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Local School Board Creates Permanent Improvement Fund

AEA President Questions Move


John Downey, president of the Archbold Education Association, questioned the wisdom of the Archbold Area School Board in deciding to set aside 1.8 mills for a permanent improvement fund.

Nevertheless, the board went ahead with the move, which will re-direct about $390,000 per year from the school district general fund to a permanent improvement fund.

Downey’s questions, in the form of public comment, came during a public hearing on the measure, held prior to the regular board meeting, Monday night, Sept. 15. The board decided to re-direct 1.8 mills of revenue during its regular meeting.

Money in a permanent improvement fund can only be spent on items that have a lifespan of more that five years. Examples are buildings, school buses, computers, even desks and chairs.

The board had previously discussed the move. David Deskins, school district superintendent, said the district has several permanent improvement needs, from roof repairs to pavement resurfacing. Money in the permanent improvement, or PI fund, could cover the needs.

Flexibility

In his comments, Downey said by re-directing money into the permanent improvement fund, the school district loses flexibility.

“It is my understanding that there is nothing you’re going to try to do that you can’t do with money already in existing general funds,” he said.

“Trying to take 1.8 mills, at an estimated cost of roughly $360,000, is excessive. And once you put it into a public improvement (fund), then you lose the flexibility to spend the taxpayer dollars.

“It’s conceivable that you could have a surplus in the permanent improvement fund, but you need to spend it on something other than buildings and computers, and you couldn’t do that. You may have to go to the voters and ask for an increase in the general levy for more millage, because you’ve now got all this money into a PI fund.”

As an example, he cited the Wayne Trace school district, where a lawsuit over a school bus crash left the district fi- nancially strapped. The Wayne Trace school board had to ask its voters for a $2 million, 25- year property tax levy to pay the judgment.

“Especially in times of financial uncertainty, you want to maintain as much flexibility as possible.

“As a school district we need to be prudent. We need to keep this money in the general fund and maintain our flexibility,” said Downey.

Reduction

The board also voted to reduce the millage being collected to repay two bond issues.

Christine Ziegler, district treasurer, said previously there is sufficient cash in the bond repayment accounts to fund the reduction.

Currently, the school district is collecting 2 mills to repay bonds issued after a 1987 vote to construct the high school. The board action reduced the millage to 1.3 mills.

The district is also collecting 4 mills to repay bonds approved by voters in 1996 to construct the elementary school, and fund renovations at the middle school. The board voted to reduce the mills to 2.6.

Both reductions take effect during calendar year 2009.

Previous estimates state the action will save the owner of a $100,000 home about $77 a year in property taxes.

All members were present, and all voters were unanimous. Next board meeting is Monday, Oct. 20, 7 pm, in the AHS media center.


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