Bank, charter school at odds over $1.2 million loan
EDWARDS – A national bank is accused of violating Colorado’s Constitution by giving a local public school a multiyear loan.
The bank called the accusation “misguided.”
Wells Fargo loaned Stone Creek Charter School $1.2 million six years ago when the school opened, according to documents obtained by the Vail Daily.
Stone Creek is a tax-funded, public, independent charter school located in Edwards. Because the loan runs over several years, Wells Fargo violated Colorado’s TABOR Amendment that prohibits tax-funded government entities from taking on multiyear debt, said Ron Wolfe, chairman of Stone Creek’s board of directors.
Stone Creek’s legal counsel advised the school to stop making the payments, and it paid its last installment in August, Wolfe said.
Wells Fargo should know who it’s loaning money to, and what the laws and regulations are, Wolfe said. No one associated with the school was around when Wells Fargo made the loan, Wolfe said.
“The fact of the matter is that the loan is legally invalid,” Wolfe said. “It’s Wells Fargo’s fault and liability. We are not paying them any more against an invalid loan, on the advice of counsel.”
Wells Fargo disagrees.
“I have discussed your letter with our legal counsel and have been advised that your belief that the loan is invalid, and therefore does not have to be repaid, is misguided,” said Wells Fargo’s William Stiewig in a letter to Wolfe.
The two sides are now debating about who pays whom, and how much.
The bank demanded that Stone Creek pay the outstanding balance.
Wolfe said if it goes to court, Stone Creek will ask for its money back.
“Our suit would request as rectification that they return all money we’ve ever paid them and they take the building. That’s a fair and square deal,” Wolfe said.
Stiewig wrote that Wells Fargo will “pursue all appropriate legal and equitable remedies at its disposal to enforce the terms of the loan.”
The school is trying to work out a settlement short of legal action, Wolfe said.
Accepting the bank’s settlement agreement would require Stone Creek to pay $100,000 to Wells Fargo, and $200,000 to move its modular buildings from Avon where they are now.
“We have neither the site nor the $300,000 total cost,” Wolfe wrote in a letter to Stiewig.
Stone Creek is in line for a school site in Magnus Lindholm’s Traer Creek subdivision in Avon, part of an out-of-court settlement Avon and Traer Creek are hammering out.
Stone Creek Charter School is holding classes in two locations, the Edwards Interfaith Chapel and up the road at Gracious Savior Lutheran Church in Edwards.
Enrollment dropped from around 200 students to 137 when the school was required to move from its site in Avon to Edwards. The enrollment decline meant a cut its state revenues. The school laid off its music and art teachers, and cut its administrative staff in half.
“Taken together, the elements of our situation make it impossible for us to enter into the Wells Fargo agreement and make continuing operations questionable,” Wolfe wrote.
Staff Writer Randy Wyrick can be reached at 970-748-2935 or email@example.com.
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