District: Changes improve bond payback options
December 15, 2010 - By Laura Colvin
Change is good, especially when it means a lower-than-anticipated interest rate and an earlier payoff date.
That, at least, was part of the message from Lake Orion Community School administrators who continue to define – and refine – details of the $25 million school bond issue meant to fund a host of district-wide improvements.
At a Dec. 8 regular meeting of the district's Board of Education, Jillynn Keppler, assistant superintendent of administrative services, presented changes to the proposed bond's financial structure.
"We're very fortunate to now be allocated dollars through QSCB, or qualified school construction bonds," she said. "The buyer gets a low interest rate through the school as part of their investment, and the rest is returned to them through a federal tax credit."
So what does it mean to Lake Orion schools?
The original language proposed debt issuance of $25,530,000 in one series at five percent interest for a term of 25 years and an increase of 1.75 mils.
The update asks for the same amount, but in two series: Series A, to the tune of $9,625,000 for 18 years at 1.01 percent, and Series B, $15,905,000 for 10 years at four percent, with a 1.6 mil increase.
"That decreases the cost of the debt to our community, which is obviously one of our objectives," Keppler said.
Based on what school officials say the average Orion home is worth on the market—about $200,000—the average Orion home then has a taxable value of about $100,000—roughly half its market value.
So, if the bond issue gets voter approval at the polls Feb. 22, an average Orion family living in an average Orion home can expect to pay an annual tax increase of $160 or $13.33 per month, $3.09 per week or $ 0.44 per day.
Currently, the bulk of funds – $14.1 million – are slated for "technology."
An allotment for safety/security measures adds up to $2.6 million, buses get a $3.1 million and $2.9 million is allocated for building refurbishment.
The last $2.8 gets sucked up by bond issuance costs, construction manager pay and architect and technology designer fees.
Voters will decide the issue Feb. 22. Watch the Review for updates and additional information.
Editor, Lake Orion Review