2023 Bond Questions
Introduction: The Central Montcalm Public School community will have the opportunity to vote on a bond proposal on the August 8, 2023 election ballot. If approved by voters, this bond proposal would provide $47,500,000 for district-wide improvements with an estimated zero mill increase to property owners over the prior year’s levy.
This bond proposal addresses high-priority projects and focuses on two key areas:
- Expanding educational programs and learning environments
- updating aging buildings & sites
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, buses, furnishings, equipment, and other capital needs. 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 expenditures must be audited by an independent auditing firm.
How would the bond proposal impact my property taxes?
If approved by voters, this bond proposal would provide $47,500,000 for district-wide improvements with an estimated zero mill increase to property owners over the prior year’s levy.
Is the bond millage rate expected to be the same for the next 26 years?
No. The bond millage rate is estimated to remain at 7.0 mills through 2034, and thereafter it is estimated to decline due to bond repayment and taxable value growth, as illustrated in the chart below. If the bond is not approved by voters, the millage rate is estimated to decline to 4.26 mills in 2024.
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 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 each series to ensure compliance.
How can the school district complete this bond proposal without increasing the bond millage rate of 7.00?
Each year the bond millage rate is recalculated based on the school district's new taxable value figure and the bond payment required in the upcoming year. Due to repaying prior outstanding bonds along with taxable value growth, it is estimated that the bond millage rate required to pay the existing bond payments will decline to allow this proposal to be funded without having to change the present bond millage rate of 7.00.
How much money would the bond proposal generate and would the funding be issued all at once?
The proposal would generate $47,500,000 which would be spent over eight years. The bonds are proposed to be issued in 3 separate series (2024, 2026, 2029). This would allow for years of bond repayments to occur before a new bond issue is completed.
Why a bond proposal now?
In 2016, voters approved a $11,595,000 million bond issue for improvements throughout the district, including a new secure office suite/entrance for the Middle-High School, a reconfigured entrance/ticketing entrance to the stadium, parking and traffic flow (pick up/drop off) enhancements at all buildings, select furniture and fixture upgrades throughout the district, and select doors, windows and roofing upgrades in all buildings.
While the 2016 bond took care of some critical issues at that time, there are many infrastructure systems that have since outlived their expected useful lives. This bond proposal would address the remaining, currently identified issues. The District continues to perform preventative maintenance on these systems. Specific systems have exceeded their expected lifecycle(s) – roofing, flooring, etc. If the bond proposal is approved, it would include the replacement of the identified systems and would extend the useful life of our school buildings. This bond proposal also addresses educational programs and learning environments by constructing new early childhood classrooms and a new auditorium.
Would the approval of the bond proposal have any impact on our current operational budget?
While funding from this bond proposal is independent of the district's general fund operating budget, the bond would likely have a positive impact on the district’s general fund by allowing the district to reallocate operating funds that are currently being spent on aging facilities, mechanical systems, and technology. The operational savings generated from new and more cost-efficient facilities could be redirected to student programs and resources.
When would the millage for this proposal first be levied if the bond proposal is approved by voters?
On the December 1, 2024 property tax bill.
Are technology purchases going to be amortized over a 26-year period?
No. Most technology purchases are required to be amortized over a 5-year period beginning at the time of installation.
Are bus purchases going to be amortized over a 26-year period?
No, bus purchases are required to be amortized over a 6-year period beginning at the time the buses are put into service.
Are businesses and second homes (non-homestead properties) and primary homes (homestead properties) treated the same regarding bond millage?
Yes, businesses and second homes (non-homestead properties) and primary homes (homestead properties) are treated the same regarding bond millage.
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 advisor to determine if they are eligible for this tax credit.
Can you help residents understand how schools of choice students impact the district?
The foundation allowance follows the student, which means the district receives State funding for each student that is enrolled at Central Montcalm Public School. For each student who attends through schools of choice, CMPS receives state funding, similar to how it receives State funding for in-district students. School of choice students help round out classrooms and sports teams, and other extracurricular programs.
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 proceeds must be kept separate from operating funds and expenditures must be audited by an independent auditing firm.
What oversights would hold the district accountable?
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 to 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 regarding 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.
How do I register to vote?
Visit Michigan.gov/vote to register to vote online. It is recommended by the Secretary of State to register by mail by July 24, 2023 to participate in the August 8, 2023 election. Individuals may also register in-person at their local clerk’s office through August 8, 2023, with the required documentation. For assistance in obtaining the address of your local clerk, visit Michigan.gov/vote.
Are owners of property in the school district eligible to vote if they do not reside in the school district?
Owners of property are only eligible to vote if they reside within the school district’s boundaries. To be eligible to register to vote you must be:
- A Michigan resident (at the time you register) and a resident of your city or township for at least 30 days (when you vote)
- A United States citizen
- At least 18 years of age (when you vote)
- Not currently serving a sentence in jail or prison
If I rent a house or apartment, can I vote?
Yes, if you rent a house or apartment you can still vote. You must be a registered voter in the city or township you are living in and live within the school district’s boundaries.
How is an absentee voter ballot obtained?
Registered voters must complete and submit the application to receive their absentee voter ballot. To vote by mail, fill out the application and sign it, and then return it to your local clerk. For assistance in obtaining the address of your local clerk, visit Michigan.gov/vote. When filling out the application, if you check the box to be added to the permanent absentee voter list, you will get an application mailed to you before every election.
If you registered to vote after absentee voter ballot applications were mailed, applications may be obtained online at Michigan.gov/vote. Absentee voter ballots are available as early as June 24 through election day, August 8, 2023.
What are the key dates leading up to Tuesday, August 8, 2023 election day?
- Registering to vote:
- The last day for voters to register by mail is July 24, 2023
- Voters may register in person through August 8, 2023 (election day) with the required documentation
- Absentee Voting:
- Absentee voter ballots are available as early as June 24 until August 8, 2023 (election day)
- Contact your local clerk with questions
- Attend a public information community forum:
May 15 at 7:00 p.m. at CM Middle School CafeteriaCompleted
- July 17 at 7:00 p.m. at CM Elementary School cafeteria
Who do I contact if I have additional questions?
Contact Marty James, Superintendent, at firstname.lastname@example.org or 989-831-2000
Where and when will the vote occur?
Tuesday, August 8, 2023 is election day, but absentee voting can occur leading up to that date. All registered voters may cast an absentee voter ballot by mail. Voters may also 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 clerk’s office. Polls will be open from 7:00 am to 8:00 pm on Tuesday, August 8, 2023.
What is the ballot language?
Shall Central Montcalm Public School, Montcalm and Ionia Counties, Michigan, borrow the sum of not to exceed Forty-Seven Million Five Hundred Thousand Dollars ($47,500,000) and issue its general obligation unlimited tax bonds therefor, in one or more series, for the purpose of:
erecting, furnishing, and equipping an addition to the elementary school building; erecting, furnishing, and equipping additions to the middle school/high school building; remodeling, furnishing and refurnishing, and equipping and re-equipping school buildings and facilities; acquiring and installing instructional technology in school buildings; purchasing school buses; erecting, furnishing, and equipping restroom and team room buildings and a press box; and preparing, developing, improving, and equipping playgrounds, athletic fields and facilities, and sites?
The following is for informational purposes only:
The estimated millage that will be levied for the proposed bonds in 2024, is 2.74 mills ($2.74 on each $1,000 of taxable valuation) for a -0- 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 twenty-six (26) years. The estimated simple average annual millage anticipated to be required to retire this bond debt is 5.44 mills ($5.44 on each $1,000 of taxable valuation).
The school district does not expect to borrow from the State to pay debt service on the bonds. The total amount of qualified bonds currently outstanding is $8,095,000. The total amount of qualified loans currently outstanding is $0. The estimated computed millage rate may change based on changes in certain circumstances.
(Pursuant to State law, 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.)
In the ballot language, the first paragraph states a not to exceed figure of $47,500,000 of general obligation unlimited tax bonds, what does this mean?
If this bond proposal is approved by voters, the maximum amount of bonds to be issued can be no greater than $47,500,000.
In the ballot language, it states that the estimated millage that will be levied in 2024 to pay the proposed bonds in the first year is 2.74 mills, what does this mean?
This means that the allocated bond millage for this proposal to be levied in the first year (2024) is 2.74 mills. (2.74 mills new bonds + 4.26 mills existing bonds = 7.00 total estimated 2024 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 26 years, what does this mean?
The school district plans to issue the bonds in 3 separate series, in 2024, 2026 and 2029. Each bond series would have a length of 26 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 5.44 mills annually, what does this mean?
This means that over the entire life of the bond proposal (3 bond series) that the average annual bond millage rate is estimated to be 5.44 mills.
In the ballot language, it states that the school district does not expect to borrow from the State to pay debt service on the bonds. What does this mean?
There is a State program known as the School Loan Revolving Fund ("SLRF") that assists school districts with completing voted bond issues by allowing schools to receive loans from the SLRF for bond payments. The school district does not anticipate borrowing from the SLRF for this proposal.
In the ballot language, it states that the amount of qualified bonds currently outstanding is $8,095,000 and that the total amount of qualified loans currently outstanding is $0. 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 $8,095,000.
Another State program known as the School Loan Revolving Fund ("SLRF") provides loans to school districts to assist with voted bonds annual payments if needed. The term "qualified loans" refers to any SLRF loan balances outstanding. The school district has not needed to borrow from this program and therefore the balance at the time of the election is $0.
ATTEND A COMMUNITY FORUM
Forums will be held on:
May 15 at 7:00 p.m. at CM Middle School CafeteriaCompleted
- July 17 at 7:00 p.m. at CM Elementary School Cafeteria
Polls are open: Tuesday, August 8, 2023, from 7:00 a.m. to 8:00 p.m. Registered voters may cast a ballot at the polling location established by their city/township.
Absentee voting: All registered voters may vote via absentee voter ballots, available as early as Saturday, June 29, 2023.
More information on voting: Visit www.michigan.gov/vote
WHAT IF I HAVE ADDITIONAL QUESTIONS?
If you have further questions, contact Marty James, Superintendent, at email@example.com