Embattled NIC trustees resigns amid residency questions

COEUR d'ALENE — Rather than answer questions about whether he legally resides in Idaho, Michael Barnes has resigned from the North Idaho College board of trustees.

His resignation came on the same day The Press published a story examining assertions that Barnes may have established legal residency in South Dakota, a domestic tax haven.

In a statement to the college, Barnes said, “It is with regret that I must announce my resignation immediately as I do not wish to allow my residency status to be yet another distraction for NIC.”

Barnes has not yet clarified his residency status. He has consistently refused to respond to Press requests for comment or interviews.

His residency first came under scrutiny last year, when community members raised concerns over whether he and fellow NIC Trustee Ken Howard remained qualified to continue in their positions based on residency requirements.

Trustees voted unanimously in December to authorize the college attorney to engage with the Idaho Attorney General to investigate the issue.

Howard — who owns a home in Kootenai County, as well as a home in New Mexico — made the motion.

Barnes seconded it.

This week, a group of prominent community members called on Barnes to resign from the NIC board of trustees or face litigation seeking his removal.

Among them was former Coeur d’Alene School District Trustee Christa Hazel. She said Barnes’ actions indicate he may intend to reside in South Dakota.

“Today’s resignation is another indication that there are serious concerns involving leadership at North Idaho College,” she said Wednesday.

Under Idaho Code, a vacancy occurs on a community college board “upon the incumbent ceasing to be a resident of the district for which he or she has been elected.”

For income tax purposes, Idaho law defines a resident as anyone who keeps a home in Idaho for the entire tax year and spends more than 270 days of the year in Idaho or who is domiciled in Idaho for the entire tax year.

“Domicile” refers to someone’s permanent home. A person can have multiple residences but only one domicile.

The Idaho State Tax Commission specifically allows that “snowbirds” who own no property in Idaho and live a nomadic lifestyle are still Idaho residents as long as they have no intention to establish a new domicile elsewhere.

Hazel said Barnes is currently associated with South Dakota Residency Center in Spearfish, S.D., a business that helps people establish residency in South Dakota.

SDRC advertises itself to retirees, snowbirds and others who live nomadic lifestyles and are looking for “a friendly state to call home for tax and domicile purposes.”

South Dakota has no state income, pension, personal property or inheritance tax, making it a popular tax haven for some.

To become a South Dakota resident, an individual has to stay one night in the state and obtain a driver’s license.

Individuals can obtain physical addresses via SDRC’s personal mailbox service and stay overnight at its campground.

The business also helps individuals organize the documents to bring to the DMV in order to obtain a South Dakota driver’s license.

One such document is an affidavit affirming that the individual intends to domicile in South Dakota and does not maintain a principal residence in another state.

It is unknown if Barnes has a South Dakota driver’s license.

Barnes has registered five vehicles in South Dakota since 2019. A few remaining Idaho vehicle registrations will expire this year.

It’s also unclear if he’s registered to vote in Idaho.

After selling his Athol home in June 2021, Barnes owns no real property in Kootenai County.

In a November blog post, Kootenai County Republican Central Committee Chair Brent Regan said claims that Barnes is not a county resident are false.

Regan said Barnes retired from his professional career, sold his house and leased a portion of a house 500 feet away, where he receives mail and “otherwise meets all the legal requirements for residency.”

“He and his wife then embarked on a long planned, and much anticipated, RV vacation,” Regan wrote.

Barnes remained on the NIC board of trustees, Regan said, because his legal residency had not changed and he was able to attend board meetings remotely.

Regan said Barnes resigned from the KCRCC because the group did not have the capability for remote meetings.

On Barnes’ behalf, Regan published a redacted bank statement from October 2021 in order to show an Idaho address. However, no other physical addresses in Idaho are currently linked to Barnes.

Barnes registered three vehicles in South Dakota last October.

Regan also published a heavily redacted room rental agreement as further alleged evidence of Barnes’s Idaho residency.

Idaho residency is determined by intent, not solely by address.

The Patriot Act prohibits mailbox service addresses, like the one Barnes appears to use in South Dakota, for banking.

Hazel said common advice for nomads is to use a friend’s address or rent a room for banking purposes.

She said she believes Barnes wants to take advantage of South Dakota’s tax laws and avoid paying Idaho taxes.

Former Idaho State Sen. John Goedde, who represented the Coeur d’Alene area from 2002 to 2014, was one of more than a dozen local residents who signed an open letter demanding Barnes’ resignation.

Goedde said Wednesday that he believes Barnes made the right decision when he stepped down from the NIC Board of Trustees.

“I think he was presented with a set of facts and realized it was unsustainable,” Goedde said.

More questions have emerged in the wake of Barnes’ resignation.

“What happens to all the decisions that have been made by a trustee who may not have been legally empowered to make those votes?” Goedde said.

The answer is unclear at this time.

Goedde said the Attorney General’s Office is investigating the matter, including whether precedent for such a situation exists in Idaho.

“I will still look forward to the Attorney General’s work on the residency issues,” Goedde said.

Barnes resigned less than a week before a planned virtual visit from the Northwest Commission of Colleges and Universities, the accrediting organization for the college.

While currently in good standing, NIC’s accreditation is under review by the NWCCU.

The visit, scheduled for Jan. 18, comes on the heels of multiple complaints about the conduct of NIC’s Trustees.

The complaints specifically called out Chair Todd Banducci, Vice Chair Michael Barnes and Secretary-Treasurer Greg McKenzie.

NIC has maintained accreditation through the NWCCU since 1950.

Accreditation makes the college eligible for federal financial aid and allows more opportunities for credits to transfer to other institutions.

Hazel said NIC is a major asset to the community.

“I hope we can save it,” she said. “North Idaho College is one of the best colleges around, but only if we can keep it. I think now is the time for the community to understand that we may be at a point where we’ve lost the college.”

In a public Facebook post Wednesday, Regan said Barnes resigned because he was “unwilling to sacrifice” the resources needed to fight an “unfounded” lawsuit.

Idaho Code states that any community college trustee vacancy will be filled by appointment by the remaining members of the board of trustees.

Any person appointed must reside in the trustee zone where the vacancy occurs and shall serve until the next trustee election.

If the remaining four trustees are unable to agree on the replacement trustee, the vacancy remains until the next community college trustee election, according to the Idaho State Board of Education.

The next NIC election is Nov. 8.

The trustees are expected to discuss this board vacancy at the next meeting scheduled for Jan. 19.