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.
“In addition, it is very challenging to project levels of services needed throughout the region,” Hill said.
The report recommends a contract that would cost TBAISD an additional $2.4 million over the next three years, an amount in between the $2.17 million and $2.86 million cost increases in TBAISD and union proposals, respectively, Hill said.
TBAISD officials returned to the bargaining table on Feb. 21 with a proposal that included about $36,000 less in added costs than the fact finding recommendation. The groups are trying to schedule another bargaining session in the next two weeks.
Two other points of dispute are in the hands of a state-assigned judge.The first is whether a handful of TBAISD consultants can join the professional union. The second is whether TBAISD’s contract can include language that would automatically implement union dues payroll deductions if Michigan’s right to work legislation is overturned.
TBAISD board members voted in October to file unfair labor charges against the union on both items. Hill said the judge should issue a ruling this summer.
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. Hill previously said ISD officials planned to wait until negotiations with the professional union and support staff union end before they decide whether to distribute cash reserves.
TBAISD and support staff union officials began negotiations in December.