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Royal Oak Schools Sinking Fund Proposal Questions and Answers

A sinking fund is established by a school district or municipal entity and can be used to pay for construction, repairs, physical improvements and building enhancements.

Royal Oak Schools Sinking Fund Proposal Questions and Answers

Still undecided on how to vote on the school sinking fund proposal on Election Day? 

The R oyal Oak School District website offers these answers to frequently asked questions:

Question:  Why is this request being made now?  

Answer:  A capital needs assessment completed this past year identified nearly $20 million in capital needs across the district. The largest single item is roof replacements; the district has approximately 870,370 square feet of roof.  A schedule for roof replacement needs to be established and funded. Other critical need areas include:

  • technology infrastructure
  • parking lots 
  • safety improvements to school entrances
  • windows and doors
  • heating/cooling systems

In an effort to maintain programs for students, expenditures for meeting such needs have been deferred over the last several budget cycles.   If we continue to postpone necessary investments in our buildings and parking lots we run the risk of having much higher costs in the future.

Question:  If this is approved, how will my taxes be different in 2013? 

Answer:  According to the latest numbers available, the median sale price for a home in Royal Oak was $137,420.  In 2013, the debt millage levied by the school district is projected to decline by 0.61 mil; this decline would partially offset the 1.0 mil sinking fund increase.  The net effect would be a 0.39 mil change in school taxes.   The result would be that the average taxpayer would see a tax increase of $26.80 per year in 2013 and 2014.  Because of continued projected reductions in the debt millage, the rate would begin to decline in 2015.  

Question: Why can’t you just keep doing what you’ve been doing without asking for more funding? 

Answer: Over the past ten years, Royal Oak Schools have implemented over $9.5 million in reoccurring budget reductions to balance the budget:   

  • central administration has been reduced by 50 percent
  • overall administration has been reduced nearly 40 percent
  • transportation, custodial and maintenance work has been privatized

Faced with daunting declines in revenue, the district has prioritized students and instruction.  We have reduced General Fund expenditures for building renovations and improvements, causing needed work to be deferred. Continuing to delay necessary work – for example, roof replacements – puts the district at risk of incurring even more significant costs. Without a dedicated revenue stream to fund such needs, expenses will need to be paid out of general revenues, reducing funding available for students and classroom needs. 

Question:  I don’t have any children attending Royal Oak Schools.  Why would I support this? 

Answer:  A recent national study looked at the correlation between student achievement and home values. This study found that home values near high achieving schools are on average 2.4 times higher than near low-scoring schools. Strong schools benefit not only the students who attend them but all residents of the community.  

Question:  Is there a guarantee the revenue will go towards the intended purpose? 

Answer:  A Building and Site Sinking Fund (BSSF) millage provides dedicated revenues that by law may ONLY be used to make infrastructure improvements and repairs to a school district’s facilities. Pursuant to State Law, the expenditure of BSSF millage proceeds must be audited, and the proceeds cannot be used for teacher, administrator or employee salaries, or other operating expenses.      

Question:  Why the November elections date?

Answer: Planning for building improvement projects requires considerable lead time. To take advantage of the summer break for such work requires that planning begin the December prior to the next summer.  Also, we believe this is an issue of such importance that we want as many people as possible to participate in the election and November elections generally have the greatest voter participation. 

Question:  What about the revenue from the sale of former school properties?  Can’t that be used for the needed improvements? 

Answer: Property sale revenues are segregated into a dedicated building and site improvement fund.   These revenues have and will fund building improvements, specifically those which the Board of Education committed to in 2005. Property sale proceeds are funding mechanical (heating and cooling) renovations at Oakland Elementary School (summer 2012) and the development of a fiber Wide Area Network to connect school facilities (summer and fall 2012). Property sale revenue is one-time revenue and is thus not the long term answer for meeting ongoing capital needs.

Question:  Do we need all of the facilities we now have? 

Answer:  Over the past year, the Board of Education analyzed our current and future property needs. Based on five-year enrollment projections, the change to all-day kindergarten classes district-wide, and a commitment to provide services for our students with special needs in our district, the Board determined that we will need our current six elementary buildings, the middle school, high school, and Churchill Community Education Center into the foreseeable future. 

Question: Isn’t enrollment continuing to drop? 

Answer: Our five-year enrollment projection forecasts declines in 2012-2013 and 2013-2014, but after that enrollment is projected to be stable.  

Question:  What are the plans for the Lockman Building (Keller West) and Administrative Offices? 

Answer:  The Administration Building is being actively marketed. While there are parties actively exploring the site, a purchase agreement is not in place at this time. When the Administrative Building is sold, administrative offices will be relocated to the Churchill Community Education Center.  Proceeds from the sale would fund necessary renovations at Churchill. The Lockman Building (Keller West), which would require millions of dollars in renovations to be used again for K-12 classrooms, will be razed to provide additional green space at Keller.   

Question:  Are you concerned that both the City of Royal Oak and the School District will be asking voters to approve millage at the same time? 

Answer:  The Board of Education has been actively working on this proposal for many years. They have intentionally delayed making this request of the citizens until the debt millage could begin to decline. Citizens understand that strong schools and strong city services make Royal Oak the desirable community that it is. Each entity, the school system and the city, has a responsibility to provide information and options for citizens.

For additional facts and information go to  www.royaloakschools.com and click on the “Sinking Fund” news item.


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