KBHI Revokes AHIT School Approval | Professional Learning Institute

AHIT, the American Home Inspectors Training Institute, took a hit from the Kentucky Board of Home Inspectors (“KBHI”) at its November meeting Tuesday.
It was the first time the KBHI revoked an educational provider’s approval.
It is not clear if the Board action calls into question other home inspector licenses previously issued to AHIT graduates. However, an AHIT representative told the Board there were about 11 pending or coming license applications from AHIT programs. Those are affected, at a minimum.
Revoking AHIT approval also is the first skirmish in what may become a running Board battle against online education. Stuck AHIT graduates at the meeting all did their prelicense training with AHIT online. It is one of the least expensive prelicense courses, at about $695 (though later it often turns out there’s more). Not to mention complications. Like this….
A major KBHI policy change now in the works would eliminate online training for prelicensing, and strictly limit online CE. Draft regulations doing just that also were reviewed at the same KBHI meeting Tuesday, though they are months away from taking effect, if they ever do. The KBHI also resisted online license renewals during the meeting, though online renewals are being installed for practically all Kentucky licensing boards and commissions now.
Revocation was handed down despite the best efforts of Katie Paepcke, the AHIT/OnCourse Learning Compliance and CE Manager, at the meeting. Paepcke took responsibility for the problem and offered to doing anything they could to fix it.
“I made the mistake they could do their field training on their own,” she told the Board.
She said AHIT “would be willing to pay for it” with other providers, to be sure they delivered field training that met the KBHI rules. Some students had received refunds apparently. Still, though Paepcke owned up to the problem, and offered practically any remedy short of sacrificing the first born on an alter, she was not well prepared for this board and seemed short on legal advice.
The vote to revoke was 4-3, the first closely split vote on the Board in half a decade.
The single-vote majority voting for revocation claimed AHIT deserved revocation, rather than any lesser penalty, and the graduates who were waiting for licenses had to keep waiting.

AHIT”s violation was “failing to comply with any other duty improved on providers in this administrative regulation” – whatever that means. (The Board motion said it was revoking under “922 KAR6:040 sec 9 1(l).” They meant 815 KAR6:040 Sec. 9(1)(L).) The only thing other schools can be sure about it that “other duties” does not mean any of the other 11 specific causes for revocation in the rule – like fraud, deceit, or false statements; falsifying records, or such. None of the “nay” votes gave an explanation for opposing revocation. Here, again, is a case where spelling out the Board’s reasons would be much more shrewd, and useful, than ducking behind “miscellaneous” reasons — particularly when dropping a severe penalty like revocation on anyone.

That narrowly split vote came with one more fly in the ointment. The fourth vote did not count.

The fourth “swing” vote came from J. R. Bone, whose term expired last summer. The statute says a member “shall not serve on the board for more than six (6) consecutive years,” a time limit Bone passed last summer. “Not serve” includes no vote. If Bone had no vote, then the Board vote actually was a tie – and the motion to revoke failed.
Count on that rearing its ugly head in the inevitable appeal. Bone also is a textbook example of disregarding the Governor’s Executive Orders 2008-454 and 2009-882, which require disclosure and absentention for a Board member who is an officer and director of a competing school. In any appeal, expect both problems to be leveled at the Board decision.
Voting in favor of revocation were Bone, Mark Oerther, Jim Chandler, and new chairman Mitch Buchanan. One thing all four have in common is membership in KREIA, a competing CE provider. The “nay” votes against revocation past chairman Mark Schmidt, education committee chairman Ken Fister, and Robb Johnson, a Louisville home inspector in charge of modernizing KBHI web services. They also were the three KBHI members with noaffiliation with KREIA. Schmidt is the Homebuilders representative on the Board. Fister represents the Kentucky Manufactured Housing Institute.
That vote followed a highly questionable secret “executive session” of the Board. Discussions of fundamental policy are exactly what Kentucky’s Open Meeting laws require boards to do in public. The vote to throw the public out also violated required statements of the exact exemption for the law the Board believed gave it the right for a secret session.
AHIT’s homepage headline calls it “Best in Class, Online and in the Classroom.”
What’s missing there is “field training” – the main thing the KBHI thought AHIT was not delivering.
AHIT provides field training, and the three home inspections KBHI rules require, in Wisconsin, where it is headquartered.. But no one could tell that from the KBHI web site listing approved schools.
Tuesday KBHI meeting included a handfull of KBHI graduates who were looking for their licenses. They all paid their tuition money and “nonrefundable” license application fee. They all thought they had done everything needed to get a home inspector license. They were not happy.

TROUBLE WITH OPEN MEETING LAWS

The Board simply has not yet tuned in to the basic idea of open meetings required by Kentucky law. One result is that the Board is subject to a 2009 Kentucky Attorney General decision speifically applying to the Kentucky Board of Home Inspectors, 09 OMD 132. That decision has “the force and effect of law.” KRS 61.846(4)(b).

The Board still thinks it can hide in committees, as it did deciding how to handle its AHIT. Why it would want to, when all of this is public policy as a matter of law anyway, is hard to fathom. But 09 OMD 132 is straightforward. It says the Kentucky Board of Home Inspectors is a public agency, and any committee established, created, and controlled by it is, itself, a public agency pursuant to KRS 61.805(2)(g), and is statutorily obligated (1) to comply with KRS 61.823 by giving proper notice of its special meeting, (2) to comply with KRS 61.810(1) by admitting members of the public to the meeting, (3) to comply with KRS 61.815 before conducting a closed session if legitimate grounds existed for doing so, and (4) to comply with KRS 61.835 by recording minutes of the meeting.

That’s basic. But the Board went O for 3 here. It handed AHIT a clean shot, for no discernable reason, other than a bad habit.

Similarly, as 09 OMD 132 put it, the Board violated KRS 61.815(1)(a) in failing to observe the requirements for conducting a closed session at its April 14 meeting. As a condition for conducting a closed session, KRS 61.815(1)(a) requires that:

“Notice shall be given in regular open meeting of the general nature of the business to be discussed in closed session, the reason for the closed session, and the specific provision of KRS 61.810 authorizing the closed session[.]”

The Attorney General went on to emphasize, in 09 OMD 132, that “in construing this provision, the Attorney General has often observed:

‘”The express purpose of this, as well as the other provisions of the Open Meetings Act, “is to maximize notice of public meetings and actions [and t]he failure to comply with the strict letter of the law in conducting meetings of a public agency violates the public good.” Floyd County Board of Education v. Ratliff, 955 S.W.2d 921, 922 (Ky. 1997). With specific reference to KRS 61.815, the Supreme Court declared that prior to going into closed session, “the public agency must state the specific exception contained in the statute which it relied upon,” and give “specific and complete notification . . . of any and all topics which are to be discussed during the closed meeting.” Id. at 924 (emphasis added). “

“[T]his office has determined that notification which does not include a statement of the specific exception(s) relied upon to conduct a closed session, a description of the general nature of the business to be discussed in, and the reason(s) for, the closed session is inadequate. 00-OMD-47; 00-OMD-64; 01-OMD-181; 02-OMD-200. 03-OMD-221, p. 4.'”

The Board’s failure to cite the specific exception upon which it relied, and the reason for the closed session, constituted a violation of KRS 61.810(1)(c) in the illegal closed session.

So, too, did the Board’s vague reliance on KRS 61.810(1), by which it may have meant subsection (c). as the statutory basis for the closed session. That exception authorizes public agencies to conduct closed session “[d]iscussions of proposed or pending litigation against or on behalf of the public agency[.]” Analyzing this exception in Floyd County Board of Education v. Ratliff, at 924, the Kentucky Supreme Court observed:

“[T]he drafters of the legislation clearly envisioned that this exception would apply to matters commonly inherent to litigation, such as preparation, strategy or tactics. Obviously, anything that would include the attorney-client relationship would also fall within this exception. The statute expressly provides that the litigation in question need not be currently pending and may be merely threatened. However, the exception should not be construed to apply “any time the public agency has its attorney present” or where the possibility of litigation is still remote. See Jefferson County Board of Education v. The Courier-Journal, 551 S.W.2d 25 (Ky. App. 1977). As properly noted in Jefferson County Board of Education, supra, the matters discussed under KRS 61.810(1)(c) must not be expanded to include general discussions of “everything tangential to the topic.”

The Attorney General again reminded the KBHI in 09 OMD 132 that “Numerous open meetings decisions of the Attorney General support this view. See, e.g., OAG 78-227; OAG 84-240; OAG 91-141; 92-OMD-1728; 95-OMD-57; 97-OMD-96; 99-OMD-146.”

So, if the Board meant to hang its hat on subsection (c), it fails. “Because the Board was not a party plaintiff or defendant in a lawsuit, had not been threatened with litigation, and the likelihood of litigation was, at best, remote, at the time of its…closed session, the Board improperly invoked KRS 61.810(1)(c),” the Attorney General has already decided in a ruling binding on this Board.

KBHI vice-chairman Jim Chandler has been saying for months that he hoped to get the Board back in the habit of recording its meetings, as it did for the first 3 or 4 years — the most prpoductive in the Board’s history. Recording all meetings is standard at the other boards, like electtricians, plumbers, HVAC, at the Deept. of Housing, Buildings, and Construction — because it protects the boards and their members. This is a little like taking pictures for home inspection reports. It protects people who are doing their job, as Board members have commented several times.

It would not be a huge surprise if the KBHI ended up wishing it had recorded the meeting, and following the Open Meeting law as well as 09-OMD-132, when it revoked its first school approval.

The decision revoking AHIT’s school approval is not final until the time for a hearing or appeal expires.

AHIT

AHIT started in 1993 in Wisconsin. It was an outgrowth of Newcomer’s Home Inspection Service, started by Ray and Virginia Newcomer, soon joined by the son, Scott, in 1993, and later Mark Newcomer, in 1999. In 1995, Scott took a fling at setting up a home inspection franchising company on the side, American Property Inspection Service. It never caught on.
Today, AHIT is part of OnCourse Learning, co-marketed through its ProSchools operation. OnCourse is owned by The Riverside Company, a private equity firm. Riverside was founded in 1998 and has invested in more than 320 transactions since then. Today, it owns about 75 businesses, including a Japanese bike retail chain in Tokyo, a window company, a few medical products companies, and a operator of private schools in Sweden. Riverside also owns other online outfits, like ProSites and WhatCounts, both online marketing businesses.
OnCourse says it started in 2007 in Milwaukee, WI. Riverside’s site says it acquired OnCourse in February, 2007 (the OnCourse site says November). Since it acquired OnCourse, Riverside has been rolling up other online schools into the operation (known as “add-on acquisitions”) – SSI Group of Clearwater, Florida (Feb., 2007); American Home Inspector Training Institute of Waukesha, Wisconsin (June, 2007); TrainingPro of Hunt Valley, Maryland (March, 2008), a provider of mortgage courses for brokers and loan officers; ProSchools of Portland, Oregon (June 2010); CompuTaught of Atlanta, Georgia (Sept., 2012), an online real estate and appraisal training company; Digital University of San Diego, California (Nov., 2012), an online bank and regulatory compliance training company; and Corporate Training Technologies (dba Bankers Edge, Sept. 2013).
Today, the OnCourse platform sells ten “online campuses” for programs in real estate, IT, and financial managment, with names like “QuickCert.”
Today’s AHIT sells courses in home inspection, locksmithing, and energy auditing. It also sells products like its own software, “InspectIt.” OnCourse lists ASHI as a”strategic allegiance” “Partner,” though that may reflect ASHI’s willingness to rent its logo more than anything else.
AHIT has grown largely by partnering with state schools and community colleges to plug in AHIT courses. That’s also a way to sidestep school licensing boards in many states. In Louisville, it has joined with Spalding/Sullivan University, for example. In Cincinnati, it set up a deal with Cincinnati State. (Disclosure: Professional Learning Institute was invited to set up a program at Cincinnati State.)
OnCourse reported 2011 revenues of $24 million. That helped put AHIT in the Inc. magazine 5000.