FACILITIES IMPROVEMENT PROPOSAL – 2016 Three Rivers Community Schools Sinking Fund Millage Committed to maintaining our high level of academic & extracurricular programs for students. At the same time we are committed to maintaining TRCS assets.

THREE RIVERS HIGH SCHOOL RECEIVES AWARD TRCS Points of Pride  Graduation rate %  54% of graduates attend college  ACT scores overall have increased since 2012  745 On-Line class enrollments  152 enrollments in Early Middle College and Dual Enrollment Courses  179 enrollment hours in our Career and Technical Education (CTE) programs  1187 students, grades 6-12, are enrolled in the Fine & Performing Arts Programs.  520 students, grades 6-12, participated in athletics during the fall and winter seasons  410 enrollments in HS advanced courses

School Funding History Michigan voters passed Proposal A; which significantly changed how schools are funded. The largest percentage of a school district’s revenues come directly from the state school aid fund. Additional sources of revenue include federal, state and local grants. School districts are limited in the type of millage proposals they can request from local taxpayers to increase revenues. Currently school districts can NOT request a millage to cover operating expenses. They can request a bond or sinking fund millage for new construction and renovations.

Year Student Count 3,042 3,035 3,003 2,981 2,859 2,787 2,764 2,710 2,721 2,684 2,692 State Aid is Funded on a Per Pupil Basis

YearCost Increase $8, $9, % $9, % $9,295.72% $9, % Cost to Educate a TRCS Student DECLINING ENROLLMENT + STATE AID LESS THAN IN INCREASED DISTRICT EXPENSE = COST PER STUDENT ON THE RISE

MANAGING THE BUDGET CONTROLLING COSTS INCREASING REVENUES… Controlling Costs Through the years cost savings processes have been implemented including:  Trane Energy Management Program  Bulk natural gas purchases  Bulk purchase of supplies  Savings on curriculum purchases  Sharing of resources with other districts  Refinancing of bonds  Single bus runs  Ongoing review of purchase requests and staff training on internal accounting policies and procedures  Department directors and administrators are active participants in budget development  Paper to technology changes Increasing Revenues Grants and Fundraising:  In 2015, we received $1.17 million in grants, plus $400,000 over four years for instructional use at the Middle School.  District and parent organizations, as well as student clubs, fundraise to supplement district programs. Additional Opportunities  Dual Enrollment  Early Middle College  After School extracurricular activities  Expanded athletic programs  On line coursework  AP classes …all while increasing student opportunities educationally, socially, and athletically

Annual Facilities Operating Expenses

Current Bond Information *Estimated dollar savings is over the life of the debt. Taken from bond refunding analysis completed by Stauder, Barch & Associates, Inc. at the time of each refunding. **Total millage assessed in any given year for debt has not exceeded 6.90 mills (2004) when the Elementary School debt was added. From the only debt outstanding was the High School debt. HS bond pay off is in Elementary bond pay off is in 2034 Renovation/Build Project: Original Bond YearYear Refinanced Original Millage Assessed Current Millage Assessed Est. Dollar Savings* High School/Middle School / $1,565,751 Elementary Schools / $1,374,610 Totals**5.35 $2,940,361

THREE RIVERS COMMUNITY SCHOOLS OWNS OVER $68 MILLION IN CAPITAL ASSETS. THIS PROPOSAL PROTECTS THE COMMUNITY’S INVESTMENT IN EDUCATION. School BuildingsBuiltRenovated  Andrews  Barrows  Hoppin  Norton  Park  Middle School  High School1999 Additional Facilities  Field House, Press Boxes, Concession Stands, Dugouts, and Tennis Courts  Bus Garage  Administration Building  Maintenance Building  Additional property surrounding High School and Middle School

Resources Used To Develop Millage Proposal  Roof study completed by Carmi Associates  District facilities assessment completed by TMP architects  Information and quotes provided by district personnel including our Maintenance Supervisor, Jerry Butts  Athletic facility assessment provided by Athletic Director, Andy Mains  Items from District Long-Range planning and Action Agenda

What are the Major Differences Between a Bond and a Sinking Fund Millage? A bond millage is a lump sum dollar amount a school district borrows. Taxpayers pay back the borrowed money, plus charged interest, through a special property tax assessment. Bonds are typically used for funding large capital projects. A sinking fund millage is a special property tax assessment. The monies collected are held in a separate school district account. Allowable projects are completed as funds are collected.

Sinking Fund Dollars Can Not be Used to Cover Operating Expenses Examples of Operating Expenses Include: Salaries or benefits for Teachers, Administrators or Support Staff Maintenance Costs – bus repair, HVAC mechanical repairs, or painting Operating Expenses – utility payments, debt repayments, leasing costs Bus purchases Purchase of equipment - computers, printers, copiers, athletic, food service or auditorium equipment Purchase of furnishings – classroom desks, projection screens or whiteboards

Sinking Fund Millage Proposal The March 8 ballot proposal requests 1.95 mills collected over 8 years. Based on 2015 taxable values this would generate approximately $1.27 million annually. The district could not spend more money in a given year than collected, but they could carry money over from year to year. By state law, dollars spent from a sinking fund can only be used to repair, remodel, acquire, or construct buildings, purchase property or improve a site. Expenditures from the sinking fund must be reported and audited annually for compliance with treasury guidelines. An assessment for proposed projects for years 1 – 8 has been developed and will be reviewed and adjusted annually.

Major Items To Be Addressed With Sinking Fund Millage  Roof resealing and/or replacement  Security upgrades at building entrances  Traffic flow improvements to increase safety in parking lots and drives  Mechanical systems, including heating, air conditioning and water treatment systems  Exterior lighting installation for security and energy savings  Additional technology infrastructure  Parking lot resurfacing  Handicapped accessibility  Other site work, including athletic facility repairs and upgrades  Repaving of Collins Drive

School Districts Utilizing Sinking Funds Of the 545 districts across the state, more than 170 have passed a sinking fund millage. Districts in our surrounding area include: White Pigeon Cassopolis Coldwater Gull Lake Burr Oak Mendon Portage Lawrence Bronson

Home Market Value Home Taxable Value (SEV) Annual Property Tax Increase (1.95 Mills) Approximate Daily Impact $ 50,000 $ 25,000 $ $ 0.13 $ 100,000 $ 50,000 $ $ 0.27 $ 150,000 $ 75,000 $ $ 0.40 $ 200,000 $ 100,000 $ $ 0.53 If approved, the sinking fund millage collection would begin with the 2016 tax year. How Would a 1.95 Mill Increase a Homeowners Property Tax?

SINKING FUND PROPOSAL RATIONALE The per pupil state foundation has not kept pace with increased costs. Funding is still lower than 7 years ago. If passed, Sinking Fund dollars will be used to:  Retain general fund dollars for educational needs instead of facility repair & improvements.  Address security needs and maintain safe and healthy learning environments for our students and staff.  Maintain financial health of the district. Sinking fund dollars incur zero interest, and there is zero debt repayment.  Protect our fund equity balance when urgent repairs are required. This reduces the potential need to borrow for operating expenses.  Reduce future operating expenses and to protect taxpayers investment in our facilities.

PLEASE VOTE TUESDAY, MARCH 8TH For More Information – Call or visit MILLAGE PROPOSAL, BUILDING AND SITE SINKING FUND TAX LEVY Shall the limitation on the amount of taxes which may be assessed against all property in Three Rivers Community Schools, St. Joseph and Cass Counties, Michigan, be increased by and the board of education be authorized to levy not to exceed 1.95 mills ($1.95 on each $1,000 of taxable valuation) for a period of 8 years, 2016 to 2023 inclusive, to create a sinking fund for the construction or repair of school buildings and all other purposes authorized by law; the estimate of the revenue the school district will collect if the millage is approved and levied in 2016 is approximately $1,273,000?