Rochester Community Schools to seek 1.5-mill sinking fund

By: Mary Beth Almond | Rochester Post | Published August 7, 2019


ROCHESTER/ROCHESTER HILLS/OAKLAND TOWNSHIP — The Rochester Community Schools Board of Education voted to put a 1.5-mill, 10-year sinking fund proposal on the Nov. 5 ballot.

If voters approve the tax and it’s levied in 2020, the district will collect approximately $7.88 million for repairs at the elementary, middle and high schools; the improvement and development of school sites; security improvements; technology acquisitions and upgrades; and for any other purpose authorized by law.

“A sinking fund … can be used for certain things identified by law — in this case, repairing and replacing capital improvements, technology and security,” said RCS Superintendent Robert Shaner.

The Board of Education voted 6-0 June 24 to pursue the sinking fund proposal for the Nov. 5 ballot.

Although Rochester Community Schools maintains a balanced budget that district officials say promotes growth and supports high-quality student programs, Shaner said there is currently no sustainable mechanism to repair, replace or buy new items that support critical facility and infrastructure needs.

Since a 2016 district needs assessment, Shaner said items once identified as “deferred needs” are now “critical needs.”

“I don’t think people realize when they walk into a school ... that you’re in a school district that gets $8,400 per student in a very volatile market, as denoted by our current situation where we do not have a state budget. That requires a business (of) our size and of our complexity to be very conservative when it comes to budgeting,” he said.

Shaner said the last bond was really focused on getting the district “up to where it should be.”

“In an organization like ours, because of the economy, we had gone a long time without putting any money into capital improvements and getting our technology, our security and our infrastructure where it needed to be,” he said. “As those projects drop off, we’re still going to have a need for deferred maintenance and things that break. We can either try to use the general fund for that — for something like a roof, or a heating and cooling system in a pool, or a ventilation system, or technology replacements — or we can go to the taxpayers and ask them to support that in a different way so we can have that money earmarked.”

Shaner said a sinking fund is a pay-as-you-go mechanism that does not require the school district to borrow money or pay interest.

“What’s really important to note about a sinking fund is those tax dollars are collected locally and they are spent locally, so they will be spent on Rochester Community Schools,” he said.

Dana Taylor, the district’s deputy superintendent of business operations, said the sinking fund will be “a no-tax-increase millage.”

“Because we have two bond issues that will be retired in May of 2020, if this ballot proposition is approved, we expect that the millage rate will actually decline in 2021,” she said.

District officials said that in 2019, the owner of an average Rochester Hills home, with a market value of $300,000 and a taxable value of $150,000, will pay $795 for RCS schools. If the sinking fund passes, officials said that same homeowner will pay an estimated $753 in 2020.

If the sinking fund does not pass, in 2020 the same homeowner will pay an estimated $528 per year, and the capital projects will  be funded from the general operating fund of the district, according to district officials.