Traverse City Record-Eagle

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February 27, 2014

Cash reserves surface in contract talks

TRAVERSE CITY — Big cash reserves at Traverse Bay Area Intermediate School District are a point of friction in negotiations between the ISD and one of its unions.

An independent fact-finding report released last month shows union officials pointed to TBAISD’s cash reserves to partially justify their proposed wage increase demand, one of several outstanding disagreements in ongoing contract talks between the ISD and its “professional” employees.

Union representatives argued TBAISD “should not be operated for the purposes of hoarding cash and accumulating massive fund balances,” according to the report.

TBAISD’s total fund balance climbed to $35.5 million during fiscal year 2012-13. Those cash reserves are spread across several accounts, but the fact-finding report focuses on the ISD’s special education and vocational education funds, the two funds from which the district’s roughly 240 professional staff members are paid.

Mary McGee-Cullen, UniServ director for the Michigan Education Association, the umbrella organization that oversees the professional union, called the cash reserves “extravagant.”

“The main thing to note is the district has the ability to pay,” McGee-Cullen said.

TBAISD officials projected the special education and vocational education fund balances will drastically decrease over the next three years, but union representatives said ISD “has a history of understating” fund balances, the report states.

The special education fund balance for 2011-12, for example, was projected to be about $12.4 million, while the actual amount came in at more than $16.5 million -- a difference of 33 percent.

ISD officials contend the 2011-12 difference stemmed from a Medicaid settlement of nearly $5 million, but the projected and actual special education fund balance amounts in the two prior years differed by roughly 20 percent, according to the report. Vocational education fund balances differed by a lower percentage.

TBAISD Superintendent Mike Hill said the differences result from the special education fund’s fluctuating local, state and federal revenues.

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