Editor’s note: There was an error in the print story, stating the District currently has $2,552,161.61 in bond funds that have not been designated for any purpose. It should have said the District currently has $103,029.11 in bond funds that have not been spent, according to the breakdown. The error has been corrected in this version and a correction will run on 2/1/18 in the print edition.
The head finance officials for the Española School District say more than $1 million meant to fund the daily operation of area schools has been improperly used to pay for capital projects, dating back to 2011.
Since 2010, District officials have spent $32,166,156.31 on capital projects using money from bond proceeds, according to a breakdown reviewed by the Board of Education during a work session, Monday, at Española Middle School.
“The District currently has $103,029.11 in bond funds that have not been spent, according to the breakdown.”
Capital projects are expenses for land, buildings or equipment, as opposed to daily operations, like utility bills and payroll.
District officials can sell bonds in the amount equal to the value of property inside the District, minus it’s outstanding debt.
Voters in the District pay the money back through increased property taxes during the time period when the District sells the bonds.
Leo Valdez, the District’s financial consultant from the national firm of Hutchinson, Shockey, Erle & Co., said at some point after 2010, District finance officials started using money out of the District’s General Fund to pay for the projects, rather than the Bond Fund, which is the money they were supposed to use.
“We did not know they were using the general operational funds process to fund the bond projects,” he said. “There was a big discrepancy as to what we thought was in the Bond Fund versus what there really was, to the tune of a about $1 million and change.”
Then, they moved money from the Bond Fund into the General Fund to make up for the unexplained deficit in the Bond Fund, Contract Business Manager Maria Fildalgo said.
When Board Member Pablo Lujan asked the total amount of money paid out of the General Fund instead of the Bond Fund, Fildalgo said it was $1,274,000.
When Board President Ruben Archuleta asked who was responsible, Fildalgo said the journal entries produced by the District Business Office between 2011 and 2013 were signed by former finance director Jeanette Trujillo.
“There were other ones done, from 2013 on, and it was (former District business manager) Myrna (Garcia) and Jeanette, Ms. Trujillo, the ones that were keeping track of pay, doing reconciliation,” Fildalgo said. “They were trying to reflect the balances on the audit and booking entries, but they were not doing it properly, reversing it, posting it again and reversing it again.”
Valdez said that is his theory about what happened, and when Board Member Yolanda Salazar asked why they did it, he said he does not know.
Fildalgo said Garcia and Trujillo did not understand what they needed to do.
The breakdown of the District’s spending of bond money includes:
• $2,552,161.61 on undesignated projects since 2010
• $8,983,395.17 at Alcalde Elementary between 2011 and 2016
• $6,676,282.23 at Fairview Elementary between 2011 and 2017
• $4,998,261.66 at Española Valley High School since 2010
• $4,042,191.71 on District-wide improvements, which Fildalgo said includes bond payments for financial advice, purchase of some land, computer equipment and expenses on the new central office warehouse on Hunter Street
• $1,927,141.77 at Española Middle School between 2010 and 2015
• $1,487,705.97 at Los Niños Kindergarten Center between 2011 and 2017
• $1,018,471.70 at Hernandez Elementary between 2010 and 2015
• $867,911.12 at Velarde Elementary between 2011 and 2014
• $286,452.85 at Abiquiú Elementary between 2010 and 2014
• $198,600.02 at Chimayó Elementary between 2010 and 2016
• $180,866.29 at Española Elementary between 2011 and 2014
• $180,492.74 at Dixon Elementary between 2011 and 2015
• $170,232.48 at Sombrillo Elementary between 2010 and 2016
• $113,442 at Cariños Charter School between 2011 and 2013
• $75,209 at Mountain View Elementary between 2011 and 2013
• $38,637.57 at San Juan Elementary between 2011 and 2015
Possible bond election
Since at least October, District officials have been considering asking voters to approve a $21 million bond this year, that would earmark money for specific projects, including the Velarde Elementary School renovation project.
The District currently has about $14 million in bonding capacity, Valdez told the Board on Monday, which means officials can borrow a maximum $14 million under state law.
However, that number could actually be closer to $21 million, depending on the value of the property within the District, because it would increase over the four-year period when the District would actually sell the bonds, Valdez said.