Gwinn school district seeks sinking fund millage

Issue returns to ballot after voters turned down first request in May

Sandy Petrovich

Gwinn Area Community Schools will appeal to voters in Tuesday’s election to pass a sinking fund millage — its second try after a request failed in the May 7 election.

The school district seeks a levy not to exceed 1.75 mills, which is $1.75 on each $1,000 of taxable property value, for 10 years — 2019 to 2028, inclusive — to create a sinking fund for items such as the construction or repair of school buildings, school security improvements and the acquisition or upgrades of technology for the purchase of real estate for sites.

The school district has been climbing out of a $406,000 deficit since June 2017 but has been careful with its spending ever since. Once out of deficit, it has to restore its fund balance to at least 5% of its annual operating budget, which is about $550,000.

A sinking fund would provide yearly funding for repairs, upgrades and replacements. Without it, the general fund would have to support these costs, making it more difficult to support items such as personnel and programs.

At the June GACS Board of Education meeting, it was announced the district would end in only a $13,555 deficit after the amended 2018-19 budget was passed.

GACS Superintendent Sandy Petrovich stressed the district still has a deficit, albeit a much smaller one than in 2017. However, the board also passed the 2019-20 budget, which is $33,227 to the positive.

“We project to get all the way through ’19-20 and end with a positive balance,” Petrovich said. “We hope to be at a point where all of our expenditures are now matching what our revenue is, but that’s based on throwing a dart — what the state is going to do.”

The state has yet to issue its budget, she said.

Petrovich called the $550,000 fund balance an “emergency cushion” that would be used if something major happened.

“Just because we’ve worked our way out of deficit does not mean we have the money at hand to pay for all of the repairs, replacements and upgrades,” Petrovich said. “We still don’t have that.”

Thus comes the need for a sinking fund. Petrovich pointed to a 10-year project list at gwinnschools.org/sinkingfund of what the district would do with the millage.

“There are so many projects, they don’t fit in 10 years,” said Petrovich, who noted it’s important for the school district to be a good steward of the funds the community entrusts it with upon passage of the millage.

Projects range from student Chromebook replacement, an upgrade/remodel of the science room at the high school, and window replacement for K.I. Sawyer Elementary School’s fourth and fifth grades.

According to the GACS sinking fund page, the 1.75 mills would provide an estimated revenue of $509,673 per year for 10 years.

There are several current items for the school district on people’s tax bills:

≤ In 2009, voters passed a .45-mill bond for the high school swimming pool hall renovation to create a middle school area in the secondary building. The last year this bond is scheduled to be levied is 2023.

≤ In 2016, voters passed a .95-mill bond for special projects of sizable value throughout the district. The last year this bond is scheduled to be levied is 2030. Completed projects include the high school track, new buses and security camera systems.

Again, a sinking fund for facility repair and replacement is important because increasing operating costs and declining revenues leave limited funds for infrastructure.

“The general fund cannot support current programs and personnel, and pay for repairs and upgrades to aging buildings,” Petrovich said. “Without a sinking fund, the district’s general fund will have to support facility costs, leaving less money to support teachers, programs, textbooks, buses and other instructional needs.”

She called the sinking fund money a “second pot of money” — or additional funding — set aside from the general fund to take care of repairs, replacements and upgrades that fund cannot support.

Marquette Area Public Schools, Negaunee Public Schools, Ishpeming Public Schools, NICE Community Schools and Superior Central Schools already have sinking funds.

GACS has produced a graph that shows the cost per day a homeowner would have to pay depending on the home’s market and taxable values. For example, a home with a market value of $100,000 and a taxable value of $50,000 would mean the homeowner would pay $87.50 per year with a 1.75 mill. That translates to $7.29 per month or 24 cents per day.

“We’re not talking hundreds of dollars for the general populace,” Petrovich said.

A problem could arise, though, for people with kids no longer attending a school in the district.

“If people in our community are no longer connected to the school, then there isn’t that urgency to do for the school,” Petrovich said. “I think it’s all about supporting the good of your community.”

She believes, then, the future of the district rests on getting the sinking fund passed.

The future of the community also could be at stake.

“It is an investment in the school, but it’s also an investment in their property because they’re helping to keep the school alive,” Petrovich said. “They’re keeping the school district alive. They’re keeping the school district in good shape. They’re helping with keeping the facilities in good shape so that the school district can not only be alive, but thrive into the future, which helps their property value.”

She also believes another attempt at getting the millage passed is necessary, even though the first attempt failed, 686-507.

“Just because we lost by 179 votes does not make the need go away,” Petrovich said. “We asked the first time because we desperately need this.”

Christie Bleck can be reached at 906-228-2500, ext. 250. Her email address is cbleck@miningjournal.net.