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Avondale Schools seeking passage of two millage proposals

By: Mary Beth Almond | C&G Newspapers | Published July 20, 2016

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ROCHESTER HILLS/TROY/BLOOMFIELD TOWNSHIP/AUBURN HILLS — Voters will consider two Avondale Schools millage proposals when they head to the polls Aug. 2.

“Both of the millages are essentially once-in-a-decade renewals,” said Avondale Schools Superintendent James Schwarz.

The first is the replacement and restoration of a non-homestead operating millage. District officials said the millage would authorize Avondale Public Schools to levy 20 mills — $20 per $1,000 of taxable value — for general school district operating purposes only on non-homestead properties — which include business, commercial, rental and seasonal home properties — for 10 years, 2016-25. The district stressed that principal residences are exempt from the millage.

“It is basically a renewal. By law, we are only allowed to levy 18 mills on non-homestead, so cost to a homeowner for this one is zero. This is against commercial, industrial and rental properties,” Avondale Schools Assistant Superintendent for Financial Services Frank Lams said.

The authorization, according to Lams, would replace an authorization for 18 mills that was previously approved by voters in 2007 that will expire with the district’s 2017 tax levy. It would also restore the authority to levy mills previously authorized, which has been reduced by 0.0432 mills due to the Headlee Amendment, and increase the prior authority by 2 mills.

“The Headlee rollback is actually an amendment to the Michigan Constitution that basically says government — school, city, county or whatever — revenue shall not rise above the rate of inflation on property taxes. If the growth of the property value exceeds inflation, then you actually have to reduce your millage so that there is no windfall for the governmental unit,” he explained.

Lams said that this year the total property value in the district has grown more than the rate of inflation, so the district has to reduce its millage levy under the Headlee Amendment.

“Now, the catch on the non-homestead is when the state calculates the pupil allowance, the foundation allowance for schools, they automatically calculate the school district will levy a full 18 mills. If you don’t, you actually lose that revenue. So, what we are asking for is we are asking for 20 mills, because the authorization — or the amount the voters would approve — that’s what gets used in the Headlee calculation. So going forward, if the situation happens again — which it most likely will — we would apply the Headlee against the 20 mills, reduce it and still be able to levy the full 18 mills, which the state says we need to levy in our foundation allowance,” he explained.

If approved, Lams said, the the millage would raise an estimated $7 million for the district in 2016.

“Asking for 20 (mills), we still can never levy above 18, but it lets us get the full amount that we are eligible for from the state,” Lams said. “It’s a quirk within the way the tax law is and the per-pupil foundation is set up in Michigan.”

The second is the replacement sinking fund millage proposal, which Lams said is applied to all property in the district and does impact homeowners. Voters will be asked to authorize the district to levy 1 mill, or $1 per $1,000 of taxable valuation, for a period of 10 years — from 2016 to 2025 — to create a sinking fund for the purpose of the construction or repair of school buildings, and the improvement and development of sites.

“We’re asking for 1 mill, with the intent to levy 0.8 mills, which will be a 0.2-mill increase over prior years. The difference between the 1 mill and the 0.8 mill is to cover future Headlee rollbacks,” Lams said. “Previously, we had been levying 0.6 mill. That was also subjected to a Headlee rollback.”

Of the 1 mill requested, 0.6 is a continuation of an authorization that was previously approved by voters in 2007 — reduced to 0.5993 mill due to Headlee rollback — and will expire in December of 2017. Approximately 0.4 mill constitutes new additional millage, which would restore authorization reduced by operation of the Headlee Amendment.

If approved, Lams said, the millage would raise an estimated $900,000 in 2016.

“We use the sinking fund for structural repairs and big-ticket maintenance items for our school buildings — roofs, parking lots, boilers, HVAC systems. We cannot use it for any type of salary or any type of routine maintenance, like painting,” Lams explained.

If voters pass the two millages, Schwarz said, it will keep the district’s budget stabilized.

“Without these referendums passing, we would have to dip into an already shrinking pool of operational funds supplied by the state … and any repairs that we would need to do on our buildings would come from the general fund, which would further deplete what we have in terms of monies going to classrooms,” he said. “The passing of these is such that it directly impacts classrooms and helps to continue to further earmark our general funds to the classrooms for the kids for supplies and other things that are needed for the classrooms.”