November 2, 2016
Dan Hanrahan, Director, Office of State Aid and School Finance
Michigan Department of Education
BREAKING NEWS: Michigan's 96th District State Representative Charles Brunner speaks exclusively with Miss Fortune about the Bay City Academy's continuing deficit.
Shortly after breaking the news on this blog October 26th of the Bay City Academy's worsening deficit, I contacted State Representative Charles Brunner for his insight and help gathering additional information from the Michigan Department of Education.
While the Bay City Academy's approved deficit elimination plan projected a fall 2016 enrollment total of 425 students district-wide, an official October 20, 2016 Michigan State Aid payment report was based on 398 students. Those student population numbers were based on preliminary headcount data collected by the Bay City Academy during the week of September 12, 2016 and reported to the State of Michigan on September 23.
However, according to an email from to Representative Brunner from Dan Hanrahan of the Michigan Department of Education (provided exclusively to Miss Fortune by Brunner), the official October 2016 Bay City Academy student count was 341, significantly lower than its management company's 425 student projection — and 57 students lower than its September preliminary figure.
The Bay City Academy's deficit elimination plan (approved by the Michigan Department of Education on January 21, 2016) was based on the following student population growth targets:
Those targets are much more modest than those appearing in a February 23, 2015 Michigan State Aid Note loan cash flow projection spreadsheet prepared by Gretchen Ingersoll for the Bay City Academy. For example, the 2016/17 number was pegged at 625 students, with 700 students expected to fill the halls during the 2017/18 school year.
During our conversation this afternoon, Brunner (who famously expressed his frustration earlier this year with the Michigan Department of Education's approval of the Bay City Academy's five-year deficit elimination plan by calling the charter school owned by convicted felon Steven Ingersoll “a sorry excuse for a school”) described his search for current information.
Brunner began with the Michigan School Reform office, (yanked by Governor Rick Snyder in 2015 from the Department of Education and shifted to one directly under his control), before reaching Dan Hanrahan in the MDE's Office of State Aid and School Finance.
In a November 2, 2016 email to Brunner, Hanrahan stated the Bay City Academy's “original plan was to end the FY 2015-16 school year with a deficit of $1,205,000. Their actual deficit came in slightly better at $1,155,000. Their original plan was to end the 2016-17 school year with a fund deficit of $1,128,611. They are now projecting to end the 2016-17 school year with a slightly lower deficit of $1,074,028.”
Hanrahan insisted that the school, managed by Mitten Educational Management, LLC (owned by Mark Noss' son-in-law Brian Lynch and his business partner, CPA Michael Randel), is “still projecting to come out of deficit in the 5th year.”
If you're counting, that's roughly $16.5 million pumped into the failing/flailing charter school between the current school year through 2019/20.
However, it's unclear whether Lynch and Randel, busy realizing cost savings by reducing the number of buildings in use, slashing the salary of its principal and consolidating insurances, will reduce their own Mitten Educational Management annual management fee.
According to the Bay City Academy's June 30, 2016 financial statement, the duo paid themselves $321,802 during the 2015/16 fiscal year.