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Board divided on use of fund balance

The Holland School Board this week approved the 2011-12 tax rates by a 4-2 vote with some members contending that fund-balance dollars should not have been used to reduce the tax levy to a 2 percent year-to-year increase.

Superintendent Dennis Johnson said Monday that the $1.5 million fund balance at the end of the 2010-11 school year exceeded the 4 percent recommended by the state Education Department. The district was cited in its last audit for keeping too much in reserve.

Johnson said the district kept $720,000 in the fund balance and used the remainder to reduce the tax levy so the district would be in compliance with state law.

But board member Judith Geer said she found it "odd" that the board was not given a choice as to how to spend the extra funds, noting that last year, the board was offered three options.

"This puts us in a precarious position," Geer said. "I worked out what my tax increase will be at the 2 percent level. That's $22 more. If it was an 8 percent increase, it would be $94 more. I would gladly have paid that for our students. I think they're worth it."

Board member Ronda Strauss said she also thought the fund balance merited more discussion.

"I would have at least liked to have options to look at," Strauss said. "We could have reduced our debt service, too. That's good financial management. This is the first time in eight years we haven't been given an option."

Johnson said those kinds of decisions would have needed to be made before June 30. The board approved a 2 percent tax hike on a levy of $6,486,626, or $127,188 more than last year. During the budget planning process, the administration estimated a nearly 10 percent increase in the tax rate.