Traverse City Record-Eagle

November 24, 2013

TBAISD still stashing cash

BY MICHAEL WALTON
mwalton@record-eagle.com

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TRAVERSE CITY — Traverse Bay Area Intermediate School District cash reserves continue to grow, despite decreases in the public agency's overall budget.

TBAISD's total fund balance climbed by nearly $600,000 -- to $35.5 million -- during fiscal year 2012-13, while the intermediate school district's expenditures and revenues fell by $3.7 million and $6.8 million, respectively, according to the ISD's annual audit report.

The $35.5 million equates to a fund balance of 61 percent -- up from last year's 58 percent fund balance -- and some local school officials are waiting to hear if the ISD plans to share some of those reserves with cash-starved local districts.

"Basically, they've got a big fund balance and we don't," said Bob Potvin, a Suttons Bay Public Schools board member. "That's the crux of the problem."

A committee of area superintendents last spring recommended TBAISD officials consider drawing down their fund balance by distributing money or additional services to local districts. ISD school board members discussed the proposal during several board meetings, but they've yet to decide whether to release funds to local districts.

"I sincerely believe they understand the nature of the problem," Potvin said. "Now the issue is to get them from being concerned about it to being sympathetic and doing something about it."

TBAISD Superintendent Mike Hill said ISD board members are waiting until negotiations with two of the intermediate school district's labor unions conclude before they decide whether to distribute cash reserves.

The ISD's contracts with its professional and support staff expired at the end of June, Hill said. ISD officials are in the middle of fact-finding with the professional staff union. Negotiations with the support staff union are scheduled to begin in December.

The contracts eventually reached with the bargaining units could increase the intermediate district's expenses, Hill said. The ISD's own budget projections also show expenses exceeding revenues over the next three years.

“The bottom line is, yes, we analyzed the superintendents' recommendations," Hill said. "We’ll continue to do that, but we look at those (budget) projections because we don’t want to be in a situation like we were in the 1990s, (when) we were billing back for services and we don’t want to be laying off staff."

Traverse City Area Public Schools Board of Education President Kelly Hall has been a vocal critic of TBAISD's high fund balance. Those funds could be helping students, Hall said, but instead they're stashed away in a bank account.

"It's unconscionable the ISD is sitting on these fund balances" Hall said.

The ISD board last month did take action on two of the superintendent committee's less-substantive recommendations. They established several designated reserve funds, including money for various capital projects and special initiatives. Board members also approved the creation of a standing superintendent's advisory committee tasked with reviewing the ISD's fund balance policies, though Hill said there's no timeline as to when the committee will be formed.