Sinking Fund - WKTV Journal

The playground at Southeast Elementary. (WKTV)

By Joanne Bailey-Boorsma
j oanne@wktv.org

The playground at Kelloggsville’s Southeast Elementary is a mismatch of different equipment: silver monkey bars that look like they are from the 1970s mixed in with what seems like newer bright blue swings, a slider, and balance equipment.

It is easy to tell that the equipment has been used — a lot. The bright blue paint on the slider has been chipped away to reveal the metal. The slides with scratches are now a faded pink and the monkey bars have a slight bent in them.

Southeast Elementary and the district’s West Elementary are two of Kelloggsville’s oldest buildings. Admitting he is not certain of their age, Eric Alcorn, Kelloggsville’s auxiliary services director, said he estimates Southeast Elementary to have been built in the 1950s or early 1960s.

Playground upgrades at the two elementary buildings are on a long list of proposed projects that will be funded if Kelloggsville voters approve a May 5 proposed 1.0 mill sinking fund request.

West Elementary would be the first school to receive new lockers, carpet, playground upgrades and parking lot repaving. (WKTV)

“With our newest elementary building, we want to make sure that all the buildings are up-to-date and that all our students are benefiting from the rewards by being able to grow both physically and mentally,” Alcorn said.

As district officials proposed a 2018 bond request for a new elementary building (which was approved by voters), they made it clear that the new building was part of a long-term plan to update and modernize the district’s elementary schools. The sinking fund request is the next step in that plan with Superintendent Samuel Wright stating on the district’s website that “A plan has been made to identify items that are necessary to keep our buildings in excellent shape and aren’t exactly recognizable. Items such as parking lot paving, HVAC, roofs, and energy conserving projects are expensive and additional funds are needed to complete these projects.”

In Michigan, a sinking fund is a millage levied to support school safety improvements, technology improvements, and the repair and construction of school buildings. It is a “pay as you go” system that does not require borrowing money or paying interest. A sinking fund milage is calculated using the taxable value of a home, which is usually about half of the assessed value. For example, Kelloggsville Public Schools is asking for 1.0 mill. On a house valued at $100,000, the taxable value is $50,000. The annual cost to a Kelloggsville taxpayer would be $50, which is about 96 cents a week.

A sinking fund is for up to 10 years. Kelloggsville’s sinking fund request would run from 2020 – 2029. It is estimated that within the first year, 2020, the district would receive about $371,073.

An important aspect to a sinking fund, which Alcorn pointed out, is that money from that fund can not be used for things like regular maintenance, purchasing teaching supplies or textbooks, or paying teacher and administrator salaries. In fact, the law requires districts with sinking funds to keep these funds separate from the district accounts and a district also must have s separate auditor each year of the funds to ensure they are being spent appropriately.

“The fund will help us pay for long term projects that in the end will help us not have to pull from the general funds to help pay for it,” Alcorn said, adding by creating a fund that allows for the district to handle building and safety concerns, the district is able to maintain school services without concerns of having to use money for an emergency.

“We are not in a situation where an emergency needs to be addressed,” Alcorn said. “However, we do not want to have to make a decision that would move money away from student services because of a need.”

School officials have made a wish list over the 10-year life of the sinking fund of items they would address in the district’s facilities. Year one would focus on West Elementary receiving new carpet, lockers, playground upgrades, and the parking lot would be repaved. The second and third year would focus on Southeast Elementary, which would receive playground upgrades, repaved parking lot that would include a bus loop, and classroom remodels. In fact, over the 10 years, every building in the district, which also includes the Early Childhood Learning Center, the middle school, high school and the alternative high school, 54th Street Academy, would benefit from the fund by receiving roof replacements, classroom updates and parking lot repaving.

If the sinking fund is approve, in year 9 the 54th Street Academy would receive a roof replacement and in year 10, its parking lot would be repaved. (WKTV)

Voting by Absentee

Kelloggsville Public Schools has about 2,400 students enrolled for the 2019-2020 school year, with Alcorn noting the district continues to grow. While most Kent County school districts are pretty much contained to one area, Kelloggsville Public Schools has about half its students in the City of Wyoming and the other half are from the City of Kentwood.

Alcorn said the district was just gearing up to inform voters about the sinking fund request when the Stay Home, Stay Safe order took effect on March 24. In April, the governor issued an executive order that the May 5 elections would be done “to the greatest extent possible” by absentee voter ballots.

Residents who have not received a notice for an absentee ballot may request one from their local clerks office. The Kelloggsville Public Schools’ website also has information on how to obtain an absentee ballot. The ballot must be mailed and received by 5 p.m. May 1 or you may bring the ballot to your city’s clerk’s office on the day of the election, May 5, by 8 p.m.

Also according to the May 5 elections order, the clerk’s office in both cities will be open for people to request, fill out and return an absentee ballot. Voters may also register and vote that day as well. According to the Kelloggsville website, you may request ballot up until 4 p.m. on May 5 and you have until 8 p.m. to return an absentee ballot.

For specific guidelines on May 5 voting, visit the City of Wyoming Clerk’s Office page or the City of Kenwood Clerk’s Office page.

On election day, the Wyoming Public School District was hopeful the citizens of Wyoming would vote to pass the funding request. The request was for a sinking fund, a shorter, smaller stream of money that acts differently from a bond issue.

“It was very hard to get a read on the way the public felt. It was very quiet,” explained Superintendent Tom Reeder. “We tried to be as informative as possible over social media and school news letters.”

The sinking fund request was passed by a vote of 1,445 to 978 and won every precinct.

The new funding will raise over $400,000 per year with little, if any, increase to the Wyoming tax payers. The sinking fund will help pay for infrastructure updates until the next bond proposal between the 2021/22 and 2022/23 school year. By that time, the District’s millages will be down to zero. Much like paying off a house mortgage.

How is a sinking fund different from a bond issue? Well, for starters, a sinking fund is for a much shorter period of time. On top of the duration, a sinking fund provides a little bit of money at a time instead of it all upfront. With a sinking fund, no debt needs to be repaid because a smaller amount of money is being brought in to pay for numerous projects. With a bond issue, the millages passed off to the taxpayer pay off the debt for the large lump sum taken upfront.

On the whole, sinking funds are more economical for smaller projects because there is no interest paid on the projects; you pay as you go.

Now that we’ve covered the jargon on the difference between a sinking fund and a bond, it’s time to talk about the real meat of what was voted on – where is the money going?

Quick answer, it’s going towards small projects that need repair on a schedule. Things like roofs, parking lots, and mechanical equipment.

Longer – more detailed – answer, it’s going towards safety and security, efficiency, and infrastructure tune-ups district wide. The breakdown is below.

Replace and Re-key Doors: Doors are rusted and multiple keys are needed in one building. Re-keying allows for a master-key allowing access to multiple school buildings.

Emergency Lighting: Emergency lighting systems are outdated and need to be upgraded for increased safety in the event of an emergency or loss of power.

Upgrade heating and cooling units: Current system runs at high output all the time.

Install High Efficiency Heating System: New web-based control unit updated system will help with energy savings by allowing the heating system to run at lower output during mild weather.

Exterior Lights: Provide better nighttime lighting for after school events.

Remodel Student bathrooms: Replace bathroom fixtures with energy-efficient fixtures and use low maintenance materials to reduce cleaning times and extend useful life.

Replace or Repair Roofs: Building roofs are past their 20-year useful lives. Recent inspections indicate that future leaks are only a matter of time.

Parking Lots: Lots are in need of resurfacing. Parking lot capacity would be increased to ease congestion of drop-off and pick-up areas.

Superintendent Reeder was very thankful to the public and adamant that the funds were needed, “We are very thankful to the public and we will stay transparent with where the money is going. Our buildings are 50 years old. They may look nice on the outside, but issues are starting to present themselves and they need to be fixed.”