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School bond cleared up



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July 24, 2013 - By Meg Peters

Review Staff Writer

The difference between the $25.5 million Lake Orion Schools bond proposed two years ago and the two proposals on the $33.2 million bond for the August 6 special election is the magnitude in renovations.

The previous bond covered "the immediate need, band-aid fixes, not the renovations this bond proposes," John Fitzgerald said, Assistant Superintendent of Business and Finance.

Proposal Breakdown

Proposition A, totaling $28.7 million, addresses issues the district believes are essential to renovate for the safety, security and operational efficiencies of the 14 buildings.

Split into three sections, $15 million would be spent on facility and equipment, $11.3 million allotted for infrastructure technology and equipment, $1.94 million covering professional fees and $397,800 would cover bond issuance costs.

Security updates and construction—recommended by an audit performed by the Oakland Township Sherriff's Department—would cost $2.99 million of the $15 million designated for facility and equipment.

Proposition B are projects termed as "enhancements" which would update facilities and equipment, and infrastructural technology and equipment, valued at $4.5 million.

Facility and equipment enhancements would use about $2 million of the Proposal B monies, technology infrastructure and equipment would cost $2.2 million, professional fees would be $255,200 and bond issuance costs $52,200.

Fourty-four percent of the bond is composed of technology infrastructure and equipment upgrades; 41 percent is designated as infrastructure, facilities and site upgrades; 10 percent is safety and security enhancements, and 5 percent is for furnishings and equipment.

This means about $17 million would be used for facilities and equipment updates/renovations (building construction, site development, furnishings and equipment and security) between both proposals. Technology and infrastructure would cost $13.5 million for the two proposals, leaving roughly $2.7 million in professional costs and bond issuance costs.

For the taxpayers

The annual costs in tax rates would be on average 1.15 mils for Proposal A and 0.18 for Proposal B, or $200 annually for a homeowner with a $300,000 market value home. The tax is calculated using the taxable value of the home. The average market value of a Lake Orion school district home is $180,000 with an estimated taxable value of $90,000, or a $120 annual tax increase for the 20-year bond term if both proposals pass.

LOCS is currently a little over $163 million in debt as a result of three previous school bonds from 2005, 2006 and 2012 which paid for the high school, the natatorium, Oakview Middle School and two elementary schools. Taxpayers are currently paying for these three outstanding qualified-bonds, which are locked in a set millage.

Lake Orion Community Schools released informational literature called "Learn the facts" after an opposition group delivered a "Vote no on new taxes" mailer to a few neighborhoods, addressing statements issued in the latter document.

One of the issues points out the non-qualified status of the proposed 2013 bond as opposed to a state qualified bond.

It is up to the local school board of education to decide whether to take a qualified or nonqualified bond status. With a qualified bond a local school district uses the State's credit rating to determine the rating on the bonds, which in many cases is lower. Secondly, a district can borrow from the state in order to pay principle and interest requirements on outstanding qualified bonds.

"A lot of districts go the qualified route to get the State's ratings. Our bond rating is equivalent to the State's now, so we don't need them to co-sign for us," Fitzgerald said. "We don't need the State's rating to get the best interest rates on the bond," he explained. According to "Learn the facts," the board is pursuing the non-qualified status because it has a better interest rate on the debt.

Some opponents are worried the school board will raise taxes additionally if they do not meet yearly school debt obligations, which is possible providing the authority both a qualified and non-qualified elected bond grants the board. For both types the local board of education has the authority to set the tax rate in order to retire the debt on an annual basis, including raising them down the road if regulations aren't met.

Fitzgerald predicts the opposite for LOCS because he predicts an increase in the tax base.

"I expect us to be lowering taxes because our tax base is growing again with new houses and new businesses, not just existing ones," he said. "As the tax base grows, the amount we need to levy will go down per house, more houses would be paying a smaller amount." Taxpayers would not see an actual decrease in the mills; however, the number of years to pay back the bond would decrease.

Campaign confusion

Another issue opponents have voiced concerns the board using over $2.6 million for campaign costs, which is untrue and illegal to bond for, Superintendent Marion Ginapolis said.

"I think what they're saying is the 'yes committee' is going to be charged to taxpayers and that's illegal. They have their own group called the advocacy committee. There are no bond campaign costs charged in the bonds. That is very misleading," she said.

There is roughly $2.7 million allocated for professional fees and bond issuance costs, which would be used only if the bond is passed.

Roof replacement and restoration would total $4.9 million throughout the district composed of 14 buildings.

"When your building needs a new roof you have to have professionals to tell you what to do. You hire engineers. There are contractors, plumbers and architects that will do the work (for different projects) Those are the fees that will be included in the bond," Ginopolis said, referring to the professional fees.

Sneak-peak of projects

Some projects affect the total district while others are tailored for individual building issues.

For Proposition A, all 14 buildings, for example, would receive a video/intercom/door release or panic distress alarm. Security camera systems replacement and renovations would occur in all 14. All except the administration building would be modified for a secure entry.

The entire district would receive $1.1 million in energy management and upgrades of mechanical systems. Almost $1.6 million would purchase network infrastructure for Proposal A.

For $20,000 the boys' locker room would be replaced at LOHS. Asbestos would be removed for $100,000 total from Blanche Sims, Carpenter and Webber Elementary, Scripps Middle and the CERC. Damaged classroom furniture would be replaced in all the schools, costing $300,000 with a 10-year-life, and flooring would be renovated or replaced in Carpenter and Orion Oaks elementary and LOHS for $500,000. Webber Elementary would receive bathroom renovations/remodeling for $90,000.

A grand total of $2.16 million would be spent on instructional desktops and $2.33 million on laptops/netbooks/mobile devices under proposition A..

There are 34 individually priced projects for Proposition A, and 21 projects for the "enhancements" Proposal B would provide.

The $2.2 million designated for technology projects would purchase $900,000 in audio/video district multimedia, a $125,000 Board Room broadcast system, and close to $1.1 million in hardware, including desktops, laptops, instructional tablets housed on portable carts and printers.

A total of $1.5 million would be spent on building construction, such as $500,000 allocated for the CERC to renovate and reconfigure the operations area of facility, and $750,000 to add multi-purpose team rooms/shelters near the football field, with a 30-year life cycle.

Site development is projected at $365,000 for improvements such as adding lights to the baseball and softball fields at LOHS, improving multiple sports fields at Orion Oaks and adding a field for football and lacrosse at Waldon Middle School.

A complete list of both Proposition A and Proposition B projects can be found at the LOCS website at http://www.lakeorion.k12.mi.us/content_page2.aspx?cid=1398.

"I think that the way we've positioned this bond everything that we have in it are critical needs, the things that we could possibly do without are in Proposition B, but everything in A are things we feel very strongly are critical," Ginopolis said.

Many of the Apple computers used throughout the district are between ten and fifteen years old. Not only would the modifications keep LO Schools among the top tiers in education, it would give students a jumpstart beyond high school, Ginopolis said.

"Our goal is to make sure that our students are learning the same way they are living, so they are not digital immigrants like some of us," she said. "We really feel technology is the new paper and pencil, it isn't just computers. It really is a whole system issue."

Timely renovations such as replacing one of the three boilers at Orion Oaks Elementary, or the roofs at Stadium Elementary and Paint Creek Elementary will be funded using the general fund. The general fund currently has $8,964,894 in its pockets, or 11.3 percent of LOCS total expenditures.

"It isn't the drain. That roof needs to be replaced," Ginopolis said referring to Stadium Elementary. "It's going to have to come from somewhere, which means it would be less money for classroom instruction."

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