA was in a high-stakes game of poker and needed to hit its bond ratios as of June 30. He said MA had always had the required 45 days of cash on hand but had never hit its debt service ratios based on the East Campus’s net income. He said that the finance team has been targeting these two ratios and was on track, but MA can’t spend more money. He said it is a pass/fail test, and the budget is built to achieve that depending on the amount of fundraising from the gala and other efforts. The better MA’s financial position, the lower the interest rates would be, he said. Although the state has a moral obligation program that would guarantee the loan, MA’s finances would have to be much better to qualify.

Gustafson referred to the packet that analyzed eight scenarios with various interest rates and terms, the impact on debt service, and the number of students MA would need to add to pay the debt service. He noted that the board would have the moral obligation to pay the bondholders whether or not they have the students, even if they have to cut staff or pay. If MA were to default on the bond, he said, they would never again be able to issue bonds. He noted that MA needs 12 more kids at the West Campus, which should be no problem. He said that, depending on the amortization schedule, MA might be able to raise $25 million for construction, but its capital plan is $32 million, so it would need to come up with grants or fundraising. If MA could raise $25 million, it would need to add 213 kids to East Campus. He said the new facilities could attract kids, and they would have to do a lot of marketing. The proposed HPP could help to add kids, but they would be counted as 0.7 full-time equivalent students.

Gustafson said MA had about 13 months to pull the trigger. Interest rates should fall in the spring, and the fall audit would show whether MA had met its bond ratios. This timing would allow MA to issue bonds and begin construction to open the new facilities in August 2027, he said.

High-Performance Plan revisited

At the Jan. 6 work session, the board returned to the proposed HPP they had discussed in November. See https://wp.ocn.me/v24n12d38ma. The HPP is a program to educate students developing athletic and creative skills at the highest levels who need more flexibility.

Vladislav “Izzy” Izboinikov, the program’s founder, returned to provide additional information and answer questions. He felt the timing was perfect and could generate numbers to offset the additional students needed. He offered to commit to between 50 and 75 kids, depending on how committed MA is to making the program grow.

The board discussed the size of the pool of students who might be interested, the concern that this might distract from MA’s efforts to return to its charter, and the impact on teachers, among other concerns. Izboinikov said the pool was smaller than Denver but not too small. Executive Director Collin Vinchattle noted that his action plan focused on the academic vision and the curriculum, which would be the same for HPP with some added flexibility. Izboinikov said there would be a learning curve, but he didn’t see a huge spike in what teachers must do. Vinchattle said MA had foundational pieces in place and that teachers already work with the Canvas system that HPP uses and already are flexible with students who take long vacations or miss classes for athletics.

After additional discussion about whether equipment would be needed, getting feedback from teachers, the need for more portables, and adjusting the proposed agreement, the board directed Vinchattle to bring the topic back to the regular meeting with the requested information.

At the Jan. 9 regular meeting, Vinchattle said he was in favor of HPP, feeling that it would be beneficial to MA and aligned with its vision by providing a high level of education to marginalized students who, because they were pursuing their skill in one area were being limited in their education. He reported that he spoke to high school teachers who said it was work they do for all students who miss class and thought it was a neat program. They did express that science labs might take more work, as would Socratic discussions, but teachers felt they could make it work. Vinchattle noted that the program would have a liaison, and that MA would dictate how the program was structured. He said that MA would create an oversight committee and asked the board to provide direction to proceed with building the program model.

The board unanimously voted to approve the HPP direction and creation of an oversight committee.

Action plan

At its Jan. 6 work session and again on Jan. 9, the board heard from Vinchattle about his action plan to address issues raised by MA’s organizational audit. See previous articles at https://wp.ocn.me/v24n11d38ma/ and https://wp.ocn.me/v24n12d38ma.

Board President Ryan Graham said this had been in the works and had been created by Vinchattle and the leadership forum. Vinchattle noted that the leadership forum came together after the organization audit performed by Lis Richard and created an action plan with action steps. Graham said the board had discussed using this as the strategic plan and asked if it would be uploaded to the website. Vinchattle said it would be uploaded to the board page.

The board unanimously voted to approve the action plan as presented to be the strategic plan.

The strategic plan and action steps can be found https://www.monumentacademy.net/school-board/.

Highlights

Board meeting highlights include:

  • Board member Jilinda Dygert reported that the School Accountability and Advisory Committee for East Campus met on Dec. 16 and discussed the parent survey, which closed on Jan. 21. The next meeting on Feb. 3 will focus on survey results and teacher evaluations. Dr. Michael Brom, Lewis-Palmer District 38 Coordinator of Assessment and Accountability, presented on Jan. 28 about the Colorado Measures of Academic Success (CMAS).
  • The board unanimously approved minor edits to its bylaws to update the title of chief operating officer to executive director and to add the Simbli platform where MA hosts its board documents as a location for record storage. MA board documents can be found at https://bit.ly/ma-boarddocs.
  • The board unanimously voted to change the number of voting directors from 7 to 5, which means the board election will have one position to fill.
  • The board modified its calendar to remove a proposed retreat on Jan. 17 and set 6 p.m. as its start time for the work session on Feb. 27 at the East Campus. Board Vice President Lindsay Clinton said she would start pushing out information about eligibility requirement and the application deadline.

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The MA School Board meets at 6:30 p.m. on the second Thursday of each month. The next regular board meeting will be on Thursday, Feb. 13, at 6:30 p.m. at the East Campus. For more information, visit https://bit.ly/ma-boe;; for the agenda and packet, see https://bit.ly/ma-boarddocs.

Jackie Burhans can be reached at jackieburhans@ocn.me.

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