The Austin School District’s scholarship monies investment policy will stay "as is.

Tuesday, October 10, 2000

The Austin School District’s scholarship monies investment policy will stay "as is."

Lori Volz, director of management services, told Austin Board of Education members Monday night that the district is restricted by state law on how it can invest money donated to the district for student scholarships.

Board member Amy J. Baskin agreed.

"It’s not that we don’t want to get more return for our money," Baskin said. "It’s that we can’t."

The issue arose two weeks ago when Mike Ruzek, an Austin businessman and supporter of many public schools initiatives, appeared before the board to question its investment policy.

Ruzek said the school board could realize a greater return on its investment of scholarship dollars.

Board Chairman David Simonson agreed and pointed out how some of the district’s top students graduate and receive scholarship checks for as little as $2.

Volz’s position was bolstered by Darwin Viker, a LAWCO accountant present at the meeting to report on the annual audit of school district finances. Viker also said school districts were severely restricted by law in how they can invest monies donated for the purpose of awarding scholarships.

He said the school district’s choice of certificates of deposit and money market funds was satisfactory and that their returns, 4 percent to 7 percent, were the best that could be obtained.

Baskin said she was fearful that the school district would lose "ownership" of its funds if it would turn them over to a foundation to invest.

"Once we give money away, it’s theirs to manage and we’re at their risk," Baskin said.

Volz said the district was not suffering any negative feedback from donors and said a family that donated $25,000 a year ago has donated $50,000 this year.

In many cases, Volz said, the donors designate how they want the money invested.

Richard Lees, a school board member, said, "People who donate money want to be assured there will be money for the purpose they intended. They don’t want any gambling with their money."

On another matter that Ruzek requested the school board’s investigation, he apparently lost again.

Ruzek had also inquired two weeks ago whether the school board was interested in establishing a policy, as allowed by law, to call for a primary election to narrow the field of candidates.

Two years ago, after six-figure deficit spending, charges of mismanagement and widespread dissatisfaction over other school district matters surfaced, no less than 17 candidates sought election to the school board.

Without a primary election, all 17 appeared on the general election ballots and there were charges that four incumbents stonewalled having a primary election because they thought their own name recognition among a field of 17 candidates would help their re-election bids.

When the ballots were counted, all four long-time school board incumbents were defeated and replaced by four candidates, including three first-time challengers.

Ruzek told the school board that voters could make better choices with a narrow field of candidates to focus upon.

At Monday night’s meeting, Dr. James A. Hess, who replaced Dr. J. Douglas Myers, explained the district’s no-primary election position. Myers resigned and retired from education in the midst of the furor over school district financial and other matters.

Hess said the costs were prohibitive and that a general election cost the district $15,000, which the still financially ailing district may not be able to afford for a primary election.

He also said 1999’s 17 candidates for four positions was a fluke. According to Hess, there were three candidates for two positions in 1997 and five for two positions in 1995.

School board member Bev Nordby wasn’t satisfied with the response to either of Ruzek’s requests.

Nordby said the school board should set a policy for future investing of scholarship dollars "so we can get a better return on our money."

On the subject of a primary election, Nordby marveled aloud whether the school board members were allowed to "change our own minds."

Ruzek was not present at Monday night’s meeting.