NIC President Bell
NIC President Bell
Big News for NIC!
Oh my goodness, College President Priscilla Bell must be so thrilled at the news that $6 Million dollars should be refunded to NIC for the pre-paid rent on the Mill site property! She is desperate for money. She recently traveled to Boise to beg the legislature for more funding, and she even asked billionaire Warren Buffett to donate an important piece of railroad land near the Mill site, which Ms. Bell said the college could not afford to buy.
The newly discovered $6 Million refund could go a long way in helping these financial needs. Maybe now the college won’t keep raising our taxes in this tight economy when folks are already paying the inflated NIC taxes that jumped 32% when the college took Foregone taxes, they said at the time, in order to purchase the Mill site.
That happened back in 2008 but the increase is part of our taxes every year now. NIC planned to purchase the Mill site for $10 Million, and they held some public meetings but refused to put the purchase to a public vote. Instead of a vote, which State law requires for big items that require public debt, NIC decided to go around the voters and do what I call a “back door deal”.
Their sly deal went like this: NIC, which is a public institution, announced suddenly, after years of saying they were going to buy the Mill site, that they were not going to buy the property…the NIC Foundation would buy it instead. The Foundation is a private charity so it doesn’t have to follow the same State laws on public debt.
Then NIC took the Foregone tax money, along with some other funds, and they gave $4 Million to the Foundation as a down payment on the lease.
The Foundation and NIC created a Lease Agreement, whereby the college would lease the land until July of 2013 for just over $2 Million per year. The Foundation took the down payment, went to Mt. West Bank, got a $6 Million dollar loan and bought the land.
The Lease Agreement is a very interesting document because it does not read like any other lease agreement used in normal business dealings. It says that at the end of the lease term OR whenever the Foundation pays off the loan to Mt. West Bank, that the title to the land MUST be transferred to the college and that the college MUST accept the title. That’s weird.
So, shortly after the strange lease agreement was created, a small group of three citizens filed a lawsuit against the college. They claimed the lease agreement was improper; that it is really an installment purchase plan and, as such, requires a vote of the people. The citizens asked for no money in their lawsuit, only a public vote. ( And they paid for all the legal and court fees themselves.)
In all of the pre-trial hearings, motions and mountains of paperwork, the college and the Foundation always insisted, over and over, that this deal was NOT a purchase. It was only a lease. Year to year. That NIC could walk away from it at any time.
Judge John Mitchell allowed the NIC and Foundation attorneys to drag their feet and delay this case. It was never allowed to come to trial even though the case had substantial legal precedent in Idaho, with a similar case in southern Idaho recently decided by the State Supreme Court in favor of the voters.
And so the story gets even more twisted when just last December, with the citizen lawsuit on appeal to the Supreme Court, the NIC board hurried to purchase the land from the Foundation.
What was the rush? Well, the answer probably lies in the Supreme Court’s decision, handed down shortly after. The Court said the whole issue of the constitutionality of NIC’s actions is now a “moot” point; that it doesn’t matter anymore because it’s all done; they now own the land.
Lesson to other college or city officials: If you’re going to do something illegal, first try to hide it. But, if you get sued, tell your attorneys to drag out the process, make sure the judge never lets it come to trial and then hurry to fix the problem so the courts can call it “moot” and they never have to make a decision on it.
Yes, it makes me crazy too.
But we’re not done yet! There’s more insanity in this mess!
In order to “purchase” the land from the Foundation, NIC gave them advanced lease payments out to the end of the lease. You see, they were so arrogant, so disrespectful of the law, that they never even created a Purchase Agreement. There is none, there never has been one. So the only thing the money could possibly be is advanced payments on the Lease Agreement. It’s even referred to as such on NIC’s own web site description of their board meeting on 11/18/10.
Now NIC owns the land. You can’t lease land from yourself, right? So those extra lease payments made to the Foundation should now be refunded back to the college: That will be $6 Million dollars, please!
What a relief for President Bell. Now she doesn’t have to worry so much about money. And what a boon for other taxing officials. Now they have another proven method for getting around the Constitution, squashing citizen advocates and avoiding the voters. Ms. Bell and the NIC Trustees must be so proud.
We get what we vote for. We only have ourselves to blame.
Comment by Ancientemplar — February 19, 2011 @ 8:48 am
NO Ancient. We, who DID VOTE, tried for change. We got what others voted for. And what those who DID NOT VOTE gave us. I do not, in any way, blame myself.
Comment by rochereau — February 19, 2011 @ 10:20 am
Follow this link to see how we arrived at the $6 million figure Mary cited.
We could only rely on the information in the “Lease Agreement.” There are alternate calculations possible based on reasonable assumptions, but the bottom line is that NIC is due a huge refund of several million dollars from its Foundation.
NIC’s Board of Trustees should be screaming for the refund. It isn’t. Why not?
Supposedly NIC’s faculty and staff “care” about the vocational and educational programs at NIC. They should be screaming for the refund to support their supposed professional commitment. They aren’t. Why not?
Kootenai County taxpayers got hosed by NIC and its Foundation. Aside from three of us who sued and a few more who have contacted their legislators, taxpayers don’t seem to care . Why not? Why do Kootenai County taxpayers simply not care when public entities mishandle millions of tax dollars, then threaten to increase property taxes because they don’t have enough money to support further mishandling of public money?
Comment by Bill — February 19, 2011 @ 11:02 am
Did we vote? Or was someone chosen with the way the county clerks office has been handled the past 15 years?
As far as the handling of money by NIC, was it REALLY for NIC or the charade to acquire the land for the boat launch? I do not believe that taxpayers do not care. I think the taxpayers are confused which is what the insiders and stakeholders are banking on (no pun intended). I also believe that NIC will get compensated from the city for the portion of the “EDUCATION”, yeah right, corridor that WILL be used for the new boat launch property (like it will ever be built). I believe this is why ms bell is in no hurry to scream. This has to be completely a “done deal” so the incompetent judges in this area will just say “Oh well, it’s a done deal and there is nothing we can do about it now.” What was the wording Bill, the point would be Moot?
Comment by concerned citizen — February 19, 2011 @ 1:16 pm
Why didn’t I know about this scam when I was buying and selling houses. I never would have had to use my own money! Cool!!
I agree in part with cc. I believe many taxpayers care and I believe much of what goes on can be confusing and down right obscure by design. But much worse are the taxpayer/voters who agree that local govts. are atrocious ( that is the most commonly used description I hear when discussing this subject) and say, “what can we do, that is how it has always been”. My answer is let your voice be heard. But intimidation is a serious weapon used by those with the power.
There are several reasons for my remaining here, the RE market being one of them. My inclination, however, is to leave, this place is antideluvian!
Comment by rochereau — February 19, 2011 @ 2:25 pm
rochereau,
“But intimidation is a serious weapon used by those with the power.”
Those of us that still have business in the downtown core have witnessed this intimidation. You play or you will pay.
Comment by concerned citizen — February 19, 2011 @ 3:03 pm
cc says, “This has to be completely a “done deal” so the incompetent judges in this area will just say “Oh well, it’s a done deal and there is nothing we can do about it now.”
My guess – is the elections contest will prove to be the same thing when the Supreme Court hears it.
Comment by Stebbijo — February 19, 2011 @ 4:25 pm
rochereau and concerned citizen,
Because “much of what goes on can be confusing and obscure,” that is exactly why the public has to be able to trust elected and appointed officials. When officials betray the public’s trust and confidence by design, then the public has every right to assume that they are being intentionally deceived.
Comment by Bill — February 19, 2011 @ 4:42 pm
rocuereau, it was the literary we.
Comment by Ancientemplar — February 19, 2011 @ 4:44 pm
rochereau, it was the literary we. I guess “we” didn’t do a good enough job at ensuring a different out come of the election.
Comment by Ancientemplar — February 19, 2011 @ 4:47 pm
I thought you meant we as in “we the county clerks office pre 2010.” 🙂
Comment by concerned citizen — February 19, 2011 @ 4:52 pm
Not the royal we? Oh yes, that is how Bloeminduplicious speaks of herself.
Ancient, I don’t know what else could have been done. Those candidates I (and I suspect you) supported, campaigned really hard. And we who supported them did so vocally. Short of taking voters into the booth at gunpoint……uhhh an interesting thought.
Comment by rochereau — February 19, 2011 @ 5:00 pm
Well, it DID work in the last election. Without guns of course but with the weapon of intimidation.
Comment by concerned citizen — February 19, 2011 @ 5:19 pm
“Intimidation” is a weapon always at the ready!
Comment by rochereau — February 19, 2011 @ 5:54 pm
Yes cc the last election was only the first phase and yes Rochereau we have to be more ready.
Comment by Ancientemplar — February 19, 2011 @ 6:05 pm
Our local officials better take heed with what is going on in the world and now in places like Wisconsin. The 95% is tired of the 5% that control the worlds wealth. Things are a changin’ and I for one am glad to see people finally taking a stand.
Comment by concerned citizen — February 19, 2011 @ 6:14 pm
Several weeks ago the lawsuit plaintiffs’ attorney, Starr Kelso, first discovered the “prepaid rent” refund due issue when the North Idaho College paid $4.1 million to the Foundation and got the deed to the property. Then in our hearing in front of Judge John T. Mitchell on February 2, 2011, Starr argued persuasively and forcefully that since Judge Mitchell had agreed with NIC and the Foundation that the “Lease Agreement” was unamended and the only agreement on the property transfer, the money paid by NIC to the Foundation was all rent. The “Lease Agreement” provided for a one-year lease term with three more annual renewals possible. The “Lease Agreement” would have self-extinguished on July 22, 2013. However, for some weird reason, the NIC Foundation decided to pay off the loan to Mountain West Bank in late November – early December 2010. Under the terms of the “Lease Agreement”, that early loan payoff triggered the requirement that the deed be delivered immediately to NIC. As of December 3, 2010, NIC owned the land.
But NIC had prepaid the “rent” until July 2013! As Mary points out, NIC’s Board of Trustees should not be paying rent to the Foundation for land NIC owned after December 3, 2010. Using data from the “Lease Agreement”, we calculate that the North Idaho College Foundation must refund approximately $6,745,602 in “prepaid rent” to North Idaho College. The exact amount of the refund would have been determined at trial, but of course, at the urging of North Idaho College and its Foundation, District Court Judge John T. Mitchell ruled there will be no trial.
You would have thought at the February 2, 2011, hearing in front of Judge Mitchell that the North Idaho College would have been thrilled to hear it was due a refund of millions of dollars. It wasn’t. The Court arguments and filings of the North Idaho College suggest that its Board of Trustees doesn’t really want to pursue getting the refund of our tax dollars.
The North Idaho College Foundation, Inc., exists supposedly to help and support North Idaho College. The North Idaho College Foundation, Inc. does not exist to receive tax money from North Idaho College. So why is the Foundation so unwilling to voluntarily refund the money due to the College? After all, the College was only renting the land from the Foundation. If you believe the College and the Foundation, the Foundation didn’t really need the College’s “rent” money to buy the land, so the Foundation ought to eagerly refund the excess “prepaid rent”, about $6.7 million to the College.
Look at all the NIC programs that would benefit from the $6.7 million refund! It’s for education! It’s for the children!
Comment by Bill — February 20, 2011 @ 8:42 am
If you’re correct, Bill, and the NIC Foundation is swimming in $6,000,000 of public money, does the Foundation have any responsibility to the public to account for how that money is being spent?
Who is the president of the NIC Foundation? Maybe we should re-publish the list of Foundation board members and perhaps some of those Foundation members’ connections, socially and fiducially, to NIC itself?
Comment by Dan — February 20, 2011 @ 9:21 am
Dan,
The NIC Foundation is a 501(c)(3) tax-exempt organization. It must comply with the IRS rules, however the only reporting requirement I’m aware of is through IRS Form 990 which is public record.
Here is a link to an excerpt from the Foundation’s 2010 Report to the Idaho Secretary of State. It lists the Foundation’s officers and directors.
Comment by Bill — February 20, 2011 @ 9:31 am
Well, of course, the NIC Foundation does not have those funds. It had to pay off Chesrown and the loan it took out to pay Chesrown. Nobody knows the actual terms of that loan or if it had any type of prepayment penalty. The idea was a longer term lease debt that was torpedoed because of the light thrown into the mix by the lawsuit.
So now what? Is there any legal basis to force NIC to recapture these funds or can they just let them slip under the tide. They do have their golden fleece land so they are happy (I guess). I still cannot determine the total we paid for the silly thing but it was outrageously overpriced and not at all supported by any valid appraisal. The entire deal was an insulting fiasco. And do not expect the average person to feel outraged. Most do not even understand the terms of their own mortgage let alone the spaghetti mess laid down to capture the Corridor land.
Comment by Wallypog — February 20, 2011 @ 2:52 pm
Wallypog,
The terms of sale between the Foundation and Chesrown would have been informative but of little relevance to our lawsuit. Ownership of the 17-acre Mill Site property was assigned to the Foundation by Chesrown during The Mill Sites, LLC, acquisition of the larger 106 acres.
One of the remedies in our lawsuit was to force the return of any improperly paid rental money. Judge John T. Mitchell rejected that.
Had the “Lease Agreement” and its semiannual payments continued until the last payment was made on July 22, 2012, the College would have paid the Foundation $10,444,804.11. Of that amount, $444,804.11 would have been interest paid to Mountain West Bank. That was the interest on the $6,000,000 loan the Foundation received from Mountain West Bank. That interest would have been exempt from federal income tax as a result of the Tax Agreement Regarding Revenue Ruling between NIC and the Foundation.
Among the people who should feel outraged are the NIC faculty and staff. Their President and Board of Trustees gave away $6+ million to the NIC Foundation at a time when the College’s programs are being cut for financial reasons. These “professional educators” whose primary interest is supposedly the quality of vocational training and education offered at NIC are oddly silent about this. They ought to be demanding answers from Bell, Armon, Wood and the other NIC Trustees. Over $6 million would go a long way toward developing and improving vocational training and educational programs at NIC.
The Idaho legislators from Kootenai County ought to also be outraged. NIC President Bell appeared in front of the Legislature’s Joint Finance-Appropriations Committee on January 26 and told legislators that if the state didn’t cough up more money, it might once again be necessary for NIC to require even more taxes. She didn’t tell them about the $6+ million overpayment to the Foundation.
Incidentally, don’t expect any outrage from State Senator John Goedde — he is a Director on the NIC Foundation! So while Bell is in Boise pleading poverty, she and her Board of Trustees are carelessly (that’s the nicest term I can use) sending $6+ million to the NIC Foundation, Inc.
Comment by Bill — February 20, 2011 @ 3:14 pm
I would like to see how they are going to trade the commercial corridor for the boat launch. Does that mean there are going to be classrooms down where the boat launch now sits on the lake? Since, of course, the commercial corridor WAS purchased for education.
Comment by concerned citizen — February 20, 2011 @ 5:21 pm
concerned citizen,
The way land swaps work is that the City will find a piece of land it owns or can buy that it can trade for a parcel it wants. Then it hires an appraiser to bring in an appraisal that miraculously matches the value of the parcel they want. Then the parties will agree to the exchange, and it will be done. Of course, in this case the parcel gained in the swap by NIC need not be usable or have any value to the College, because the College will simply sell it.
Comment by Bill — February 20, 2011 @ 6:54 pm
Oh I think I understand how it works. That is why they needed that particular one and only “appraisal?” of that prime location abutting the sewer treatment plant. Nothing is to good for the REGULAR citizens of CdA.
Comment by concerned citizen — February 20, 2011 @ 7:16 pm