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What is a Permanent Improvement Levy and Why is it Needed?

What is a Permanent Improvement Levy and Why is it Needed?

*Published by Tom Golinar, Treasurer/CFO

Mariemont City Schools has a combined 2.5-mill operating and a 5.75-mill permanent improvement issue before voters on the November 6 ballot. Funds from this single issue provide two separate yet very important priorities for the overall operations of the school district.  

The operating issue pays for day-to-day operating expenses such as teachers, utilities and supplies. The permanent improvement issue is used for capital improvement projects, maintenance and repairs of school property and certain equipment items that are designed to last five years or more. For example, these funds can purchase technology, heating and air conditioning systems, roofs or other facility upgrades. Ohio law prevents these funds from being used on staff salaries or benefits. So while each is important, they fund very different types of expenditures.

Mariemont City Schools will use the Permanent Improvement money generated from Issue 2 to address the significant issues at the high school as well as make security enhancements at all schools in the district. It will allow the district to make critical repairs and replacements to the plumbing and electrical systems, roofs and heating and air conditioning systems at the high school. It will also allow the district to replace the academic areas of the high school with new classrooms, spaces for project-based learning and labs so that students can compete with their peers in other top school districts in Ohio and across the nation. The security enhancements will provide features to all of our schools that are essential to today’s safety plans for school security.

The financing for these improvements works a lot like a home mortgage. A home buyer typically doesn’t have the full cost of a home saved up in cash when purchasing it. So, instead, the total cost is financed over a period of time through regular payments. A Permanent Improvement levy works in the same way. A Permanent Improvement levy allows the district to make the necessary repairs and upgrades at the high school as well as the security enhancements at all schools now even though the full cost of the project will be financed over 37 years. Once the debt payments have been made in full, the Permanent Improvement issue will be removed from the books.

Permanent Improvement levies are highly regulated. They are offered for one year, five years or on a continuing basis. There are no other options. Furthermore, 37 years is the longest amount of time a school district is allowed to finance this type of a project. This allows the millage request to be lower and future residents to pay their fair share of the capital improvements. Unfortunately, there isn’t a “37 year option” for Permanent Improvement issues. So the district has to put the issue on the ballot as a continuing issue even though it will be removed from the books after the debt for the project is paid in full in 37 years.  

Financial experts that assist in long-term financing options recommended this as the most cost-effective way for the district to get the repairs and upgrades that it needs now, keep the millage request lower and ensure future residents help with the overall cost.

If you have questions about Issue 2 or how it is funded, please contact the district at 513-272-7500.