District moves forward with bond extension
August 25, 2010 - Goodrich-The school board voted 6-0 on Monday night to move forward with a $15.4 million bond extension for renovations to several district buildings. If approved, district voters would decide the issue on Feb. 22, 2011.
Five years ago, board members considered a bond of $32 million for renovations to several buildings, but the proposal was tabled. Since then, a sagging economy has pushed the SEV (State Equalization Value) of area homes down, reducing the maximum bond amount the district can obtain to $15.4 million.
District Superintendent John Fazer said if the board waits until May 2011 to vote, the area SEV will dip by a projected 8.6 percent, dropping the maximum amount to $1.1 million.
"No new taxes. By using the School Bond Loan Fund (SBLF) we can keep our current millage rate of 7.75 mills," said Fazer. "The SBLF supports smaller districts like Goodrich when the SEV is low. The key is we can extend the mills out without raising taxes."
Trustee Linda Jackson said that since the announcement of the bond extension earlier this month, she had been receiving calls from district residents not fav- oring the bond issue.
"Residents are saying, 'Why do we need the bond extension now?'" said Jackson. "We as a board really have our work cut out for us."
Jackson questioned the future of Reid Elementary School which currently houses kindergarten through second grade, and possible upgrades with bond money to the oldest facility in the district. Sections of the building were constructed in 1913, she added.
"It's an old building and there's no space around Reid Elementary to expand," she said. If we have more growth in the district it won't be there."
School officials have until Oct. 8 to decide what projects will be targeted if the bond is approved by voters.
According to the Michigan Department of Treasury, the SBLF program offers a state credit enhancement and loan mechanism for school district bond issues. The bonds must be qualified by the state treasurer and the bond proceeds must be used for capital expenditure purposes such as building, renovation or upgrades.
Atlas Township Supervisor Shirley Kautman-Jones, former Goodrich School Board member, attended the meeting.
"Do I think the buildings need attention?" she asked the board. "Yes. It's like taking care of your house— you just have to do it. In addition (regarding the bond) it will be up to the people to decide. The board is going to have to be very diligent on how to spend the $15 million and make it most effective. The schools are the cornerstone of the community and they have been very supportive in the past of such bonds."
Jones emphasized that currently there are 131 foreclosures in Atlas Township, with 49 of those on unimproved property.
"With that many homes in foreclosure it's going to be a long time before new homes are built," said Jones. "It's the big picture of the growth in the township. At the township we are possibly looking at a millage in November 2012 for police—I don't think the school bond extension will impact the possibly of police millage."
The SBLF allows schools like Goodrich to borrow from the state the difference between what their debt levy produces and the amount actually needed to make their annual bond payments. The idea, say state officials, was to allow growing schools to bond for more construction than their existing tax base could reasonably support.
In the case of the Goodrich School District, a $200,000 home pays about $775 per year in school taxes. The millage rate would stay at 7.75 until the total loan is paid off.
The assumption underlying SBLF loans, according to the Department of Treasury, is that the borrowing district's tax base will grow over time, and that eventually the loans can be paid off, on top of the district's bonds.