Like a row through a sewer in a glass-bottomed boat, it's crystal clear that the road apples bobbing below are winking back at you in derision — that is, if you believe that contemptuous mockery and ridicule can come from something that sticks to your hiking boots.
In the second half of Miss Fortune's examination of the Bay City Academy's precarious financial situation, I'll focus on the flypaper-like relationship with its soon-to-be incarcerated landlord, Steven Ingersoll, and his exorbitant rents. (You can catch up on the first installment at this link.)
And I'll ask a serious question — one that literally no other media source is asking — why is convicted stalker Patrick Cleland still on the Bay City Academy payroll...and what secrets could he spill?
Finally, will the budget figures in the Bay City Academy's expected deficit elimination plan resemble cafeteria vegetables — cooked beyond recognition?
First, let's look at how the Bay City Academy arrived in Deficit Town: via the Steven Ingersoll Express.
Regular readers of this blog will recognize same unethical habits — prepaid management fees and bogus “cash refunds” that went unpaid, sitting for years on the books as “receivables” from the management company — Steven Ingersoll employed during his multi-million dollar plunder scheme at the Grand Traverse Academy.
And it appears that the Bay City charter school's board members are as willfully impotent and sympathetic as those in Traverse City.
But let's stop talking in code.
The Bay City Academy's $1.3 million dollar deficit is not a “budget shortfall” or a “negative amount”, it's a loss. As of June 30, 2015, the Academy's current liabilities exceeded its current assets by $1,374,477 (and the General Fund had a deficit fund balance of $1,374,477).
You'll note when you read the Bay City school's 2015 financial report (as of today, still not available on its website), auditor Weinlander Fitzhugh expressed doubt about the financial viability of the school: “As discussed in Note 13 to the financial statements, the Academy has incurred a significant operating deficit in 2015 resulting in a cash flow shortage. These conditions raise substantial doubt about its ability to continue as a going concern.”
Effectively restating financials from its first three fiscal years, and without Steven Ingersoll's trademark money sleight-of-hand, the Bay City Academy situation reminds me of Warren Buffett's famous comment: you only find out who is swimming naked when the tide goes out.
And the tide's done gone out.
While it's true that the “debt is a hangover of what has happened here”, it happened with the apparent approval of the Bay City Academy's Board of Directors.
Headed by longtime Ingersoll crony (why does this sound so familiar?) Craig Johnston, the board voted to approve every move Ingersoll made, from budgets to the annual financial report.
Did anyone ask why the so-called rebates were never repaid?
And was there no one who knew that Ingersoll was not allowed to prepay his management fee in one lump sum?
Yes, but they likely just looked the other way.
The “irregular expenditures” may have stopped — but the money will never be recovered.
Make no mistake in assuming that Steven Ingersoll is “no longer part of the school in any way”. With a board headed by the same crony who watched this Titanic sink (Craig Johnston) and the son-in-law (Brian Lynch) of another crony (Mark Noss) heading a hastily-formed management company, the fortunes of Ingersoll and the Bay City Academy are inextricably bound.
The Bay City Times article throws unwarranted shade at the Essexville-Hampton Public Schools, erroneously claiming that district dug itself “out of a $600,000 hole through wage and benefit cuts.”
The Essexville-Hampton district finished the 2013-14 school year in deficit of approximately $90,000. That deficit was projected to grow to nearly $600,000 if nothing was changed during the next year.
Unlike the Bay City Academy, which reacted only after the Michigan Department of Education interceded and demanded that the stumbling charter school file a formal deficit elimination plan, Essexville-Hampton filed a timely plan that included concessions made by every single employee in the entire district.
Would you like to know how I know those facts?
How’s that for transparency?
Compare that to the Bay City Academy, which still has not made its 2015 financial report publicly available on its site, and maintains “the district is not in deficit, therefore, there no deficit elimination plan is in effect.”
However, strangely enough, I do agree with Board President (and Ingersoll lackey) Craig Johnston’s call for a name change: “Changing the name tells the public what we already know," Johnston said in the November 20, 2015 Bay City Times article. "We are light years ... different than what this school used to be, but the public doesn't know that. We still have ties to the old guard.”
If it worked for Hitler, it should work for the Bay City Academy.
What, you didn’t know about Hitler’s dream car? Hitler proposed to build a cheap car that almost anyone could afford.
But the name given the vehicle by a subsidiary of the Deutsche Arbeitsfront (German Labor Front), “Kraft durch Freude” (Strength through Joy) didn’t roll off the tongue as easily as your average Panzer formation rolled into Poland.
And so the car we now know as the Volkswagen was renamed.
So what about Pat Cleland?
Sentenced on Tuesday to two years' supervised probation, Cleland stalked his former live-in girlfriend, who sought and received a personal protection order in Leelanau County.
And reports indicate Cleland is still employed at the Bay City Academy.
Wonder if he filed his Conviction Disclosure Form with the Michigan Department of Education?
I'm not surprised.