SINKING FUND

What Is A Sinking Fund?

A sinking fund is a voter approved "pay as you go" plan giving our school district the money we need to cover repairs and upgrades without having to borrow or take loans. This helps us save money because we don't have to pay extra in loan interest. These funds can be used for anticipated and unanticipated building and site repairs.

• ​​All monies collected are utilized to directly benefit the district. No bonds are sold and there are no interest expenses.

• Can be used for the continual upkeep of school buildings, facilities, and surrounding school sites (i.e. security, technology, parking lots, playgrounds, etc.)

• Sinking funds cannot be used to pay for salaries, textbooks, loose furnishings/equipment, operational costs (other than building repairs) or school buses.

It's important to note that sinking fund millages are usually set for a specific period, often 10 years, and they may be subject to renewal through another vote after the set period.

Is a Sinking Fund levy similar to a Bond?

Sinking funds and bonds are both approved and generated by taxpayers, but they are very different. When a school district issues bonds, they're essentially borrowing money from taxpayers, and then taxpayers pay back that borrowed money over time, along with interest. On the other hand, sinking funds are like a special savings account funded by taxpayers, but without borrowing any extra money or paying interest. The money in a sinking fund is set aside for specific purposes, and there are rules in place to ensure it's used properly.

What does the State of Michigan pay for?

In Michigan, schools receive money from the state to help with teaching and learning. However, this funding doesn't cover the costs of taking care of, fixing, or improving buildings. Many schools in Michigan use sinking funds to take care of important building repairs and upgrades.

Benefits of utilizing a Sinking Fund:

• Provides additional funding for building and site repairs and improvements (including safety and security)

• Keeps general fund dollars dedicated to academic programs and salaries.

• Allows the district to improve critical infrastructure and maintain important community assets.

• Enables districts to plan and execute larger projects over time, avoiding sudden financial burdens, reducing the reliance on loans and debt, and ensuring consistent improvements.

• Helps the district respond to unexpected repairs or urgent needs without disrupting other programs or services.

Does Manton Consolidated Schools currently have a Sinking Fund?

Manton does not currently have a sinking fund in place.