Questions and Answer Session:
When? Monday, October 23
Where? Burr Oak Community Schools (enter Door 3, go to the classroom connected to the wood shop)
Time? 7:30 p.m.
Below are some common questions and answers related to the sinking fund levy proposal:
What is a sinking fund?
A sinking fund is a “pay as you go” system which is generated by local voters. It provides school districts with funds to pay cash for repairs and improvements as needed. A sinking fund saves money by addressing infrastructure maintenance without incurring interest on loans or bonds. The funds are utilized to protect the taxpayer investment by paying for school repairs and maintenance projects as they are completed.
What does the State of Michigan pay for?
The State of Michigan provides schools with funds to support educational instruction. Current funding does not provide funds to maintain, repair or improve buildings. Burr Oak Community Schools, like many Michigan schools, utilizes a sinking fund levy to fund these important repairs and improvements.
What are the benefits of a Sinking Fund?
Keeps more general fund dollars in the classroom. The renewal of the Sinking Fund would provide the district with dedicated funding towards our facilities, preserving general fund dollars to provide educational opportunities for students.
Provides additional funding for building site improvements
While small improvements have been made using sinking funds provided through the last election, the majority was saved up and we have now entered into a contract with a construction company to replace the roof over the main building. Additional funding was transferred from the general fund to the sinking fund to support the project.
The Burr Oak Board of Education has identified many necessary improvements that the sinking fund would address and will work to prioritize the needs.
Provides additional funding for safety/security improvements The safety of our students is always a top priority. The renewal of the Sinking Fund will provide our district with secured future funding to make improvements to our current safety and security infrastructure.
Is a sinking fund levy similar to a bond?
Sinking funds and bonds are both approved and generated by taxpayers, but they are very different. A bond is a form of borrowing and taxpayers must pay back the borrowed funds over a period of years with interest. Sinking funds are levied, but are not borrowed. This means the funds generated do not include borrowing additional debt or incurring interest. Sinking fund revenue is also limited in its uses which are regulated by law.
What can sinking fund revenue NOT be used for?
Employee Salaries
Employee Benefits
Books
Consumable Supplies
Routine Maintenance like mowing, cleaning, and snow removal
Does Burr Oak Community Schools currently have a sinking fund?
Yes. The current sinking fund millage expires with the 2024 levy.
What happens if the sinking fund levy is NOT approved in November?
Without levy approval, there will be a significant financial impact on educational budgets, as the district must use general fund dollars to make all site and security improvements.
If the proposed sinking fund levy is approved, what happens to the previous levy?
If approved, the new levy would replace the previous levy. It is not added to the previous levy.
How much revenue would the sinking fund generate for Burr Oak Community Schools?
The proposed sinking fund would generate approximately $162,639 each year, or a total of $813,196 over 5 years.
How much will the proposal cost the average homeowner?
This is a renewal. You will continue to pay what you are currently paying.