Traverse City Record-Eagle

June 5, 2013

Editorial: District must return excess reserves

Traverse City Record-Eagle

---- — Some Traverse Bay Area Intermediate School District board members seem to have a problem understanding how much — or how little — authority they really have over millions in mostly local taxpayer money.

As reported by the Record-Eagle, the TBAISD is sitting on massive cash reserves while area school districts are cutting their own budgets to survive.

A committee made up of superintendents from member school districts has recommended the ISD establish how much cash it should keep on hand — as virtually every other government entity does — and give up the rest. The committee recommended the ISD reduce its bloated fund balances by giving local districts cash or additional services.

And that redistribution can’t have any strings attached.

Although TBAISD Board of Education President Joseph Fisher called the recommendations “positive” and “constructive,” he also said the ISD should ensure any money it might eventually release is used responsibly.

Sorry, but that’s not his call to make. Money returned to local districts should have gone to them in the first place, and any decisions on how it is spent must be local decisions.

“I don’t want to pay for the travel of the board at (Traverse City Area Public Schools),” Fisher said. “I’m not interested in doing that. I want to make sure that we do what is best for kids.”

Frankly, Traverse City school officials — and taxpayers — shouldn’t give a fig about what Mr. Fisher thinks the money should go for. After hoarding millions over the years, the ISD is hardly in a position to dictate what a local district should do with what is, essentially, local money.

If Traverse City officials want to spend it on travel, coffee mugs or key chains, that’s the TC board’s decision — and they’ll have to answer to local taxpayers.

We’re talking millions here. The ISD’s general education fund has $4 million in cash reserves, its vocational education fund has about $5.2 million and its special education fund about $16.5 million. Large portions of each of those funds are derived from local tax levies.

The ISD’s current total cash reserves of about $35 million represent a massive 58 percent fund balance, an amount unheard of in local government. The superintendent committee recommended a level between 15 and 30 percent, as recommended by the ISD’s own auditors. Even 30 percent seems excessive.

An ISD board member suggested the district could reduce the amount it levies in taxes, a direct help to taxpayers. That would work, too.

Whatever course it takes, the ISD must decide soon how to redistribute its wealth and then get it done — with no strings attached.