LONGMONT — The St. Vrain Valley School District is selling a $5 million warehouse to the state in an ongoing effort to rebuild its shaky finances.
During a Tuesday morning meeting with state Treasurer Mike Coffman, St. Vrain officials confirmed plans to sell the Clover Basin Educational Support Center to the state, then buy it back within the coming year.
The move will help the district create a legally required financial cushion.
“We’ll go for the warehouse,” Coffman said at the end of the 20-minute meeting he requested. “It looks good. I feel confident with it now.”
Coffman called for the meeting Monday after the district twice revised the amount of money it would need to raise through the so-called lease-purchase agreement with the state.
District officials told Coffman on Tuesday that they upped the loan request from $1.7 million to about $5 million because they failed to set aside reserves required under TABOR. Borrowing less would have gotten the district from under Coffman’s control sooner.
“People got excited because we had cash,” said Mark Pillmore, the district’s chief financial officer. “Unfortunately, not all those dollars were available. The dollars were there, but we didn’t have the ability to use them.”
Under a new state law, school districts can put up buildings as loan collateral to acquire interest-free loans. The district plans to formally agree to the loan tonight.
Officials have spent the last month assembling the right combination of buildings to use as collateral, but eventually decided to just put up the warehouse, which recently was assessed at $5 million.
Last fall, district officials revealed they were facing a $13.8 million deficit and had borrowed heavily from the state to pay their bills.
The crisis has forced 7.125 percent across-the-board pay cuts for district workers, although students have been largely spared the pain of the crisis.
Coffman continued to insist Tuesday that students be insulated from budget reductions. Starting July 1, the district plans to borrow about $29 million from the state’s interest-free loan program run by Coffman.
That program is intended to help school districts bridge the gaps between when they spend money and when taxes are collected. Coffman has used his control of that program as a lever to force concessions aimed at protecting students.
On Tuesday, he also used that lever to prevent school district officials from barring a Times-Call reporter and photographer from the meeting. St. Vrain Valley Board of Education Vice President Rick Samson physically blocked the door to the conference room after Coffman walked in.
Coffman insisted that the meeting should be public, pointing out that the district’s money comes from taxpayers. Samson said the meeting should remain private. Coffman then said he’d walk out and kill the deal if Samson refused to relent. Samson then offered a reporter a chair inside the conference room.
The district expects enrollment to grow by about 500 students next school year, and has created a contingency fund to ensure there’s money to hire additional teachers, Superintendent Randy Zila told Coffman on Tuesday.
Also at the meeting, Coffman told Zila and Pillmore that he was considering hiring an independent auditor to monitor the district’s finances. Because that would cost the district money, Coffman said he is instead open to holding quarterly briefings on the district’s finances to save St. Vrain taxpayers the expense.