Board Meeting April 20, 2017 10AM to 12PM Eastern Standard Time Members Present Members Absent Staff Present Guests Jeffrey Pic Catherine Wynne Mike Watkins Michael Beedie Reggie Johns Ronald Picket Pam East Leah Singleton Gerald Waters Brian Tesner Lori Gulledge Natalie Kelly Scott Clemons Ralph Haben Janice Thomas Bambi Smith- Phone Connie Lyda Christine Hurst Elizabeth Holifield-Phone Rae Kerr-Phone Linda Alexion Linda Nelson - Phone Kathy Donofro Walter Sachs-Phone Denise Myers Delbra Percy Mylisa Lee-Phone Cathy Harcus David Daniels-Phone Mark Stavros-Phone Shawna Peterson Kathy Milton Pauline Patrick - Phone I. Welcome and Chair s Remarks President Jeffrey Pic opened and welcomed everyone to the Board Meeting at Big Bend Community Based Care, 525 N. Martin Luther King Jr. Blvd, Tallahassee, FL 10:14 AM EST. A quorum was met. Guests were introduced. II. Consent Agenda Mr. Pic reviewed the agenda as presented. All Directors were provided the board packet including consent items in advance. Policies were presented and formally adopted by the Chair s written consent. a. Review and Approval of Minutes b. Review Performance Child Welfare/Behavioral Health c. Media Coverage d. Policy Reviews for Approval 525 N. Martin Luther King Blvd., Tallahassee, FL 32301 (850) 410-1020 -----------------------------www.bigbendcbc.org---------------------------------
Page 2 April 21, 2017 No items were pulled from the consent agenda. Motion: To accept Consent Agenda Items. Moved by Scott Clemons; Seconded by Kathy Harcus. Motion Approved. III. Review and Approval of Finance Committee Report A. 16-17 Budget CFO Lori Gulledge presented the Finance Committee Report. Child Welfare The Working Summary Budget to Actual indicates a surplus variance of $147,892. FSFN-Board (Out of Home Care) remains in deficit at ($238,684) through February 28, 2017. The deficit continues to be consistent with that noted in prior months. MAS continues to have a $0.00 variance. The BBCBC Working Budget Summary indicates that a 1.89% CBC Board reserve and a projected CBC roll-forward of approximately $513,865 as of February 28, 2017. Managing Entity The Working Summary Budget to Actual reflects a variance surplus before subcontracted services of $27,682 and a total variance surplus of $1,952,879. The majority of the surplus is in subcontracted services due to the DCF restriction of payment for a monthly pro-rata share. Providers continue to over-earn to cover the available surplus. Based on the accrual report through February 28, 2017, providers are over-earning in both unrestricted Substance Abuse and Mental Health categories; however, there is risk that BBCBC will have to return funds to the Department for under-earning of certain restricted funds. The BBCBC Working Budget Summary indicates a projected ME roll-forward of $1,509,825 which is expected to be reduced for funding of current projects into SFY 17/18 of $1,108,071. Independence Village Balance Sheet for Independence Village through February 28, 2017 reflects a cash deficit of ($67,630). Currently there are 4 vacant units with 3 scheduled tenants to move in during May. That should leave 1 available unit. BBCBC is trying to reengage investors to purchase the property. Cash flow has to be absorbed through unrestricted funds. Special Items CEO Mike Watkins reviewed risk items from the finance committee minutes: Marketing the Independence Village property. Refinance of Tharpe Street. Reorganization of the corporate structure of Big Bend. Note: this is a separate agenda item for Executive session. Motion: Scott Clemons to accept Finance Committee Report. Moved by Kathy Milton. Motion Approved.
Page 3 April 21, 2017 B. Refinance of Tharpe Street: Recommendation approved by the Finance Committee for local bank (Sunshine Community Bank) with the ability to offer BBCBC a favorable rate and a favorable amortization of 25 years that will help BBCBC s cash flow significantly. BBCBC will save approximately $42,000 in interest going from a 7% note to a 4.65% note. BBCBC will have a cash flow variance of about $162,000 on an annual basis. The commitment letter provides all the details of the proposal. In addition BBCBC is renegotiating the 2 nd mortgage with the 2 nd mortgage holder. Motion: Scott Clemons - adopt the resolution for refinancing. Seconded by Kathy Milton. Motion Approved. IV. Strategic Discussions A. Annual Priorities COO Pam East presented the annual priorities pages 58-85. Last summer BBCBC adopted annual priorities to work on throughout the year. Priorities are running smoothly with the exception of one area (Washington County). Pam has a list of action items to work on in Washington County. B. Inspire Group Home Mike discussed the five articles that have been in the newspaper recently regarding the Domingo Drive and Raa Avenue locations of Inspire Group Home. Inspire Group Home is a local asset licensed for 13 15 year old males and has held a contract with BBCBC for approximately seven years. Inspire has closed the Domingo Drive location. The Raa location is still open and Inspire is trying to develop positive relationships with the neighbors. BBCBC has provided the neighborhood with two updates on activities. Additionally, Inspire has officially purchased the Rehwinkle address (the old Treehouse II location). This house is scheduled to have a license review around April 18, 2017. BBCBC has been diligently worked with Inspire to get issues resolved. Mr. Kirk Brown with Grants Etc. presented a report on the status of the new group home plan for improvement. Mr. Brown stated that through its work with Inspire there has been a shift in the entire feeling of the group home. It was functioning before, but it has now been pushed to the next level. Grants Etc. continues to work with Inspire to move the youth forward and now there are performance based mechanisms and the staff are being evaluated on this. The prognosis is bright as long as this structure moves forward. Inspire staff seems to be welcoming the change.
Page 4 April 21, 2017 V. Review Risk Management a. Executive/Legislative Executive branch is processing BBCBC contract renewal for ME. The performance report has been submitted for review, however, the terms are not known at this time. BBCBC will re-address the issue, in early May. Natalie Kelly with FAME provided an update on the current legislative session. Mental Health and substance abuse issues are being discussed. Specifically, the opioid substance abuse issue was discussed for almost an hour on the Senate floor. There is almost $1B in potential funding. There is $27M for the opioid crisis being passed through from federal sources. In addition, there is approximately $20M for member projects being discussed. Senator Jack Latvala is a champion of the issue with Revenue Maximization. He believes this funding will go through DCF ME. The Governor, Pam Bondi, DCF, DOH, and FDLE will host workshops in Palm Beach, Manatee, Orange and Duval counties to discuss ongoing issue of the opioid drug issue. Mike made note there were no workshops in any of the BBCBC covered counties but the Panhandle has a huge substance abuse issue. Discussion pursued about opioid and substance abuse issues and possible ways to become proactive. Action Item: Mike will follow up with DCF. The BBCBC network providers should also be included. Mike to setup initial call. Invite should include Dr. Stavros, Christine Hurst, Dr. Liz Holifield, Walter Sachs, Scott Clemons, and Linda Nelson. b. Legal No changes to report. c. Other Linda Alexionik made a presentation on the new integration project that VOICES has been working on with FSU College of Medicine. VI. Review Governance a. Status of Directors i. Reappointment of Member(s): Gerald Waters term will be expiring in June. We will discuss next meeting. ii. Proposed Member(s): Michael Beedie Motion: To appoint new Board member Michael Beedie Moved by Scott Clemons; Seconded by Reggie Johns. Motion Approved.
Page 5 April 21, 2017 VII. Executive Session Immediately following the adjournment of the Board of Directors Meeting Big Bend CBC reorganization was discussed. An addendum package was passed out to all members present at the time. This package included graphic schematic of CBC of Central Florida Family of Companies, schematic of the proposed restructuring of BBCBC and a Legal Planning Checklist to Reorganize Big Bend Community Based Care. Ralph Haben introduced Kristin Keane with Carlton Fields to discuss the reorganization. We need to be protected due to the amount of funds we are now handling, well over $90M; we are a joint CBC & ME; we own $20M in property. The reorganization will reduce our liability. Kristin Keane discussed the current structure of the enterprise. The new idea is to create a holding company. The holding company will house the management. It doesn t hold assets directly, it controls, through contracts and agreements. The real property would be held in one or more LLC s that would be held by the holding company. From a state perspective it is a separate company altogether. This will insulate the liability by corporation. The structure is incredibly flexible. Mike Watkins discussed the CBC of Central Florida Family of Companies structure. Their cluster of corporations insulate the activities of each corporation. Not only does this insulate the liability by corporation, it also affords us the flexibility to be able to allocate resources for future contracts or even existing contracts in a way that we cannot do today. This will also provide an opportunity for growth and maximize our value. Scott Clemons asked what the negatives are. Ralph Haben explained there would be 2 entities with 2 or more Boards. There would be more administrative reporting from a business perspective. This is not problematic. Motion: Allow staff to prepare full reorganization package utilizing Carlton Fields. Moved by Scott Clemons. Seconded by Liz Holifield. Motion approved. Discussion followed about the commitment letter for the refinance, which is approximately 90 days, as it would relate to the reorganization. Mike Watkins suggests that we move far enough along to accommodate the transfer of our current re-fi while we have the books open, then we can come back with a modified resolution in approximately 2 months.
Page 6 April 21, 2017 Chair Jeff Pic will reach out to members to serve on the new Board of Directors of the Holding Company. Kristin Keane requested a contact be assigned for her. She would prefer it be staff or counsel. She will also need names of the entities themselves. Lori Gulledge was assigned as her contact along with Ralph Haben, General Counsel. Jeff thanked everyone for their participation. Motion was made for adjournment and 2 nd by Reggie Johns at 12:10PM EST. VIII. Next Meeting: Next meeting: June 15 th in Panama City at 10:00AM CST. IX. Adjourn Directors were thanked for their attendance. Board of Directors Meeting was adjourned at 11:45AM EST. Moved into Executive Session Meeting.