What is a bond proposal and how can funds from a bond be spent?
A bond proposal is how a public school district asks its community for authorization to borrow money to pay for capital expenditures. Voter-approved bond funds can be spent on new construction, additions, remodeling, site improvements, athletic facilities, playgrounds, furnishings, equipment, and technology. Funds raised through the sale of bonds cannot be used on operational expenses such as employee salaries and benefits, school supplies, and textbooks. Bond funds must be kept separate from operating funds and must be audited by an independent auditing firm.
Who was involved in determining what to include in the bond proposal?
After the November 2019 bond proposal was not approved by voters, the District engaged community members, staff, and parents in multiple surveys and forums to gather their feedback on the previous proposal. An independent, scientific survey was conducted by EPIC MRA, a research firm, to measure public opinion of a random sampling fo registered voeters in Cedar Springs. Using the data gathered through surveys and forums, the District carefully reviewed feedback and studied options to move forward with an updated long-term maste rplan for school buildings and revised a smaller proposal with no tax rate increase expected.
Planning for the previous bond proposal in 2019 began with a District-wide facility assessment of buildings and sites. The facilities assessment identified specific systems that have exceeded their expected lifecycle(s) - lighting, roofing, HVAC, etc.
The 2019 bond proposal was also informed by the community-driven strategic planning process, which took place from January-July 2019. Five focus groups comprised of 25-30 people of different backgrounds were utilized to gather community input. The feedback from the focus group conversations was used to generate questions for a comprehensive survey that was sent out in February 2019. Each student in grades 6-12, all parents of students grades PK-12, and all District staff received a survey. Community and business leaders and residents of Cedar Springs were able to submit a survey electronically through a link on the District website.
In addition to the input gathered from the strategic planning process, public forums and staff interviews also helped review and prioritize the scope of the bond proposal. The final determination of scope was made by District administration and the Board of Education.
What was the key feedback gathered after the 2019 proposal was not approved by voters? Did the district address the voter concerns?
Voters did not want their taxes to increase
The August 2020 proposal has no expected tax rate increase
Voters wanted the proposal to focus on needs, not wants
The August 2020 proposal was revised to be smaller and does not include a new 8th - 9th grade school building. The new proposal instead focuses on addressing student capacity at existing school buildings
The District needs to continue working on building trust within the community input and feedback
How would the bond proposal impact my homeowner property taxes?
If approved by voters,there is expected to be no tax rate increaseto property owners. The debt tax rate is expected to remain the same at 7.00 mills but would extend the current rate further into the future.
Would the approval of the bond proposal have any inpact on our current operational budget?
While funding from this bond proposal is independent of the support the District receives from the State of Michigan for annual operations on a per pupil basis, the bond would likely have a positive impact on the annual operating budget. It would allow the District to reallocate operating funds that are currently being spent on aging facilities, mechanical systems and technology. The savings generated from new and cost-efficient facilities could be redirected to student programs and resources.
Is the bond millage rate estimated to be the same for the entire life of the bond proposal?
No. The bond millage rate is estimated to remain at 7.00 mills through 2036, thereafter it is estimated to decline due to bond repayment and taxable value growth.
When would the new bond proposal be paid off?
If the bond proposal is approved by voters on August 4, 2020, the final levy for this proposal is 2052. The maximum number of years the bonds in each series may be outstanding, exclusive of any refunding, is thirty (30) years.
$68,000,000 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.
When will the millage for this proposal first be levied?
On the July 1, 2021 property tax bill.
Is the School District going to immediately issue $68,000,000 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.
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.
Registered voters may cast a ballot at the polling location established by their city/township. If you have questions or do not know where you vote, please contact your city/township office. The election will be held on Tuesday, August 4, 2020. Polls will be open from 7:00 a.m. to 8:00 p.m.
Visit michigan.gov/vote to view your sample ballot, verify your voter registration, find your polling location or contact your Local Election Official.
How is an absent voter ballot obtained?
Absent voter ballots are available to any registered voter. Registered voters must complete and submit an application for an absent voter ballot. Your request for an absent voter ballot must be in writing and can be submitted to your city or township clerk. (For assistance in obtaining the address of your local clerk, see Michigan.gov/Vote) You must request an absent voter ballot by mailing the application, a letter, a postcard, or a pre-printed application form obtained from your local clerk's office. Requests to have an absent voter ballot mailed to you must be received by your clerk no later than 5 p.m. the Friday before the election.
Applications are available from your local clerk's office. You also may obtain an application online at www.mi.gov/sos. Click "Elections in Michigan" on the top menu, and then click on "Information for Voters" then click on "Obtaining an Absent Voter Ballot."
If I rent a house, can I vote? How would my taxes increase if I rent a house?
Yes, if you rent a house you can still vote. As a renter, unless you are responsible for paying the property taxes, your taxes would not increase. You do need to be a registered voter in the city or township you are living in.
What are the key dates leading up to the Tuesday, August 4, 2020 vote?
Registering to vote:
The last day for voters to register by mail is July 20, 2020
Voters may register in-person through Tuesday, August 4, 2020 (election day) with the required documentation
Absentee voter ballots are available from June 20 until August 3, 2020
Contact your local election official with questions
Will I be able to provide input regarding the design of the buildings?
Yes. If the bond proposal is approved, the community will have the opportunity to participate in the final planning, design, and implementation of the school buildings. A committee for each building would be created for stakeholders to participate and provide input and feedback.
What oversights would hold the District accountable during design and construction?
If approved by voters, the District's Architect/Engineer would design the proposed projects and prepare construction documents and specifications for the projects. Once the projects are designed, the District's Construction Manager will assemble bid packages and publicly advertise and solicit competitive bids for all work. This is required by law, as outlined in the Revised School Code. This process ensures that the District selects the lowest responsive and responsible bidder. All qualified contractors will have an opportunity to attend a pre-bid meeting to obtain additional information and project clarification. All qualified contractors will have the opportunity to participate in the competitive bid process.
At what point would the State of Michigan, as well as the local fire and police departments, provide input into the bond projects?
Each project will be required to be submitted to both the Bureau of Construction Codes (BCC) and the Bureau of Fire Services (BFS) for both plan review and permitting. These agencies will review the projects to ensure they comply with applicable codes, before any building permits are issued. Building plans and specifications must be signed and sealed by a Licensed Architect/Professional Engineer before submission.
As of March 21, 2019, Michigan law requires school districts to consult on the plans for the construction or major renovation regarding school safety issues with the law enforcement agency that is the first responder for that school building. This consultation would happen after a bond proposal has been approved by voters, before construction documents are finalized prior to project commencement.
What about the previously approved Sinking Fund? How does that impact the District?
In February 2012 voters approved a Sinking Fund that provides approximately $600,000 per year for ten years for ongoing repair of school infrastructure and sites, and technology upgrades.
Sinking funds can be used for remodeling or repairing facilities, improving sites, structures, athletic facilities, playgrounds, or other facilities and technology infrastructure. School districts are not allowed to use funds from a Sinking Fund for operating expenses such as teacher, administrator or employee salaries.
The Sinking Fund ensures that operational funding remains in the classrooms for learning, teaching, books, and technology, provide students with basic necessity of warm, safe and dry learning environments, create efficiencies and long-term financial savings. The Sinking Fund is the means by which the District can protect the community's investment used by our students, staff, parents and community.
Projects completed with Sinking Fund dollars since 2012: • Football field athletic turf • Track resurfacing and striping • Playground equipment • Pavement work throughout roadways and parking lots • Resurfacing of parking lots at Beach, Middle School • LED light fixtures in the gymnasiums • Roof work at Cedar View, Beach, Cedar Trails, High School, District Service Center • Additional lockers at High School • HVAC replacement - new condensing boilers at Cedar View • Carpeting replacements • Secure building entrance improvements at High School, Cedar Trails, Red Hawk • Door buzzer systems at Cedar View, Beach • Install gym floors at Cedar View, Beach • New parking lots at Cedar Trails, Cedar View • PA systems all schools* • Exterior doors at Beach and Cedar View* • Blue Point Alert System* • Access controls on exterior doors*
*a combination of Sinking Fund dollars and Michigan State Police grant dollars
Shall Cedar Springs Public Schools, Counties of Kent and Newaygo, State of Michigan, borrow the sum of not to exceed Sixty-Eight Million Dollars ($68,000,000) and issue its general obligation unlimited tax bonds therefor, in one or more series, for the purpose of:
erecting, completing, removdeling, or equipping or reequipping school buildings or other facilities, or parts of or additions to those facilities; furnishing or refurnishing school buildings; acquiring, preparing, developing, improving, or equipping structures, athletic fields, playgrounds or sites, or parts of or additions to sites, for school buildings or other facilities; and acquiring, installing, or equipping or reequipping school buildings for instructional technology?
The following is for informational purposes only:
The estimated millage that will be levied to pay the proposed bonds in 2021, under current law, is 1.18 mills ($1.18 on each $1,000 of taxable valuatino) for a 0.00 mill net increase over the prior years' levy of 7.00 mills. The maximum number of years the bonds of any series may be outstanding, exclusive of any refudning, is thirty (30) years. The estimated simple average annual millage anticipated to be required to retire this bond debt is 4.04 mills ($4.04 on each $1,000 of taxable valuation).
The school district expects to borrow from the State School Bond Qualification and Loan Program to pay debt service on these bonds. The estimated total principal amount of additional borrowing is $6,499,371 and the estimated total interest to be paid thereon is $6,824,042. The estimated duration of the millage levy associated with that borrowing is 18 years and the estimated computed millage rate for such levy is 7.00 mills. The estimated computed millage rate may change based on changes in circumstances.
The total amount of qualified bonds currently outstanding is $32,140,000. The total amount of qualified loans currently outstanding is approximately $1,601,284.
(Pursuant to State law, expenditure of bond proceeds must be audited, and bond proceeds cannot be used for repair or maintenance costs, teacher or administrator or employee salaries, or other operating expenses.)
If you have additional questions, please contact Scott B. Smith, Superintendent, at Scott.Smith@csredhawks.org or 616-696-1204