Saturday, May 27, 2017

THE (HALF)NAKED TRUTH: Michigan's Open Meetings Act Exempts Closed Session Meeting Minutes From Freedom Of Information Act Requests; Court Order Required For Public Disclosure

“I just feel that it’s a private matter between the board and the management company,” Noss said.
Traverse City Record-Eagle
May 27, 2017

I can't even.

Setting aside as-yet unaddressed inaccurate reporting in its May 17 article regarding the Grand Traverse Academy board's last meeting, this morning's Record-Eagle piece may have topped it.

And the biggest whopper wasn't even delivered by Full Spectrum Management's Mark Noss, who described his management contract with a publicly-funded entity in this covert manner: “I just feel that it’s a private matter between the board and the management company”

No, the biggest whopper was delivered by treasurer Samer Bourdkani, belying his ignorance of the law, in this case Michigan's Open Meetings Act.

Bourdkani said the results of the board's review of Full Spectrum Management would “eventually become public anyway”, although minutes of yesterday's closed session are exempt from Freedom of Information Act (FOIA) requests.

While it's true the board's review of Full Spectrum Management is subject to FOIA, the report's formal submission deadline is June 30, 2017, making any meaningful analysis by the public months away.

In addition, according to Michigan's Open Meetings act, minutes of closed sessions are kept for at least one year and one day following the regular meeting at which the closed session was approved, and longer if it is the subject of current litigation. 

These notes are not available to the public, and may only be disclosed if required by court order in a civil action filed in accordance with MCL 15.270, 15.271 or 15.273. 

Michigan Open Meetings Act Opinion No. 6353 provides that disclosure may not be made even if the person requesting the closed session, in this case, Mark Noss, subsequently waives or withdraws the request and consents to disclosure. 

Without minutes from the closed session, the public will never really know what was discussed, and if any deals were cut between Noss and the board.

But Bourdkani went further, sounding like a cartoon mafioso: “Some of the leadership here has asked the question and they deserve to know but on the other hand, I don’t want to air out anything that doesn’t need to be aired out. We can work it out between us,” Bourdkani said. 

In other words, dobbiamo tenerla in famiglia.

Omertà on Grand Traverse Bay, or just another cover-up?

Friday, May 26, 2017

“PROTECTING” TRAVERSE CITY STATE BANK OR EXERCISING FISCAL RESPONSIBILITY FOR STUDENTS, EMPLOYEES OF GRAND TRAVERSE ACADEMY: Will GTA Board Skip Another Michigan Finance Authority State Aid Note Pool To Lard Even More Short-Term, High-Interest Debt On Financially Distressed Charter School?

The most critical milestone in this year's Michigan Finance Authority State Aid Note loan process is the first deadline, Friday, June 9, exactly two weeks from today.

Initiating the process requires the Grand Traverse Academy submit four documents, including the qualification letter shown below. 

So there should be no earthly reason, like a badly-timed contretemps with its management company, for the board to miss the deadline this year.


Thursday, May 25, 2017


Tomorrow, May 26th, the Grand Traverse Academy board meets at 1:00pm to discuss its future, the penultimate meeting of its current school year.

One hour before that meeting is set to begin, the Grand Traverse Academy will make an $11,164.58 interest payment to Traverse City State Bank — for a $2.33 million bond issued on September 6, 2016  “to finance operating cash-flow shortfalls”.

On August 26th, just ten days before the new school year begins, the Grand Traverse Academy has to come up with the $2,341,536.74 it owes Traverse City State Bank —“by hook or by crook”.

Amid claims of fiscal irregularities, and facing an investigation by the Michigan Department of Education and the Attorney General, the Grand Traverse Academy’s plans for expansion are as dead as Greg Gianforte's political career, as board members weigh a possible management company switch.

The recent decision by the board of the Traverse City charter school to search for a new management company comes on the heels of  shrinking enrollment, putting additional financial pressure on a school still dealing with a debt overhang. That excessive debt, and the board's ten-year history of increasing short-term borrowing, is directly due to the financial wounds inflicted by the school's former manager, Steven J. Ingersoll. 

Ingersoll is currently serving a 41-month sentence in federal prison for tax evasion and conspiracy to avoid taxes.

SCHOOL BOOKS COOKED: Former Manager Admits Multi-Million Dollar Misappropriation

Local coverage of the growing financial panic at the Grand Traverse Academy, especially a May 17 front-page story in the Traverse City Record-Eagle, has persistently avoided fact-checking comments from board members, promulgating fake news. 

Choosing instead to swallow (like a killer whale with a penguin) falsehoods from the board and the head of its management company, Mark Noss, the Record-Eagle regurgitates what it's told, publishing those falsehoods as fact. 


And until this morning, I assumed its reporters didn't bother to check facts — but I was wrong.

Early this morning, a spokesperson for the Michigan Treasury Department confirmed in an email that the Treasury had indeed provided the Traverse City Record-Eagle with the Grand Traverse Academy's Michigan Finance Authority State Aid Note loan borrowing history on May 17, the day the Record-Eagle's “GTA seeks $2.3M loan” story appeared online.

However, even though the newspaper received the same history shown in the chart above, it's reporter still chose to describe a ten-year cycle of borrowing, retiring debt, and subsequent borrowing as “a decade-old debt”, implying it was a lump sum refinanced annually. 

That is untrue, as the Michigan Finance Authority requires State Aid Note loans to be repaid within a year.

As of today, the Record-Eagle has not retracted or corrected its May 17 article. 

The article chose not to counter Mark Noss's fatuous assertion the school goes three months without any money driving into a new fiscal year.

While Michigan school aid payment dates do not coincide with a school's fiscal year (July 1-June 30), the assertion there's a three-month suspension of cash flow is deliberate misinformation.

As you can see from the official 2016-2017 Michigan school payment schedule below, payments began in October and run through August. 
The Michigan Finance Authority's state aid note loan program is structured to front-load a portion of a school's aid payment for a subsequent school year in August, providing an advance for the upcoming year along with the final payment for the current year. 


And what to make of the comments attributed to board members Samer Bourdkani and Lesley Werth? They're either too stupid to tie their own shoes, or are part of a deceitful plan to convince you that up is down, and down is up.

Take Bourdkani, a CPA and the board's treasurer, and this comment: “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.”

Bourdkani must have forgotten he'd attended a special board meeting on August 30, 2016, where he was one of four board members (Bourdkani, Piche, Drilling and Rogers) who unanimously approved a resolution to issue a $2.33 million State Aid Note, borrowing the money from Traverse City State Bank.

Having trouble remembering? Maybe this will help, Samer (your name's right there on the top line).

Although Lesley Werth skipped the August 30, 2016 meeting, her signature appears on the official State Aid note filing, issued on September 6, 2016.

You should have that in your files, Lesley, so you won't need to ask Mark Noss.  


And Noss, twisting in the wind during this Kabuki theatre performance, the supposed search for a new management company, clearly knows this is a joke. 

Noss, and every board member, knows the $2.33 million loan, with a looming balloon payment, was issued by Traverse City State Bank — the financial institution Noss proclaimed needed to be “protected” in this 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.) 

Mark, we see you're still protecting Steven Ingersoll, and not just Traverse City State Bank.

Demonstrating exactly where his loyalty resides, Noss cravenly asserts Traverse City State Bank is “not happy with us right now”.

I'll leave analysis of that statement to Dr. Freud.

If anyone wants documents supporting story, I've published every one associated with the Grand Traverse Academy/Traverse City State Bank $2.33 million loan at these links: Part 1 and Part 2. The documents were provided by the Michigan Treasury department as a result of my Freedom of Information Act request.

Better yet, ask the Traverse City Record-Eagle why it's suppressing the truth, and ask Mark Noss and the members of the Grand Traverse Academy board why they're all lying.

Tick-tock, tick-tock.

Only 93 days until that $2,341,536.74 balloon payment is due at Traverse City State Bank.