LONGMONT — When former St. Vrain Valley School District Superintendent Roger Driver and director of finance Joanne Harbert returned in November to help the district sort through its finances, they knew the job wouldn’t be easy.
Trying to figure out how the district got itself into a $13.8 million deficit — which was revealed in November — was a huge task in itself, one that continues to develop. More importantly, figuring out how much money the district currently has to work with for the 2002-03 school year proved just as challenging.
Challenging, in part, because three loan payments they weren’t anticipating came due in February.
At a March 26 school board work session, Driver and Harbert announced the district will need to pay an unexpected $575,000 in loans for energy-savings and telephone equipment.
Now, that number has increased to about $661,000 because of another unknown $86,000 lease for a copy machine.
In 1998, the district entered into an energy-performance contract with Long & Associates, an Englewood company that works to cut energy costs at buildings.
According to Rex Hartman, director of operations and maintenance, the district paid the company about $5 million to replace lightbulbs at district buildings with more energy-efficient bulbs, change ballasts and add equipment to heating and air-conditioning units to make them more efficient. To pay for this service, the district got a loan from a local bank and agreed to pay it back over 10 years.
According to Ralph Bozella, director of energy education and maintenance, the district spent $1,654,785 from July 2001 through March 2002 on utility costs. From July 2002 through March 2003 the district spent $1,508,994, a savings of about $146,000 directly related to the 1998 renovations. The leftover money should have gone to pay the existing loan, he said.
District officials could not immediately say how much money the district is saving now over 1998.
However, the 2002-03 budget did not account for the loan the district had to pay back. Also, district officials do not know if this loan was taken into account for the 2001-02 budget.
“I guess (Ken Kirkland and Walker Nielsen) kind of forgot to include these payments,” Harbert said Thursday.
Kirkland held the post of assistant superintendent of business services, and Nielsen is the former director of finance. Both left their posts after the district revealed the $13.8 million deficit.
Harbert and Driver discovered the mismanagement when the $473,000 in loan payments came due.
Bills for a color-copier purchased in spring 2002 and lease-purchase agreements for telephone equipment were discovered in the same way.
“In one way or another, Kirkland and Nielsen adjusted the budgets to not include those leases,” Harbert said.
“I am frustrated,” Driver said on Thursday. “You think you have things in hand, you expect some changes, but not all of it.”
With the possibility of a war with Iraq and the dwindling economy, Driver and Harbert also announced on March 26 that the district could see a $600,000 shortfall in vehicle-registration taxes for the current budget year.
When people buy new cars, a portion of the money they spend to register their vehicle goes to the school district. The district is expecting to receive $600,000 less during this school year than it was anticipating from these taxes.
At the March 26 work session, Driver said he did not believe this fund was mismanaged. Instead, he said, the economy and a lack of people buying new cars is the probable cause.
As Driver and Harbert continues to work this weekend on the projected 2003-04 school year budget, they are anticipating the district will receive another $900,000 less in these taxes, which it was anticipating.
Gasoline costs also have caused some worry.
“Last year at this time, the district was paying 54 to 55 cents per gallon,” said Rick Ring, custodial and transportation director. “This year, we are paying about $1.04 per gallon.”
The increase in fuel costs is related to the current conflict with Iraq, district officials said.
About every 10 days, the district gets a bill for how much it costs to fill school buses and other district vehicles, Ring said. The district operates vehicles that together hold about 10,000 gallons in fuel.
The 2002-03 budget included the 55 cents-per-gallon number, not the $1.04, Ring said.
Because of this, the district is anticipating spending another $110,000 this year that wasn’t expected when the 2002-03 budget was being prepared a year ago. Harbert and Driver will have to account for the increase in fuel costs as they project the 2003-04 budget.
With all this in mind, the district was able to pay about $5.9 million back to the state on April 16, Harbert said.
In December, the district signed an agreement with state Treasurer Mike Coffman in order to secure $9.8 million in much-needed loans, bringing the total state debt to about $27 million. To comply with the plan, the district must pay about $20 million back to the state by June 30.
To stay on track, Harbert estimated in January, the district needed to pay $5.6 million back in April. The district was able to pay back $300,000 more than it was expecting. “Which is good news,” Harbert said Thursday.
After the $5.9 million April payment, the district now owes $14.1 million to the state by June 30.
At the end of February, the district had an operating deficit of about $318,000.
Harbert is currently working on March’ figures to present to the school board prior to Wednesday’s regular board meeting.
On Thursday, she said she is hoping to see a positive balance for March.
“I’m keeping my fingers crossed,” she said.
As for how the district will deal with the $1.37 million hit it has taken this year in surprise expenses and reduced income, that is still to be decided.
Kendra Fish can be reached at 303-776-2244, Ext. 211, or by e-mail at email@example.com