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Monday, August 7, 2017

GRAND TRAVERSE ACADEMY VIOLATES BOND COVENANT! General Fund Balance Sinks To New Low

GTA'S LONG HISTORY OF BOND COVENANT MONKEY BUSINESS BEGAN IN 2007...THE FIRST YEAR! 

Do you remember the lubricious paean to Steven Ingersoll's pseudo-sainthood, 2014's “History of Grand Traverse Academy”?

That document helped spawn the “philanthropist or thief” meme, and revealed a whopper: 

“There were times when the resources were just not there. So Smart Schools basically pledged or rebated that money back, saying ‘at some point in time we will repay what we’re calling a prepaid expense.’” 

This excerpt, taken directly from the History document, portrays Ingersoll as a philanthropist, one willing to dig into his own deep pockets to save the day: 

“In 2007, after two years of work, Dr. Ingersoll arranged for an advanced refunding of the 2002 building finance agreement. This resulted in a vast improvement of the Academy’s debt structure dropping interest rates from 9.5% to 4%. 

This allowed the high school, early childhood wing and second gymnasium to be built. 

The new bond structure required GTA to carry a minimum fund balance of approximately $650,000. 

At the time the fund balance was $184,000. SSM and Dr. Ingersoll deposited $494,000 into GTA’s account to bring the Academy’s fund balance into bond covenant compliance.
That 'History' excerpt is a bundle of lies, so I will reveal the truth: buried on page 12 of the 142-page Grand Traverse Academy $16,200,000 Series 2007 Bond Issue's Official Statement is this gem: 

“The Academy expects to comply with the above-described covenants in 2008, but will not comply at the time of the issuance of the bonds.” 

Hmmm?

Then why the rush to sign a promissory note with the Grand Traverse Academy board before June 30, 2007, as Ingersoll insisted (under oath) to Assistant U. S. Attorney Janet Parker on December 8, 2015 during his sentencing hearing? 

And where did that money really go? 

(In the Grand Traverse Academy's 2008 audit, covering the fiscal year that ended June 30, 2008, Ingersoll attributed the increase of $505,714 in fund balance from $184,235 in 2007 to $689,949 in 2008 to “staying on budget and achieving an excess of revenues over expenditures for the period”, not an Ingersoll sugar daddy trick. Look it up for yourself: it's there on page 10. )

After discussing early financing for the construction of the Grand Traverse Academy, under direct examination by his attorney, Jan Geht, revealed he covered his end on that $474,000 transaction: 

A. So I immediately began searching for a better deal and finally in 19 -- or in 2007 we were able to achieve through AG Edwards a bond offering that brought our interest rate down to just south of 4 percent. And at the time it was the second best pricing of any charter school in the nation, and that helped us substantially. We had grown from the inception rather steeply. Traverse City State Bank had funded additional construction projects, and ultimately we achieved the bond deal in 2007, and at that time, just before the bond deal was closing, it was the morning of a big conference call with the investment houses that were buying the bonds, I suffered a heart attack, and the bond deal closed while I was in the hospital. 

And they actually had to come and, you know, certify that I was alive as part of the bond disclosure; but, anyway, I recuperated for a couple of months and then I started -- when I was feeling better I started reading the bond document and I realized that there was -- and I hadn't realized this before, that there was a debt service -- 

THE COURT: Covenant. 

A. -- covenant and it defined the level of fund balance that the Academy had. There was a formula that determined what that was, and the Academy did not have that level of fund balance, and so that was May of 2007. 

The covenant came into place July 1 of 2007. I had two months and needed a half million dollars -- well, about $400,000. So I went to Traverse City State Bank and personally borrowed a half million dollars and wrote a check to Grand Traverse Academy for $474,000, and at the same time we entered into a promissory note coming from the Academy to Smart Schools -- Smart Schools did -- I say I did this, Smart Schools did this; sole owner of Smart Schools. 

But after pushing the Grand Traverse Academy to sign a promissory note before the end of the fiscal year ending June 30, 2007, (the note was signed on behalf of the board by Lesley Werth on June 8, 2007), Ingersoll borrowed a half million dollars in the form of a line of credit from Traverse City State Bank...but didn't deposit that money in a Grand Traverse Academy account during the 2007 fiscal year.

Nope. 

It appears that Ingersoll waited until the next fiscal year, ending June 30, 2008...or did he?


So why the rush to borrow the money in 2007, then?

And why does the Grand Traverse Academy's History document promulgate the fiction that Ingersoll rode in on a $474,000 horse and saved the day?

For the same reason a dog licks his balls: because he can.

Tomorrow, the years of pinched austerity facing the Grand Traverse Academy, the looming default on an already infamous $2.33 million Traverse City State Bank loan, and why the Michigan Finance Authority won't provide the Grand Traverse Academy with “assistance to find another private lender for a possible two- or three-year payoff plan”. 

9 comments:

  1. It is riduliculous that the Record Eagle doesn't print an honest interpretation of what is really going on at GTA. They are really doing a disservice to the community. It is quite obvious that the bank, the Michigan Department of Education, Lake Superior State University, the board members and the superintendent(especially) are in on this whole corruption. It is time for the state to take over this school and get it back in order or shut it's doors and support the public schools in the area. There isn't one thing that doesn't stink about this. Way to go Ingersoll and Noss rode the free money for a long time, well now it's time to clean house and make these two follow the path in life they have chosen...convicted felons.
    Come on people do the right thing for your children and your community.

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  2. What a bunch of crooks, boy if I were the Record Eagle I'd be investigating this story this could be a real paper seller.

    ReplyDelete
    Replies
    1. If the Record-Eagle finally did some real investigation and journalistic homework, they could be true heroes for exposing the corruption and misuse of taxpayer money. Maybe they could sell their story to 60 Minutes or 20/20. Maybe they should start seeing 20/20 for a change.

      Delete
    2. What am I, chopped liver in an olive jar? F**k the Record-Eagle! I've already done the "real investigation and journalistic homework" you're suggesting that fishwrapper undertake.

      Maybe I'll just sell my story to 60 Minutes or 20/20...hell, even Megyn Kelly!

      Delete
    3. Real professional language for a "journalist", Miss Fortune.

      Delete
    4. Why thank you, Anonymous. Next time you should comment under your own name.

      Delete
    5. Oh ghee, must be the "Misinformation Record Eagle" commenting on the art of journalism writing. Too bad your rag doesn't give the public the truth.

      Delete
    6. Nah nah nah nah nah! You seem to have understood that language perfectly anomalous you must definitely be one of Ingersoll rats no more big cheese for you comprende!

      Delete
  3. You are not chopped liver, Miss Fortune. We would love it if you sold your story and research to 60 Minutes 20/20 or 48 Hours and were finally rewarded for all the hard work you've been doing and continue to do. A comment was simply made to the August 8th remark: "If I were the Record-Eagle I'd be investigating this story; could be a real paper seller." It simply meant if the Record-Eagle were as diligent as you, they'd have the facts straight and help their community. No harm was meant to you; rather, it was a compliment to your tenacity and hunger for truth and justice.

    ReplyDelete

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