This will be the last opportunity I have to address the community before Tuesday’s election in which Ovid-Elsie Area Schools is asking voters to approve a zero mill bond extension. If approved, the current millage rate (7.8 mills) would be extended from 2035 to 2038.
Ballot language can be very confusing, so I am including some talking points here that will hopefully create a better understanding. Additionally, please know the ballot structure is dictated by state statute and we don’t have a lot of wiggle room in the particular things that must be included in the ballot language. The first portion of the ballot, before the “informational purposes” heading, deals with the specific bonds being authorized by the voters. It identifies the maximum amount of bonds that our district can issue:
“Shall Ovid-Elsie Area Schools, Clinton, Shiawassee, Saginaw and Gratiot Counties, Michigan, borrow the sum of not to exceed Six Million Two Hundred Fifteen Thousand Dollars ($6,215,000) and issue its general obligation unlimited tax bonds therefor, for the purpose of:”
Next, the indented paragraph lists the specific limits on the purposes that the bond money can be used. This section is what the voters are saying we can borrow to spend on the project and what the project can be.
“Remodeling, including security measures, furnishing and refurnishing, and equipping and re-equipping school buildings and facilities; acquiring and installing instructional technology and instructional technology equipment for school buildings; erecting school storage buildings; purchasing school buses; and developing and improving athletic fields and facilities, parking areas, driveways, and sites?”
The “informational purposes” section is the background tax information related to the bonds. The first paragraph describes the first year’s levy and the average levy for these specific bonds. That first paragraph also lists the maximum number of years these specific bonds may be outstanding.
“The estimated millage that will be levied for the proposed bonds in 2019, under current law, is 0 mill ($0.00 on each $1,000 of taxable valuation). The maximum number of years the bonds may be outstanding, exclusive of any refunding, is twenty-four (24) years. The estimated simple average annual millage anticipated to be required to retire this bond debt is 0.44 mill ($0.44 on each $1,000 of taxable valuation).”
The second paragraph deals with the district’s School Loan Revolving Fund (SLRF) participation for this specific bond issue. That is a special program that the state has established by the state constitution. The program is structured to help districts keep their millage at a lower rate. The state’s SLRF lends to the district “principal” that is used to help pay debt service on the bonds referenced in the first portion of the ballot, which keeps that millage rate lower. The state charges interest on that loaned principal through the SLRF (the district draws interest on the bonds).
Both that principal and interest are different than the bond amount in the first portion of the ballot. Under the SLRF program, the district has the authority to levy its debt millage beyond the maturity of the bonds to pay back the state the amount borrowed through the SLRF.
“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 $1,315,282 and the estimated total interest to be paid thereon is $3,841,366. The estimated duration of the millage levy associated with that borrowing is 19 years and the estimated computed millage rate for such levy is 7.80 mills. The estimated computed millage rate may change based on changes in certain circumstances.”
The third paragraph in the “informational purposes” section is the total participation of the District in the SLRF, including both the proposed bonds and all outstanding bonds.
“The total amount of qualified bonds currently outstanding is $20,170,000. The total amount of qualified loans currently outstanding is approximately $7,394,292.”
While this still may be confusing, it is important to recognize that by simply extending the bond debt three years, the district will capture all $6.2 million to use toward capital improvements. Again, this allows our current budget to stay closely tied to the classroom. Please note the district also has opportunities to refinance, or refund bonds. Since 2005, Ovid-Elsie Area Schools has refunded bonds five times to save our community an estimated cost avoidance of more than $5.5 million.
Over the last several months, district officials and community members have been out presenting information to the public — dozens of meetings have taken place and informational fliers have been distributed. We have done social media blasts nearly every week to keep the public informed on the process of this campaign in order to maintain complete transparency.
During these meetings we have been asked (by some) to cut programs, raise class sizes, lay off staff, eliminate sports, or spend the sistrict’s fund balance. This is very much in contrast to what our mission and vision are for our sistrict — we want to continue to offer the finest educational programming in our area. Your “yes” vote Tuesday will allow us to do just that.
Please get to the polls Tuesday and vote “yes” to support Ovid-Elsie Area Schools.
Dr. Ryan L. Cunningham
Superintendent and Parent
Ovid-Elsie Area Schools