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.
The balance has now reached a staggering 61 percent and is actually up from the 58 percent from last year. Most public entities are happy if their fund balances reach into double digits, let alone more than 50 percent of budget. And some don’t have any fund balance to speak of. But ISD officials still aren’t ready to share the wealth.
A committee of area superintendents last spring recommended TBAISD officials consider drawing down the fund balance by distributing money or providing additional services to local districts. ISD board members discussed the proposal during several board meetings, but have yet to decide whether to release funds to local districts.
To put it politely, that is both insupportable and offensive.
This is public money intended to provide educational services and it should be doing some public good beyond fattening the ISD’s bank account. No one would responsibly want the ISD to jeopardize its financial health, but no one can responsibly deny that area districts are hurting — and have been for many years — and need every dollar and every service for their students they can get. The ISD’s defense of its absurd fund balance policy has so far fallen far short of what the public should accept.
Traverse City Area Public Schools Board of Education President Kelly Hall has said the ISD’s inflated fund balances could be helping students instead of sitting in the bank.
“It’s unconscionable the ISD is sitting on these fund balances,” she said. That’s putting it mildly.
The ISD’s reaction to critics has been to do essentially nothing. The board has established several designated reserve funds, including setting aside money for various capital projects and special initiatives. And board members also agreed to create a standing “superintendent’s advisory committee” to review the ISD’s fund balance policies.
While it’s hard to tell just what a “superintendent’s advisory committee” is supposed to do, anyone hoping for some progress from that front should look elsewhere. So far, Hill said, there isn’t even a timeline for when the committee will be formed, let alone when it might actually meet (if ever) and what it might actually do (if anything).