January Advisory Meeting Minutes

Date/Time: Tuesday, January 9, 2018 @ 6:30 pm

Location: Flagstaff Arts & Leadership Academy, Room 4

In Attendance: Debbie Bodin, Joe Bodin, Susan Fox, Jeran Fox, John Brixen, Molly Silverman, Janet Levin, Stephanie Kohnen, Larry Wallen

Agenda Items:

1. Larry Wallen presents Financial Issue
   1. Expenses are exceeding monthly Income (revenue)
   2. Monthly expenditures are depleting cash balance
   3. One million dollar cushion from the State of Arizona
   4. Down approximately twenty 7th graders is the main issue (lowers income)
   5. Which do you fix: lower expenses and/or raise revenue
   6. Causes
      1. 2010 Bond that built the building ($4.3 million = $31,000 per month) for next 23 years = $372,000 per year. Bonding company is in Tucson.
      2. Promissory Note with Contractor (sued) – $6,000 per month (the contractor said you asked for changes above the original estimate, they sued, and it was settled at $500,000 in damages at $6,000 per month for ten years and then re-evaluated at 11% interest). Larry has stopped the payments and is asking their attorney to get back to the table. Has paid $245,000 with only $110,000 towards principal so far.
      3. SPED settlement – $3,000 per month (until $150,000 is paid off). Paid off last spring.
      4. Reduced enrollment – loss of 20 seventh graders = $159,000.
      5. Current funding – 1st year implementation – adjusting monthly payments
         1. Examples
            1. August – $202,232.28
            2. January – $181,000
      6. Applying for $150,000 loan through a Tucson bonding company.
      7. Options to Solve Issues
         1. Increase Revenues – Can’t increase state funding
         2. Current Shortfall – Need $25,000 to meet expenses
         3. $400,000 in cash reserve (last June). Now at $150,000. Makes about 4 months of cushion in the bank
         4. Refinance the Bond (new tax bill may allow us to refinance it). Doesn’t pay it off, just kicks the money down the road. currently at 7% – reduced to 3.5%.
         5. Promissory note rolled principal at a lower percentage too.
         6. Recruiting more students – adding 6th grade ($350,000 in new revenue)
         7. Increase Class Size slightly – can put up to 45 students in the modulars.
         8. Income Possibilities
            1. Tax Credit Increases
               1. campaign to try to generate this revenue
               2. $400 married / $200 individual
               3. Subscription Option – $33.33 per month or $16.67 per month (create a campaign)
            2. We are a 501c3 so any general donations can be done.
            3. 529 accounts is available for tuition only (so we probably don’t count)
            4. Corporate Sponsorship Program – multiple levels for different size businesses
            5. Culture of Giving – Fundraising programs. Eric Walden (Choir teacher) is looking into creating a program.
            6. Grant Writing – our population makes us not eligible for many of the grant programs.
            7. Teacher Fund – ask parents to give money directly to teachers (BASIS raises $250,000 per year). Goes to teachers for bonuses. Do a Subscription scenario.
            8. Reduced / Free Lunch Rate – fill out forms and the state gives extra money if there is a high enough percentage of people qualifying.
         9. Expenses
            1. Operational costs are $10,000
            2. Payroll is $175,000
            3. Cost Reduction measures
               1. Energy is controllable
               2. Paper and Printing (google school usage)
      8. Messaging
         1. consistent message
         2. town halls
2. Meeting ends at: 8:35 pm