}

Tuesday, May 23, 2017

MY BEAUTIFUL BALLOON (PAYMENT): Grand Traverse Academy Board Facing August 26, 2017 $2,341,536.74 Balloon Payment To Traverse City State Bank For September 2016 State Aid Note Loan; $120,205 Interest-Only Payments Made No Dent In Principal

BREAKING NEWS: TCSB LOAN HAS 5.75% INTEREST RATE; MFA NOTE LOAN WOULD HAVE CHARGED 3.0% INTEREST! The Grand Traverse Academy's $2.3 million dollar outstanding loan, profiled in the May 17, 2017 Traverse City Record-Eagle, and described in the article as a “short-term loan from the Michigan Finance Authority” to cover unfunded operational expenses, was not (as the piece asserted) issued by the MFA.

The loan was made to the school by Traverse City State Bank, and the GTA did not borrow from the MFA last year (see GTA's MFA history chart below). In addition, instead of paying 3.0% interest to borrow from the state program, the Grand Traverse Academy board chose instead to pay a hefty 5.75% to Traverse City State Bank.




A Michigan Department of Treasury Security Report, received by the Department's Local Audit & Finance Division on September 14, 2016, reveals the $2,330,000 State Aid Note loan was issued to the school by Traverse City State Bank, with the GTA paying TCSB a $466.00 filing fee on September 7, 2016.

In addition, the Security Report (obtained from the Michigan Treasury department by a Freedom of Information Act request) included a schedule showing that $120,2015.36 of interest-only payments leaves a whopping $2,341,536.74 balloon payment due on August 26, 2017. 

The schedule, shown at left, shows the balloon payment is due on August 26, and that $120,205.36 of interest was due to be paid between October 2016-July 2017.

In the Record-Eagle article (previously addressed on this blog), a comment attributed to Full Spectrum Management's Mark Noss in this excerpt (The MFA, because GTA officials aren’t able to pay off the debt within one year, refuses to reauthorize the new loan, officials said. Private lenders previously willing to refinance the debt — like Traverse City State Bank — also have backed away from the charter school this year. “They’re not happy with us right now,” Noss added.) now appears even more misleading than previously judged—with Noss' intimations echoed by various GTA board members.

It was no secret, however.

A resolution was approved by the GTA board of directors during an August 30, 2016 special meeting. Lesley Werth did not attend the meeting, but the board engaged the Grand Rapids office of  Dickinson Wright to review the bond and obtain the required legal opinion.

So how did the Record-Eagle get it so wrong...and why didn't GTA board members Werth and Bourdkani contradict the fiction Mark Noss was spinning?

Anybody?

11 comments:

  1. Has the Record Eagle issued a cirrevtion, or follow up?

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  2. I JUST LOVE how you find the dirt on this mess. It is amusing that the board wants to keep handing off their money to the crooks. Do the management in house - and pay a salary - and get a real administrator. Get rid of all Ingersoll payments for materials (useless garbage) and work your way out of this mess. Or not, and send the kids back to public schools without the crooks - and make the public schools in the area better and strong with the student count.

    ReplyDelete
    Replies
    1. The irony is the so called "dirt" is publicly available information the board clearly knows exists, because it resides in their files, too!

      Why anyone thought the truth would never come out is beyond my comprehension.

      "Hey, let's lie about everything. Nobody will check, and we'll get away with saying anything we want!"

      Look at the treasurer: “This note, even though it’s interest-only, every year we try to take a little bite off it,” said Board Treasurer Samer Bourdkani. “It was at $3.3 million then down to $2.8 million. Now it’s at $2.3 million.”

      Right, bite ME why don't you.

      It's a one-year loan with a huge balloon payment--that is if you think $2.4 million is big, and I do.

      “They’re not happy with us right now,” Noss added. Sure, big talk for someone who's on the hook for a mortgage, a $900,000 line of credit debt repayment obligation assumed from Steven Ingersoll, and poking the financial bear that feeds him.

      Who are you trying to kid?

      Delete
  3. As a school district, if you can not borrow from the MFA, you are in financial trouble. Why were they even discussing another building, etc. Are these board members to stupid to realize what their financial statement and the refusal for "normal" financing means? Maybe, they need to have an accountant come in and have an honest conversation about their financial reality, their personal liabilities for fraud, and have an open, honest luck at what their stupidity may cost them personally. We already know what handing Steve and company all their funds has costs. By all logical sense, that board should have a fund balance where they no longer have to borrow money to operate. Instead, Steve is rich.

    ReplyDelete
    Replies
    1. The GTA board did not apply for MFA funding in 2016.

      Delete
    2. Did not apply? Or did not have the financial stability to qualify? From my experience with this type of borrowing, they had to much debt to the amount of state aid coming in to "qualify" for the MFA funding. You are basically borrowing against your state aid payments for the year - and appears that GTA did not have enough state aid. If you were not "fronting" the management fee, you could probably reduce the amount needed to borrow upfront for cash.

      Delete
    3. Not criminal to lie to a newspaper - the GTA board has been doing it for years directly or thru Ingersoll/Noss combination. It is only illegal to lie - when you are under a legal obligation to tell the truth. These board members appear to have memory issues, the details are not important, and keep up the bullshit until it is proven they are liars. Maybe the AG, can start to hold them personally responsible - it might help their memories get better.

      Delete
  4. So GTA didn't apply for the MFA fund, yet the Record Eagle writes an article on the front page and quotes someone that they are paying the state back? What kind of malarkey is the paper feeding people. And Noss also says that Traverse City State Bank doesn't like them. Yet it is Traverse City State Bank that is loaning money personally to Noss and also to the GTA. And the board members act like they know none of this, yet they have to sign the papers for the loans. I am appalled at everything that is going on here. The school is obviously underwater and playing the public and the Record Eagle, Traverse City State Bank,the chartering university(Lake Superior State University), the GTA admin. and board members. What's going on here are these legitimate business not looking into the facts or are they protecting Someone? I don't know but I hope it isn't the later. When is this going to explode and newspapers and everyone start looking for the truth and stop letting these guys bilk the GTA.

    Oh and let's not forget, anyone working there is laying it on thick that Noss is great. I am sure they are just afraid of loosing their jobs, who wouldn't be. That's right, teachers have gotten fired for asking questions about all of this, guess we can understand why they lost their jobs. And I guess we can understand why people are defending him, it's under duress.

    When many of these people were there back when Ingersoll was there, why do you think anything would have changed?
    Mark Noss is continuing Ingersoll's legacy of money laundering, clean house people. Safe the school for the children, teachers and community. Get to their board meetings and get answers.

    ReplyDelete
    Replies
    1. The GTA board is responsible for activity undertaken on the school's behalf by its management company, as it collectively has to approve (by resolution) each step the manager takes.

      To feign ignorance for even a moment, like select board members did in the May 17 Record-Eagle story, of financial transactions that are happening under their watch is almost criminal.

      Delete
  5. Wonder if the GTA board wants to go after Ingersoll assets now? Does Ingersoll not have any assets left they could get to fund the school? House in Bay City? Bed and Breakfast? I thought he was rolling in the money? Yet, he sticks his friend with a $900,000 note? I wish I had friends who would accept the obligation for $900,000. Wonder if Noss is regretting that decision today? Go after the money folks, force Ingersoll to cash in his assets - go after the debt he owes the school.

    ReplyDelete

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