NOTE 11 - Short-Term Notes 2009
The Academy had two short-term notes payable at the end of fiscal year ending June 30, 2009 totaling $3,200,000. There was a State Aid Anticipation note from the Traverse City State Bank in the amount of $1,200,000 with an interest rate of 3.75 % due by March of 2010. There was also a note with the Traverse City State Bank that had a balance of $1,303,575 which was paid off in July of 2008 through a refinancing with Fifth Third bank for a new State Aid Anticipation note. In addition to the refinanced amount of $1,303,575 another $2,696,425 was included to establish the new State Aid Anticipation note for a total $4,000,000 with a variable interest rate not to exceed 7% per annum. At the end of June 30, 2009 there was still $2,000,000 yet to be paid.
Coming later today, how the Grand Traverse Academy relied on short-term loans to stay afloat, and why that debt sank the charter school like the Titanic.
