[00:00:02] EVERYBODY SET? GOOD EVENING. WELCOME TO THE FEBRUARY 24TH, 2026 SPECIAL JOINT MEETING OF THE TOWN COUNCIL, [A. CALL SPECIAL TOWN COUNCIL/BOARD OF TRUSTEES JOINT MEETING WITH THE WESTLAKE DEVELOPMENT CORPORATION TO ORDER AND ANNOUNCE QUORUMS PRESENT] BOARD OF TRUSTEES AND THE WESTLAKE DEVELOPMENT CORPORATION. A QUORUM OF TOWN COUNCIL. THE BOARD IS PRESENT. KEVIN SMITH IS NOT GOING TO JOIN A QUORUM FOR WESTLAKE DEVELOPMENT CORPORATION IS PRESENT. I THINK MIKE ASSELTA IS GOING TO BE ON VIDEO UPSTAIRS. THE TIME IS NOW 5:00. AND PURSUANT TO THE PROVISIONS OF CHAPTER 551 OF THE TEXAS GOVERNMENT CODE, [B. EXECUTIVE SESSION ] THE TOWN COUNCIL BOARD OF TRUSTEES JOINTLY WITH THE WESTLAKE DEVELOPMENT CORPORATION, WILL ADJOURN INTO EXECUTIVE SESSION IN ACCORDANCE WITH THE AUTHORITY CONTAINED IN B.1. SECTION 551.072. DELIBERATION REGARDING THE PURCHASE, EXCHANGE, LEASE OR VALUE OF REAL PROPERTY A. 48 AND 52 GIRONA AND 34 CORTEZ, WESTLAKE ENTRADA. AND B.2. SECTION 551.087. DELIBERATION REGARDING ECONOMIC DEVELOPMENT NEGOTIATIONS TO DELIBERATE THE OFFER OF FINANCIAL OR OTHER INCENTIVES TO BUSINESS PROSPECTS A. PROJECT 2025-06. AND B. 2025-09. WE´LL NOW ADJOURN INTO EXECUTIVE. BOARD OF TRUSTEES AND THE WESTLAKE DEVELOPMENT CORPORATION. AS THE CHAIRMAN OF THE BOARD OF THE WESTLAKE DEVELOPMENT CORPORATION, I NOW ASK, DOES THE WDC NEED TO TAKE ANY ACTION AS A RESULT OF THE EXECUTIVE SESSION? [C. TAKE ANY ACTION, IF NEEDED, FROM EXECUTIVE SESSION ITEMS ] I MOVE TO GRANT AUTHORITY TO THE WDC BOARD CHAIRMAN TO EXECUTE DOCUMENTS AS DISCUSSED DURING EXECUTIVE SESSION RELATED TO PROJECT 2025-09 ON BEHALF OF THE WESTLAKE DEVELOPMENT CORPORATION, INCORPORATED. CAN I GET A SECOND? SECOND. ALL IN FAVOR? AYE. ANY OPPOSED? MOTION CARRIES. AS MAYOR OF TOWN COUNCIL OF WESTLAKE I NOW ASK, DOES THE TOWN COUNCIL NEED TO TAKE ANY ACTION RESULT OF THE EXECUTIVE SESSION? YES, MAYOR. I MOVE TO GRANT AUTHORITY TO THE MAYOR TO EXECUTE DOCUMENTS AS DISCUSSED DURING THE EXECUTIVE SESSION RELATED TO PROJECT 2025-09 ON BEHALF OF THE TOWN OF WESTLAKE. CAN I GET A SECOND? SECOND. ALL IN FAVOR? AYE. AYE. ANY OPPOSED? MOTION CARRIES. THANK YOU VERY MUCH. THIS IS A BIG DEAL FOR US. AT THIS TIME, I'D LIKE TO THANK THE MEMBERS OF THE WESTLAKE DEVELOPMENT CORPORATION FOR THEIR ATTENDANCE AND SERVICE. WE'LL TAKE A BRIEF PAUSE, ALLOW THEM TO EXIT, GET TO THEIR RESPECTIVE DINNERS AND OTHER BUSINESS. THANK YOU, GUYS. SORRY, MATT. THANKS, JOHN. THAT'S GOOD. THANK YOU ALL VERY MUCH. BIG DEAL. OKAY. WESTLAKE ACADEMY BOARD OF TRUSTEES AGENDA ITEMS D.1. [D.1. (TABLED 2.17.2026) Discuss, consider and act regarding WA Resolution 26-03 to approve contracting with Technology Lab to provide Information Technology services to Westlake Academy and authorizing the Head of School to execute the agreement for same. (Dr. Kelly Ritchie, Head of School) ] (TABLED 2.17.26). DISCUSS, CONSIDER, AND ACT REGARDING RESOLUTION 26-03 TO APPROVE CONTRACTING WITH TECHNOLOGY LAB TO PROVIDE INFORMATION TECHNOLOGY SERVICES TO WESTLAKE ACADEMY HEAD OF SCHOOL TO EXECUTE THE AGREEMENT. THIS WAS TABLED OUR LAST REGULAR MEETING SO STAFF COULD NEGOTIATE A CONTRACT WITH TECHNOLOGY LAB FOR CONSIDERATION OF APPROVAL BY THE BOARD OF TRUSTEES. THE NEGOTIATION IS STILL UNDERWAY AND THE STAFF REQUESTS TO BE CONTINUED ON MARCH 24TH AS REGULAR. I NEED A MOTION FOR THIS TO CONTINUE FOR THE MARCH 24TH MEETING. SO MOVED. SO. CAN I GET A SECOND? ANY OPPOSED? MOTION CARRIES. D2. THANK YOU, MICHAEL. [D.2. (TABLED 2.17.2026) Discuss, consider and act regarding WA Resolution 26-04 to approve a contract with Charter Impact to provide services to Westlake Academy and to authorize execution of the agreement by the Head of School. (Dr. Kelly Ritchie, Head of School) ] D.2. (TABLED 2.17.26) DISCUSS, CONSIDER, AND ACT REGARDING WA RESOLUTION 26-04 TO APPROVE A CONTRACT WITH CHARTER IMPACT TO PROVIDE SERVICES TO WESTLAKE ACADEMY, AND TO AUTHORIZE EXECUTION OF THE AGREEMENT WITH THE HEAD OF SCHOOL, DOCTOR KELLY RITCHIE. THIS ITEM WAS TABLED LAST REGULAR MEETING AND NOW STAFF HAS HAD TIME TO NEGOTIATE A CONTRACT. IT WILL BE CONSIDERED BY THE BOARD THIS EVENING. DOCTOR RICHEY. YES. THANK YOU SO MUCH. ALL RIGHT, SO WE'RE BACK TONIGHT. WHAT WE DECIDED LAST WEEK, OR WHAT I WAS CHARGED WITH LAST WEEK, WAS TO COME BACK WITH THE BEST POSSIBLE CONTRACT. AND THAT'S EXACTLY WHAT WE'VE DONE THANKS TO THE HELP OF JANET AND CHARTER IMPACT TEAM MEMBERS. AND SO WE'RE GOING TO REVIEW JUST THIS INFORMATION, GO OVER IT A LITTLE BIT. IF YOU REMEMBER, THE SCOPE OF WORK THAT WE'RE LOOKING AT HERE IS ALL ENCOMPASSING WITH HANDLING THE FINANCIAL RESPONSIBILITIES OF THE ACADEMY. IT'S INCLUSIVE OF ALL OF THE BUSINESS MANAGEMENT SERVICES, PAYROLL SERVICES AND THEN STUDENT DATA SERVICES. THAT INFORMATION WAS ALL IN YOUR PACKET AND PRIOR PACKETS. SUMMARY OF CONTRACT NEGOTIATION. I JUST WANT TO SAY. [00:05:01] AND, YOU KNOW, JANET'S HERE, SO YOU'RE OBVIOUSLY WELCOME TO ASK ANY QUESTIONS OF HER. WE ALSO HAVE THE CHARTER IMPACT TEAM ON THE ZOOM. THEY'LL BE HAPPY TO ANSWER ANYTHING. BUT CHARTER IMPACT WAS EXTREMELY FLEXIBLE. THEY EXPEDITED THEIR REVIEW. THEY RECONCILED ALL OF OUR REDLINE REQUESTS. THEY ACCEPTED 35 CHANGES WITHOUT ANY EDITS. THE ONLY POINTS OF DISCUSSION WERE LIMITED TO THEIR ABILITY TO MOVE FURTHER IN A COMPROMISED POSITION WITH WESTLAKE ACADEMY ON AREAS THAT IMPACT THEIR ABILITY TO PERFORM AND PROVIDE SERVICES AT A QUALITY AND A COST THAT IS FEASIBLE FOR THEIR BUSINESS. SO EVEN ON THOSE POINTS, MEANINGFUL, CONCESSIONS WERE MADE BY CHARTER IMPACT THAT ILLUSTRATE THEIR COMMITMENT TO THE PARTNERSHIP THAT THEY WANT TO HAVE WITH US. SO AS WE LOOK AT THIS, I JUST WANT EVERYBODY TO BE CLEAR THAT THEY REALLY WENT ABOVE AND BEYOND DURING THESE NEGOTIATIONS. SO JUST AS SOME HIGHLIGHTS, THE CONTRACT TERM AND RENEWAL STRUCTURE, WE'RE LOOKING AT A THREE YEAR INITIAL TERM. AND AUTOMATIC ONE YEAR RENEWALS THAT WOULD OCCUR UNLESS WE GIVE 60 DAYS NOTICE. THIS PROTECTS WESTLAKE ACADEMY'S FLEXIBILITY WHILE MAINTAINING CONTINUITY OF SERVICES. WE HAVE COST INCREASE PROTECTIONS, SO NO INCREASES DURING THIS INITIAL THREE YEAR TERM. THIS PROVIDES US THE ABILITY TO PROJECT OUT FOR BUDGET PURPOSES, LONG TERM STABILITY, CONTROLLED ESCALATION FOR ANY KIND OF PLANNING PURPOSES THAT WE WOULD NEED. FEE STRUCTURE AND COST TRANSPARENCY. AGAIN, MOST OF THIS WAS PRESENTED AT THE VERY FIRST MEETING THAT WE HAD WITH CHARTER IMPACT. 2% OF THE BOARD APPROVED REVENUE. ANNUAL AUDIT TRUE UP FOR ACCURACY. SO ONCE WE KNOW EXACTLY WHAT WAS SPENT OUT OF THAT BUDGET. PAYROLL PROCESSING, $25 PER EMPLOYEE PER MONTH, IT ADJUSTS MONTHLY BASED ON ACTUAL STAFFING. SO IF OUR STAFFING GOES DOWN, THEY ADJUST THEIR COSTS ASSOCIATED WITH THAT. STUDENT DATA SERVICES, $30 PER ENROLLED STUDENT PER YEAR. AND THEN THE ADDITIONAL SERVICES PROTECTIONS, WHICH ARE OUT OF SCOPE WORK CANNOT BE BILLED WITHOUT OUR ADVANCED WRITTEN APPROVAL, WHICH MEANS THEY CAN'T DO ANYTHING ON OUR BEHALF THAT WE HAVEN'T AUTHORIZED. OUT OF POCKET EXPENSES ONLY FOR SPECIAL REQUESTS. AND THEN LATE FEES ARE GOVERNED BY THE TEXAS PROMPT PAY ACT. THIS ENSURES A CLEAR PRICING MODEL, AUDIT RECONCILIATION, AND NO SURPRISE CHARGES. FEE STRUCTURE. SORRY. LIABILITY AND REMEDIES. SO FIRST REMEDY WOULD ALLOW FOR REPERFORMANCE OF SERVICES. AND THEN AFTER THAT, DAMAGES ARE CAPPED AT $250,000 OR INSURANCE LIMITS, AND THEN NO CAP IN CASES OF GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT. OF COURSE, WE WOULDN'T EXPECT THAT, BUT STILL A NICE PROTECTION TO HAVE. TERMINATION FLEXIBILITY. SORRY. THIS IS. THERE WE GO. TERMINATION FLEXIBILITY. SORRY. THAT'S IT. THERE WE GO. TERMINATION FLEXIBILITY AND TRANSITION PROTECTIONS WITHOUT CAUSE. WESTLAKE ACADEMY MAY TERMINATE WITH 30 DAYS NOTICE. THE $50,000 IMPLEMENTATION FEE OTHERWISE WAIVED PAYABLE IF TERMINATED EARLY. THIS REPRESENTS APPROXIMATELY TWO MONTHS OF SERVICES TO ENSURE PROPER OFFBOARDING OR TRANSITION SUPPORT. FOR CAUSE, 45 DAY CURE PERIOD. FOR MATERIAL BREACH, NON APPROPRIATION PROTECTIONS. SO WESTLAKE ACADEMY MAY TERMINATE WITH TEN DAYS NOTICE IF FUNDS UNAVAILABLE. $50,000, AGAIN, IMPLEMENTATION FEE OTHERWISE WAIVED PAYABLE IF TERMINATED EARLY. TRANSITION SUPPORT. UP TO 90 DAYS OF TRANSITION ASSISTANCE AT NO COST TO US. THIS INCLUDES DATA TRANSFER AND OPERATIONAL CONTINUITY IS GUARANTEED. AGAIN, THIS PROVIDES GUARANTEED TRANSITION SUPPORT IN THE EVENT THAT WE NEEDED THAT. SO CONTRACT HIGHLIGHTS. THE INITIAL TERM WOULD RUN JULY 1ST THROUGH JUNE 30TH, 2029. AGAIN, THAT THREE YEAR PERIOD, THE WORK WOULD ACTUALLY BEGIN WELL BEFORE JULY 1ST BECAUSE THIS WOULD BE THE TRANSITION PERIOD THAT WOULD BE NEEDED TO BE READY FOR THAT JANUARY. OR SORRY, JULY 1ST TURNOVER. THE AUTO RENEWAL, UNLESS WE GIVE A 60 DAY WRITTEN NOTICE, THOSE ONE YEAR TERMS WOULD CONTINUE AFTER THAT. THE TERMINATION WITHOUT CAUSE PROVISIONS ARE IN THERE AND THEN INTERPRETATION FOR CAUSE, THE NON APPROPRIATION CLAUSE THAT WE JUST COVERED AND TRANSITION ASSISTANCE UP TO 90 DAYS. THOSE ARE THE TERMS OF THE CONTRACT. AND WE ARE HOPING FOR APPROVAL FROM THE BOARD TONIGHT SO THAT WE CAN MOVE FORWARD WITH THIS CHOSEN COMPANY. [00:10:04] WHAT QUESTIONS DO WE HAVE FOR DOCTOR RITCHIE? GREAT JOB. COUPLE STUPID LITTLE QUICK QUESTIONS. OKAY. JUST HAVING LIVED WITH LAWYERS WAY TOO LONG. THEY DIDN'T TRY TO THROW IN ANY KIND OF STRANGE FORCE MAJEURE CLAUSE THAT ALLOWS THEM TO DO SOMETHING STRANGE. AND ANOTHER AN EXAMPLE OF THAT, IT'S LIKE A REOPENER. IF SOMETHING HAPPENS IN THE ECONOMY, THE INFLATION SPIKES UP TO 9%, 12%, AND THEY'RE ONLY ABLE TO RECOUP 3%. SO THERE'S NO RE OPENERS, NO FORCE MAJEURE, NOTHING THAT THEY CAN USE AS A GET OUT OF JAIL FREE CARD? OKAY. I WANT JANET TO CONFIRM THAT MY UNDERSTANDING IS. NOT RELATED TO COST. OKAY. THAT'S GOOD. AND THE 3% INCREASE ONLY APPLIES IF THEY ARE INCURRING INCREASED COST FROM THE THIRD PARTY VENDORS. SO THE PEOPLE THAT THEY ARE PURCHASING THE SOFTWARE FROM, ANYTHING THAT THEY ARE USING AS SUPPORT FROM THIRD PARTY, THAT'S WHERE WE WOULD POTENTIALLY SEE AN INCREASE. YES. ALL RIGHT. YES. THEN I WANT TO CLEAR SOMETHING UP. I KNOW THERE'S BEEN. I KNOW TJ YOU ASKED ABOUT THIS QUIRKY LAWS, WHAT WE FOLLOW. BUT WE ARE FOLLOWING THE RIGHT PROCUREMENT AND RFP PROCESS. JUST MAKE SURE THE BOARD UNDERSTANDS THAT. UNDER THE EDUCATION CODE? YES. YES. AND THE CURRENT FINANCIAL POLICIES FOR THE TOWN INDICATE THAT SO WE ARE IN COMPLIANCE WITH THIS. THANK YOU. I DO HAVE A QUESTION. YOU KNOW THE QUESTION. ON THE CONTRACT HIGHLIGHTS HERE YOU HAVE UP ON THE SCREEN FOR THE INITIAL TERM, WHICH RUNS THROUGH 2029, WE HAVE THE EARLY TERMINATION PENALTY OF $50,000, WHICH IS EFFECTIVELY A LIQUIDATED DAMAGES PROVISION. THE ACTUAL LANGUAGE OF THE CONTRACT READS THAT THAT KICKS IN AT ANY POINT THE CONTRACT IS TERMINATED, NOT AT THE END OF A CONTRACT TERM. WE HAVE TO GIVE 60 DAYS NOTICE. SO IF WE DO NOT GIVE NOTICE AT ANY POINT IN 2031, 2035, 2040, IF WE'RE STILL WORKING WITH THEM, THERE'S EFFECTIVELY A PENALTY HERE, WHICH DOESN'T SEEM LIKE THE INTENTION. SO I JUST WANT TO SEE. AND DAVE'S ON THE PHONE. IF WE CAN ADD JUST LITERALLY FOUR WORDS OF CLARIFICATION IN THAT SECTION 14.01 TO STATE THAT SPECIFICALLY, IF. AND THIS IS THE LAST SENTENCE OF THE FIRST PARAGRAPH. ANY OVERPAYMENT SHOULD BE REFUNDED. THE CLIENT AND CLIENT MUTUALLY AGREE THAT PAYMENT OF THE ONE TIME IMPLEMENTATION FEE IN THE EVENT OF TERMINATION BY CLIENT COMMA DURING THE INITIAL TERM, WHICH MIRRORS WHAT YOU HAVE HERE ON THE SCREEN. COMMA IN ACCORDANCE WITH SECTION 14.01. THEN THERE'LL BE THE PENALTY THAT KICKS IN AS OPPOSED TO HAVING IT BASICALLY EVERGREEN. EVERY YEAR THE CONTRACT RENEWS. SO WE HAVE CHARTER IMPACT ON THE PHONE. GUYS, DO YOU WANT TO REPLY TO THAT OR RESPOND TO THAT QUESTION? YEAH. AND TJ, THANK YOU FOR THE THOUGHTFUL QUESTION. AND I JUST WANT TO MAKE SURE THAT I'M UNDERSTANDING THIS CORRECTLY. SO YOU'RE REFERRING TO THE FIFTH BULLET POINT ON THIS AROUND OR THE SECOND BULLET POINT? I JUST WANT TO MAKE SURE I'M TRACKING THIS. ON THE SLIDE, THIRD BULLET POINT. SECOND BULLET POINT. THIRD SUB BULLET POINT. YES, ABSOLUTELY. AND SO SAYING THAT IN SUBSEQUENT RENEWAL YEARS, IF THERE IS TERMINATION WITHOUT CAUSE OR FOR CONVENIENCE AT ANY POINT THAT GETS WAIVED AFTER THE INITIAL THREE YEAR TERM. YEAH. BECAUSE UNDERSTANDABLY THE ORIGINAL CONTRACT WAS, YOU KNOW, THE ORIGINAL PROPOSAL WAS FOR A LONGER TERM WITH REALLY NO OUT. OBVIOUSLY WE HAVE TO HAVE THE OUT JUST GIVEN WHAT WE DO. YOU KNOW, GIVEN THE WAY THE SCHOOL WORKS. AND SO WHAT I'M PROPOSING HERE IS THAT IT SEEMS HIGHLY UNUSUAL TO HAVE A EVERGREEN TERMINATION PENALTY IN A CONTRACT THAT'S GOING TO, YOU KNOW, PRESUMABLY LAST FOR 5, 10, 15, 20 YEARS IF THE RELATIONSHIP GOES WELL. YEAH, ABSOLUTELY. AND HOPEFULLY MANY YEARS INTO THE FUTURE. SO THE INTENTION BEHIND THAT BEING EVERGREEN, AT LEAST AS IT'S WRITTEN RIGHT NOW, IS SO THAT IT REFLECTS THE PROPER COMPENSATION REQUIRED TO DO OFFBOARDING AND A SEAMLESS TRANSITION TO THE NEXT PROVIDER, OR TAKING THIS IN-HOUSE, ETC. WE TYPICALLY DO SOMETHING AROUND THE EQUIVALENT OF TWO MONTHS OF SERVICE, AND WE JUST BALLPARK THAT AROUND 50,000 HERE JUST ON A BLENDED OVERALL. AND IN ADDITION TO THE OFFBOARDING COMPONENT OF THAT, THERE'S OFTENTIMES DIFFERENT SEASONALITY NEEDS, FOR EXAMPLE LIKE BUDGET BUILDS OR FINAL YEAR AUDIT AND THINGS LIKE THAT. SO IT'S A LITTLE BIT CYCLICAL. THAT'S WHY WE HAVE THIS IN HERE, BECAUSE WE ALMOST EXCLUSIVELY DO NOT ALLOW TERMINATION WITHOUT CAUSE IN OUR CONTRACTS. BUT WE WANT TO BE A FLEXIBLE COMMERCIAL PARTNER HERE, WHILE ALSO PROTECTING OUR BUSINESS INTERESTS IN ENSURING A REALLY ROCK SOLID TRANSITION PLAN FOR THE ACADEMY, SHOULD YOU ALL DECIDE TO MAKE A MOVE MID-YEAR. [00:15:05] AND I CERTAINLY APPRECIATE THAT. AND THAT'S WHY WE HAVE THE 90 DAYS OF CONTINUED ASSISTANCE, YOU KNOW, PROVISION IN THE CONTRACT, WHICH IS SEPARATE. I MEAN, THIS IS SORT OF AN UNUSUAL WAY TO APPROACH IT. YOU HAVE IT STRUCTURED AS AN IMPLEMENTATION FEE, WHICH, BY THE WAY, INCREASED BY 10X FROM THE PREVIOUS VERSION OF THE CONTRACT. AND YOU'VE KIND OF RESTRUCTURED AS A LIQUIDATED DAMAGES PROVISION. SO IF THERE IS GOING TO BE NEEDED ADDITIONAL SERVICES BEYOND THE 90 DAY TRANSITION THAT'S ALREADY IN THE CONTRACT, THEN FOR SURE, AT THAT POINT WE CAN NEGOTIATE THOSE SERVICES. BUT TO HAVE A, YOU KNOW, EXPLODING TERMINATION PROVISION THAT REQUIRES THIS AT ANY POINT. RIGHT? IF WE DECIDED TO TERMINATE ON MAY. WELL, WE COULDN'T REALLY TERMINATE BEFORE THE END OF THE YEAR WITHOUT THIS KICKING IN. SO BASED ON THAT, ARE YOU SUGGESTING THEN, IF WE GAVE NOTICE OF TERMINATION ON, LET'S SAY, WHAT IS IT? APRIL 30TH, 2029, THEN AT THAT POINT, WE WOULD NOT GET THE 90 DAYS OF COVERAGE? YOU WOULD GET. SO JUST IN TERMS OF HOW THE NEGOTIATIONS HAVE EVOLVED. I KNOW THAT THE IMPLEMENTATION FEE HAS 10X. I THINK THAT WAS A LEVER THAT WAS PULLED WHEN WE INCLUDED THE TERMINATION WITHOUT CAUSE OR FOR CONVENIENCE HERE. SO THAT WAS A WAY TO INCLUDE THAT IN HERE, TO MAKE THAT CONCESSION FOR TERMINATION WITHOUT CLAUSE WHILE ALSO PROTECTING THOSE BUSINESS INTERESTS. THE 90 DAY POST TERMINATION SUPPORT WAS LANGUAGE ADDED AFTER THAT, IN WHICH CASE THEY'RE BASICALLY SAYING THE SAME THING. SO THAT WAS LANGUAGE THAT WE DON'T NORMALLY HAVE IN THERE, YOU KNOW, CODIFIED. WE'RE OBVIOUSLY A GREAT PARTNER IN TERMS OF THOSE TRANSITIONS, BUT THAT'S HOW WE ARRIVED AT THAT PIECE. SO LET'S SAY AT ANY POINT DURING THE YEAR, THERE CAN BE. AS LONG AS IT'S WITHIN THE 30 DAYS OR 60 DAYS PRIOR TO THE. EXCUSE ME, 60 DAYS IN BULLET TWO PRIOR TO THE AUTO RENEW. WE WOULD JUST CONCLUDE THE REST OF THAT YEAR IN TRANSITION WITHOUT PENALTY. I'LL BE HONEST, I'M JUST STILL NOT COMFORTABLE WITH SUCH A LARGE TERMINATION PENALTY FOR A CONTRACT THAT POTENTIALLY IS GOING TO GO ON FOR MANY YEARS TO HAVE THAT. I UNDERSTAND THE NEED TO HAVE IT IN THE FIRST THREE YEARS ON ACCOUNT OF THE FACT THAT, YOU KNOW, YOU'RE MAKING A BIG UPFRONT INVESTMENT AND GET EVERYTHING SET UP. BUT TO HAVE THAT LAST PERPETUALLY WITH THE CONTRACT SEEMS JUST LIKE ALMOST A GUARANTEED PENALTY. YEAH, IT'S CERTAINLY NOT INTENDED TO READ LIKE THAT AT ALL. LET'S ADD THOSE FOUR WORDS AND THEN WE SHOULD BE GOOD. OKAY. DO YOU MIND IF I MAYBE ADD A LITTLE CLARITY HERE? PLEASE JUMP IN. I THINK IN THIS SCENARIO THAT YOU ARE PRESENTING HERE, THAT WOULD SIMPLY BE NOTICE FOR CANCELLATION AS OPPOSED TO TERMINATION FOR CAUSE OR CONVENIENCE. EXCUSE ME. TERMINATION FOR CONVENIENCE. AM I MISUNDERSTANDING YOUR. YEAH. THERE'S TWO THINGS WE'RE TALKING ABOUT HERE. SO IF WE GIVE NOTICE WITHIN THE 60 DAY WINDOW. RIGHT? WE'RE STILL GOING TO GET 90 DAYS OF TRANSITION PERIOD. IF WE TERMINATE FOR CAUSE, OR. SORRY. FOR CONVENIENCE. AT ANY POINT OUTSIDE OF THAT 60 DAY WINDOW BEYOND THE THIRD YEAR OF THE CONTRACT, THEN WE'RE STILL GOING TO HAVE A $50,000 EARLY TERMINATION PENALTY, EVEN THOUGH IT'S NOT EARLY AT THIS POINT, IT'S THREE PLUS YEARS INTO THE CONTRACT. AND THEN ALSO WE'D BE DUE 90 DAYS OF POST TERMINATION SUPPORT. WHAT I'M SUGGESTING IS WE HAVE A 30 DAY NOTICE. NOW, WE GOT 30 DAYS THAT WE'RE STILL GOING TO BE PAYING PLUS A $50,000 PENALTY. SO IT'S NOT LIKE YOU'RE OUT THE ENTIRE, YOU KNOW. YOU'RE OUT THE ENTIRE. YOU WILL HAVE HAD THREE YEARS OF THIS RELATIONSHIP AND THREE YEARS OF FEES ON THIS RELATIONSHIP. SO WHAT I'M SUGGESTING IS THAT TYPICALLY A EARLY TERMINATION PENALTY WOULD PHASE OUT BEYOND THE, YOU KNOW, OVER THE COURSE OF THE INITIAL TERM AND CERTAINLY AT THE END OF THE INITIAL TERM. YEAH, I UNDERSTAND. YOU KNOW, I THINK OUR GOAL HERE, AS DAVE MENTIONED, IS TO TRY TO ACCOMMODATE THE REQUEST MADE BY THE BOARD OF CONVENIENCE TERMINATION FOR CONVENIENCE, WHICH IS NOT SOMETHING IN OUR STANDARD CONTRACTS. I'M ACTUALLY NOT FAMILIAR WITH THAT BEING IN ANY OF OUR CONTRACTS TO DATE AND TRYING TO MAKE SURE, AS DAVE MENTIONED, WE CAN PROTECT OUR BUSINESS INTERESTS. I THINK AT THE END OF THE DAY, IF WESTLAKE ACADEMY WANTED TO TERMINATE THEIR CONTRACT MID-YEAR, I THINK SOMETHING WOULD HAVE TO BE GOING VERY WRONG. RIGHT? FOR BOTH PARTIES HERE. SO JUST TO BE CLEAR, I'M NOT TALKING ABOUT MID-YEAR AND 2027, 2028. I'M TALKING ABOUT AFTER WE'VE HAD THIS INITIAL TERM. RIGHT? SO I COMPLETELY AGREE. RIGHT? THAT'S HOW THE BUDGET IS BUILT. THAT'S HOW THE SCHOOL CALENDAR WORKS. YOU KNOW, CERTAINLY, YOU KNOW, YOU'RE FAMILIAR WITH THESE THINGS, RIGHT? SO I DON'T WANT TO OVEREXPLAIN. BUT YEAH, GO AHEAD. [00:20:02] PART OF WHY WE TYPICALLY DON'T HAVE TERMINATION WITHOUT CAUSE OR FOR CONVENIENCE IS BECAUSE WE REALLY STAFF THESE PROJECTS ALIGNED WITH DEDICATED PODS, AND WE DO OUR ENTIRE CAPACITY PLANNING MODEL BASED ON THAT STAFF RATIO ALIGNED WITH THE CLIENT BASE THAT WE HAVE. AND SO THAT'S PART OF THOSE ASSURANCES THAT WHY WE JUST DON'T INCLUDE THE TERMINATION WITHOUT CAUSE. WHAT I THINK, YOU KNOW, WHAT WE CONSIDER IS AFTER THAT FIRST THREE YEAR TERM, I MEAN, WE COULD DROP THAT $50,000 DOWN. THAT'S SOMETHING THAT I THINK WE COULD ARRIVE AT HERE. BUT AGAIN, WE'RE ALSO TRYING TO MAKE SURE THAT WE'RE PROTECTING OUR STAFFING MODEL, THE COMBINATION OF US DELIVER QUALITY WORK AT AT COST FEASIBLE FOR OUR CLIENTS ACROSS OUR ENTIRE PORTFOLIO. AND THAT REALLY COMES DOWN TO STAFFING CAPACITY, WHICH IS BUILT OUT, YOU KNOW, FAR IN ADVANCE OR, YOU KNOW, LEADING UP UNTIL THAT NEXT CALENDAR YEAR OR FISCAL YEAR. I THINK WHAT WE'RE TALKING ABOUT HERE IS, AND WE TALKED ABOUT THIS SEVERAL TIMES OVER THE LAST WEEK DURING THE NEGOTIATIONS. THERE ARE LEGAL NEGOTIATIONS TO MAKE SURE THAT WE'RE IN COMPLIANCE WITH EXPECTATIONS AROUND TEXAS LAW AROUND ZBA. THERE ARE ALSO BUSINESS NEGOTIATIONS AND CHARTER IMPACT TO SOME EXTENT HAS TO PROTECT THEIR OWN BUSINESS INTERESTS. AND I WANT TO DIRECT YOU AGAIN TO WHAT'S ON YOUR SCREEN. THEY ACCEPTED 35 PLUS CHANGES WITHOUT EDITS. TO THEIR CONTRACT. SO OF COURSE THEIR FIRST VERSION OF THE CONTRACT IS GOING TO BE AS FAVORABLE AS POSSIBLE TO THEM. SO WE HAVE TO PROPOSE THAT IT'S TO THEIR VERSION. I AGREE. EVEN SO, THEY MET US WITH 35 PLUS CHANGES WITHOUT ANY EDITS. KELLY, HERE'S HERE'S MY DEAL. I'M NOT A LAWYER, BUT I'VE DONE TENS OF THOUSANDS OF CONTRACTS. WE'RE COVERED FOR, YOU KNOW, TERMINATION FOR DEFAULT BASICALLY ON THE CONTRACT. RIGHT? WITH CAUSE. THAT'S GREAT. WITH CAUSE WE'RE NOT GOING TO HAVE TO PAY THE $50,000 BECAUSE IT'S JUSTIFIED. RIGHT? A T FOR C IN MY EXPERIENCE, IF I GET A T FOR C, OR SOMEBODY ELSE GIVES ME A T FOR C, THERE'S A COST FOR DOING IT BECAUSE IT'S A CONVENIENCE. YOU'RE CHOOSING TO DO IT. AND THERE'S A COST FOR CHOOSING TO DO IT. AND I PERSONALLY UNDERSTAND THEY HAVE FULL TIME EMPLOYEES THAT ARE PAID THAT ARE NOT, YOU KNOW, AT WILL NECESSARILY IN A LOT OF CASES BECAUSE THEY WORK ON MULTIPLE PROJECTS. AND ON TOP OF THAT, THEY'RE GOING TO CONTINUE SUPPORTING US FOR 90 DAYS. AND DO YOU HAVE AN IDEA REAL QUICK OF WHAT THAT 90 DAY BURN RATE FOR YOUR TEAM IS? JUST CURIOUS. FOR YOUR TEAM WORKING ON US FOR THAT 90 DAYS? I DON'T HAVE AN ACTUAL DOLLAR AMOUNT, BUT WHAT WE KIND OF BALLPARK THAT AROUND IS ABOUT TWO MONTHS OF JUST THE ONGOING CONTRACT SERVICE AMOUNT. OKAY. AND WHAT'S THAT TOTAL? WE BALLPARK THAT AROUND $25,000 A MONTH. SO IT'S BASICALLY. SO THEY'RE GOING TO WORK FROM TOMORROW TO JULY 1ST REALLY JUST GETTING US SET UP WITHOUT ADDITIONAL COMPENSATION. I JUST WANT TO CLARIFY ONE THING THEN THOUGH. SO 90 DAYS OF TRANSITION. SO I JUST WANT TO MAKE SURE BECAUSE THE SUGGESTION HERE IS THAT IF THEY'RE NOT COMPENSATED THEY WON'T NECESSARILY BE PROVIDING THE TRANSITION. AND SO EFFECTIVELY THIS REALLY ISN'T LIQUIDATED DAMAGES. WE'RE JUST GIVING THEM A 90 DAY TERMINATION WINDOW. EFFECTIVELY. I JUST WANT TO MAKE SURE THAT WHEN WE TERMINATE, IF WE HAVE A $50,000 PENALTY AT SOME POINT, AGAIN, IF SOMETHING HAS TO BE GOING WRONG. THE OTHER THING TO KEEP IN MIND, TODD, IS THAT TERMINATION FOR CAUSE STILL HAS A 45 DAY CURE PERIOD, RIGHT? AND SO THERE'S A PERIOD IN WHICH THEY HAVE TO CURE. IF THEY CANNOT CURE, THEN WE CAN TERMINATE. AT THAT POINT, WE'RE PROBABLY GOING TO BE IN A TOUGH SPOT AS IT IS, BECAUSE IF THEY'VE DONE SOMETHING THAT'S GOING TO BREACH THE CONTRACT, FROM THE SCHOOL'S PERSPECTIVE, THAT'S GOING TO BE CHALLENGING. WE'RE GONNA HAVE TO RECTIFY THAT, AND THAT'S GOING TO COST MONEY. SO THE TERMINATION FOR CONVENIENCE IS REALLY BASICALLY EFFECTIVELY A 90 DAY TERMINATION WINDOW. SO WE HAVE 60 DAYS TO TERMINATE IF IT'S THE END OF THE CONTRACT TERM. IF IT'S NOT THE END OF THE CONTRACT TERM, WE EFFECTIVELY ARE PAYING FOR 90 DAYS OF ADDITIONAL COVERAGE. AND I WANT TO MAKE SURE WE'RE GETTING THAT COVERAGE, BECAUSE NOW I'M GETTING DIFFERENT MESSAGES HERE THAT THE 90 DAY WINDOW IS A TRANSITION WINDOW. AND I WANT TO MAKE SURE OUR STAFF IS COMPENSATED, ETC. THAT'S GREAT. BUT LET'S JUST CALL IT WHAT IT IS THEN AND SAY, ALL RIGHT, WE BASICALLY HAVE TO GIVE THEM 90 DAYS OF WIND DOWN TIME. WE'RE GOING TO PAY THE MONTHLY FEE OR PAY THE $50,000 AS A FIXED RATE FOR THE THREE MONTHS OF ADDITIONAL. OR TWO MONTHS ADDITIONAL COVERAGE, BECAUSE WE HAVE TO GIVE 30 DAYS NOTICE. DAVE, DO YOU HAVE A THOUGHT ON THAT? [00:25:01] YEAH, I THINK GOING BACK TO. I COULDN'T TELL WHO IT WAS, THE OTHER GENTLEMAN THAT SPOKE RIGHT WHEN T AND C REALLY THERE'S SOME SORT OF PENALTY AND IT COMES BACK TO NOT JUST THINKING ABOUT THE OFF BOARDING AND THE FIXED FEE FOR THE 90 DAYS OF COVERAGE, BUT ALSO THE IMPACT TO OUR OVERALL STAFFING MODEL, BECAUSE WE REALLY DO PLAN AND DO CAPACITY ALIGNED TO THE CONTRACTS THAT WE HAVE AT THE ONSET OF A SCHOOL CALENDAR YEAR. AND SHOULD THAT GET DISRUPTED ALL OF A SUDDEN, THAT DISRUPTS OUR COST MODEL FOR OUR ENTIRE BUSINESS. SO THE PENALTY IF IT IS TERMINATED, RIGHT, WITHOUT CAUSE, BETWEEN 71 AND 60 DAYS PRIOR TO 630 OF THE FOLLOWING YEAR. RIGHT? THAT'S WHERE WE WOULD LOOK FOR THE $50,000 IN THE IMPLEMENTATION FEE REACTIVATION. WHERE ARE WE? THE ONLY THING I WOULD SAY IS THAT WE JUST GOT TO CLEAN UP THE CONTRACT, BECAUSE RIGHT NOW, ON TERMINATION, WE HAVE TO TURN OVER ALL THE AGREEMENTS. I'M FINE APPROVING IT RIGHT TODAY WITH JUST ONE MINOR THING, WHICH IS WE HAVE TO CLARIFY THAT AT THE POINT OF TERMINATION. RIGHT? IT KICKS OFF A WINDOW WHERE WE'RE GOING TO START A 90 DAY WIND DOWN PERIOD, AND CURRENTLY THE CONTRACT IS DRAFTED SUCH THAT ALL DOCUMENTATION HAS TO BE TURNED OVER AT TERMINATION, WHICH WON'T ALLOW FOR A 90 DAY WIND DOWN PERIOD. SO IT JUST NEEDS TO BE. IF WE'RE ACTUALLY GOING TO HAVE THAT 90 DAY WIND DOWN PERIOD, WHICH WE HAVE, WHICH I THINK WE ABSOLUTELY NEED, THEN WE JUST GOT TO MAKE SURE THAT WE ACTUALLY HAVE THAT AS ONGOING, CONTINUOUS SERVICE TO WIND DOWN THE OPERATION AND TRANSITION TO A NEW VENDOR OR NEW PROVIDER OR BACK IN-HOUSE. THAT'S ALL. AND THEN THE FEE FOR THAT, IT'S NOT REALLY A LIQUIDATED DAMAGES FEE. IT'S JUST GOING TO BE A FIXED FEE FOR THE LAST 90 DAYS OF SERVICE. IT'S GOING TO BE $50,000. I'M COMFORTABLE WITH ADDING THAT LANGUAGE IN AROUND ALL DOCUMENTS, DATA, ETC. HAS TO BE FULLY TRANSITIONED. NOT A DATE OF TERMINATION NOTICE, BUT AT THE END OF TERMINATION NOTICE PLUS 90. AM I INTERPRETING THAT CORRECTLY, TJ? YEAH, I JUST WANT TO MAKE SURE THAT WIND DOWN PERIOD, BECAUSE IT'S IN TWO DIFFERENT SECTIONS IN THE AGREEMENT. AND THERE'S A CONFLICT BETWEEN THE TERMINATION AND THE WIND DOWN. SO I JUST WANT TO MAKE SURE THAT IT'S CLEAR THAT THIS IS ACTUALLY CONTINUED SERVICE THROUGH THE END OF WHAT IS NOW BASICALLY, YOU KNOW, A TERMINATED AGREEMENT THAT STILL IS GOING TO HAVE 90 DAYS OF SERVICE ON IT. YEAH, ABSOLUTELY. THAT'S NOT AN ISSUE AT ALL. AND, YOU KNOW, JUST TO REITERATE WHAT KELLY HAD HIGHLIGHTED TO IS LIKE, WE WANT TO BE A GREAT PARTNER AND WE'RE GOING TO ENSURE SUCCESS, RIGHT? WITH WHETHER IT'S A WIND DOWN PERIOD OR THE ONGOING SUPPORT FOR YEARS TO COME. AND, YOU KNOW, WE'RE EXCITED ABOUT THE PARTNERSHIP AND TO GET THIS FINALIZED WE'VE TRIED TO BE AS COMMERCIAL AS POSSIBLE. AND, YOU KNOW, WE'RE CERTAINLY COMFORTABLE ADDING THAT POINT OF CLARIFICATION. IT'S NOT EVEN A A CONCESSION. IT'S JUST A POINT OF CLARIFICATION THERE, TJ. SO THANKS FOR CALLING THAT OUT. I APPRECIATE THAT. I'D LIKE TO MAKE A MOTION TO APPROVE WESTLAKE ACADEMY RESOLUTION 26-04 WITH THE MODIFICATION WITH LANGUAGE THAT TJ WILL PROVIDE WITH KELLY, AND THAT YOU HAD AGREED THAT WE'LL BE WORKED OUT PRIOR TO SIGNING THE FINAL CONTRACT. CAN I GET A SECOND? SECOND. ALL IN FAVOR? AYE. ANY OPPOSED? MOTION CARRIED. THANK YOU. SO, TO CLARIFY, I'M GOOD TO SIGN THIS CONTRACT AS SOON AS THAT MODIFICATION. [E. FUTURE AGENDA ITEMS ] FUTURE AGENDA ITEMS. STAFF RECAP. TOWN COUNCIL. [F. STAFF RECAP OF TOWN COUNCIL/BOARD DIRECTIONS RECEIVED ] DON'T REALLY HAVE ANY OF THAT. ADJOURNMENT. A REMINDER THE NEXT REGULAR MEETING WILL BE HELD FOR TUESDAY, MARCH 24TH, DUE TO SPRING BREAK IN THE THIRD WEEK OF MARCH. I NOW ADJOURN THE MEETING AT 6:18 P.M. I CAN'T THANK YOU ALL ENOUGH TODAY AND OUR WESTLAKE DEVELOPMENT CORPORATION FOR THE CONVERSATION WE HAD EARLIER TODAY. THANK YOU. MEETING ADJOURNED. * This transcript was compiled from uncorrected Closed Captioning.