Ann Arbor school board to reject combination sinking fund-bond millage renewal
The Ann Arbor Public Schools' sinking fund millage expires in 2014, and the school board has decided to forgo moving forward with a combination sinking fund-bond proposal and just stick to a straight-up sinking fund millage renewal.
![042413_Ann_Arbor_Public_Schools_Board_of_Ed_meeting_CS-15.jpg](http://www.annarbor.com/assets_c/2013/08/042413_Ann_Arbor_Public_Schools_Board_of_Ed_meeting_CS-15-thumb-350x233-149233.jpg)
The Ann Arbor Board of Education.
AnnArbor.com file photo
The deadline for submitting certified proposal language to the county clerks office for the Nov. 5 election is Aug. 27.
The district's sinking fund levies 1 mill in property taxes to be used toward repairs and improvements of AAPS' physical properties.
The sinking fund millage was last renewed by district voters in 2008. For fiscal year 2014 (tax year 2013), the levy is projected to produce $7.6 million, according to budget documents.
Due to state regulations, the tax money collected in the sinking fund cannot be used for building maintenance or operating expenses, such as employee compensation, furniture purchases, technology purchases and upgrades and other items.
Because of the stringent restrictions on sinking fund uses in Michigan, the board weighed going out for a combination sinking fund-bond proposal that would still levy approximately 1 mill of property taxes, but through both avenues, would allow the district to spend the money more broadly in ways a sinking fund alone could not.
Former Executive Director of Physical Properties Randy Trent recommended the combination bond-sinking fund. Trent's primary reason behind wanting AAPS to go out for both was a need to purchase about $5 million-worth of new desks, tables and chairs, office and lunchroom furniture for the district.
However, after much discussion at Wednesday's regular Board of Education meeting and receiving input from the district's legal counsel, the board decided not to pursue this route.
Interim Superintendent David Comsa said there were some concerns about whether proposal language could be drafted in time for approval, considering a combination bond-sinking fund millage is more complicated, and whether school officials could get with its actuaries about a bond proposal prior to Aug. 27.
With a sinking fund, the levy amount is set and the amount of money that is collected varies from year to year based on property taxes. Also, unlike a bond, the district can spend taxpayers' money as it's collected, rather than borrowing the full amount of the bond upfront from a third-party lender.
With a bond, the taxing entity sets an amount it wants to collect and then the millage rate or the levy varies over the course of the bond to ensure the pre-determined amount is collected.
So the differences in how the levies work also cause the combination bond-sinking fund millage idea to be complicated. Because the district is looking at a short timeframe of putting the proposal on the November ballot, the board expressed that it would be more difficult to educate the taxpayers about the ballot proposal to ensure they understand before November.
Board members expressed not wanting to forget about this combination proposal as an option and possibly considering it again in the future when they have more time to look at it, draft the language and campaign to build voter support.
According to documents prepared by the district in February, Ann Arbor’s 2010 sinking fund money has been used district wide for:
- Mechanical and electrical upgrades
- Key card access system for security
- 9 roof replacements
- 16 parking lot replacements
- 18 schools with ADA (Americans with Disabilities Act) site improvements
- 10 schools received site improvements
- 22 schools received new landscaping beds
- 22 schools received ADA interior signage for classrooms and wayward signs
Danielle Arndt covers K-12 education for AnnArbor.com. Follow her on Twitter @DanielleArndt or email her at daniellearndt@annarbor.com.
Comments
snapshot
Sun, Aug 18, 2013 : 10:38 p.m.
The manipulation and creative conjuring by the AAPD and the BOE in order to bilk property owners out of more money as a result of previously negotiated and unsustainable special interest contracts, continues to amaze me. A shameful sham.
aataxpayer
Sun, Aug 18, 2013 : 3:35 p.m.
The AAPS has faced huge financial challenges, so I would like to support this. On the other hand, why should voters trust the administration if they don't verify how they have been spending 7 million per year since the last renewal in 2008? AAPS - Let's make a deal, I'll trust if you verify that you are trustworthy. Open the books with details.
Roger Kuhlman
Sat, Aug 17, 2013 : 3 p.m.
Why is there no discussion of what is best for the taxpayers? Ann Arbor taxpayers pay a lot of property taxes and for many of us these taxes are very heavy financial burden.
West Side Mom
Sat, Aug 17, 2013 : 2:56 p.m.
I'd like to see how they plan to spend this money. Is there a 5-year Capital Improvements Plan?
Wondering
Fri, Aug 16, 2013 : 2:31 p.m.
Being very upfront, clear, and detailed with taxpayers regarding how the previous sinking fund dollars have been spent will go a long way toward convincing voters to renew the sinking fund. The board should ask for this information as part of its own very important oversight of whether these dollars have been well-spent, before it approves a request for renewal to go on the ballot. The district needs to run a very tight well-grounded financial and educational ship if the district wants continued taxpayer support.
Wondering
Sat, Aug 17, 2013 : 8:08 p.m.
@ Goober - No, I think there is a much more constructive alternative than that one. :-)
Goober
Fri, Aug 16, 2013 : 4:50 p.m.
Shall we hold our breath until we get this info and details?
JRW
Fri, Aug 16, 2013 : 12:26 p.m.
Vote this down, folks. AAPS needs to live within its means, make the necessary budget cuts, and maintain their buildings using their budget, and not keep asking residents for more and more and more $$. VOTE NO! Don't give them one more dime until they get serious about fiscal responsibility and hire professional financial managers. Send a message that the district needs to consolidate schools and get rid of expensive, poorly performing personnel.
Roger Kuhlman
Sat, Aug 17, 2013 : 3:04 p.m.
How about only holding votes on AAPS millages on regulary scheduled November election dates? How can AAPS get away with holding elections in May?
Goober
Fri, Aug 16, 2013 : 4:49 p.m.
You are correct. But AA voters tend to be apathetic and normally, there is a very low turnout for voting. I am voting no and hoping the voters find a way to get the AA BOE to quit - all of them.
Greg
Fri, Aug 16, 2013 : 10:44 a.m.
Really, until the board get serious about closing and consolidating the schools they have to get some efficiency and cost savings going, personally I am not interested in giving them more to spend. Real leaders do what is needed, not just keep pushing it off hoping problems will go away. Detroit is great example of decades of this, couldn't get much clearer where that leads.
Goober
Fri, Aug 16, 2013 : 8:56 a.m.
Vote yes out of fear. Vote no until projects are dollarized and to force fiscal responsibility.
Ann Arbor Parents For Students
Fri, Aug 16, 2013 : 3:31 a.m.
I hope that they are not considering a enhancement millage instead. This will be voted down too.
RUKiddingMe
Fri, Aug 16, 2013 : 3:09 a.m.
Every one of those bulleted items itemizing the money spent should have a dollar amount next to it. Most of them are vague, but even given an assumed difficulty with briefly summarizing it, a dollar amount at this bulleted level would still help. It's very easy to waste millions of dollars when the line item is "site improvements" or "landscaping" or "signage"or really anything in that list.
DonBee
Fri, Aug 16, 2013 : 12:24 a.m.
Funny - the article says that the sinking fund can not be used for maintenance and then lists roof replacement and other maintenance as the primary use of the money.
DonBee
Sun, Aug 18, 2013 : 7:30 p.m.
M. Haney - I would be careful if I were the school district on how I explained this millage. To say: "it does not do maintenance" would probably be the kiss of death, because most people think of major maintenance as just that, not infrastructure improvement.
Roger Kuhlman
Sat, Aug 17, 2013 : 3:09 p.m.
Roof replacement qualifies as an infrastructure improvement? Those who want to spend more and more public monies can always game the system. Why can't AAPS learn to live within its means and act responsibly?
M.Haney
Fri, Aug 16, 2013 : 1:45 a.m.
Roof replacement qualifies as a infrastructure improvement. Regular annual maintenance such as painting, cleaning, etc. does not qualify.
Mike
Thu, Aug 15, 2013 : 11:13 p.m.
Smart move, having the sinking fund millage voted down wouldn't be good..............