Voters in the Leland school district will be asked to decide a $600,000 bond issue for the purchase of buses, technology and classroom equipment.

The Leland Board of Education voted 6-0 at Tuesday’s rescheduled monthly meeting to ask voters in the May 6 election to approve the bond issue, which will fund the purchase of large items that general fund revenue can no longer support. The move was recommended by the board’s finance committee which includes president Andy McFarlane, trustees Maynard (Rink) Wheeler and Alan Hartwick, and superintendent Mike Hartigan.

Action was taken after looking at budget projections for the 2008-09 school year. Gov. Jennifer Granholm has presented a sliding scale for increases ranging from $75 to $216 in per-pupil foundation allowance for schools in the upcoming fiscal year. In meetings last month with state legislators from the Grand Traverse area, Hartigan was told it’s likely Leland would receive a $174 increase, but suggested the figure should not be used to calculate revenue for 2008-09. With that in mind, Hartigan’s budget projections include an increase of $125 per student, bringing the district’s per-pupil allowance to $8,313. Based on a “conservative” enrollment figure of 495 and the projected state allowance, state revenue is estimated at just over $4.1 million. An additional $425,880 in revenue from federal Title I funding and an anticipated fund balance of $378,611 from this year bring the total funds available to $4,913,024.

“I was told that 2010 is going to be a tough year at the state level, due to a number of factors,” Hartigan said, citing a contractual 3 percent salary increase for state employees and manipulation of the state retirement system. “The challenge for is us is getting to 2011.”

Since the 1999-2000 school year, Leland has been able to forgo extensive program cuts by tapping into its reserves. That year, the district’s fund balance was $545,243, representing 16.64 percent of expenditures. The fund balance is expected to drop to 8 percent of expenditures by the end of the current school year, and 4.56 percent based on projected budget figures.

“That’s a 49.8 percent reduction in fund balance,” Hartigan said.

Board members said they were not comfortable with the dwindling reserve in light of upcoming expenses. The district’s bus fleet was reduced by three last year — one by an accident, two more by a recall that took them off the road.

Typically, a bus is purchased by the district bi-annually.

Increased state graduation requirements calling for additional science instruction is also expected to tax the district’s coffers in the form of additional laboratory equipment. Likewise, the cost of maintaining the district’s technology is also expected to cut into the budget.

“It’s a challenge. Nobody likes more taxes,” the superintendent said. “I know what the board has done in the past to keep money close to kids. Our goal is maintaining the future — not the future maintaining us.”

Based on the taxable values in the district, business manager Sandra Potts estimates the district will have to levy an additional one-quarter mill to pay off the bonds over five years.

Leland voters approved a bond issue in 2003 to fund expansion/renovations to its facility. Over the years, the original millage approved for the bond issue has been reduced from 2.3 mills to 1.65 mills, because of additional construction.
Voters approved a sinking fund millage of .30 last year.

In other business during the 90-minute meeting, the board discussed other issues to be voted upon in the May 6 school election. Leland is the only district in the county that will not have candidates on the ballot this spring. Last year, the board agreed to align its terms with the November election, in a cost-cutting measure. The terms of McFarlane and trustee Peggy Miller will be extended through November. However, voters will have another proposal to act upon. In addition to the bond sale, they will be asked in May to approve the annual 10.9-mill levy on non-homestead and non-qualified agriculture parcels.

In addition to filling two board seats, in November, voters will have to consider the same non-homestead millage levy to be collected the following summer.