The Oxford School Board approved the ballot language for a $28.28 million bond proposal to replace and upgrade district infrastructure at a July 25 meeting.
Voters in the district will be asked in November to approve the bond proposal, along with a sinking fund proposal– both of which would be used to complete a variety of capital improvement projects, including the replacement of roofing; sidewalk and parking lot repavement; the replacement of worn playground equipment, and fire alarm system updates throughout the district.
If approved, the bond would also allow the district to buy new school buses and install air conditioning throughout Oxford’s elementary schools, officials said.
According to Sam Barna, assistant superintendent of Business and Operations, limiting the bonded amount to its current standing would keep the district’s current debt service tax rate steady at 7.9 mills, while allowing the district to fund the necessary projects.
Although the millage rate would remain the same if the bond is approved, Barna noted the length of repayment for the district’s bond debt, currently set to end in 2037, would be extended by three years.
This is the language that will appear on November’s ballot:
“Shall Oxford Community Schools, Oakland and Lapeer Counties, Michigan, borrow the sum of not to exceed Twenty-Eight Million Two Hundred Eighty Thousand Dollars ($28,280,000) and issue its general obligation unlimited tax bonds therefor, in one or more series, for the purpose of remodeling, furnishing and refurnishing and equipping and re-equipping school buildings; purchasing school buses; and developing and improving playgrounds, parking areas and sites?
“The estimated millage that will be levied for the proposed bonds in 2018, under current law, is 0.39 mill ($0.39 on each $1,000 of taxable valuation) for a 0.00 mill net increase over the prior year’s levy. The maximum number of years the bonds of any series may be outstanding, exclusive of any refunding, is thirty (30) years. The estimated simple average annual millage anticipated to be required to retire this bond debt is 1.01 mills ($1.01 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 that borrowing is $2,671,534 and the estimated total interest to be paid thereon is $12,513,139. The estimated duration of the millage levy associated with that borrowing is 18 years and the estimated computed millage rate for such levy is 7.90 mills. The estimated computed millage rate may change based on changes in certain circumstances.
“The total amount of qualified bonds currently outstanding is $112,975,000. The total amount of qualified loans currently outstanding is approximately $19,813,569.”
During board comments at the meeting, Superintendent Tim Throne said officials have tailored the district’s list of current needs to input that has been received from parents.
“We’ve asked internal people. We’ve asked our parents, ‘What are our needs?’ and, resoundingly, they came back and said we need to take care of those investments we’ve already made . . . our buildings,” Throne said. “We now have identified our total needs, what would it take . . . and we’re asking specifically for what we have identified and what our parents in our community have said they’d like to see.”
Along with a bond, district officials will also place a 5-year 0.75-mill sinking fund request on November’s ballot, which would generate approximately $800,000 per year for five years to help cover building improvements and technological equipment not covered by the bond. Necessary improvements and upgrades are estimated by officials to total $30.4 million.
A sinking fund millage is different from a bond issue in that the bond issue is a lump-sum amount the district borrows and pays back. The sinking fund millage is a limited property tax, using more of a pay-as-you-go method to fund building remodeling projects as they are completed.
For a homeowner whose property has a taxable value of $100,000, that 0.75 mills would equate to an additional $75 annually for five years, according to Barna.
The funds would also allow the district to put $1.25 million into the upgrade of technology in classrooms districtwide and $150,000 into building security upgrades.
“A five-year sinking fund is the more appropriate way to (upgrade technology) rather than placing it into the bond, which is over many more years,” Barna said. “Technology is ever-changing. Technology has a useful life from a depreciation standpoint of between 3-5 years. It makes more sense to use the financing vehicle of a sinking fund rather than a bond. A bond, you’re paying interest. A sinking fund, obviously, it is taxed to your local residents. but there are no interest charges on it . . . It’s just more appropriate.”
The school board is expected to approve the ballot language for the $4 million sinking fund at its Aug. 8 meeting.