Editorial: Don't mess with Bend-La Pine's reserve money


Published Jun 1, 2013 at 05:00AM / Updated Nov 19, 2013 at 12:31AM

The labor negotiations between Bend-La Pine Schools and its teachers union are as about as collegial and polite as things can get when it’s a fight about money.

When the groups met over four hours Thursday night, they did get courteously crosswise in a few areas. For instance, one difference was in the proposed salary increase. The union, the Bend Education Association, proposed a 3.2 percent increase. The district proposed 1 percent.

They also presented different outlooks on how to move forward with the district’s so-called TIF grant, or Teacher Incentive Fund. It’s basically an experiment in how to better serve students by making use of student achievement in evaluations and looking at incentive pay.

It would be wrong to read too much into either of those differences, at this stage. What’s on the table at a moment in time could be a lot different as the parties get closer to an agreement. That is bargaining.

One intriguing discussion, though, was about the district’s ending fund balance. That’s the reserves the district has left over at the end of a fiscal year.

In 2013, the ending fund balance is $5.28 million. That’s about 4.25 percent of the district’s general fund. The proposed 2014 budget would put the district’s ending fund balance at $5.97 million or about 4.5 percent of the general fund.

Mark Molner, the head of the teacher’s union, suggested the district could target an ending fund balance of $5.64 million. That increases reserves and the district would have an additional $331,767 that it could spend over the next fiscal year on other things.

Before the district representatives could object, Molner acknowledged that when he did an Internet search for “ending fund balance” the first search result that came up was from the Oregon School Board Association, warning school districts from letting unions target ending fund balances.

The district did object. Peggy Kinkade, a school board member, and Superintendent Ron Wilkinson, both argued that the ending fund balance target should not be messed with.

They are right. The district needs a healthy reserve. The general rule of thumb is at least 5 percent. It has been the school board’s policy to gradually increase it by one quarter of a percent a year to get it to 5 percent. That’s a smart policy. Healthy reserves keep the district prepared for the unexpected. They also help the district when it goes out for school bonds to build new schools. It may get lower interest rates.

When the district gets up to 5 percent, maybe then reserve levels can be questioned.