Ryan and Deleens. The League did send my invite to meet with you both to the wrong person. Nonetheless, let me address your points now.

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1 From: To: CC: Sent: 10/3/2015 3:46:31 P.M. Mountain Daylight Time Subj: Re: Discussion about Academica Ryan and Deleens The League did send my invite to meet with you both to the wrong person. Nonetheless, let me address your points now. 1. In my early meetings with the HHA Board they advised that Academica would not submit their proposed contract as part of the application. A "sample" contract, if that was provided, is not the same thing. The Academica agreement is a critical element of this application and, from an authorizer perspective, should be required. I am not mistaken about this. My subsequent review of the contract last weekend revealed terms that I view as onerous for the school and this suggests why the contract was not forthcoming from Academica initially. 2. You advise that the League reviewed the contract. In your you note their comments and questions. Their comments which you quote represent nothing more than a summary of some of the contract terms. The League will generally only do what they are asked by a start up charter board. I don't know what they were asked to do. Perhaps they were not asked to do a "deep dive" analysis or a legal analysis. However, their questions which you quote are related to some of the concerns that I have expressed. I do not believe that the League attorney reviewed the contract or, I expect, there would certainly have been issues raised. The League attorney may observe now that this contract does not meet TABOR provisions as regards multi-year contracts nor represent best charter practices as regards the "for cause" termination provisions. 3. You advise that the contract language which repeatedly lists services that Academica "may provide" was meant to merely reflect that the HHA Board would have the flexibility to opt out of having Academica provide any of the services. This is not real flexibility for the Board because there are no provisions for any commensurate reduction in the $450/student flat fee. You further state in your that the $450 flat fee: "Since it is a flat fee, it does not increase with school funding increases passed by the legislature." Yet the contract in Paragraph 24 Base Compensation clearly states that there will be annual adjustments to the $450 flat fee based on the Consumer Price Index or year to year percentage changes in the per pupil funding. Furthermore, if the funding is actually reduced, Academica "will consider lowering the fee". So, by the contract language there are provisions for annual increases but Academica is not required to reduce their fee if funding is reduced. This also seems unfair and potentially very onerous for the school. I am not certain how to reconcile what you say as being in the contract with what is actually in the contract. 4. Regarding the transfer of employees to other Academica schools, you defend this practice by stating that the Board makes all the decisions and a transfer would be mutually agreed between the Board and Academica. However, from a practical standpoint, Academica could ask a HHA employee if they would be interested in a transfer, particularly if a promotion or raise were involved. The Board is then placed in a bad situation wherein if they deny a transfer they have a disenfranchised employee. If they feel compelled to allow the transfer then the HHA program is compromised by the loss of valued employee. Of course, the employee can resign at HHA and re-apply at the other Academica school if Academica made them aware of the opening. In this scenario, the Board may then feel compelled to go along. In my opinion, all the advantages in this transfer "arrangement" flow to Academica and the disadvantages go to HHA. 5. Your states "Academica provides all bookkeeping and financial reporting services within the basic service fee." However, in paragraph 6, titled "Bookkeeping" is this statement "Service Provider will Received October 4, 2015 Page 1

2 coordinate with the accounting firms selected by the Board "the accounting firm" and serve as liaison with them to ensure the accuracy and timeliness of financial reporting and record keeping as may e required by the Charter and State law". If Academica is providing all the bookkeeping and financial reporting services as you say, why is the Board having to select another, outside "accounting firm" to do this work too? Why is Academica's role as stated in the contract that of only the "coordinating" liaison if, as you say, Academica is actually doing this work? I am not certain how to reconcile your response to what is actually in the contract. To me, it appears that HHA is selecting and paying for an outside accounting service which then begs the question, what is Academica providing for $450/student? 6. You explain in your that the employee leasing relates only to a situation where Academica may contract separately with payroll services. To begin with, I am uncertain why these services involve any sort of employee leasing at all. Also, in the contract, paragraph 7, is a statement which reads "All employees selected by the Board shall be HHA employees or employees leased to HHA, and will not be employees of the Service Provider (Academica)." So, HHA is going to pay for outside payroll services because payroll services are not part of the $450/student flat fee. Similarly, in the same paragraph, HHA is going to pay for an outside "professional employee management company "which can perform the human resource services for the School." The Service Provider (Academica) will "coordinate these services". In most Colorado charter schools, these functions are performed "in house" at the charter school level and in cases where a Board elects to use a payroll service, there is not another layer of "oversight" management (and cost) between the school and the payroll service. Again, what is HAA getting for $450/student? One question that I would ask is whether Academica receives any compensation from these outside service organizations for recommending them to a school? 7. You state in your that "The outside accounting service is only for the purposes of the annual audit. Academica provides all other accounting and reporting services." Clearly, the Bookkeeping contract verbiage in paragraph 6 does not align with your statement. Furthermore, in Paragraph 8 Financial Projections and Financial Statements, another reference to the outside "accounting firm" states that "the Board, based on recommendations made by the accounting firm, will adopt accounting policies and procedures." In point of fact, most charters in Colorado who use outside accounting/bookkeeping firms do rely on those services for recommendations on policies and procedures because those services normally have a relative wealth of experience in Colorado compared to new charter Boards. The major difference is that those charter Boards are not paying a hefty fee per student for another Service Provider to provide a separate and additional layer of oversight of the accounting firm. 8. Your response to my question regarding the relevance of Contract paragraph 15 School Board Representation is that this paragraph was mistakenly included as it actually applied to another school in Nevada. My general impression of the contract is that it is sloppily written, lacks coherency within the document and is generally ambiguous. As such a key document, one would expect that Academica would be particularly conscientious with it's preparation. Academica, one would think, would be especially attentive to putting their best foot forward. In my opinion, no attorney wrote it. Nobody critically proofread it and that includes nobody with Academica, nobody with the founding Board and no independent charter school experienced attorney in Colorado who would be representing the Board. (This observation is apart from the terms that are especially onerous for HHA.) 9. The justification you offer in your response regarding the "for cause" termination contract provisions states "...Indeed, if the school is operating successfully and efficiently as our other school clients, and we are meeting all of our service obligations, then we would like to maintain our relationship with the school." Of course, any of the myriad service providers for Co. charter schools would like to maintain their relationships as long as possible too. However, the Co. service providers realize that change happens and competition is actually healthy for everyone, schools and providers alike. If a school determines that their needs can be better met with another provider or with in house services, then everyone recognizes that the school board must have the flexibility to respond in the best interests of the students and with regard to spending taxpayer dollars responsibly. The difference here is that you contractually assume the position of having some sort of "property right" to serving the school. There is no such "property right" that I am aware of. In addition to being outside TABOR requirements and just from a common sense, business perspective, the automatic renewals, automatic base rate escalators and Received October 4, 2015 Page 2

3 termination for cause only provisions are simply over the top onerous to HHA. You reference Academica's track record in other states and boast referrals in support of Academica. My response is that Colorado is widely recognized as being at the forefront among other States in education reform, particularly in the area of charter schools. Many States are fairly new at charter schools. Others have spotty records of success. Others have lax authorizers and have lessons to learn yet. I cannot account for policy decisions in other states. I will reiterate a point from an earlier . If part of Academica's marketing strategy is to target middle class or upper middle class neighborhoods, then the fact that those students are socially and economically advantaged will go along to virtually assuring at least mediocre student performance. Then termination of Academica is next to impossible regardless of how well Academica performed. Given your confidence in Academica and the track record that you claim supports it, Academica should be confident that their service will be valued at $450/student in Colorado without these terms in their contract. Having been an authorizer for the Colorado Charter School Institute for six years, I and the CSI Board would occasionally see applicants who advanced charters that featured Core Knowledge programs, but did so only because they were more certain to have a CK charter granted than another model. In fact, they had other agendas for the school and just needed a charter to be granted. I learned recently that the HHA founding Board first broached the idea to the District of doing a BYU Prep replication. This was news to me. I tried to find anything on line about such a school or schools to see how they aligned with CK. Perhaps your inquiry was just something of a passing thought. Nonetheless, what does a BYU Prep school do that is unique or different from CK schools? Are there different expectations (students expected to go to BYU)? I am a charter school supporter and parent choice advocate. I am especially a supporter of CK. I consider the application process with an authorizer as an opportunity to test an application and the applicants. The result, in most cases, will be a granted charter that is much stronger than a less rigorous process would produce. The more rigorous, the better for the students. My recommendation to your Board is to thoroughly read the contract and understand it. Then, arrange for a Colorado charter school experienced attorney to read it and listen to their advice. Then eliminate the onerous provisions as outlined above and in my earlier (include an independent third party review of facility proposals). I only reviewed the contract, if the balance of the application is done with the same lack of thoroughness that I see in the Academica contract, then you will have more work to do. Finally, you probably should not bank on winning an appeal to the State Board. Some knowledgeable folks agree that an appeal is a loser on the TABOR requirement alone. You have come along way, you probably have a ways to go yet. Dean Titterington In a message dated 9/27/2015 4:15:29 P.M. Mountain Daylight Time, Ryan.Reeves@academicanv.com writes: Dean, Received October 4, 2015 Page 3

4 I m sorry to be ing on a Sunday afternoon. I first saw this yesterday, but was attending my daughters soccer games and helping a friend move most of the day. And I know I will be in a meeting of the Nevada State Public Charter School Authority most of the day tomorrow, so this is really my only opportunity to send out an . Great to see your interest in the HHA application. I know you have a lot of experience and knowledge about the Cherry Creek School District, Core Knowledge Curriculum and charter school operations in general. As such, having you support this school s application would be a great benefit to the Board. However, I have also noticed a lot of misunderstandings and reluctance in your comments about Academica. I hope you will be able to sit down and meet with me to discuss Academica s history, model of services, and record of success. I ed you last week in response to an introduction sent to you and me by Lori Ventimiglia. However, Lori had a different address for you (deanihp@aol.com), so perhaps you did not receive it. I just wanted to clarify I few issues which you raised in your recent and contract review document with Deleen. First, please know the Academica Contract was submitted to the League of Colorado Charter Schools and reviewed by them as part of the application review process that Academica and HHA jointly completed with them. We never refused to show a proposed Contract to the League or to anyone else. In fact, providing a sample contract to the HHA Board was one of the first things I did when I started meeting with them a year ago. The League s review process is anonymous, so I do not know who at the League made what comments. However, under the heading strengths the following shows some of the comments that were made: Academica is a school management company that is noted as highly successful. There is a Services Agreement included which is able to be severed with or without cause prior to the school opening and at renewal each time after that but only for cause. It automatically renews if written notice is not given to sever at renewal time. The company employees can t serve on the charter board and must disclose any conflict of interest for goods or services being considered. All employees are employees of the school and not the SP. Cost is $450/pupil and reimbursement for costs of travel, etc. Any disagreements will be settled in CO courts. The reimbursement costs need prior approval by the board. There were also critiques and questions, such as the following: CO license to operate? Are all things in the agreement such as curricular and marketing assistance included in the one price? Who writes the checks and purchase orders? Are there Academica operational policies that can be shared? Who decides on the cost of the facility? Received October 4, 2015 Page 4

5 So I m not surprised that you have some questions as well. And we are more than happy to clarify with you or anyone else. As I ve told the HHA Board, ALL services are included in the $ per pupil. Any permissive language in the contract, such as may provide, was intended to demonstrate that the Board directs our services, not open up some kind of loop hole where we charge more for certain services. Furthermore, the flat fee of $ per student is a fixed fee that we have not adjusted in more than 5 years in Nevada and hope to not have to adjust for many more years into the future. Since it is a fixed fee, it does not increase with school funding increases passed by the legislature. To briefly address some other concerns, as listed in the document you recently created: 1. We have no authority to hire, fire or transfer school employees. Any reference to personnel going from one Academica serviced school to another involves increased opportunities for schools and their employees to have growth. For example, Doral Academy of Nevada recently hired a Somerset Academy of Las Vegas teacher as an AP. Both schools are serviced by Academica, Somerset supported the teacher s promotion and Doral had an increased pool of candidates to consider. It is this type of mutually agreeable scenario between Academica managed schools that this contract provision is intending to reference. 2. Academica provides all bookkeeping and financial reporting services within the basic service fee. The only hires needed to be made by the school are an office manager at the school site who prepares purchase orders for Principal signature, which are then sent to Academica for processing, and the retention of an outside auditing firm for the annual audit. 3. Academica does not lease employees to the school. The reference to Leasing employees is for the purposes of payroll processing through an outside provider. We have both national providers (ADP) and regional providers (Paypros) with special pricing arrangements with Academica that are beneficial to the school. 4. The outside accounting service is only for the purposes of the annual independent audit. Academica provides all other accounting and reporting services. 5. Reference to the State Board is simply a contract revision that was missed. That language arises from Nevada, where a State Charter Authorizer is used. 6. As mentioned above, Academica truly intends to provide all services listed, any language that a service may be provided is simply meant to defer the Board s right to direct Academica s services, not limit services provided within the basic service fee. 7. Our history in Nevada speaks for itself in the area of facilities development. We have worked with rented space from churches and retail developments, developed buildings through three different development organizations, and always kept our Boards involved and informed in the process. I am very proud that Academica helped to promote legislation to allow for tax-exempt bonds to be issued for charter schools through the Nevada Division of Business and Industry, and that Somerset Academy of Las Vegas, with Academica s guidance and assistance, recently became the first Charter School to utilize this financing mechanism in purchasing two school facilities directly in the name of the School. Received October 4, 2015 Page 5

6 8. The Term of the agreement represents our hope to be a long term partner of the school. Indeed, if the school is operating as successfully and efficiently as our other school clients, and we are meeting all of our service obligations, then we would like to maintain our relationship with the school. I will work with HHA s selected counsel on any contract revisions necessary to make sure the language of the agreement reflects the true commitment of Academica, as listed in this and demonstrated by our track record. HHA Board Members have spoken with Nevada school representatives who know me personally, can speak to Academica s model, services and fees, and they have received nothing but positive feedback. I can assure you the same, please feel free to contact any of the dozens of Board Members and school Administrators we work with on a daily basis. And I again want to ask you to meet with me when I am in Colorado this week if you are available. My cell number is I will be in town on Wednesday and Thursday and would really appreciate the opportunity to sit down with you. Thanks! Ryan. Received October 4, 2015 Page 6