}

Sunday, January 22, 2017

IT'S TIME TO CLOSE THE BAY CITY ACADEMY: Painlessly Putting It To Sleep Is The Most Humane Option; Let's Stop The Whimpering!

Every dog or cat owner has faced this situation: having your beloved pet euthanized in order to spare it from further pain and suffering.

And it's painfully obvious that time has come for the Bay City Academy.

Coming tomorrow, the case for going all-out Kevorkian on the fatal financial tachycardia at the failing charter school.

Friday, January 20, 2017

STEVEN INGERSOLL SHAFTS TAXPAYERS FOR ANOTHER $1.4 MILLION WITH HIS CHEMICAL BANK/MADISON ARTS NON-PERFORMING LOAN; Provides Brian Lynch's “Mitten Educational Mangement” With Six-Figure, Tax-Free Gift In The Form Of Free Rent

Bill DiSessa, a spokesman with the Michigan Department of Education, said the state isn't concerned about Ingersoll being the landlord of the charter school buildings. 

“There is some irony in there, given the circumstances, but we still approved the plan,” DiSessa said. “As long as no management company folks involved with Smart Schools are involved, then we're OK.”
MLive
April 5, 2016

“We disclosed that information with the state superintendent and they are well aware that we are still obligated by our lease agreement,” said Brian Lynch, who runs Mitten Management, the school's management company. 

Lynch said his management company is negotiating with Ingersoll about the future of the lease agreement. He declined to comment on the nature of those negotiations or any details of the lease agreement. 
MLive
April 5, 2016
  

“To our knowledge, none at the time of our inquiry. We will follow up on the current status.”
Dan Hanrahan, Michigan Department of Education
email response regarding rent payments 
by Mitten Management to Steven Ingersoll
July 6, 2016


“Lynch said his management company hasn't paid rent to Ingersoll over the past year. He declined to comment on the reasoning for that. Jan Geht, Ingersoll's attorney, told MLive Wednesday, Nov. 16, confirmed the building was foreclosed on because Bay City Academy wasn't making its rent payments.”
MLive
November 16, 2016

Ah, the trap of unintended consequences might have just snapped shut on the boys at Mitten Educational Management, one of whom (fortunate son-in-law Brian Lynch) recently admitted not paying rent to Steven Ingersoll in the last 18 months for use of the Bay City Academy's Madison Arts building. 

Of course, Ingersoll's attorney, Jan Geht, (apparently forgetting whose name was on the mortgage) blamed Mitten for the default, telling the Bay City Times “the building was foreclosed on because Bay City Academy wasn't making its rent payments.”

Lynch's free ride began just days after Ingersoll abruptly stopped making his monthly $13,808.07 mortgage payments to Chemical Bank on August 21, 2015, triggering a default and a July 12, 2016 foreclosure notification.

If you're a sentient being, you're likely making a connection.

The cascade of financial crapola rolling out of the Steven Ingersoll scandal hasn't stopped, even after the kingpin of a gang of charter cheaters was sentenced to 41 months in federal stir.

And nothing irks me more than a schnorrer. 

What exactly is a schnorrer? 

The best definition I found for the Yiddish term “schnorrer” comes from Wikipedia. “The English usage of the word denotes a sly chiseler who will get money out of another any way he can, often through an air of entitlement. A schnorrer is distinguished from an ordinary beggar by dint of his boundless chutzpah.” 

(Not to be confused with a “gonif”, of course.)

After months of dancing around the truth like chubby stripper, Mitten Educational Management's Lynch admitted the company that's managed the Bay City Academy since May 2015 was getting a free ride from Steven Ingersoll—to the tune of $340,346...or was it $226,931?

You'd have to pore over the pages of the Bay City Academy's June 30, 2016 financial statement to find this list of budgetary highlights on page 8, detailing two seemingly contradictory statements about a $340,346 budget savings coupled with a startling $226,931 for “In-kind rent income”.

If you read this carefully, you'll likely be confused, as there was no explanation of the two figures anywhere else in the report.  (Don't look away like you did in math class to avoid getting called on!)

In-kind contributions are known as donations to a company that affect its assets. These contributions can be recorded into QuickBooks using a journal entry. You'll need to have a few different accounts already set up before recording the transaction, but once recorded, you can track contributions.  Using journal entries, you can use the fair market value to track the overall value of in-kind contributions your company receives.

It appears that the Bay City Academy had budgeted roughly $340,00 in rent payments for the 2015-2016 fiscal year, a budget that may have earmarked $60,000 in annual rent for the Mancelona building housing its North Central Academy campus, an expense that was unnecessary after it was waived by U. S. National Bank Association.

On July 14, 2016, U. S. National Bank Association, the trustee of a $2.8 million municipal bond issued August 1, 2001 on behalf of the defunct Concord Academy-Antrim, held a public conference call with Mitten Educational Management's Michael Randel regarding the building currently housing Mancelona's North Central Academy.

The building lease expired on July 31, 2015, and was not formally extended, although the Bay City Academy continued to occupy the building rent-free. 

According to documents filed by U. S. Bank, the Bay City Academy agreed to “occupy, protect, insure the premises” through the conclusion of the 2015-2016 school year. 

During the July 14, 2016 phone discussion regarding the Bay City Academy's finances, Randel asserted the charter school was left in such a pitiable financial position by Ingersoll's Smart Schools Management, which Randel euphemistically said “overspent”, that it could not afford to pay any rent during the 2016-2017 year. 

A determination was made by U. S. Bank to allow the Bay City Academy to occupy the Mancelona building through the end of the current school year in return for heating, insuring and maintaining it. 

So would that $60,000 be considered a gift in-kind to the Bay City Academy? 

Could be, as the crumbling charter school is a Michigan domestic non-profit corporation—owned by Steven Ingersoll.

Let's examine another scenario: Ingersoll owns the Madison Arts building, defaults on its USDA-backed mortgage, allows the son-in-law of his business partner, Mark Noss, to use the building without paying rent, which then allows Ingersoll to write off the $250,000 fair market value of that free rent as an in-kind donation and Lynch's company to keep larger slice of the Bay City Academy's shrinking financial pie as its management fee.

Of course, that scenario only works if you're actually filing tax returns and paying taxes, which we know Ingersoll hasn't done for at least four years.

The official “lender’s transcript of account” for Steven Ingersoll's USDA-backed loan guarantee reveals he began making regular mortgage payments (not the interest-only payments he made during the project's construction phase) on September 13, 2011, making his final payment on August 21, 2015.

Now that the Madison Arts building will officially be back in the hands of Chemical Bank on February 27, 2016 (unless Deborah and Steven Ingersoll cough up the $435,662 owed by the duo), the bank will file a claim with the USDA, requesting payment of the $1,441,600 guaranteed portion of the loan.

But, hey, all is not lost!


According to a February 4, 2011 attachment signed by Ingersoll, any loss paid to Chemical Bank by the USDA is a federal debt owed by guarantor Ingersoll:

“Guarantor acknowledges and agrees that any loss claim paid by the Agency on the Note shall be a Federal Debt owned by Guarantor up to the amount in paragraph 1. [NOTE: $1,802,00.] 

Guarantor agrees to immediately reimburse the Agency for the loss claim. The Agency may use all remedies available to it, including those under the Debt Collection Improvement Act, to recover the Federal Debt from the Guarantor. The Agency’s right to collect from the Guarantor is independent of the Lender’s rights to collect under the Note and will not be affected by any release by the Lender. Any Agency collection under this paragraph does not need to be shared with the lender.”

Yeah, like that's going to happen! 

Welcome to Michissippistan, where tax fraud makes you MORE qualified for public funds!