Why are there two school proposals on the May 2023 ballot? What’s the difference between the operating millage and technology and transportation bond?

In order to receive state funding, every school district in Michigan is required to pass and levy an operating millage to collect local taxes. In the absence of passing the operating millage, LPS would not receive its annual state aid and would not have sufficient funds to operate the school at current levels.  Some districts ask their voters to approve this millage periodically (to cover some number of years); others, like Leland, seek voter approval of the operating millage each year. The school’s operating tax is only collected on non-homestead properties. Homestead property (i.e., a person’s primary home) is exempt from the operating tax.

Why is the school asking voters to consider another bond when voters not too long ago passed a bond to build a new school?

         The construction bond passed by voters in 2018 provided funds to build a new elementary school and new gym to replace the old elementary school and gym that were built in the 1930’s and 1950’s. The bond funds were not used for the upkeep or repairs of the rest of the buildings. Bond monies cannot be spent on repairs to buildings, capital improvements to infrastructure, or systems in general. Those costs are typically paid for with sinking funds if approved by voters. If not, those expenses come from the general fund.  A technology and transportation bond is similarly limited in scope and can only pay for equipment, technology, and buses. 

How much money would the technology and transportation bond generate and how much would it cost me? 

         The technology and transportation proposal on the May ballot asks voters to consider the approval a 0.45 mil levy. That’s $45 per year for every $100,000 of taxable value of a home. (Not the market value of a home, but the taxable value, which is generally much less - about ½ - of the home’s market value.) The school would then sell the bonds, and the bank would issue us a loan which we pay back over the loan terms. LPS has structured its debt load such that as old debt is paid, we return to voters with an amount that would keep our total debt load at 2.5mils total; therefore, there is no expected increase in taxes. 

What projects are proposed to be funded by the transportation and technology bond in the next five to seven years and how was it determined which projects would be performed?

         The school board and its finance and facilities subcommittee meet regularly to review expenses, and with input from the teaching staff, maintenance team, and administration, identifies the highest priority technology improvements, upgrades, and bus replacement schedule that would need to be addressed within the next five years. Preliminary bids and contractor input were sought to estimate anticipated costs and a schedule was created to prioritize the expenses. The identified expenses include bus replacements, one-to-one students and staff technology devices, upgrades to the wireless system, switch and server replacements, battery backups, and other equipment that is nearing end of its useful life.  

How is this different from a sinking fund millage that we approved last year and what can sinking fund monies be used for?

         A sinking fund millage allows a school to raise monies to be used for upkeep, repairs and upgrades of the existing buildings and infrastructure.  Sinking fund monies pay for the physical capital repairs and improvements to school facilities - such as replacing classroom door locks with safety locks that staff and students could activate without a key, repairing building infrastructure, and keeping the systems of the school working properly. Sinking funds do not have to be paid back so there is no interest payment on the principal we collect.  

A bond is different.  Bonds are highly restricted sources of funds that may only be spent on their named and intended purposes; in this case, for the replacement of buses and technology upgrades and equipment. 

In the absence of voter approval of bonds or sinking funds, LPS would not have a dedicated revenue source available to fund these needs.  These expenses would then have to be funded from operational funds, which would reduce the funds available to spend on educational programs and activities (i.e., in the classroom), teachers, athletics, curricular materials and all other operational budget items.