Bates Area Civic Association

Value_SalesPrice

2011-2012_annual_financial_audit_(atm)(communacadem)

Just a little history. DC sold the Armstrong Building to CAPCS for $900,000 (tax assessed property value is over $20 Million) and in addition provided a $25 Million Bond to CAPCS (see draft of 2011-2012 annual financial audit), below is an insert from pages 11 and 12 of the

NOTE 7 DEFERRED CHARGES

Costs incurred in connection with the issuance of $25 million Revenue Bonds

(Community Academy Public Charter School, Inc. Issue), Series 2007 by the

Government of the District of Columbia and a loan of $3 million by Eagle Bank

to finance the acquisition and renovation of the historic Armstrong School

building (located at 100 P Street Northwest in Washington, D.C.), are capitalized

and amortized using the effective interest method. These capitalized costs as of

June 30, 2012 and 2011, consisted of the following:

2012 2011

Costs $ 3,754,862 $ 3,754,862

Less: Accumulated

amortization (688,181) (548,936)

Deferred charges, net $ 3,066,681 $ 3,205,926

Amortization expense was $139,245 for each of the years ended June 30, 2012

and 2011.

NOTE 8 NOTES PAYABLE

On May 1, 2007, the School signed an additional note with the District for the

issuance of $25 million in Revenue Bonds (Community Academy Public Charter

School, Inc. Issue), Series 2007 to finance the acquisition and renovation of the

historic Armstrong School building located at 100 P Street, Northwest in

Washington, D.C. The building is used for classrooms and administrative offices.

COMMUNITY ACADEMY PUBLIC CHARTER SCHOOL, INC.

NOTES TO FINANCIAL STATEMENTS

June 30, 2012 and 2011

– 12 –

NOTE 8 NOTES PAYABLE (Continued)

The note required the School to make a deposit to restricted accounts for the

periodic payment of bond interest and the retirement of bond principal. The bonds

are secured by land, building, and certain revenues. The term of this bond is for

thirty years at an interest rate of 4.5% per annum on $4,200,000, 4.75% per

annum on $7,930,000, and 4.875% on $12,870,000. The note matures on May 1,

2037. As of June 30, 2012 and 2011, the principal balance was $23,540,000 and

$24,015,000, respectively. The School had $951,814 and $978,814 in restricted

cash and cash equivalents at June 30, 2012 and 2011, respectively.

On November 14, 2008, the School entered into a note with Eagle Bank. The

$250,730 note was earmarked for the purchase of a utility truck and a security

system. The term of this note is for five years at a 6.5% interest rate. As of June

30, 2012 and 2011, the principal balance was $82,704 and $134,248, respectively.

On July 29, 2009, CAPCS signed an additional $3,000,000 note with Eagle Bank.

The note was the result of the restructuring of pre-existing debt requiring monthly

interest payments only on one portion of the loan through the maturity date. The

loan was earmarked for the completion of the build-out to the second and third

floors of the historic Armstrong School building, located at 100 P Street,

Northwest in Washington, D.C. The remaining portion of the loan had a variable

interest rate of 2% above the prime rate. This variable rate was no less than 6.5%.

The note required the School to fund an interest reserve account with an initial

minimum balance of $500,000 and deposit $105,223 quarterly into the principal

reduction escrow account. These amounts totaling $1,706,886 and $1,285,994 as

of June 30, 2012 and 2011, respectively, are included in the restricted cash and

cash equivalents balance in the accompanying financial statements.

The principal balance on this note was $1,367,907 and $2,540,025 at June 30,

2012 and 2011, respectively.

auditor’s report.