How would the bond proposal impact my homeowner property taxes?
If approved by voters, it is projected that the debt tax rate would increase by approximately 0.90 mills over the current debt tax rate. For a $100,000 market value home this equates to an estimated increase of $45.00 per year or $3.75 per month.
When would the new bond proposal be paid off?
If the bond proposal is approved by voters on November 5, 2019, the final levy for this proposal is 2053. The maximum number of years the bonds in each series may be outstanding, exclusive of any refunding, is thirty (30) years.
$81,150,000 is a lot of money. Why does it cost so much to renovate the buildings?
Commercial building costs have greatly increased over the years due to rising material and labor costs. According to RS Means (Reed Construction Data), the Historical Cost Index for Commercial Construction in Grand Rapids, Michigan has increased as the following:
2003-2018 (15yrs) - increase of 173.9% 1998-2018 (20yrs) - increase of 193.4% 1988-2018 (30yrs) - increase of 254.4%
National averages are similar to these figures.
Would money from the bond proposal be used to pay teachers' salaries and benefits?
No. School districts are not allowed to use funds from a bond for operating expenses such as teacher, administrator or employee salaries, routine maintenance, or operating costs. Bond revenue must be kept separate from operating funds and bond revenue expenditures must be audited by an independent auditing firm.
How would I know the bond funds would be spent the way they are supposed to be spent?
Michigan law requires that expenditure of bond proceeds must be audited, and the proceeds cannot be used for repair or maintenance costs, teacher, administrator or employee salaries, or other operating expenses. An audit would be completed at the end of the project to ensure compliance.
In the ballot language, the first paragraph states a not to exceed figure of $81,150,000 of general obligation unlimited tax bonds, what does this mean?
With approval of this bond proposal, the maximum amount of bonds to be issued can be no greater than $81,150,000.
In the ballot language, it states that the estimated millage to be levied in the first year for this proposal to pay the proposed bonds is 1.88 mills, what does this mean?
This means that the estimated bond millage rate to be levied in the first year for this proposal is 1.88 mills. (1.88 mills new bonds + 6.02 mills existing bonds = 7.90 total estimated millage rate).
In the ballot language it states that the maximum number of years any series of bonds may be outstanding, exclusive of refunding, is not more than 30 years, what does this mean?
Each bond series in the proposal must have a length of 30 years or shorter.
In the ballot language it states that estimated simple average annual millage that will be required to retire each bond series is 4.95 mills annually, what does this mean?
This means that over the entire life of the bond proposal (all bond series) that the simple average annual bond millage rate is estimated to be 4.95 mills.
In the ballot language it states that the School District does expect to borrow from the State to pay debt service on the bonds. It also says the estimated total principal amount of the borrowing is $1,821,234 and estimated interest is $7,272,276. What does this mean?
In order to achieve a lower targeted total bond millage rate of 7.90 mills, the School District is utilizing a State program known as the School Loan Revolving Fund ("SLRF"). The SLRF provides loans to school districts for voted bond issues reducing the amount of property taxes needed to be collected from the community in order to fund the annual bond payments during the borrowing period. This paragraph provides the estimated amount of borrowing and interest associated with this bond proposal by participating in the SLRF.
In the ballot it states that the estimated duration of the borrowing is 18 years and that the estimated computed millage rate for such levy is 7.90 mills. What does this mean?
This section means that it is estimated that the School District will participate in the SLRF for an 18-year duration and that the presently agreed upon participation bond millage rate is 7.90 mills.
In the ballot language it states that the amount of qualified bonds currently outstanding is $30,905,000 and that the total amount of qualified loans currently outstanding is $5,923,919. What does this mean?
The Michigan School Bond Qualification and Loan Program ("SBQLP") is a state program that assists school districts with voted bond issues by providing a bond rating credit enhancement which assists in reducing borrowing costs. The term "qualified" in this case means that the School District has existing bonds outstanding that are qualified by the SBQLP. At the time of the election the principal amount of qualified bonds is $30,905,000.
In order to achieve a lower targeted total bond millage rate of 7.90 mills, the School District has utilized a State program known as the School Loan Revolving Fund ("SLRF"). The SLRF provides loans to school districts for voted bond issues reducing the amount property taxes needed to be collected from the community in order to fund the annual bond payments during the borrowing period. In this case the term "qualified loans" is referring to the School District's present estimated principal and interest SLRF balance of $5,923,919.
When will the millage for this proposal first be levied?
On the July 1, 2020 property tax bill.
Is the School District going to immediately issue $81,150,000 of bonds?
No. The bonds are proposed to be issued in 2 series (2021, 2023). This allows for years of bond repayments to occur before a new bond issue is completed.
Are technology purchases going to amortized over a 30-year period? Is there a technology replacement plan?
No. Technology purchases are required to be amortized over a 5-year period beginning at the point of installation. Yes, each bond series has an allowance for future technology purchases and updates.
Is the bond millage rate expected to be the same for the next 30 years?
No. The bond millage rate is estimated to remain at 7.90 mills through 2036, thereafter it is estimated to decline due to bond repayment and taxable value growth.
Are there property tax exemptions to anyone of any kind?
If a business has been granted an Industrial Facilities Tax ("IFT") credit, then only half of the taxable value is subject to the bond millage. The business would need to verify if some of the taxable value has been designated for the IFT credit. One item a community member could research is the Michigan Homestead Property Tax Credit. The Michigan Homestead Property Tax Credit is a method through which some taxpayers can receive a credit for an amount of their property tax that exceeds a certain percentage of their household income. This program establishes categories under which homeowners or renters are eligible for a Homestead Property Tax Credit. We would recommend that community members consult their tax provider to determine if they are eligible for this tax credit.
Are businesses and second homes (non-homestead) and primary homes (homestead) treated the same regarding bond millage?
Yes, businesses and second homes (non-homestead) and primary homes (homestead) are treated the same regarding bond millage.
If you have additional questions, please contact Scott B. Smith, Superintendent, at Scott.Smith@csredhawks.org or 616-696-1204