Igate nest board meeting minutes 3 24 15

i-GATE NEST Board Meeting Meeting Minutes March 24, 2015 INTRODUCTIONS/ROLL CALL Present: Mayor John Marchand, Art Pontau (not officially voted in), Dr. Marshall Kamena, Mayor David Haubert, Council Member Newell Arnerich, Pamela Ott (proxy to Mayor Jerry Thorne), Marc Roberts (ex-officio), Executive Director Brandon Cardwell, Chairman Shail Khiyara Call In: Rameet Kohli, Dr. Woody Clark CITIZENS FORUM none ACCEPTANCE OF MINUTES - Meeting minutes for 3/31/2014 and 6/20/2014 (Longard Facility) .

- Dr. Woody Clark commented that the 3/31/2014 meeting minutes should show he was present by way of telephone.

- Shail Khiyara mentioned action items from 3/31/2014 on which there was no follow-up on in the 6/30/2014 meeting. The principal one related to the proposal to combine the two boards. It was not discussed in the 6/30/2014 meeting and hence should have been discussed in the Board Initiated Matters section.

- Motion: Newell Arnerich; Second by John Marchand to accept the draft minutes as submitted for both dates and showing Dr. Woody Clark as being present at the 3/31/2014 meeting. (David Haubert abstained.)

ACCEPTANCE OF FINANCIALS - Dr. Woody Clark asked if these were annual financials. Marc Roberts indicated they represented a) July 14 through Feb 15 profit and loss; b) Feb 15 profit and loss; c) a balance sheet.

- Motion to approve: John Marchand; Second: Newell Arnerich. Unanimous pass.

MATTERS FOR CONSIDERATION Resolution of the agreement signed with Mr. Conneran (legal counsel) per directive of the NEST Board.

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Motion: Newell Arnerich; 2nd by John Marchand that NEST pay attorney Michael Conneran for his efforts.

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Chairman Shail Khiyara asked if we should consider amending the letter to say “iGATE NEST” instead of “iGATE Development Corporation”? Newell Arnerich specified acceptance of the letter as is, and the agreement, and send payment.

E. D. Brandon Cardwell indicated that since we are agreeing to pay Conneran, no change is required at this point to the letter.

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Discussion of current NEST assets 1

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Chair Khiyara asked the amount of NEST’s cash. Marc Roberts reported it was $28,853 with about $25,000 remaining after we pay Mr. Conneran.

Chair Khiyara asked regarding any other assets. E.D. Cardwell said, “None.”

Chair Khiyara asked regarding liabilities. E.D. Cardwell replied: none known.

Newell Arnerich indicated that the Development Corp Board would have to make an offer to Marilyn Eakin and handle payroll obligations with NEST’s defeasance.

Discussion of current NEST direction -

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John Marchand indicated that we talked about dissolution of the NEST Board two meetings ago.

Newell Arnerich indicated that we should have one organization and give this board the opportunity to serve on the Development Corp Board or the Advisory Group.

John Marchand moved to dissolve the NEST Board and transfer its assets to the Development Corp Board. (No second was heard.)

Rameet Kohli said our guidance was from the last iGATE Development Board meeting. It proposed a meeting to determine the final structure of the Board. He noted it could be Public Sector only, with a private Advisory committee or possibly be a public private board but with a smaller group of people.

He hoped we would table the dissolution of the NEST Board until we have that vote done in May. At that time we could decide the NEST issue. Chair Khiyara agreed with this approach. He indicted that clarity on the governance structure should come first. Then a decision on the NEST issue could be resolved.

Chair Khiyara also believed that any NEST Board decision it should be an agendized action item that’s pre-defined and shared publicly.

Newell Arnerich indicated that the Development Corp is a public entity and has to remain as a public entity until the funding sources change and its not likely they will in the near future, i.e. the public sector will continue to fund it. He iterated that those in the private world can serve if they choose to on the Advisory Board if they choose not to be subject to Brown Act and other government regulations.

Rameet Kohli preferred clarity first on exactly the terms of governance of the final entity. He said that we have not had a vote on the governing board composition yet. Once that vote is made we can then decide what to do with NEST. Woody Clark iterated he supports Rameet Kohli’s motion.

Newell Arnerich asked what good it does to wait until that vote. This Board needs its defeasance and then move on.

Woody Clark asked for clarification of the motion, its standing, & any amendment to the motion.

Rameet Kohli reiterated his suggestion to wait until after the May 21st Development Corp Board meeting’s decision on its own make-up. Then NEST should meet to settle its issues.

Newell Arnerich asked why wait because the disposition of this Board has no bearing on the governance structure. He felt that it made no difference how the Development Corp Board ends up being structured. Newell Arnerich inquired about what it is that Rameet Kohli is trying to accomplish.

Rameet Kohli clarified that he does not want us to be a position of rushing to a decision. He believes that until we get clarity on the governance structure, he would hate to eliminate the NEST Board prematurely.

John Marchand indicated that with the dissolution of the NEST Board, everyone

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became a de-facto member of the Development Corp. Hence no additional meeting is necessary.

Newell Arnerich responded that this is in our 3/31/14 meeting minutes.

Chair Khiyara indicated that there are several items of note in the last two meeting minutes. Dissolution was a suggestion in that meeting’s minutes.

There was also a motion passed in 3/31/14 to have an approach that combined the NEST and Development Corp Boards, and created two separate final Boards. One would be public sector, and the other private sector board.

Pleasanton initiated the action item of defining that structure to combine the two Boards. That proposal was on the agenda for the 6/31/14 meeting, but was unfortunately not discussed. (Chair Khiyara was unable to attend that meeting due to a medical emergency overseas). He (Chair) indicated there is an alternate path which was never discussed.

Rameet indicated that the NEST Board has been operating on a strategy that would move from 97% public sector funding to a public-private sector funding model. Does the path for the new DevCorp structure is yet to be decided get us to a public-private structure? We won’t know that until we know what the governing Board looks like.

Newell Arnerich indicated that we do know that today and this is ridiculous. “We need to be more efficient and we don’t need two boards. In terms of what we are going to look like – all of us in the public sector want to get out of this. We need to simplify our approach, get to one Board and whether you want to sit on the public sector side then you have to follow the Brown Act. If you don’t then you sit on the Advisory Committee. But know that all of us on the public sector side want to get out and have an exit strategy. It will take a while because there isn’t a Revenue inflow. We have talked a lot about it but no one has taken any action.”

Chair Khiyara indicated that is simply not true.

Dr. Woody Clark indicated that he “humbly disagrees” with Newell Arnerich. He said that there are lots of times when things have been suggested and recommended by the NEST Board. However, they have been either just dropped, ignored, or not followed through with the execution side. He thinks the suggestion to take time and look at this carefully and in depth before “defeasing” anything. “To dissolve NEST today would be a grand and a big mistake. “ Newell Arnerich asked again what’s the point of this. “ I am paying for this meeting. “ Chair Khiyara opined that these are tax-payer dollars, not the dollars related to any particular Board Member.

An extended discussion took place relative to public and/or private memberships on boards of different types. Some of the attendant financial challenges faced by the rules regulating each type of model were included.

Chair Khiyara summarized the issues of today for the Board. He indicated there are other options that have not been considered. Additionally, there was a proposed action taken by the NEST Board that has not been fulfilled. Therefore it is not a necessity to dissolve NEST today.

Newell Arnerich inquired what action was being mentioned here and chair Khiyara indicated it was one taken at the 03/31/14 meeting. It was to identify a path to create a governance structure that would attract private funding. The action was initiated by the city of Pleasanton. Chair Khiyara, Nelson Fialho, Sblend Sblendario, and Jonathan Lowell, the City Attorney, were tasked to have the report presented to the NEST Board at the 06/31/14 meeting. It was on the agenda but not discussed, apparently in favor of the ITV merging issue.

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A discussion followed regarding the history of Board and Committee actions, studies & recommendations without proper “follow-through”. Examples included research on CA Energy Commission & PUC grants, CEC funding for the epic program, and possible support from corporations such as GE. There was action by the Board to look at these areas for funding suggested some Board Members, but issues got dropped before any substantive completion occurred. Some offered the opinion we did not have the right messaging developed at that time.

To refocus the issues at hand Chair Shail Khiyara summarized the conversation There is a desire to dissolve the Board, but there is a proposal to wait until May 21st. At that time we should decide as a joint Board as to the direction of governance that this Board takes. That path may or may not take us to publicprivate funding. At the moment it appears that it will not take us to public-private funding, because that Board will be governed by the Brown Act. There is a proposal that he put together last year with Pleasanton that describes a two Board structure that could work. Mike Conneran (outside counsel) indicated in an email that this structure could work.

Here is a quote from Mr Conneran’s opinion from March 24th, 2015:

Shail: You asked me if it would be possible to form a different corporation, separate from the current iGATE board, that could include industry members and would not be subject to the legal restrictions applicable to public agencies, including the Brown Act and conflict of interest regulations. It is definitely possible to do that, but care must be taken to avoid any governmental involvement in the entity’s formation. We can advise you about the necessary steps. In that way, private investors could participate in the second body without having to comply with the disclosure requirements applicable to public officials. Let me know if you have further questions.

Michael

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Chair Shail Khiyara indicated that E.D. Brandon Cardwell does not feel sure that this would work. Brandon suggested if this Board was created completely separately, then it could work. But once it takes public sector funds would require it to be subject to the FPPC regulations.

Shail Khiyara indicated that this matter would have to be explored with a legal counsel and we should get an opinion as to why or why not. This is again an option that has NOT been considered.

E. D. Brandon Cardwell asked what about this is unique to NEST? Why could this not be done under the Development Corporation.

Newell Arnerich indicated he does not have a problem with this idea. He would like us to get to one Board and dissolve NEST. Marc Roberts indicated that we can never convert this existing NEST Board into anything other than a public Board. To pursue this new structure, we need to create a new non-profit Board to follow this idea from Chair Shail Khiyara.

Returning to the immediate issue of dissolution, Marshall Kamena said this feels like the Army and the Navy. Let’s say the Development Corp is the Army and it says to the Navy (NEST) that we don’t see any reason for you to exist, so we would like to absorb you into our umbrella. So let’s take that action. But wait, only some of you get to stay. So not knowing who will be on that governing Board makes this difficult. The only thing we know for sure from past discussions is that the surviving DevCorp Governing Board will consist of public officials. So any input that NEST really has, is now. Therefore waiting one more meeting to get clarity does not seem like it’s a difficult thing to do.

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Woody indicated in order to have a motion, we need to have such authorization on the agenda, legally. Today’s agenda it says “Discussion regarding NEST direction”. It does not state direction nor action, only discussion.

Rameet Kohli said all of us want to see a resolution happen. He thought Marshall brought up a great point. We need full transparency across the Board.

We can make this work with whatever legal structure comes up but let’s wait till May 21st and have everything on the table. He indicated he is seeking transperancy. He strongly stands by Marshall Kamena’s argument and it would not hurt anyone to wait till May 21st.

Newell Arnerich indicated that we probably don’t agree on this. We have talked about this for a long time and we are all on the same page with a non-profit.

Dr. Woody Clark had to leave and indicated that if a vote turns out to be permitted he would not place a vote for any motion to dissolve NEST at this point. He reaffirmed the need to stop and think about this to understand the governance into which we will be transferring assets.

Dr. Woody Clark left at 6:30pm.

Newell Arnerich indicated that everyone is holding out for a position and he does not get that. “So what purpose does it serve for us to wait if we all sit on the Development Corp Board, and now we are saying that this Board wants to hold off until the Development Corp Board decides?”

Rameet Kohli said that’s a good point and the counter to that is, “What’s the big issue in waiting until May 21st for a joint meeting to resolve this?”

Newell Arnerich indicated, “We have been waiting a long time to do this, so why are we waiting longer?”

Chair Shail Khiyara indicated we have indeed waited a long time. However, we have not discussed the actions taken by the NEST Board on 03/31/14 i.e. the two board structure proposed – public and private board. “If the date here on this proposed idea is0 4/14/14, why has this not been brought to the table?”

E.D. Brandon Cardwell asked who was responsible to bring it to the table.

Chair Shail Khiyara replied that this was an action taken, again, in the 03/31/14 meeting, was discussed with Pleasanton, was on the agenda for the 06/30/14 meeting .He could not Chair that meeting due to a medical emergency overseas, Additionally, while this was on the agenda, it was never discussed. So in effect, we took an action in March and we came back in June and said we will discuss it as an agenda item, but that did not happen.

David Haubert said that at the next meeting in May we should have it on the agenda with authorization to take action. Shail Khiyara agreed and reinforced that it does not say that in the agenda for today’s meeting. John Marchand indicated that we can still take action though.

Marshall Kamena indicated that nothing on this agenda says that we get to vote today. John Marchand indicated that is an artifact of the agenda put together by the Chair. Marshall Kamena asked what other agenda does he have to go by?

Shail Khiyara asked are we adding something new to the agenda? John Marchand indicated that “discussion” allowed us to take action. The reason we were meeting as NEST one more time was because we needed to write the check to Mr Conneran. Otherwise we would have dissolved NEST at the last meeting (referring to the last Development Corp meeting) and that was in those meeting minutes.

Shail Khiyara asked Marshall Kamena if this was indeed in the last Development Corp meeting minutes and Marshall Kamena indicated that was not the case.

Shail Khiyara pulled up and checked the last Development Corp Board meeting

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minutes and confirmed that was not the case – i.e. there was no action from that meeting that required NEST to meet to dissolve itself.

Marshall Kamena said - we cannot rearrange this agenda for our own convenience. We do not know who will be on the final governing Board except for about three or four public officials. And, there is a chance that none of the private sector will be on that Board.

Marc Roberts asked if we would want to have the NEST Board anyway?

Marshall Kamena said he would like to study the alternatives for several weeks.

Newell Arnerich indicated that every member of the NEST Board sits on the Development Corp Board and there is no issue.

Marshall Kamena said if he wanted as a private sector individual to be on the Development Corp governing Board and is willing to be subject to the Brown Act, there is no mechanism for him to be on that Board.

Brandon Cardwell indicated there is no mechanism prohibiting you from being on that Board.

Kamena responded that the minutes of the Development Corp Board meeting reflect that there is no mechanism for the private sector to be on the Board.

Cardwell responded that those may be attitudes. Hence, Marshall Kamena asked then why not wait until that is clear at the May 21st meeting.

Rameet Kohli asked why cant we agree that those who wish to stay with iGATE NEST make their case in the Development Corp Governing Board meeting coming up on May 21st and, at that point decide whether the NEST Board would be dissolved or not.

Rameet further indicated this is disappointing. He joined this Board three years ago and is trying his best to help out, is a big believer in public sector, worked on the hill, is a planning commissioner for Dublin and feels that what is going on is petty. “We have the opportunity to figure this out at the May 21st meeting and move on.”

E,D, Brandon Cardwell asked to whom will the case be made for NEST on May 21st Rameet Kohli said that the case will be made to the entire Governing Board concerning NEST. Newell Arnerich asked whether or not Ramet’s role would be different because he might sit on both Boards Rameet Kohli indicated that it is not clear to him what the private sector role will be going forward with iGATE. Until he knows that answer, he does not think he is in a position to dissolve anything as a voting responsible member of iGATE. He would like to first see what the final governing body will be and then he can make a decision on what happens to NEST. David Haubert asked if the Development Corp has taken the action to include the NEST Board members. Newell Arnerich indicated yes that is the case and they suggested we have this meeting to defease NEST Shail Khiyara pointed out that this is NOT the case. The Development Corp Governing Board meeting minutes do not indicate anything about meeting to defease NEST nor can they direct the NEST Board to do something. He suggested that before we approve meeting minutes that we read them.

Newell Arnerich went back to the 03/31/14 meeting minutes and said it was mentioned in there. Shail Khiyara asked if those meeting minutes said meet to dissolve NEST Board. Newell Arnerich responded saying it says ‘to consider it’.

The meeting minutes also said to ‘consider other options’.

Newell Arnerich said there is a disagreement there and he cannot fathom why we

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would not defease the NEST Board. We are not accomplishing anything Rameet Kohli said perhaps there is a new scenario that in May 21st it’s decided that there is ONLY a public sector Board and that there is perhaps a private sector advisory committee that will leave some of us out. So for those of us who want to continue to stay engaged and involved in iGATE, where do we stand with all that? So for me its important to know those steps, before we determine the outcome of the NEST Board. Don’t you think it makes sense for me to go through that logical step? He indicated he is not trying to be difficult he just wants transperancy and wants to go through the process.

Newell Arnerich said the public entities are the minority on the other Board.

There is nothing predetermined.

Brandon Cardwell asked what advantage would be created by a bait and switch move.

Rameet Kohli said looking at things in black and white you are leaving door open for that. He is looking at this from a process angle and wants to ensure we follow due process. He is not looking at it from a viewpoint of an advantage to be gained.

David Haubert said that if wherever we go with this, no matter what you see with the Dev Corp action, there will be a Dev Corp & it will have all the members. It can take subsequent actions to go in any which way. It will have majority of nonelecteds. Newell Arnerich indicated that the public sector is a minority to which Marshall Kamena reinforced that though this is the case now, it is only the public sector who will have guaranteed seats.

Newell Arnerich indicated we have enough votes to move forward with defeasing the NEST Board today if we want to. Do we want to do that and make everyone upset? He said he is willing to wait but he wants on the agenda at the next NEST Board meeting – the discussion to defease this and take action to sell the assets to the Development Corp The NEST Board agreed that immediately following the Development Board meeting on May 21st there will be an iGATE NEST Board meeting to discuss, and take action.

E.D. Brandon Cardwell read an email from Doug Rotman (listed below as attachment #1).

Newell Arnerich asked if we will have a single item on the NEST agenda to take action to defease this Board and transfer its assets to the Development Board.

David Haubert said he wants to include an understanding of what the Development Corp action preceding that is.

David Haubert said that it is worthwhile to discuss the proposal that Shail Khiyara had developed showing a two board – one public, one private approach.

Art Pontau indicated yes, it might be a good thing to do David Haubert summarized the proposal, in that there is a body whose sole purpose is to give money to a non-profit institution as grants are given, this body would act as a private sector body, to take in money from other private sector, to take money, to advise startups etc. He further indicated that it is unclear to him how this body would be or would not be subject to the Brown act.

Shail Khiyara said it is a valid point and Marshall Kamena asked when should we discuss this proposal. Shail Khiyara indicated that there are two attorneys who have looked at this – Jonathan Lowell (Pleasanton) and Mike Conneran. Shail Khiyara asked that we engage Mike Conneran to look at this and have a report on this at the next Board meeting.

Newell Arnerich indicated that this should be decided at the Development Corp

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Board meeting. Studying this alternative should be on the Development Corp board. This is an exit strategy and we should wait.

Marshall Kamena reminded the Board to recognize that the Development Corp had only three or four (non-public official) members until the two Boards merged.

NEST Board had the majority of Board members.

Chair Shail Khiyara read the note quoted earlier from Mr. Conneran (listed below as attachment #2) In finality, the Board agreed to the following: o In the May 7th Development Corp Governing Board meeting, we should discuss the proposal shared by Shail Khiyara and take action to study or not to study this proposal and others. E. D. Brandon Cardwell was requested to ask the Development Corp Board chair to include this on the Board agenda. The topic could be – Discussion of possible organization structures for iGATE that allow for Private Sector funding? o May 21st the Development Corp Governing Board meets to agree on the final governance structure. Prior to that, bring forth an attorney’s opinion (if the Board took action on May 7th ), on the discussion of possible organization structures for iGATE that allow for Private Sector funding?

The meeting was adjourned at 7:08 p.m.

Attachment #1 – Doug Rotman Email

From: Rotman, Doug [mailto:rotman1@llnl.gov] Sent: Tuesday, March 24, 2015 3:30 PM To: Brandon Cardwell Subject: RE: Next iGATE NEST Board meeting

Brandon, Since I will not be able to attend the NEST board meeting tonight, please convey the following to my fellow board members. I vote in favor of disbanding the NEST board, and I vote in favor of transferring NEST funds to the I-GATE board.

Thanks, Doug

Attachment #2 – Michael Conneran Email

On Tue, Mar 24, 2015 at 4:31 PM, Michael N. Conneran <mconneran@hansonbridgett.com> wrote: Shail:

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You asked me if it would be possible to form a different corporation, separate from the current iGATE board, that could include industry members and would not be subject to the legal restrictions applicable to public agencies, including the Brown Act and conflict of interest regulations. It is definitely possible to do that, but care must be taken to avoid any governmental involvement in the entityâ&#x20AC;&#x2122;s formation. We can advise you about the necessary steps. In that way, private investors could participate in the second body without having to comply with the disclosure requirements applicable to public officials. Let me know if you have further questions.

Michael

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