Reply to Does anyone know the status of the Proposed BASIS Expansion

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[quote=Anonymous]The way certain items are reported was changed by recent changes in GAAP--Generally Accepted Accounting Principles. Auditors have to comply with GAAP and thus BASIS's financials look worse than they did before the change. It was pretty murky to me, but it sounded as if the changes make it harder for BASIS to meet the debt ratios imposed by its lenders. It seems to be looking for an infusion of cash from DC to make its balance sheet look better.

My impression was three-fold: one, the primary reason BASIS wants the whole hog is its own financial situation. Two, it is hoping to negotiate a better deal with DC. If it only submitted a whole hog plan, the staff would have recommended against approving it and there would have been no further chance of negotiating a better deal. Now, by creating a situation in which the Board thinks a BASIS elementary school is a good idea, there's a much improved chance that BASIS will come back with a "compromise," which won't help its financial situation as much as the whole hog would, but will be better than the plan the Board approved last night. BASIS viewed last night's meeting as a negotiation. Three, I am not convinced BASIS will walk away if it can only get the current plan. Note that DeAnna whatever said that BASIS would "probably" not go forward;she never made a definite statement that it definitely wouldn't.

So, now BASIS knows its approved for the "conservative growth" pathway and that's its floor. It's going to try to negotiate a better deal. If it can't, it may still go forward with the conservative growth pattern. It will turn to its lenders and ask for some chances in its agreements, pointing out that the shortfall will be a temporary situation and in three or four years it will have the whole hog and be in compliance.

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