POLSON — Lake County commissioners are asking for a public apology from Polson School District Superintendent David Whitesell for comments he made, which referenced illegal activity by the county treasurer, during the district’s December board of education meeting on Monday, Dec. 12.

In that meeting, the school board discussed the district’s transition to private banking with members of the First Interstate Bank management team. During the discussion, trustee Nancy Lindsay brought up the cash-flow issue that had caused a rift last June when teachers did not receive their entire summer paychecks as they normally do, on the last day of school.

The superintendent offered her an explanation:

“In the past, the county would give us our check and they would also float the money that we would get in the third or fourth week in June with other districts’ money in the county to cover payroll, and that’s a violation,” he said. “When we went to First Interstate Bank, that illegal activity was no longer possible ... We have begun to aerodynamically become financially or fiscally more responsible and some of the things we have done in the past don’t hold water now and we cannot continue to do.”

When the county commissioners got wind (and a recording) of the school board meeting earlier this month, they responded with a letter, signed by the three commissioners, Paddy Trusler, Ann Brower and Bill Barron, county treasurer Patti Kugler, and deputy county attorney Mark Russell.

“Lake County takes exception to your allegations,” the letter states, “We ... request any documents in your possession that describe any illegal behavior engaged in by Lake County in managing the funds for the public and Polson School District … and that you consider your actions and make a public apology to the Lake County Treasurer.”

The county, which is routinely audited by an independent agency, claims they are, and have always been, in compliance with state law.

“The reason that we believe an apology is in order is that a professional person does not make baseless allegations in a public forum,” Trusler, the commission’s chairman, said. “It takes away all the public trust to make unfounded statements — which we still believe they are — that just throws this cloud over the entire public entity.”

Whitesell, who was in Billings earlier this week at a school board convention, said he is working on a response to the county commissioners that he believes will validate his comments from the December meeting.

“I do have documents that they will be receiving,” Whitesell said. “I’ve been advised by the Montana School Board Association that the county was in violation of the standards set forth by Montana code MCA 20-9-212 parts one and three, particularly part three. If there needs to be an apology made, I will be more than happy to step up and make one.”

Trusler said the county does not benefit financially from managing the school district’s money and there are no hard feelings out there because the school district decided to switch to the private sector.

“There is a small administrative fee, but it’s very minimal,” he said. “Our desire to handle their money or their desire to have somebody else do it really isn’t an issue.”

What has become an issue, Trusler said, is the timing element pertaining to when the school district receives its money because the county must balance its books before it releases funds to the school district.

“When it was one big investment pool, we had more monies to pull to meet their expectation,” he said.

Whitesell agrees that timing is a concern, and it’s something that the school district clerk and administrators have been working hard to fix.

“The county treasurer sent a letter to us on June 14 that said by us leaving the county we would be vacating the opportunity to receive money from the county pool,” Whitesell said. “So, while paying our teachers for three months on the last day of school has been something that in past practice we’ve been able to do, once we pulled out of the county, that was no longer a viable option for us.”

According to Whitesell, there may be members of the school board that want to see the district go back to having the county handle its finances, but with First Interstate Bank, he said the district is actually making money on its investments.

“It is a growing and evolving, but fiscally solvent fashion in which we’re headed,” he said at the December meeting. “We’re optimizing our budget reserves that are being charged negative interest, so financially, for the district and for our taxpayers, this has been a positive thing.”