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School Bond Loan Fund forum



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June 11, 2014 - Brandon Twp.- Residents of the school district who want a better understanding of why their tax bills are increasing are invited to attend a public forum at 6:30 p.m., June 25, at the Brandon High School Performing Arts Center, 1025 S. Ortonville Road.

The forum will address the School Bond Loan Fund millage, which is increasing from 8.24 mills to 9.66 mills this year and then jumps to 13 mills, which is scheduled to be levied from 2015-2035 in order to be in compliance with P.A. 437.

"There are still misunderstandings about this," said Superintendent Lorrie McMahon. "The forum will inform the public so they understand why their taxes have gone up and why the school board is choosing the default option— so we can continue to fight it."

Public Act 437, passed in 2012 by the state legislature, mandates that schools pay off loans from the state within six years of paying off bonds. The district is currently making payments on two different voter-approved bonds, one from 1996, and the other from 2006. Because the housing market crashed shortly after the $73 million bond passed in 2006, the district has had to borrow about $4 million every year from the state to make the annual $8 million bond payment.

"We are $150 million in debt related to the bond," said Jan Meek, executive director of business services for the district. "We've had to borrow 50 percent of the bond payment each year, so we are that far under water... Interest accrues every day."

The state charges the district a 3.52280 percent interest rate.

District officials here have protested the change in law and pleaded to be exempt and "grandfathered in," holding to their original repayment agreement with the state, all to no avail. The board has considered requesting the state reduce the amount of mills that will have to be levied in exchange for a longer period of years in which to levy the mills, but McMahon said they likely will not go that route.

Legislators including Joe Graves, Brad Jacobsen, and Dave Robertson have been invited to the forum, as well as the district's financial consultant, R.J. Naughton.

"The district has done nothing wrong, we moved forward with the bond totally following all rules and regulations," said McMahon. "(Graves, Jacobsen and Robertson) voted for money to help the bailout of Detroit, which is great, but the least they can do now is support their own district."

Susan covers Brandon Township and Ortonville
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