The Iowa City Community School District school board unanimously voted to approve a loan of up to $3 million to assist the district in payroll for the month of March in an out-of-cycle board meeting Tuesday.
The board approved the loan ahead of finalizing $8 million in proposed district-wide budget cuts. The district is taking the loan out from Midwest One Bank, and board documents state the district will decide the amount of money it borrows based on what is needed for payroll, but it will not exceed $3 million.
According to board documents, the loan will be withdrawn as needed, meaning the amount of money borrowed is dependent on what the district will require for payroll in March. Interest on the loan is 6.25 percent, but it will only accrue interest on the amount borrowed once the district confirms the amount it needs for payroll.
Board member Mitch Lingo said he was frustrated with the district’s financial position, as the impending budget cuts will force the board to make reductions.
“It’s just dumbfounding that we could be in this position, given the budget we have, the amount of children who rely on us,” Lingo said. “We need to figure this out, we can’t be nice, and we can’t be easy.”
In a board meeting on Feb. 24, Superintendent Matt Degner proposed an action plan to cut over $8 million from their budget over fiscal 2027. Potential reductions include bus routes, reassigning district administration to building administration positions, and removing individual chromebooks for every student and selling a portion of the Chromebooks.
RELATED: ICCSD proposes staffing reductions, bus route consolidation, administration changes
The district also introduced its interim chief financial officer, Kim Michael-Lee. Michael-Lee presented to the board, updating them on the district’s financial status and the steps she is taking to improve it.
Michael-Lee said she plans to implement what she referred to as a “month-end close process,” which she described as evaluating the assigned tasks of staff, allocating new tasks to staff members, and balancing the district’s finances. She emphasized this process as normal and essential to every other business she has worked in, including her own public accounting business.
“I’ve been asking a lot of questions,” Michael-Lee said. “People may not like them, but they’re necessary to get what you need. We need to find out what happened and how to correct it moving forward.”
Board member Jayne Finch said she is concerned about Michael-Lee’s contract and who she reports to at the district level. Finch said Michael-Lee’s independence from the district administration is important to this process to ensure clear communication with the board.
“I expect you to be an independent voice, not influenced or filtered by anyone in the administration,” Finch said.