The Georgia Charter Educational Foundation board of directors, the nonprofit board governing Cherokee Charter and Coweta Charter Academies, voted Thursday to move forward with plans to purchase property for the two schools.
The property would be owned by Red Apple Development and operated by the Georgia Charter Educational Foundation.
Red Apple Development is the for-profit real estate arm of Charter Schools USA.
Chairperson Lyn Carden, treasurer Danny Dukes, and board members Ernest Taylor, Mark Johnson and John McIntyre met for about an hour by teleconference for the meeting. Board members Marian Parker, Bob Young, Fred Black and Clifford Hayes were not at the conference meeting.
The first agenda item was a discussion of the foundation’s proposal to purchase and pay for construction costs for the schools.
The bond underwriter is BB&T Capital Markets, and their representative Michael Braun said that there are two separate bond deals, one for the Coweta Charter School project and one for the Cherokee Charter project.
The plan would include purchasing the building that Cherokee Charter is now housed in on Sixes Road in Canton.
“It’s contemplated to be a $14.1 million transaction,” Braun said of the Cherokee project.
Braun said Coweta Charter Academy “needs to grow its enrollment in order to boost its revenues to afford the full payment, it’s viewed as a more risky transaction, because those students may or may not come.”
Charter Schools USA Chief Financial Officer Richard Garcia, one of three Charter Schools USA representatives on the call, said Coweta Charter Academy’s situation is “not uncommon.”
Johnson, the newest board member, who is a civil and commercial attorney from Marietta, asked how the enrollment issue at Coweta Charter Academy was being dealt with.
“It’s not a brand new school, it’s been in operation now for a few years now,” Garcia said. “We have a marketing team that’s working diligently to get up to enrollment. If we don’t get up to enrollment, obviously we’ll re-evaluate what that means to the budget, recap the budget and make it work.”
Carden said lack of enrollment was because of an absence of facilities, and said that now there is more room and she expects enrollment to rise.
The GCEF board of directors voted to sign the non-binding bond terms sheet, providing outstanding issues were addressed, and appointed Dukes as the designee to work on finishing the deal.
The other item on the agenda for the meeting was the presentation of the auditor’s engagement letter by CSUSA accountant Matt Grossman.
“The audit fees proposed … are $8,750 per school,” Grossman said. “The terms of the engagement letter are pretty standard.”
The auditing will be conducted by the Keefe, McCullough and Company, and Dukes said there needed to be assurances that the board saw the audit before it went to third parties.
“You do have that commitment from us,” Grossman said.
The board passed the agreement to engage in auditing with the firm.
The next meeting go the Georgia Charter Educational Foundation will be Aug. 22 at 10 a.m., and the location is yet to be determined.