PETOSKEY -- At the same time Petoskey school officials are carrying out some big-ticket investments in the district's physical assets, they're also exploring cuts to other school resources because of budget limitations.
As district chief financial officer Kent Cartwright points out, the situation isn't one of simply favoring one type of resource over the other.
Voters also approved a sale of bonds to bring $4.9 million for technology improvements, with extra property taxes to be levied for eight years to cover bond repayment.
These funding mechanisms can only be used for acquiring, maintaining or upgrading physical resources as specified in the ballot proposal, and cannot be drawn upon to pay for operating needs such as personnel, textbooks and utilities.
"By law, we're not allowed to tap those sources to help the general fund," Cartwright said.
State law doesn't allow local school districts to approach voters for extra taxes to help bolster school operations, he added.
Instead, Petoskey's operating revenue, like that of many other Michigan districts, is based largely on a basic per-pupil allowance that's calculated at the state level. Cartwright noted that this recently has stood at $6,966 for each student, down from a high of $7,316 which the state allotted during the 2008-09 school year.
"Districts have been left to deal with inflationary cost increases without any additional resources," he said.
The state-calculated funding allowance derives from a combination of sources: an 18-mill tax which districts levy on local non-homestead properties, as well as contributions from state-levied property and sales taxes. Voters decided on this approach through a 1994 ballot question known as Proposal A.
Petoskey's building and site tax levy stands at a rate of about 1.32 mills and will be collected for a total of seven years. This year, it will generate about $1.7 million.
In the coming months, the district will be putting proceeds from this millage to use for about $2 million worth of roofing updates and other projects at Petoskey Middle School and several elementary buildings. School officials also will kick in $125,000 as well as needed land toward the new Turcott Field, a baseball field at the high school/middle school campus that the district is pursuing in cooperation with the city of Petoskey. It will replace a smaller field of the same name on Petoskey's west side.
In the years ahead, district officials plan to use that tax levy's proceeds to pay for additional projects, such as roofing and pavement updates and boiler replacement at Sheridan Elementary School and interior updates at Petoskey Middle School. Plans also call for Northmen Drive, an access road at the middle school/high school campus, to be repaved and a new drive constructed to link the campus with Atkins Road to the south.
Using proceeds from the technology bond -- for which local property owners are paying 0.4 mill in taxes to cover repayment -- the district is in the process of replacing many aging computer workstations and servers. Bond proceeds also have been targeted for network upgrades, portable electronic devices for use by school classes, telephone and surveillance equipment and more.
Meanwhile, on the operations side, administrators note that expense trends and expectations for at least slight state funding reductions are prompting them to look for ways to cut costs. They expect the district will need to identify about $1.5 million worth of cuts in operating expenses for 2013-14 to keep its general budget balance at a point that assures steady cash flow. Cartwright said school board members likely will consider possible approaches at their next regular meeting -- set for 7 p.m. Thursday, May 16, at the Spitler Administration Building -- as well as at June's regular meeting and several special sessions expected in the weeks ahead.
Administrators have assembled a list of 48 potential cost-saving measures that could be considered, with Cartwright noting that they're evaluating dozens more from staff and community members to see if they would be viable for the school board to consider.
A regional approach?
While Michigan's local school districts can't approach voters for extra property taxes to support their operating budgets, Public Schools of Petoskey chief financial officer Kent Cartwright noted that such ballot proposals can be considered at a regional level.
Known as regional enhancement millages, these tax proposals would require approval of voters throughout an intermediate school district. These entities typically have territories that take in multiple local school districts, and they assist those local districts in providing programs and services.
Cartwright and Rick Diebold, superintendent of the Charlevoix-Emmet Intermediate School District, said area schools administrators periodically have discussed the concept of seeking one of these millages. But so far, they said the critical mass of support hasn't looked to be in place in local communities.
In order to approach voters with the tax proposal, an intermediate school district would need to receive resolutions of support from boards in at least some of its local school districts. To move ahead with a ballot question, these expressions of support would be needed from some combination of local districts that take in a majority of the intermediate service area's students.
To date, Diebold noted that only a handful of Michigan's 57 intermediate districts have passed such proposals.
Determining the particulars for a ballot request and evaluating whether it would be feasible to seek can be time-consuming processes for one local district, Diebold said. And with circumstances varying from one district to another, he noted that formulating a regional proposal could be more complex.
"The interests of everyone are different," Diebold said. "They're all in different situations."
In some cases, Diebold noted that districts might be hesitant to seek a regional millage for fear it would compete with other funding measures on the local school ballot, such as building and site millages or technology or transportation bond issues.
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