Rusimovic, Carole

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Goodloe-Johnson, Maria [Maria.Goodloe-Johnson@seattleschools.org] Wednesday, October 07,200911:28 AM

Chin, Janet

Fw: Board Meeting Memo

NWEA Board Memo 2009-1 006.docx

Please print for me

From: Matt Chapman <matt.chapman@NWEA.org> To: Board of Directors <BoardofDirectors@NWEA.org>

Cc: Executive Leadership Team <ExecutiveLeadershipTeam@NWEA.org> . Sent: Tue Oct 06 19:03:122009

Subject: Board Meeting Memo

Board Members:

Attached is a fairly brief memo to give you an advance view of issues for this Friday's meeting. We'll get the official agenda and minutes out very shortly, but I wanted to get this to everyone so you can review it prior to the meeting. As always, please don't hesitate to contact me if you have an questions or concerns.

Matt Chapman President & CEO

Northwest Evaluation Association 5885 SW Meadows Road, Suite 200 Lake Oswego, OR 97035

Direct: 971-222-1700

Main: 503-624-1951

Cell: 503-804-1700

www.nwea.org

Transcript of Evidence Page 2164

1

To: NWEA Board of Directors

From: Matt Chapman

Re: Upcoming Board Meeting

Date: October 6,2009

My apologies for the late deiivery ofthe board memo. Unfortunately, I wound up getting sick on the road last week, and am digging out from a huge pile of delinquent tasks. {That's not a scenario 1 recommend.}

In any event, there is as always a huge amount going on, and we are making very real progress on all fronts. I look forward to this Friday's meeting, and believe the following background will be helpful to the Board's deliberations and decisions.

Board Membership Update

We are delighted to welcome Joey Wise back to active membership on the Board. Joey completed his consulting project for NWEA on professional development as of September 30, and there will be no compensation to him after that date. There were three parts to the original plan, and two have been completed. The third (implementation of the plan) will take much longer, but it can and will be done by regular NWEA staff. In lieu ofthat portion of the plan, Joey has served as a recruiter for the new position of Director of Professional Development, helping us to identify key candidates for what will become a critical part of our growing organization. (I hesitate to mention this since Joey is now reading the board memos, but this is one heck of a bargain compared to the usual recruiting fees.) If we ask nicely at the meeting, we might be able to get Joey and Ginger to overcome their shyness and give us a brief update.

We also are delighted to welcome retired Congresswoman Darlene Hooley to our Board. As we have discussed during several meetings, Darlene's experience at both local and national levels will be an invaluable asset to NWEA, and she even brings the perspective of a former teacher.

It will be a pleasure and an honor to welcome Darlene to our Board for her first meeting this Friday. In all my decades of working with people in the public sector, there is no one I admire and respect more than Darlene.

Finally, we have reached an agreement with Barbara Smith for her to work as a long term consultant to NWEA in the area of special education. As you all know, this is a huge passion for Barbara, and one she intends to continue even in retirement. The only sad news is that this will require her to resign from our Board, after many years of dedicated service. I have been trying to track Barbara down to see if she will be joining us on Friday so we can bid her a formal thanks and welcome her to her new role with NWEA, but it does not appear that this will work

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for her (but one never knows with Barbara's schedule). In any event, we're excited to have Barbara focus on this key need - an area where we are frankly not helping kids learn as much as we need to help them.

Financial Report

Geri will provide the usual financial report, both in terms of last year's final numbers and our year-to-date performance and anticipated performance for our 2009-10 fiscal years. The short report is that our expectations have improved somewhat from what we projected in June, as renewals have remained very strong. We now expect this year's loss to be in the neJghborhood of $lMM, which is materially better than our June forecast. me a r€i:"QJ!Lti cu la r-Iy excited tID bave several of-our l-arger gartneJ;s ~sucl:J as §eattJe.) wi'lQ a 1'8 testing mud'! more broadly, <and we also are delignlea to have been awarded a very large ($1.7MM) contract to provide professional development and related assessment services for the Bureau of Indian Education. We remain hampered by the limitations of our MAP 1.0 platform in many partners (Seattle) where it has resulted in much more stress and effort than anyone wants to have happen. However, we have been able to work through those so far and we remain alert and cautiously optimistic that this will continue for the balance of our fall testing season ..

The audit of last year's results will hopefully be final by Friday, but in any event it is once again very routine, without any material issues. We will have an audit meeting at the start of Friday's session, to bring the Board fully up to speed on our processes and results. For that part of the meeting we will be joined by representatives of Moss Adams, our independent auditors.

One of the "happy" problems we now face is that we have grown to the point where the signing authority that Jeff and I have (absent getting a board member to cosign) exceeded our limits recently on the BIE contract (thanks to Brenda for helping on that one), and we believe

CU~8~)uch as BIE or - we hope - Delaware).

Theta Funding and Status

We spent a great deal of our June meeting reviewing the status of Theta, including demonstrations of key features ofthe new testing platform. At that meeting; Jeff and I stated that we would likely need additional funding authority for completion of the project, and committed to providing an update at this meeting on the financial aspects of the project. That will be a material part of the presentations, including a review of past funding authority (and what it encompassed) along withcurrent needs and projections through completion. As we

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anticipated, we are now at a point where the project is within sight of completion, and while there have been very material cost overruns, we believe we are now able to provide reliable projections on the overall costs, including costs from here to completion. This has been by far the largest project in NWEA's history, and has well illustrated our very limited capabilities as a development organization to carry out a project of this size. While we have material frustrations with IBM, we also remain convinced that their involvement was essential. We also are confident that the results will be well worth the time, cost, effort, and stress. Without a new platform, our future would be extremely dim.

port OUf gerformance Bona for Delaware once we

Theta will be code complete and ready for the testing cycles to begin in early December, which is a huge milestone. We remain committed to a general release on August 1 of next year.

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Delaware

As noted above, we are again in the throws of a Delaware RFP, and this will again require a huge effort. I have asked Amber Wilke and Charles Merritt to join us to provide an update for the Board on the status of our response and other preparations. The RFP response is due October 21, and a decision is anticipated mid-November. As reported previously, AIR sued Delaware after we won the last time, and Delaware is going through the entire process again. That puts huge stress on our time frames for completing the tasks needed ~ especially item development - but it also means we get to refine and clarify what we proposed.

As was true in the earlier RFP, Delaware is again asking for a performance bond. NWEA has apparently never been required to post a performance bond in the past, and the only way to start such a relationshi.p is to back the bond with cash collateral. That will require about $4 million to be held during the term of the contract, at least until we can create a long term relationship with a bonding company. That is part of the reason we are proposing a larger financing effort, so that we not only refinance the IBM debt at lower rates over a longer term, but also include enough cash to assure we can still have an appropriate cash cushion.

Core Curriculum

Board's insights and input.

Executive Session

One item of unfinished business from last meeting was evaluation of the CEOi which Brenda and Jim have undertaken. This will also provide an opportunity for a fully candid session on any topics of interest to the Board.

As always, feel free to contact meif you have any questions, or if there are topics you believe we also should include in the agenda. [look forward to seeing everyone on Friday.

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