Sept. 27, 2013
By Tara Cavanaugh
On Nov. 5, the community will be asked to vote on approving the district’s sinking fund millage. Here are answers to frequently asked questions about the fund.
What does the sinking fund pay for?
The district needs to maintain its buildings. The sinking fund millage is a pay-as-you-go method for building projects. The district does not pay interest on the money used.
Here are some examples of what the sinking fund pays for:
- Parking and paving
- Accessibility needs as per the Americans with Disabilities Act
- Building system replacements
The sinking fund cannot be used for:
- Teacher salaries
- Administrator salaries
- Employee salaries
Many of the repairs and updates that are paid for by the sinking fund are repairs and improvements that help the district avoid spending larger amounts of money. For example: the underground storage tanks in the bus building are now 30 years old and past their warranty. The district will replace them now because if those tanks leak, the district would have to spend money on cleanup as well as replacements.
How much money is in the sinking fund each year?
The sinking fund produces $7.4 million annually. Spending more means conducting a larger volume of work, which means it’s more likely that classroom activities would be disrupted.
Will voting to approve the sinking fund increase my taxes?
Your tax rate for the sinking fund will not increase over what you are paying now. In 2008, the community approved a sinking fund millage of 1 mil. The district is asking to continue the millage of 1 mil.
What does a 1 mil rate mean for my taxes?
1 mil is a tax of $1 per every $1,000 in value for your home. A homeowner with a $150,000 home would have a taxable value of $75,000 and would pay $75 toward the sinking fund.
What happens if the sinking fund millage is not approved in November?
Even if the sinking fund millage is not approved, the district still needs to find a way to keep its buildings open and operating safely, so money to make necessary updates and improvements would come out of the district’s general fund. The district’s general fund has already lost $43 million over the past five years (including this school year) due to decreased state funding. The district had to make budget cuts this year; for a list of this year’s cuts, see here.
Didn’t we approve a sinking fund millage in 2008?
Yes. That sinking fund millage covers from 2010 to 2014. The vote in November is for a sinking fund starting the 2015-2016 fiscal year. The district asks the community to vote for the sinking fund a couple of years before it is implemented in order to do thoughtful planning for schools and classrooms.
We just approved the Tech Bond last year. How is that different from the Sinking Fund Millage?
A bond issue is a lump-sum dollar amount that the district borrows through the sale of bonds in order to fund capital projects. Taxpayers pay the money back over a period of years with interest, similar to a home mortgage. The money from the bond has to be used for specific purposes outlined to the taxpayers.
This infographic shows what the Tech Bond money is being used to pay for.
A sinking fund millage is a limited property tax for addressing building repairs and remodeling projects. It’s more like a bank account where you can access the money on-hand to pay for projects as they are completed. The district does not pay interest on the money used. This proposal would also allow equipment purchases if permitted by law.
Where can I get more information?
The district will provide community forums on Oct. 2 from 6:30-8 p.m. at the Pioneer Annex and on Oct. 25 from 1-2:30 at the downtown district library (a brown bag lunch). The AAPS News will also continue updating its Sinking Fund Series.
More on the Sinking Fund: