To the Ovid-Elsie Community:
On Tuesday, May 7, Ovid-Elsie Area Schools is asking voters to approve a Zero Mill Bond Extension. If approved, the current millage rate (7.8 mills) would be extended from 2035 to 2038.
Ballot language can be very confusing, so hopefully this note will create a better understanding. Please know that the ballot structure is dictated by state statute. The first portion of the ballot, deals with the specific bonds being authorized by the voters. It identifies the maximum amount of bonds that our district can issue:
“Shall Ovid-Elsie Area Schools, Clinton, Shiawassee, Saginaw and Gratiot Counties, Michigan, borrow the sum of not to exceed Six Million Two Hundred Fifteen Thousand Dollars ($6,215,000) and issue its general obligation unlimited tax bonds therefor, for the purpose of:”
Next, the indented paragraph lists the specific limits on the purposes that the bond monies can be used, if approved by voters.
“remodeling, including security measures, furnishing and refurnishing, and equipping and re-equipping school buildings and facilities; acquiring and installing instructional technology and instructional technology equipment for school buildings; erecting school storage buildings; purchasing school buses; and developing and improving athletic fields and facilities, parking areas, driveways, and sites?”
The “informational purposes” section is the background tax information related to the bonds. The first paragraph describes the first year’s levy and the average levy for these specific bonds as well as listing the maximum number of years these specific bonds may be outstanding.
“The estimated millage that will be levied for the proposed bonds in 2019, under current law, is 0 mill ($0.00 on each $1,000 of taxable valuation). The maximum number of years the bonds may be outstanding, exclusive of any refunding, is twenty-four (24) years. The estimated simple average annual millage anticipated to be required to retire this bond debt is 0.44 mill ($0.44 on each $1,000 of taxable valuation).”
The second paragraph deals with the district’s School Loan Revolving Fund (SLRF) participation for this specific bond issue. The state’s SLRF lends to the district “principal” that is used to help pay debt service on the bonds referenced in the first portion of the ballot, which keeps that millage rate lower. Both that principal and that interest are different than the bond amount in the first portion of the ballot.
“The school district expects to borrow from the State School Bond Qualification and Loan Program to pay debt service on these bonds. The estimated total principal amount of that borrowing is $1,315,282 and the estimated total interest to be paid thereon is $3,841,366. The estimated duration of the millage levy associated with that borrowing is 19 years and the estimated computed millage rate for such levy is 7.80 mills. The estimated computed millage rate may change based on changes in certain circumstances.”
The third paragraph in the “informational purposes” section is the total participation of the District in the SLRF, including both the proposed bonds and all outstanding bonds.
Dr. Ryan L. Cunningham, Superintendent, Ovid-Elsie