Royal OakAugust 22, 2012
School district seeks 10-year, 1-mill sinking fund
By Chris Jackett
C & G Staff Writer
ROYAL OAK — After waiting several years for the debt millage to decrease, the Royal Oak Neighborhood Schools district is seeking a 10-year, 1-mill sinking fund approval on the Nov. 6 ballot.
District residents currently pay 7.73 mills annually for the 2012-13 school year.
“We’ve talked about this in the district for as long as I’ve been on the board, so probably seven or eight years now, and have actually planned for it where our debt retirement would have the least amount of impact on the taxpayers as possible,” said Gary Briggs, Board of Education president. “There are constant maintenance issues that we deal with all the time.”
The board voted unanimously Aug. 9 to seek the sinking fund after a 20-minute presentation from Superintendent Shawn Lewis-Lakin.
“There’s a lot of needs that continue to develop,” Lewis-Lakin said. “A sinking fund provides $2.2 million a year in dedicated revenue. Funds are restricted. They can only be used to make infrastructural improvements and repairs to the school district’s facilities. The expenditures are audited; proceeds cannot be used for teacher/administrator salaries or other operating expenses.”
If approved, the 1-mill measure would be offset in 2013-14 by a 0.61-mill decrease to the debt millage, meaning the overall impact would be a 0.39-mill increase to 8.12 mills for the first two years. Continuing in 2015-16, the debt millage would decline each year before disappearing in 2021-22 during the ninth year of the proposed 10-year sinking fund.
“While we’re asking for a 10-year sinking fund proposal, really the incremental bump in taxes would be for just four years and then it continues to drop,” Lewis-Lakin said. “You’ve waited to ask the people for this until the overall debt millage declined so the impact would be less. We’re at a point where, not only is there a rollback in that debt millage, but it will continue to fall because we are paying off our debt.”
The overall millage amount would be 7.64 in 2017-18, which is 0.09 lower than the current 2012-2013 total millage.
“Its not a great time, but it’s a great idea and something that’s long overdue for our school district,” said Michael Hartman, board treasurer. “I think, in the long run, it’s going to be to the benefit of anyone who lives in Royal Oak.”
The district is also trying to increase revenue with one-time income from the sale of several properties, many being the sites of razed elementary schools. One of the biggest improvements the site sales and sinking fund would address is the 870,370 square feet of roofs on district buildings.
“The challenge with property sales is, once you sell that property, you don’t get to use it for the next roof, because it is one-time revenue,” Lewis-Lakin said. “We are using property-sale revenue that we have received recently, and that we anticipate receiving, to fulfill promises made in 2005.
“We made some promises about our elementary buildings in 2005. We’ve been slow at fulfilling those promises because of a lag, a slow down, in property sales. We’re going to honor the commitments we made in 2005 with the property-sale revenue; specifically, with commitments to Oakland and Oak Ridge.”
Lewis-Lakin said, if approved, the sinking fund would cost Royal Oak residents only about $30 per year more than they currently pay.
To other nearby districts, RONS’ 7.73 mils compares favorably. Although Berkley and Clawson are lower at 4.22 and 6.1 mills, respectively, high-performing districts such as Troy, Birmingham and Bloomfield Hills have rates of 9.74, 12.08 and 10.07 mills, respectively.
The school district’s millage request will run alongside a 3.95-mill request from the City of Royal Oak, which is focusing on public safety needs.
For more information on the proposed RONS sinking fund, visit www.royaloakschools.com.
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