Minutes of the New York State Proprietary School Advisory Council Meeting

June 16, 2010

New York Film Academy – New York, NY

Submitted by:  Monica Borden

Present:

Mike Hatten, Chair

Rabbi Yerachmiel Barash, Member

Vincent Ferrara, Member

James Devaney, Member

Anthony Casale, Member

Anthony Civitano, Member

Carole Yates (BPSS), Ex-officio Member

Norene Grose, Ex-officio Member

Absent:

Allan Goldberg, Member

Lisa Harris (CPB), Ex-officio Member

Dennis Buckley (OSC), Ex-officio Member

Lisa Timoney, (DOB), Ex-officio Member

Host:

David Klein, Director – New York Film Academy

Call to Order:

Mike Hatten called the meeting to order at 10:30 a.m. 

Introductions:

The Advisory Council members introduced themselves – six out of seven voting members were present, so the Council was able to vote on recommendations.

Mike Hatten then introduced David Klein, the meeting host and director of New York Film Academy.  David gave a little background on the building in which the school is located – Tammany Hall.  Built in 1830, it was once the home of the Democratic Party in NYC and then became the home of NYC labor unions.

David also gave rules for optimal filming, and told the audience that once the film is edited, it will be sent to Mike Hatten to view.

Approval of Minutes:

Anthony Casale made a motion to approve the March 17, 2010 minutes as written, with Vincent Ferrara second.  The motion passed with all in favor – none opposed.

BPSS Update and Status Report:

Carole Yates gave the BPSS update –

• David Brieff has been out on extended sick leave due to a recent motorcycle accident.  He is currently recovering and is back to work on a part-time basis.  During his recovery, Carole handled some of his duties, so that work did not back up.
• Monica Borden and Thomas Reimer recently testified for the Attorney General’s Office at a trial involving one of our previous allied health school owners, Ronald Kehinde.  Carole was told by a representative of Department of Health that Mr. Kehinde’s businesses billed Medicaid approximately $93 million, and much of that was obtained illegally.  Due in part to BPSS’ testimony, Mr. Kehinde was found guilty of forgery and fraud and sentenced to 2-6 years imprisonment and his corporation paid approximately $1 million restitution to Medicaid.
• The Department of Health registry is operational and will help control the certification of Home Health Aides trying to pass off illegally obtained documents as legitimate.  There is discussion of possibly instituting a licensing exam, as well.
• The BPSS bill is still pending, due to budgetary issues in the legislature.  It will not make it through this session. The Department will push it forward with full force in the fall.
• The budget has not passed yet, and the governor is including portions of his budget in the emergency extender bills, which must be voted on by the legislature each week, in order to fund the state operation.  Extender bills must be approved or rejected in their entirety, so each week until the budget is passed the governor is getting portions of his budget approved.
• Senate bill S7906 was recently introduced (partner bill in Assembly is A11300), which states that its purpose is to protect the constitutional rights of school owners.  This bill takes away BPSS’ authority in dealing with student complaints and creates a legislative disciplinary board, made up of politically appointed positions, to take on this responsibility.  It also puts restrictions on the Advisory Council, and allows for the new committee to recommend disciplinary action against specific BPSS staff members.  There is little chance of passage, however it is out there. 
• BPSS will be part of the SED reorganization, which includes the move to a new (yet to be appointed) Deputy Commissioner.  There was one position posting and a series of interviews.  However, a Deputy was not hired and another posting has been issued. 
• Race to the Top is a key Department initiative, with up to $700 million available to New York State, if we meet the criteria, which includes additional charter schools and teacher performance indicators.  SED has recently submitted its second round proposal.
• There are a number of cost cutting measures included in budget proposals, including retirement incentives.  The 55/25 incentive (55 years of age with 25 years of service) is one that is expected to cause some issues in SED.  When a staff person accepts the incentive, their position is eliminated.
• SED is facing severe budgetary restrictions, at least until the budget is passed.  So far, BPSS travel has not been hit too hard, but daily expenses, like postage is taking a hit.  Currently, the NYC office cannot replenish its postage meter, so creative solutions are being implemented.

Council Discussion on the BPSS update:

James Devaney asked Carole if she has heard any discussions about closing BPSS.  Carole has not.  Jim stated that it was an option for California, and Michigan is discussing it now. . . .

Mike Hatten expressed concern at that possibility, stating that New York State has a strong State Education Department and is preferable to a state with weak or non-existent regulations, which is key to quality education.  He said that it’s incumbent upon schools to work with the BPSS professionals, and that the proposed S7906 is less than professional and not well thought out.

Anthony Civitano asked Carole about the status of the Tuition Reimbursement Account.  Carole stated that it is currently at $2.2 million.  Anthony asked if it is at risk of being swept.  Carole stated that she did not believe so.

Review Issues from Past Meetings:

Anthony Civitano asked that the June 2010 minutes reflect an amendment to the March 2010 minutes, whereas Alex Zholendz’ comments regarding the need for approval of the Infection Control Bill are included.  Mike Hatten asked Monica to review the notes from March 17, 2010 to see if there is any additional information that can be added to update the March minutes.

• Recording Secretary Notes – Because of the fact that meeting minutes are not transcripts or recordings of actual comments, specific comments made by Mr. Zholendz are not available.  Notes of the previous meeting minutes were reviewed, and the only additional information that can be added is the reason why Mr. Zholendz believed there is a need for passage of the Infection Control Bill.  Mr. Zholendz stated that people are dying from infections received during appearance enhancement treatments – additional information was not included as he was not able to provide actual documentation.  Mike Hatten requested that Mr. Zholendz share his verified documentation at the June 2010 Advisory Council Meeting.

Infection Control Bill:

Anthony Civitano asked to break protocol during the Council member discussion to allow a representative from the audience present information pertinent to this discussion.  There was no objection.

Ray Testa, Vice-President of Government Affairs for Empire Education Group, responded to Mike Hatten’s request for more information on the Infection Control Bill and its possible impact on schools.  The New York State Beauty School Association contacted their national accrediting agency (NACCAS) and posed some questions to them.  NACCAS responded in a letter dated May 27, 2010.

Anthony Casale made a motion to include the letter in the minutes, and Anthony Civitano was second.  The motion passed with all in favor – none opposed. 

Ray also asked Mike Hatten if the proponents of the bill provided the documentation that Mike requested in March.  Mike stated that they had not submitted anything for his review.

Anthony Civitano then asked the Council to recognize Anthony Fragomeni, owner of Northern Westchester School of Hairdressing & Cosmetology, who would address the issue of public outcry. 

Anthony Fragomeni presented an e-mail that he received from Leslie Roste, National Director of Education & Market Development for King Research, which distributes Barbicide - the top disinfectant used in salons and schools.  Anthony spoke with her at a recent AACS conference, and discussed the need for infection control.  He followed up his conversation via e-mail, and she responded in kind.  Her e-mail stated that there is no verifiable evidence to corroborate the claims of 10% of the population being infected in salons, or dying from infections received there.

She also stated that most states with continuing education courses require 2-4 hours.  RN’s take one-hour annually – and it’s her opinion that salons can easily accomplish this in 2-3 hours.

Anthony Civitano made motion to include e-mail in the minutes, and Anthony Casale was second.  The motion passed with all in favor – none opposed.

Anthony Casale asked Mike Hatten if the Council plans to take a formal position, and asked Carole Yates about the current status of the bill?

Carole stated that there have been multiple meetings between the proponents and opponents of the bill, and that SED and DOS’ legislative liaisons keep in close contact with the pertinent Senate and Assembly committees, as well as with the Governor’s office.  All indicate that this bill will not pass this session – it is currently tied up in Ways and Means.

Anthony Casale suggested that the Council take a formal position, and Mike Hatten agreed to write a position paper, IF instructed to by the Council.

Vincent Ferrara brought up the related topic of the “Special Ops” paper – which contains adverse information regarding the Advisory Council and accuses BPSS and the Advisory Council of having a personal vendetta against Alex Zholendz.

Anthony Casale suggested that Mike Hatten craft a position paper to be voted on by the Counsel at the next meeting.  Mike agreed to do so.

The discussion turned to S7906, which attempts to take away the ability of the Advisory Council to discuss pending legislation.  Mike Hatten reminded the Council that Section 5010 of the Education Law indicates that the duties of the Council include discussions and recommendations concerning the following:

• Trust accounts
• Performance standards
• The effectiveness and utilization of the tuition reimbursement fund
• The efficacy of instituting a fee-for-service system
• The effectiveness of the timelines mandated by this article
• The impact of assessments on schools
• Recruitment bonuses
• Such other matters as the council determines are appropriate.

Mike stated that it’s his opinion that the Advisory Council has a strong responsibility to vet any and all issues that affect proprietary schools and their students, and asked the other Council members for their opinions on S7906 and the Infection Control bill.  The following was discussed:

• Infection Control Bills (S6820/A9926)
• Re:  Ramifications as it relates to national accreditation.  Mike asked if any council member had evidence contrary to the information contained in the NACCAS letter.  None.
• Re:  3-6% assessment on all appearance enhancement schools.  Mike asked if any council member supported that issue.  None.
• Re:  Continuing Education.  Jim Devaney and Ray Testa commented that in order for a course to be considered “continuing education” it is taken to maintain a license – not as a prerequisite to obtaining an initial license.  Mike asked if any council member wanted to dispute that interpretation.  None.
• Legislative Disciplinary Committee/Advisory Council Restrictions (S7906/A11300)
• Re:  Restricts duties of the Advisory Council and assigns BPSS complaint and investigation responsibilities to a legislative disciplinary committee.  Mike asked for discussion on how to approach this bill.
• Jim Devaney, Vincent Ferrara, and Anthony Civitano, agreed that, while they respect BPSS and agree that rules are needed, the bill does not appear to be moving, and the best approach may be to watch it carefully and be ready to comment if it begins to move. 

Council Appointments: 

Mike Hatten stated that there are still more positions available:

• One from the Speaker of the Assembly
• One from the Temporary President of the Senate
• One from Governor’s Office, which is the student advocate appointment

Comments and Questions from the Council:

Vincent Ferrara gave a summary of the first meeting of the Advisory Council Subcommittee on Workforce Development.

• Current subcommittee members - Vincent Ferrara (chair), Mike Hatten, Matthew Kirshenbaum, Deborah Ferrarro, and Monica Borden.

• The subcommittee met on June 3 in the BPSS NYC office.  An overview of the voucher process and issues of concern were discussed:  Requirements for school and student eligibility, required placement, ‘in-demand’ programs, variance in pricing, etc.
• Vincent thanked Matthew Kirshenbaum for providing the subcommittee with important information regarding the voucher process and ‘in-demand’ programs.
• A future goal of the subcommittee is to meet with NYC Department of Small Business Services to obtain clarification on process and alert them to specific issues where schools are having difficulties.  It hopes to establish regular contact with DSBS, to act as a voice for the schools.  While the subcommittee is looking for additional members to give input to the process, it plans to work with BPSS to establish contact and to work on a professional level with DSBS. 
• Monica Borden created a list of topics discussed and a list of proposed outcomes.  Once the committee agrees on them, she will set up a meeting with the Commissioner of the NYC Department of Small Business Services – hopefully before the next Advisory Council meeting in October.

Mike Hatten stated that the Council will follow the progress of the subcommittee and asked anyone with pertinent issues/comments to contact Vincent Ferrara or Monica Borden.

Mike then asked Carole Yates if she received letters in support of BPSS’ pending legislation from the NYS Beauty School Association or the Coalition of New York State Career Schools.

Carole stated that she received one from the Advisory Council, but is still working on issues with both the NYSBSA and the Coalition. 

Mike then discussed recent statistics that show NYS has the worst GED® pass rate in the country.  He’s also concerned about the decreasing number of GED® tests sites, which has fallen from 310 to 175.  He asked Carole if the GED® office will be part of the SED reorganization.

Carole responded and said that she believes part of the problem with the statistics is that NYS does not charge for the test, therefore people can take it multiple times until they pass or give up.  There is less preparation if someone can keep taking the test until they pass.  She stated that the adult GED® program is supposed to be part of the new Workforce Development Unit and is hopeful that the reorganization will help with this issue.

Mike asked Monica if she scheduled school owners to speak at this meeting.  Monica stated that she did not schedule any school owners/directors for this meeting in an interest of time – the agenda for this meeting was already full.  She indicated that school owners/directors will be invited to speak at the next meeting.

Jim Devaney asked Carole the condition of office morale.  Carole told him that morale is very low, due in part to the fact that the Albany office move has been canceled due to budgetary reasons.   She stated that there is some internal office changes planned, such as expanding Monica’s office – which is the worst space in the Albany office.  She stated that the mood in the offices is somber, the threats of furloughs and state shutdown are distracting, and her staff is discouraged by some of the things they’ve seen recently.

Mike Hatten asked Jim Devaney for an update on the national level.   Jim stated that the gainful employment issue is still meeting strong resistance.  He met with members of US Department of Education, who told him that they like the proprietary school business model but it doesn’t fit in line with colleges, especially the outcomes and budgetary issues.

Mike mentioned that gainful employment has many technical flaws, and was delayed while USDE is still looking for ways to balance tuition rates with earned wages.  He suggested that schools research the issues and make their opinions known.

Jim Devaney reiterated Mike’s point and stressed the fact that proprietary schools must stress their placement rates, which are crucial in this economy.

Mike reminded schools that bad publicity is easy to come by, demonstrated by a recent school raid by USDE, which made the front page of the papers.  Schools must counter this by promoting good stories.

Vincent Ferrara asked the Council if they wanted to address “Special Ops.”  He and others are concerned about their names being included in inappropriate ways.  Anthony Civitano agreed and stated that the author, Alex Zholendz, has been trying to defame him personally.  He suggested that, if addressed, it should be done so on principle and showing a united front.   Anthony went on to say that he became a target after turning down an offer (that he believed to be an attempt at bribery), to support the bill.

Anthony Casale asked who received a copy.  Carole told him that legislators, members of the Board of Regents and the press got it a few weeks ago.  Anthony stated that when you respond to something publicly, you draw attention to it, where little or no attention may have been given to it prior to that.  He suggested that everyone be ready to respond if asked, but it may be better to ignore it and address the bill.  He reminded everyone to concentrate on two things – the bill and factual arguments.  He also reminded everyone that they may wish to seek personal counsel, and offered to help individuals craft their own responses.

Comments and Questions from the Audience:

Ray Testa commented on the placement requirement for DSBS and stated national accrediting agencies rely on school data, to meet the placement requirements.   He also stated that the USDE’s negotiated rules have been posted, with State Authorization being a key issue.  The California sunset was used as one of the examples where there was no state oversight, schools tried voluntary compliance, and the program approvals fell to the accrediting agencies.  In the new rules, in order for schools to maintain Title IV eligibility, a state approval must meet certain conditions.  Diluting BPSS’ power, as S7906 attempts to do by taking away the investigation and complaint processes, may deem the schools regulated by BPSS as ineligible for Title IV funds.  He stated that the comment period on this issue ends August 2, and rules on Gainful Employment should be posted soon.

Terry Zaleski (Executive Director of Coalition of New York State Career Schools) asked Carole if printed GED® scores are acceptable for enrollment, in lieu of actual GED® certificates.  Carole said that she will check into and get back to him.

Frank Talty (Refrigeration Institute) stated that the GED® printout does not contain any of the required documentation – name, social security number, authorization number, etc.

Terry Zaleski asked Carole if there was any decision on the Laser Hair Removal issue.  Carole stated that she’s been working with Department of State and communicating her discussions with Anthony Civitano, as the NYS Beauty School Association has been working on this, as well.  She sent an e-mail to Dan Shapiro on June 15, and will check in with him upon her return to Albany.  She said that she spoke with the Executive Secretary of the SED Board of Medicine, who told her that laser HAIR REMOVAL is not considered a medical procedure; therefore the Office of the Professions does not regulate it.  Carole believes the main concern with Department of State will be practioners not operating within the approved scope of practice.

Terry Zaleski asked Carole if there is an update on the issue of NYC Department of Small Business Services rescinding the proposed requirement that all schools had to be licensed by BPSS to obtain WIA funds.  Carole said that the decision was made by Department of Labor to not require licensure for specific contracts and the NYC DSBS is not happy with it.  She will follow up and get back to the schools – it can also be added as a topic for the Workforce subcommittee meeting.

Terry also reminded everyone that the Coalition will be hosting their 10th convention at the Hotel Thayer, located at West Point, from November 17-19, 2010.

Dennis Cariello (previous Deputy Counsel for Post-Secondary Education with USDE, now private counsel) stated that USDE recognizes BPSS’ authority and relies on BPSS to protect program integrity, which is what will be required by USDE in their new rules regarding state approvals – states will be required to have rigorous rules and a process for reviewing complaints, like NYS currently has.

Regarding S7906 – Dennis mentioned that the change in structure proposed in this bill could jeopardize schools’ ability to qualify for Title IV funding, as it will take away BPSS’ investigative and complaint process – doing just the opposite of what the NPRM rules require.

Dennis also told the audience that the NPRM rules have been published and is over 500 pages long.  A few areas were not discussed but are important, such as the rules regarding incentive compensation and safe harbors.  He encouraged everyone to get to know them and comment.  He emphasized that USDE reviews all comments submitted.

Randy Rock (Educational Compliance Management) told the audience that schools who receive Title IV funds will be required to have a website up by July and must publish the cost of each textbook (by course) on the site.

Dominick Bonomolo (USA Beauty School) briefed the Council and audience on the recent raid by USDOE officials at the school.  He stated that the NY Post ran an article that contained incorrect information.  For example, the Post claimed that the school officials declined to comment, however Dominick stated that no schools officials were available to comment.  He also stated that the 25 federal officials were at the school for over eight hours, claimed to have a search warrant, but never showed it to anyone.  He also stated that the federal officials took more than 36 boxes of original records and took mug shots of all of the school personnel, and claims that there were numerous human rights violations.

Anthony Fragomeni (Empire Beauty School, and co-chair of American Association of Cosmetology Schools’ Government Relations Committee) gave input into the background of James Kvaal – Bob Shireman’s replacement.  Anthony stated that Mr. Kvaal has a long history as an education policy advisor under the Clinton administration, Sen. Paul Simon, and Chairman Miller.  AACS considers him a hands-on advisor, who takes time to learn about issues and considers him a tough but fair administrator, and looks forward to working with him.

Anthony also stated that S7906 is a travesty and it’s embarrassing that any legislator would introduce this as legislation.  He reiterated what Dennis Cariello mentioned – that NPRM supports BPSS policies currently in place, and he believes that it’s incumbent upon the Council to oppose the bill in some way.

Anthony went on to state that the NPRM high school diploma/GED® issue is designed to weed out high school diploma mills.  However, when fewer GEDs are available, more people turn to illegitimate high school diplomas.  He encouraged SED and the Council to find out how more GED® test sites can be made available.

Jay Fund (Hunter Business School) encouraged the Council to continue to talking about the good schools in the industry.

Mike Hatten suggested that the school associations do school bios and pass them on to key legislators.

Carole Yates agreed that it is always nicer to hear good stories and complemented Institute of Audio Research for a great catalog submission.

Mike Hatten stated that the Council very much appreciates schools that host meetings, which in turn, gives them the opportunity to show off their facility and programs.

Christopher Felder (Long Island Barber School) stated that Milady is scheduled to release their new Barber textbook on 7/1/10, which will include additional infection control topics, and plans to do so with their other textbooks in the future.

Ray Testa stated that he’s involved with 23 state regulatory agencies and that this Advisory Council is doing a remarkable job of bringing regulatory agencies together with schools to discuss issues, and it’s reflected in the present audience, which appears to be overwhelmingly supportive of BPSS’ work and that of the Council.  He also commented that without stringent rules, there would be anarchy in this sector and that negative topics must be discussed in order to take appropriate measures to keep that from happening.

Mike Hatten thanked the David, Jim, and Sonny from the New York Film Academy for filming the first session.

With no additional comments from the Council or floor, Mike stated that the next meeting will be scheduled in Albany in October at a date and time to be announced.

The meeting was adjourned at 1:30 pm.