Cindy Barth is a retired schoolteacher. But she hasn’t closely followed affairs in her smallish Upper Peninsula school district of Dollar Bay-Tamarack City since returning home after years of working overseas.

Late last month, she learned, by way of a notification from the local township, that a school election would be on the Aug. 6 ballot. Barth said she called local officials for information, and didn’t get much, but did learn that it was a $4.7 million bond proposal (tax increase), an estimated hike of a little over 5 mills ($5 for each $1,000 in SEV) for 20 years.

She voted no. The proposal passed by 24 votes, out of 360 cast. Turnout was 25.8%.

Barth, who owns commercial property in the school district in addition to her homestead, said she was “sick to my stomach” over the result.

“I felt there was a lack of proper notification. They put out as little as possible that they could get away with. For me, it was a very expensive civics lesson," Barth said.

She’s not alone.

The Dollar Bay bond proposal was one of nearly two dozen public school tax plans on the August ballot across Michigan, according to Gongwer News Service. Fifteen were tax hikes (as opposed to renewals). Ten were approved.

Taxing authorities regularly schedule proposed increases for elections when it is less likely that voters will be paying attention, said Michael LaFaive, senior director of fiscal policy at the Mackinac Center for Public Policy.

An analysis by LaFaive and colleague Jack McHugh in 2014 found that millage hikes for school debt increase by 75% over inflation since the 1994 adoption of Proposal A, which placed strict limits on school operating taxes. Many of the tax hike elections were held on dates aimed at limiting voter participation, and came to be known as “stealth” elections, he said.

LaFaive said a subsequent state limit on the timing of tax hike elections (dates in May, August and November), enacted in 2003, has meant that “it happens less often, but not as less often as it should.”

“Obviously, it’s easier to get (tax hike supporters) out in off years. There is much greater turnout of ordinary people in even year elections," LaFaive said.

Jennifer Smith, director of government relations for the Michigan Association of School Boards, said public school officials believe the current limits on election dates and information requirements are sufficient.

“We used to hear that we were holding ‘stealth’ elections. That’s not possible anymore,” Smith said.

State law requires that the information districts provide about tax proposals is factual, Smith said. “We haven’t heard a lot of the election complaints since they limited the number of days” on which tax hike votes can be held, she said.

Kristin Lortie, a part-time resident and property owner in Dollar Bay, disagrees.

“This wasn’t a stealth election. It was an ambush election,” Lortie said of the Dollar Bay millage proposal. She added that people affiliated with the school would have been fully informed about the upcoming bond election.

Information about the proposal — physical plant improvements designed to provide a “Safe, Warm, Dry and Thriving” educational experience for Dollar Bay students, according to the district’s website — was scanty and haphazard, Lortie said.

Lortie said she found out about the proposal from another resident when she attended a property tax Board of Review meeting in mid-July. Lortie, who spent five years working with school districts in Colorado on capital projects, said she was “flabbergasted by the lack of notification . . . and budget information.”

Lortie said she requested details about the district’s needs and how the bond proposal would address them and had to wait until the day before the election “before I got any real information.”

“They’re saying they did everything that was required. But everything about it was disturbing,” she said.

Christina Norland, principal and acting superintendent of Dollar Bay-Tamarack City responded to the complaints in an email. She requested the email be published in full.

The email states:

“Our small school district has not asked local residents to consider a bond issue for our school since 1997, over twenty years ago. Since then, many real needs have been identified that must be addressed: safety/security of students is primary--also necessary are updating our very old boiler system, repairing a leaking roof, and adding additions and reconfiguring space for students’ needs and growing numbers--for example, adding a much-needed preschool (which our town does not have). All of this information, and much more, has been available to the public for some time, and well before the election.

August and May school bond elections are quite common. The school board decided on the August election date because it best suited a construction timeline which allowed for design to take place over the winter and construction to take place the following summer, when school is not in session.

Regarding the district’s publicizing of the election: The legislature imposes the election notice duties on the district's election coordinator, who was required to ensure a notice be published in the local newspaper by July 8th. This was done. Here’s what we chose to do, in addition, in order to get the word out to local voting residents: created and disseminated an informative video about the bond issue; made powerpoints and info sheets and linked them on the school website; had a float/presence in the 4th of July parade (the town's biggest event of the year) and there passed out information and invitations to the bond issue meetings to hundreds of people; sent out digital newsletters and emails to parents and community members about the election; hung 11 x 17 informational posters at all local businesses that would allow it; invited local radio stations, newspaper, and TV to do stories on the election; and held two informational meetings, one in each of the affected towns, which were well-attended. TV 6 ran a story on the election prior to a bond issue town meeting, the local newspaper published a front page story, also before one of the town meetings, and local radio stations announced the election several times beginning days in advance of the election. Because we went far above and beyond the requirements, many people have complimented the district on our efforts in making information available to the public. I am proud of and thankful to all who helped publicize this important event: school staff, the Daily Mining Gazette, TV 6, local radio stations, parents of our students, community members, and more.”

A 2017 study from the University of Pennsylvania Law School found that for most cities, a government-owned internet service loses money. But according to a recent story in the Battle Creek Enquirer, the municipal broadband operation in Marshall has been a success.

“Internet service in Marshall was slow, so the city built its own fiber-optic network,” reads the headline. But the article does not address controversies surrounding governent-owned internet service, including competing with private providers. It also does not quantify the financial losses that have been the pattern in municipal broadband ventures, which then fall on taxpayers.

The article cites insufficient interest from private internet providers as a reason for government intervention.

“In our experience, the cities will reach out to the providers and ask them to improve service,” it said, quoting Chris Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance. “They will typically respond and say it’s adequate and doesn’t need to be improved. Those companies have a limited amount to invest, and they will invest it where they can get the most profit.”

But Theodore Bolema, founding director of the Institute for the Study of Economic Growth at Wichita State University, doubts that claim.

“These companies are in the business of expanding and looking at costs versus benefits,” he said. “They also don’t have a limited amount to invest: If a project looks like it will be profitable, capital markets will provide the financing because they expect to get a return on the investment.”

Bolema said he suspects the real reason internet companies don’t expand into towns like Marshall is because city officials pave the way for municipal operators to establish themselves while making the process expensive and difficult for everyone else.

Ed Rice, Marshall’s director of electric utilities, said that the city had an easier job in developing the network than a private company would.

“The city had an advantage because we are a municipal electric utility,” Rice said, according to the Enquirer. “It was pretty straightforward to get the fiber attached to the poles, because sometimes that could be a pretty convoluted process.”

“Mr. Rice is right about this being a big advantage for the Marshal electrical utility,” Bolema said. “Getting right-of-way access is one of the most expensive and time-consuming tasks for any broadband service, and Marshall is letting its municipal internet service have that access for free with no delays in getting regulatory approvals. If Marshall can make it so easy for its own service to get access, then presumably the city could make it just as easy for any private company to come into Marshall.”

Bolema pointed to Traverse City, where the broadband company LightSpeed had been in talks with the local government about building a 1-gigabit fiber network. The company eventually decided not to enter the market. It cited disagreements with the city-owned utility over access to conduits and pole attachments, and whether it would be allowed to expand to all homes in the city.

Traverse City is now moving forward with government-run broadband.

According to the Enquirer, the city of Marshall decided to construct a $2.5 million broadband network using loans from other city accounts, including the electric department. The city, Rice told the newspaper, had not yet begun to pay off the loans, though it expected to begin doing so in 2019. Last month, the city told Michigan Capitol Confidential that it still hasn’t repaid any of the borrowed money but now plans to start making payments in 2020.

Bolema warned that borrowing from other city departments is a strategy with potential negative consequences.

“First, if the city fails to sign up very many customers, any losses will probably have to be recovered from electricity customers, including those who are not interested in the city’s internet service,” he said. “Second, this suggests that the electricity and internet operations are comingled, which may make it difficult later to assess how well the project does.”

The University of Pennsylvania Law School discovered that only two of the 20 projects it analyzed earned enough to cover their costs during the useful life of the networks. When projects fail to generate enough revenue, residents and taxpayers end up holding the bag. The study also noted that researchers were only able to find 20 cities that separated out their financial reporting for municipal broadband operations from other city operations.

Bolema said the article’s most glaring omission is how quickly broadband technology becomes obsolete. While financing plans for municipal broadband systems often anticipate 20-30 years of use, network equipment often goes out of date before then. Cities risk fiscal harm if customers switch to new providers due to changing technologies or other reasons.

“They are investing for the long term in technology that quite likely won’t be the prevailing technology in just a few years,” Bolema said. “If that is the case, then we will likely see a lot of municipal broadband systems with high rates of signing up customers and financial reports that look fairly good in the early years but that may well change in a few years with new developments.”

Marshall’s construction cost estimates have been relatively accurate, and its operating cost projections have come in slightly under budget.

“But if that is the case,” said Bolema, “then Marshall is not typical of other municipalities, and not a very good example to cite for why more cities should consider launching municipal broadband networks.”