Traverse City Record-Eagle

Our Views

December 1, 2013

Editorial: TBAISD can't defend bulging fund balance

To hear Traverse Bay Area Intermediate School District superintendent Mike Hill tell it, his board members understand the plight of cash-strapped area school districts that want the ISD to share some of its wealth, but worry that the ISD has its own financial house to look after first.

That’s despite the fact that some public school districts — all of which have seen dramatic cuts in state funding — are dipping into their general funds to provide special education and other services that state Intermediate School Districts are charged to provide.

Hill said ISD board members are waiting until negotiations with two of the district’s labor unions conclude before they decide whether to give area districts a break.

After all, the ISD is in the middle of fact-finding with the professional staff union, whose contract expired five months ago. And negotiations with the support staff union are scheduled to begin in December; given the speed at which the ISD has dealt with the professionals, that means it could be June or beyond before they hammer out a new contract.

And ISD budget projections show expenses exceeding revenues over the next three years.

“ ... (W)e don’t want to be in a situation like we were in the 1990s, (when) we were billing (districts) for services and we don’t want to be laying off staff,” Hill said.

That’s fine. Public entities are supposed to keep their financial house in order, after all, and taking a conservative approach to budgeting is good policy.

But it’s a snow job.

Hill’s lamentations about budgets and pending labor contracts and future revenues sound serious until they’re put into perspective.

The ISD right now is sitting on a whopping, unheard-of fund balance of $35.5 million for the 2012-13 fiscal year. In fact, while area school districts that are part of the ISD were coping with more cuts and red ink budgets, the ISD’s fund balance actually rose by nearly $600,000 last year, even as expenditures fell $3.7 million and revenues fell by $6.8 million. That’s worth repeating: While revenues declined, the fund balance went up.

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