Nampa’s deficit grows by another $1.2 million

Seemingly, all the surprises in the Nampa School District these days are unpleasant ones — with big dollar figures attached.

On Tuesday night, the school board received $1.2 million worth of bad news. An accounting error will require the district to monitor its cash flow on a daily basis for the next few months. It may force the district to borrow again next year to stay out of the hole. And this news comes as the district faces some difficult and personal budget decisions, shedding at least 40 teaching and administrative jobs.

The $1.2 million error involves money the deficit-riddled district collected for building bonds. From 2004 to 2008, the district kept $1.2 million in property taxes and state bond equalization money in its general fund, rather than moving it into a fund used to pay off bonds.

By all accounts, this was not a criminal or willful act. The money never left district coffers, and was used to finance day-to-day district operations — but proceeds from a voter-approved bond issue are supposed to be spent on building projects. So this means the district must now take $1.2 million out of its general fund, and put it back into repaying bonds.

The district will make this $1.2 million payment, but it will take some maneuvering to do so.

Nampa will borrow up to $6.3 million against future payments from the state, and use this line of credit to stay afloat. The district was already planning on this short-term borrowing, and received a judge’s approval for the plan in February, but now it will use $1.2 million to pay its bond fund.

The district may not have to borrow the entire $6.3 million, district financial officer Michelle Yankovich said after Tuesday night’s meeting. But anything the district borrows must be repaid by Aug. 15, the same date it receives a payment from the state, and the district will owe 2.1 percent interest. (A 2.1 percent interest rate on $6.3 million would come to $132,300.)

Thomas Michaelson mug
Thomas Michaelson

Yankovich believes the $6.3 million will be enough to keep the district afloat, while it waits on August and October payments from the state. But the district will monitor its bank accounts daily, she said. And interim Superintendent Thomas Michaelson said the district might have to borrow again next year to cover day-to-day costs.

Tuesday’s news was just the latest financial setback for the Nampa district, which has seen its deficit grow to a projected $5.1 million.

School Board member Bob Otten, one of two incumbents facing opposition in the May 21 election, said this latest accounting “minefield” illustrates that past district leaders simply didn’t know what they were doing. “I am just frustrated with this and hope this is the beginning of the end.”

Said Michaelson, hired in November to help guide the district out of the red, “I hope that this is the end, not just the beginning of the end.”

But for the district and the board, the tough decisions won’t end any time soon.

On Tuesday, Michaelson unveiled a plan to reduce 4 ½ full-time administrative positions. Most of the cuts will occur at the elementary school level; the district can eliminate a principal’s job with the closure of Sunny Ridge Elementary School, and two building administrators’ jobs will be eliminated. Cutting the 4 ½ positions should save about $300,000.

Still looming is a plan to eliminate 40 to 50 teaching positions. This is a 5 percent cut, and Idaho’s so-called “use it or lose it” law allows cash-strapped districts to siphon up to 9 percent of their salary money into daily operations.

Michaelson will unveil his plan for cutting teaching jobs at the board’s next meeting —  which will be held May 14, one week before the board elections.

More reading: The Nampa School Board gets a round of applause for rejecting another outsourcing plan. Details on the EDge blog.

Kevin Richert

Kevin Richert

Senior reporter and blogger Kevin Richert specializes in education politics and education policy. He has more than 30 years of experience in Idaho journalism. He is a frequent guest on "Idaho Reports" on Idaho Public Television and "Idaho Matters" on Boise State Public Radio. Follow Kevin on Twitter: @KevinRichert. He can be reached at [email protected]

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