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Sunday, August 6, 2017

ONCE AGAIN, TRAVERSE CITY RECORD-EAGLE SCREWS THE GTA DEBT POOCH! August 6th Story Erroneously Labeled Grand Traverse Academy's Looming $2.3 Million Traverse City State Bank Loan A “Decade-Old Debt”. For The Love Of Everything Holy, Please Get This Right!


“The decade-old loan was first handed to the school by the Michigan Finance Authority to help fill cash shortfalls when per-pupil, Michigan Department of Education funding dries up in the summer months. The short-term borrowing helps cover unfunded operational expenses but state law requires it be paid back within one year. 

Academy officials have continued to carry the debt by chipping away at small portions and seeking a new loan to pay off the previous one each year. Traverse City State Bank stepped in to refinance the debt in prior years but their willingness has since waned, officials said. And the bank wants its cash back by October.”
Traverse City Record-Eagle
August 6, 2017

Noooooo!

It's not a “decade-old loan”, Record-Eagle!

The $2.3 million loan financially hobbling the Grand Traverse Academy was issued to the charter school by Traverse City State Bank on September 6, 2016 and it's coming due in 20 days.
Oy, gevalt! 

I thought the series of stories I wrote in May, featuring exclusive documents from the Michigan Finance Authority, cleared this up.

But I was wrong...and so was the reporter who penned the dodgy piece that popped up this afternoon on the Record-Eagle's site. 

Let me tell you one more time: if didn't know better, after reading the Record-Eagle article you'd be left thinking the GTA has been refinancing the same SAN loan for ten years, and the Traverse City charter school was singled out for harsh treatment by the Michigan Treasury Department. 

Neither contention is true. 

The Michigan Finance Authority (as outlined in Michigan's Revised School Code) requires SAN loans funded by the Michigan Treasury be repaid not later than 372 days from from date the note was issued, and has for years. 

The statute authorizing state aid notes also requires funding from any other source (like municipal bond underwriting and placement firms and a certain Traverse City bank) also be term-limited to 12 months. 

In addition, the loan in question, a $2.3 million SAN loan, was authorized by the Grand Traverse Academy board during an August 30, 2016 special board meeting. It is the loan that requires refinancing by the board, as funds are not available to make a $2,341,536.74 balloon payment to its lender (which is Traverse City State Bank, not the Michigan Finance Authority) in ten days. 

No carrying the debt and chipping away at small portions, like a blind chicken—each SAN loan funded by the Michigan Treasury is legally required to be repaid 372 days from the date the note was issued.

Accountant Steve Peacock, sounding like he's relying solely on Grand Traverse Academy board members and reports from the Record-Eagle to fill in his colossal financial blanks (will someone please send him a link to my blog?), told board members: “This is going to be a big press on cash. Because of the health of the school, we’re handcuffed.”

Handcuffed?

Yeah, you're handcuffed, all right.

Handcuffed by someone who took a perp walk back on April 9, 2014, that's who!

Beginning with the fiscal year ending June 30, 2009, the Grand Traverse Academy's former manager, convicted felon and current resident of Duluth FPC, Steven Ingersoll, began to borrow massive sums through SAN loans on behalf of the school, spurred by the impact his embezzlement was beginning to have on the Academy's throttled cash flow. 

Ingersoll established a pernicious pattern the board remains locked into today: an addictive reliance on balloon payments and new notes every year. 

For example, the Academy had two short-term notes payable at the end of the fiscal year ending June 30, 2009 totaling $3.2 million dollars. At the end of June 2009, there was still $2,000,000 yet to be paid. 

By the end of the fiscal year ending June 30, 2011, the Academy had two short-term notes totaling $5,587,294 (with a $5,537,219 principal and $50,076 accrued interest). 

Starting in May of 2011, the State of Michigan began taking payments for a $2.0 million State Aid Anticipation Note with the Michigan Finance Authority directly out of state aid payments prior to distributing the remaining funds through Lake Superior State University and Wells Fargo. 

And former manager Mark Noss (left), twisting in the wind during this Kabuki theatre performance, must be laughing like a hyena at this joke. 

Noss, and every Grand Traverse Academy board member warming a seat during the fiscal year that ended on July 30, 2017, knew the $2.33 million loan, with a looming balloon payment, was issued by Traverse City State Bank — the same financial institution Noss proclaimed needed to be “protected” in a February 21, 2017 email to the Grand Traverse Academy board. 



In addition to Noss assuming the obligation to repay Steven Ingersoll's Smart Schools Management Traverse City State Bank $925,000 line of credit debt, the bank also holds the mortgage on Noss' home and was set to provide a $3.1 million construction loan to his MDN Development, LLC for the expansion of the Grand Traverse Academy's math and science center.

You know, the center Noss would have built, rented to the GTA and then sold to the school at a $1.8 million dollar profit!

If you'd like the in-depth examination of the GTA's finances I reeled out in May (something you won't find in the Record-Eagle), here are those stories:

May 17, 2017: “By Hook Or By Crook
May 18, 2017: Putting The ‘Ass’ In Ascertain
May 23, 2017: My Beautiful Balloon Payment
May 24, 2017:  Like A Snake Eating Its Own Tail, Part 1
May 24, 2017:  Like A Snake Eating Its Own Tail, Part 2
May 25, 2017: “From The Amazingly Inaccurate Newspaper Story Department

4 comments:

  1. We're so glad you are always on top of things, Miss Fortune. You always do your homework; shame the Record-Eagle isn't doing theirs!

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  2. Looks like Noss took the "line of credit" from Ingersoll's reigns because he had to and also because he saw this cash cow academy running away from the Ingersoll/Noss team. The real motivation whether it was with Ingersoll's Smart Schools or Noss's Full Spectrum was and is always GREED. There is no ounce of philanthropy or service in either one's IVL (I Value Loot) genes.

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  3. Wonder if they speak to one another anymore. We'll have to check if the Grand Traverse Academy also known as the Grand Theft (of Taxpayer Money) Academy is still using (and paying!) for the IVL bullcrap curriculum that Ingersoll and Noss co-owned. Will have to check the school's (if we can call it that) website.

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    Replies
    1. Just checked the GTA's website and IVL (I Value Loot) is still part of their curriculum. Wonder how much they are paying for that alleged curriculum or if they simply forgot to take it off their website homepage. What a joke of an explanation - "Founded on understanding of timing and sequences of brain development..." What a bunch of bull. There is timing involved however - timing of money flowing from one management company to another, from one crook (Ingersoll) to another (Noss). The Grand Theft Academy was paying $150,000 to both Ingersoll and Noss...$300,000 IVL smackers a year. The school's new management company and board better revisit that bunk curriculum and needless expense and do away with it.

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