Notice of Prospect of Revocation (Letter to Governing Board)

From Hawaii State Public Charter School Commission, 03/18/2019

Notice of Prospect of Revocation 

​Dear Ms. Royale and the Governing Board of Kona Pacific Public Charter School (KPPCS):

​This letter provides you with the formal Notice of Prospect of Revocation required by §8-­‐505-­‐16, Hawaii Administrative Rules (HAR) and in accordance with the action taken on March 14, 2019, at the State Public Charter School Commission’s General Business Meeting.

​Under §302D-­‐18(g), Hawaii Revised Statutes (HRS), the Commission took action to initiate the revocation of KPPCS’s charter contract based on the information presented and gathered to date that indicates that KPPCS failed to comply with the provisions of the law and:

• committed material and substantial violations of the terms, conditions, standards, or procedures required under Section 302D-18, Hawaii Revised Statutes, and the State Public Charter School Contract; 
• failed to meet sufficient progress toward performance expectations set forth in the contract;
• failed to meet generally accepted accounting procedures of fiscal management; or
• substantially violated any material provisions of law from which the charter is not exempted.

The Commission’s concerns include but are not limited to:

• Commingling of funds between the school and the non-profit, Friends of Kona Pacific Public Charter School (FKPPCS)
• Continuous overpayment of lease rent from KPPCS to FKPPCS for every year except school year 2016-2017
• Fronting money to FKPPCS to cover FKPPCS cash flow problems
• Failure to maintain sufficient funds to cover the school’s payroll as evidenced by its bank statement showing a negative <$18,586.97> balance on July 20, 2018.
• Evidence of FKPPCS driving the financial decisions of the school’s governing board
• Conflicts of interest and ethical concerns with the governing board and employees of the school
• Constitution of and actions by the governing board of KPPCS that may be out of compliance with HRS 302D-12(h)

Under HAR §8-­‐505-­‐16, KPPCS has thirty days from the date of notification, to respond to this Notice of Prospect of Revocation.  The school also has the option of requesting a hearing on this matter in accordance with HAR §8-­‐505-­‐20 and may request legal representation subject to Section 28-­‐8.3, HRS. For more details, we refer you to HAR §8-­‐505, Subchapters 4 and 5. 

​We will also be notifying parents and KPPCS’s staff of the Commission’s decision on March 18, 2019, along with the process that will occur.   The Commission will also be setting up information on our website to provide the most updated information.

If you have procedural questions, please contact Chief Operations Officer Yvonne Lau (Yvonne.Lau@spcsc.hawaii.gov) or (808) 586-­‐3775.

​Sincerely yours,

​John S.S. Kim

Chairperson, State Public Charter School Commission

​Sione Thompson

Executive Director, State Public Charter School Commission

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Letter Mailed to Kona Pacific Public Charter School ʻOhana

Posted by Hawaii State Public Charter School Commission, 03/18/2019

Kona Pacific Public Charter School Parents, Families, Faculty, and Staff 

​Dear Kona Pacific Public Charter School Ohana: 

​This letter is to notify you that the Hawaii State Public Charter School Commission voted last Thursday, March 14, 2019, to initiate the revocation process for Kona Pacific Public Charter School (KPPCS). The revocation of KPPCS’s charter contract would result in the closure of the school. 

​The Commission took action to initiate the revocation of KPPCS’s charter contract due to significant concerns that the school failed to comply with the provisions of the law, specifically, the school: 

• ​committed material and substantial violations of the terms, conditions, standards, or procedures required under Section 302D-18, Hawaii Revised Statutes, and the State Public Charter School Contract; 
• failed to meet sufficient progress toward performance expectations set forth in the contract; 
• failed to meet generally accepted accounting procedures of fiscal management; or 
• substantially violated any material provisions of law from which the charter is not exempted. 

The Commission’s concerns include but are not limited to: 

• Commingling of funds between the school and the non-profit, Friends of Kona Pacific Public Charter School (FKPPCS) 
• Continuous overpayment of lease rent from KPPCS to FKPPCS for every year except school year 2016-2017 
• Fronting money to FKPPCS to cover FKPPCS cash flow problems 

Kona Pacific Public Charter School Ohana Page 2 March 18, 2019 

• Failure to maintain sufficient funds to cover the school’s payroll as evidenced by its bank statement showing a negative <$18,586.97> balance on July 20, 2018. 
• Evidence of FKPPCS driving the financial decisions of the school’s governing board 
• Conflicts of interest and ethical concerns with governing board and employees of the school 
• Improperly seated governing board of KPPCS that was constituted in violation of state law regarding charter school governing boards (HRS 302D-12(h)), thereby calling into question the legitimacy of the actions taken by the current KPPCS governing board. 

The Notice of Prospect of Revocation is the first step in a process. The Commission is committed to keeping you informed especially for students and families and staff. 

The most up to date information regarding KPPCS will be provided on the Commission’s website, www.chartercommission.hawaii.gov. You also are welcome to contact the Commission office at info@spcsc.hawaii.gov or (808) 586-3775. Staff will be available to assist you in answering your questions. 

​Very truly yours,

​John S.S. Kim

Chairperson, State Public Charter School Commission

​Sione Thompson

Executive Director, State Public Charter School Commission

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Response from Kona Pacific Public Charter School

Notice of Prospect of Revocation

At its general meeting on March 14, the Hawaii State Public Charter School Commission voted to issue a “Notice of Prospect of Revocation” of the charter  contract with Kona Pacific Public Charter School. On March 18, a letter was mailed to the staff and families of the school, informing them of this decision.

The revocation of the charter contract would result in the closure of the school. The notice is the first step in that process, which will proceed over the next few months.

On March 21, the governing board of KPPCS sent a letter to the commission staff and commissioners expressing the school’s concern that proper legal processes were not followed regarding the commission’s meeting and vote. The text of the letter is below; follow the “more” link for the full text of the letter.

The school will next be responding to the notice itself. In their letter to KPPCS staff and families, the commission listed concerns about various actions taken by Kona Pacific’s staff, director and governing board, as well as former staff, directors and governing boards. The school will be addressing all of the commission’s concerns in its formal response to the Notice of Prospect of Revocation.

To view the Notice of Prospect of Revocation, please see the commission’s website here.

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21 March 2019

To: Sione Thompson, Executive Director, SPCSC Commissioners, Hawaii State Public Charter School Commission, 1111 Bishop Street, Suite 516 Honolulu, HI 96813

Dear Mr. Thompson and Commissioners,

We are writing regarding the Commission’s March 14 meeting concerning Kona Pacific Public Charter School and the subsequent March 18, 2019 letter to Kona Pacific Public Charter School’s staff and parents. We respectfully insist that the Hawaii State Public Charter School Commission immediately: a) rescind its letter, b) remove the message on the same subject posted on its web page, and c) rescind its vote to initiate the revocation process of our charter for the following reasons:

First, the Commission posted and promulgated its notice for the March 14, 2019 meeting on March 8, 2019. As you are aware, the Charter School Commission is subject to HRS Chapter 92 – Public Agency Meetings and Records. See HRS 302D-3(a). Per HRS Section 92-7(a), the Commission is required to give written public notice of “any regular, special, emergency, or rescheduled meeting.”  The meeting notice “shall include an agenda that lists all of the items to be considered at the forthcoming meeting.”  Per HRS Section 92-7(b), the Commission is required to post the meeting notice on its website and its office “[n]o less than six calendar days prior to the meeting.”  Per HRS Section 92-7(c), if the notice is posted on the Commission’s website less than six calendar days before the meeting, “the meeting shall be canceled as a matter of law and shall not be held.”

Although the agenda item “Update/Action on Intervention Protocol for Kona Pacific Public Charter School’s Notice of Concern Regarding Public Charter School Contract Violations and Performance Concerns” had been posted in advance of the deadline of six days prior, that meeting notice did not include an agenda that listed all of the items to be considered at the March 14 meeting, which constitutes a violation of HRS Section 92-7(a).

Second, the 7 bullet point list of agenda items of continued concern contained at pages 6 and 7 of the Commission’s public notice/agenda for its March 14, 2019 meeting does not correlate with issues actually addressed by Commission members at the March 14, 2019 meeting.

Per HRS Section 92-7(d), the Commission “shall not change the agenda, less than six calendar days prior to the meeting, by adding items thereto, without a two-thirds recorded vote of all members to which the board is entitled.” There is no evidence that this vote occurred, yet Commission members nevertheless failed to address any of the 7 issues listed on the agenda. Instead, Commission members grilled members of the Governing Board about a) alleged “illegality” of email voting as provided for in the school’s By-laws; b) alleged lease rent “overpayments”’ and c) discussion of “fears” expressed by a school staff members.

The Commission proceeded to question the School’s director, and Mr. Thompson asked him the following list of questions (not in this order, and not these precise words): a) You will definitely not be coming back to the school next year, is that correct? b) Have you had access to the school’s financial records at all times during your tenure? c) Were you informed when you took the job that there were commission concerns about past school enrollment procedures? d) Did a Friends board member enter the school office and threaten and intimidate a school employee? and e) Does the board often take email votes?

No advance notice of any of these topics was given to the Board, which was deprived of a meaningful opportunity to provide informed responses.

The Commission then justified its vote for a Prospect of Revocation of the School’s charter based partially on some of these concerns.

On these two grounds alone, the meeting was invalid, and the vote taken thereat is void. However there are additional reasons the Commission’s actions are subject to challenge for procedural and due process deficiencies.

Third, prior to the March 14, 2019 meeting, the Commission members were not provided with Kona Pacific’s written submission, which was timely submitted March 11, 2019 (see attached). This submission addressed the issues that the Commissioners verbally (more about this issue below) introduced at its February 28 special meeting, all regarding the school’s relationship with its associated non-profit, Friends of Kona Pacific Public Charter School.

Though the Governing Board had never received a Notice of Concern or any kind of written document outlining those matters, the Board was nevertheless trying to be cooperative and proactive in immediately addressing the Commissioners’ newly expressed concerns. Despite the fact that Mr. Thompson assured us via email that these materials would be provided to the Commission members prior to the meeting, such never in fact occurred. This alarming oversight further materially impaired the Governing Board’s ability to address the Commission’s concerns verbally raised at its March 14, 2019 meeting. More specifically, because the Commissioners never received our March 11, 2019 document, they revisited all of the questions they had already raised at the February 28 meeting under the apparent belief that the governing board had done nothing at all in the intervening period to address those concerns.

To further compound the failure to provide Kona Pacific’s written submission to the Commissioners, some of those same issues were subsequently included in the Commissions’ list of reasons for voting at that meeting for a Prospect of Revocation of the school’s charter.

Fourth, yet another new matter was raised at the March 14 Commission meeting without being properly agendized or noticed, namely concerns over the legality of a By-Law provision that purportedly permits Board voting via email. Instead of clearly identifying this important issue as an agenda item, it was first brought forward in the Commission staff’s March 12 submittal, which contained a paragraph stating that Commission staff were “unclear” about the propriety of this clause and any votes taken on the basis thereof. As a result, Board members were again blindsided and not provided with a meaningful opportunity to provide informed responses after consulting with legal counsel.

In addition, the By-Laws at issue predate the current Governing Board; and we believe that these Bylaws had been previously provided to the Commission for review.

Still more troubling is the fact that in December 2018, Commission staff member Sylvia Silva specifically agreed that the Governing Board could undertake an email vote to approve the January meeting minutes reflecting the vote to approve the school’s SY 2019-20 enrollment packet, in order for the Commission to accept the enrollment packet. While we recognize that Ms. Silva’s intention was to assist the school, it is clear the practice of email voting was well known to commission staff prior to the 3/14/19 meeting. Another example of this: Josh Deweerd, a support staff of HPCSC, has attended 3 out 5 board meetings during the new GB Chair’s term. The Chair took the opportunity to speak with Mr. DeWeerd on two of those visits, specifically asking for guidance or suggestions if he found any part of the meeting to be out of compliance or not in best practice. All three of the board meetings during his visits included discussion and ratification of email votes. The Chair also emailed a similar message to Ms. Silva after she attended a GB meeting in December.

Because the issue of email voting was not properly noticed, all pertinent facts were not disclosed to Commission members, including the above. Therefore, concern with email voting cannot be a valid basis for issuing a Prospect of Revocation of the School’s charter.

In addition to these substantial procedural errors, there was not a sound substantive basis on which to issue the Prospect of Revocation. Kona Pacific reserves the right to address the substantive issues at a properly noticed meeting at which all submittals from the school are provided to the Commission.

For all of the above reasons, the Commission’s vote to initiate the revocation process was founded on substantive and procedural and due process improprieties that must be immediately rectified. Indeed, swift action is the only way to remediate the damage to the school’s reputation caused by the issuance of the March 18 letter to staff and parents.

Due to time constraints, we respectfully request a prompt response to our request, as well as written confirmation that all Commission members have been provided a copy of this letter.

Rest assured that we have been working with the Attorney General’s office regarding these matters, and will continue to follow their advice moving forward.

Regards,

The Governing Board of KPPCS

cc:

Greg Ushiroda, Department of the Attorney General, Education Division

Richard Thomason, Department of the Attorney General, Employment Law Division

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Governing Board Letter to Staff and Families

26 March 2019

Aloha Kona Pacific Staff and Families,

In order to continue to keep the school moving toward correction and compliance with the Hawaii Public Charter School Commission, and having consulted with commission CEO Sione Thompson, the governing board has elected to immediately begin self-reconstitution. The current members wish to honor their commitment to the children and acknowledge that our number one priority is to ensure they can continue to receive the unique gift of a Waldorf inspired education. The school will accept applications for new members, ensuring that the new board members will constitute the majority. The current board is open to and welcomes the charter school commission’s assistance in selecting new members.

As current members leave the governing board, the new board members will appoint the replacement members.  This process will be completed in phases, in order to ensure the continuity of the wide range of board responsibilities. During the transition, the new members will begin the work of getting up to speed on the charter contract as well as the school’s organizational documents, and the many rules and procedures the governing board must follow. The new majority will also drive the selection of the school’s new leader(s), the budget for 2019-20, and all forward-looking decisions for the next school year.

During the transition period, the current members will work with the new members to continue addressing the compliance issues, and “cleaning-up” anything the commission finds unsatisfactory, including a severing of the MOA with the school’s associated non-profit, Friends of Kona Pacific.

The board plans to have this process completed by June 30, 2019. By that date, all of the commission’s issues regarding the school’s relationship with Friends of KPPCS will be corrected and/or addressed with new policies to prevent future issues, and the school will have totally reconstituted the governing board in an orderly fashion allowing for continuity of responsibilities in a very conscientious process.

All governing board positions are unpaid, volunteer positions. Although unpaid there can be high-level satisfaction knowing you are serving a greater good, and doing a job that needs to be done for a community you care about. If you are interested in joining the governing board and assisting in the reconstitution process, please submit your resumé and a short statement about the skills, knowledge and experience your service will bring to the school. The board is working on scheduling an open town hall meeting. In the meantime, we ask the community to please find common ground in what is best for the children and use this time to set a positive example and support the school through the process.

Mahalo,
The Governing Board of KPPCS

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