Anchor Bay School District held a public hearing on the proposed 2025-26 budget and tax millage on Feb. 25, 2025, where staff presented the district’s plan to levy the full 18 operating mills and a 10-mill debt levy and reviewed revenue and expense changes that produce a small projected surplus.

Todd Rathbun, staff member, told the board the district is proposing total revenues of about $80 million and expenses just under $80 million, producing an estimated net revenue over expenditures of about $320,000 for 2025-26. Rathbun said taxable values used for the operating levy increased from roughly $335 million to about $356 million — a rise of about $21 million, or 6.36% — and all-property values (used for debt) rose about $86 million, or 4.89%.

The presentation explained the Headlee rollback effect for Michigan millage limits and a Truth in Taxation notice for increases in total taxable value. Rathbun said the district requested 19.4687 mills in November 2023 for a 10-year operating authorization beginning in 2025; this year’s Headlee millage reduction fraction was 0.9903, and state law limits the district to levy no more than 18 operating mills. “We are intent on levying that full 18 mills,” Rathbun said.

Rathbun reviewed budget assumptions: a projected enrollment decline of about 50 students, which he estimated would reduce revenue by about $490,000; an assumed $400 increase per pupil in the foundation allowance, which would add roughly $2.1 million; and one-time or nonrecurring items from 2024-25 that will not repeat, including the sale of a property called Sugarbush. He said the district expects about $472,000 in a grant obtained with help from Congressman Elissa Slotkin’s staff (referred to in the presentation as the Hertel grant) to be split between the current and next fiscal year.

On federal and state program funds, Rathbun said the district has swapped some federal IDEA-B funds for local special-education millage collected by the intermediate school district to reduce administrative burden. He also said previously received MPSR funds and remaining ESSER funds were removed from the 2025-26 budget (citing eliminations of roughly $900,000 and $2.1 million in specific MPSR lines), and that change contributes to the revenue variance between years.

Expenditure changes highlighted by Rathbun include a roughly $1 million decrease tied to a one-time 1.47(g) grant and retirements that lowered personnel costs in some positions. At the same time, the budget includes negotiated compensation increases of about $1.9 million in salaries (Rathbun said roughly $1 million of that is targeted to teachers). The district plans to add three fully loaded positions (a district technology position, a security supervisor and a curriculum-improvement position) and to increase pupil-transportation costs by nearly $2 million because electric-bus purchases have been shifted into 2025-26.

Rathbun said the district has received two Clean Buses grants, has placed an order for three additional buses and hopes to have six new electric buses by the end of 2025-26. He also said the budget includes about $120,000 more for contracted security services and that the district will issue a request for proposals to ensure competitive pricing; the current provider Fortis has performed satisfactorily, he said, but has requested a substantial increase.

On insurance, Rathbun told the board general liability costs rose by about 30%, roughly $139,000, which he said reflected marketwide increases rather than local claim activity. He also said health-insurance costs and band-uniform and electric-bus expenses are included in the proposed budget.

Rathbun reviewed the district’s fund balance history and projections, noting the district’s low point in 2019-20 when it was under state fiscal monitoring and that the projected fund balance for 2025-26 is just above 19% (the district said it targets about 16% as a healthy reserve level). He recommended the board keep the reserve target in mind when making discretionary spending decisions.

The board opened the floor for public questions; none were offered. The hearing was closed on a motion by Mister Venetale supported by Miss Knox. The roll call vote recorded all members present voting yes; the motion carried and the board adjourned the hearing and moved into the regular 7 p.m. meeting.

Because this session was a public hearing rather than a formal final budget adoption, no final levy adoption vote was taken in the segment of the meeting covered by the transcript.