Schools to hold February election for bond issue
September 22, 2010 - One thing's clear, said Jillynn Keppler, assistant superintendent of administrative services: the way schools are funded doesn't cover big purchases and major repairs.
So how does Lake Orion Community Schools go about funding new buses, better technology and building repairs?
Go for a bond.
The idea originally started brewing in the strategic planning finance committee in early June and made its way before the school board at their last meeting, Sept. 15.
Now, the district is preparing to put a bond proposal on the ballot for a February 2011 election.
Superintendent Ken Gutman said there isn't a monetary figure attached to the proposal yet because no one knows exactly what the bond will pay for. He did say, however, that it won't be for "wish-list" items.
"We need to look at a stripped-down, non-wish-list type bond because this is not the time to look at all the enrichment kinds of things. This is the time to look at what we need. Do we want to wait 10 years for a roof? I don't think we can," he said.
The district is currently seeking community members interested in deciding the content of the bond and communicating with the public. Anyone interested should contact Julie Olko at 248.693.5414 or email@example.com.
What's likely, say officials, is that the bond will be for safety and security measures, transportation, major repairs and technology.
Initially the strategic planning finance committee and the school board weren't in favor of a bond proposal, but after meeting with Paul Stauder of Stauder Barch, an advisory firm with which the district has worked in the past on other bond issues, "it became apparent that there was an issue of timeliness when it comes to a bond issue," Gutman said.
According to Stauder, the community should vote on the bond proposal before tax values decline to 2011 levels; this will ultimately save district residents money.
Seeking a $20 million bond – a dollar amount used only for projection purposes – means a tax increase of 1.5 mills for residents, based on 2010 state equalization values (SEV). A mill is the equivalent of $1 per $1,000 of taxable value. So, for example, if a home is worth $100,000, each mill would be $100 in taxes. The current levy on tax payers for schools is 7.491.
But, if the district waits to hold the election until May when 2011 values kick in, going for $20 million would mean a 5.5 mill increase because values are expected to decrease by nearly 12.5 percent, according to Stauder.
Stauder added that SEV decline for 2012 will also be around 12.5 percent, and the longer the district waits to go for a bond, the worse the five-year tax value average will be.
"It will be about 10 years down the road before you'll be back to the valuation that you had this year," Staudar said to the school board.
Using next year's SEV, or the values of the next several years out, would produce a scenario where the district could never repay the state, "which means they would never approve (the bond) in the first place," said Mary Jo Burchart, board president.
The election in February comes in addition to the board election in May when four seats will be up for grabs. The district will foot the bill for both elections. The board's election May 5, 2009 cost a hair over $25,000, according to the Orion Township clerk's office.
School Board President Mary Jo Burchart said holding two elections might be a tough pill to swallow for district residents, but the difference in millage levies between holding it in February and May makes a February election "the only option we have."
"Otherwise we would have to ask folks to pay more money," she said.
Board Treasurer Jim Weidman said he was one of the last people to jump on board with the bond proposal, but ultimately, a bleak financial outlook and the need for updates swayed him.
"After we complete the coming year, projections are looking like we could see a reversal of $600 or more dollars in our per-pupil allocation (from the state) for 2011/12. With that looming, and with our need for buses and technology, it made sense for us to look at (a bond)."
Since June, when strategic planning participants discussed the idea of a bond proposal, the district and board have been garnering information to see if a bond would be viable, said Weidman. The board then brought the idea to their August workshop and decided to bring it back again in September.
According to Weidman, getting the bond proposal on the upcoming November ballot would have been "very difficult" because of governmental processes and a lack of information at the school board level.
Mike Luna, Lake Orion parent and finance committee member, said a bond issue "is the right thing to do."
"It's not the right time for this, and it won't be for the next four or five years to ask for a bond proposal, but in order to use the money for our buildings and students, we should do this now as opposed to paying it in interest," Luna said.
Reporter, Lake Orion Review