}

Tuesday, October 10, 2017

I JUST WANT TO BORROW ENOUGH MONEY TO GET OUT OF DEBT! Michigan Treasury Security Report Reveals Grand Traverse Academy Borrowed Millions To Pay Off Traverse City State Bank; $1.5 Million Balloon Payment Looming In August 2018



THE FOLLOWING STATEMENT IS UNTRUE: “If we don’t pay the state aid to Traverse City State Bank, they’re allowed to intercept our state aid coming in from the state and take it until the (debt) is satisfied,” said board treasurer Samer Bourdkani. “Basically, our immediate priority is to make sure we can secure this and get this going.” 

Traverse City Record-Eagle
August 6, 2017

HERE'S THE TRUTH: THE GRAND TRAVERSE ACADEMY BOARD HAS TO APPROVE A RESOLUTION FOR AN INTERCEPT AND SEND A FORMAL REQUEST TO LAKE SUPERIOR STATE UNIVERSITY: Section 2.04. Academy Board Requests for Direct Intercept of State School Aid Payments. If the Academy Board directs that a portion of its State School Aid Payments be forwarded by the Fiscal Agent to a third party account for the payment of Academy debts and liabilities, the Academy shall submit to the Vice President of Finance for the University and to the University Charter School Office: (1) a copy of the Academy Board’s resolution authorizing the direct intercept of the State School Aid Payments; and (ii) a copy of a State School Aid Payment Agreement and Direction document that is in a form acceptable to the Fiscal Agent.
 At a June 30, 2017 “special meeting”, the Grand Traverse Academy’s board of directors approved a “Resolution Authorizing A Line Of Credit For School Operations”, ostensibly to cover cash flow shortages in the Academy’s General Fund. 

Four board members approved the Resolution (Samer Bourdkani, Mike Drilling, Lea Piché and Lesley Werth; Mike Rogers was absent), which authorized the Academy to obtain a line of credit from a “private financial institution to secure funds for school operations”. 

The loan amount was capped at $2,335,000, but the money was not used for cash flow shortages.

Instead, the Grand Traverse Academy’s board earmarked the new loan to fulfill its outstanding $2,341,536.74 obligation to Traverse City State Bank. 

The Michigan Finance Authority 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) also be term-limited to 12 months. 

In addition, the loan in question, a $2.3 million SAN loan underwritten by Traverse City State Bank, was authorized by the Grand Traverse Academy board during an August 30, 2016 special board meeting. 

An August 9, 2016 Cash Flow Projection, created by Mark Noss for the fiscal year ending June 30, 2016, aggressively predicted a 1,250 student count during the 2016/2017 school year. 

To make matters worse, Grand Traverse Academy superintendent Susan Dameron publicly stated in the last few months that she expected up to 1,200 students to enroll in the 2017-2018 school year.  

A more conservative estimate set the population at 1,160, roughly the Grand Traverse Academy's tally from the official Michigan Spring 2017 school count. 

But only a little more than 1,100 students actually enrolled. 

Michigan will provide the Grand Traverse Academy a foundation allowance of $7,631 per student in FY 2018. 

With 65 fewer students, that means the district will get roughly $496,015 less than it originally budgeted for this school year. 

That loss of students compounded the Traverse City charter school’s cash flow problems. 

Coming tomorrow, a full report how the Grand Traverse Academy borrowed millions to repay millions to Traverse City State Bank...and will end up owing millions!


2 comments:

  1. Thank you, Miss Fortune, for doing this service of keeping people aware of what is going on. Local media (newspapers, mlive, and TV) should be covering all this. Hope you get compensated for all your work...with a movie or national TV coverage. It would be great if 60 Minutes, 20/20 or 48 Hours hired you and rewarded you. Make a documentary of all this and pay you for it.

    ReplyDelete
  2. Thank goodness you have the facts and are actually reporting the facts. Bravo!

    ReplyDelete