FAQ's

Oxford Community Schools

November 7, 2017 Bond & Sinking Fund Proposals

FREQUENTLY ASKED QUESTIONS

1) Why are these bond and sinking fund questions proposed?

We need to maintain the community’s investment in the infrastructure of the District. Bond proposals have been the primary method of financing the district’s infrastructure needs used by Oxford Board of Education.

We are approaching 9 years since the 2009 Bond. We identified the mechanical systems and facility needs in the district. We also need to continue to replace school buses, technology, and security. The .75 mill/year, five year sinking fund proposal would allow us to bridge the gap between a no millage increase bond and our total district wide need.


2) What process was followed to develop the upcoming ballot proposal?

The scope of the proposal is based on what the district has identified as critical needs, not wants. These needs have been shared and affirmed through a variety of activities over the past year including facilities assessments, discussions and meetings with our teachers, support staff, parents, community surveys, and extensive reviews and discussions at regularly scheduled open board meetings.


3) Does the Board of Education support the proposals?

The Board of Education supports the size and scope of both the proposed bond and sinking fund.

4) Are the proposed improvements in alignment with the District’s overall Mission and Goals?

Every decision we make regarding this proposal will be premised on:

  • Our planning being in alignment with our district’s clearly defined Goals and Strategic Framework

  • Making recommendations based on the very best interests of our students and the communities we serve

  • Expecting to maintain the current district debt tax rate of 7.9 debt mills (No anticipated tax rate increase for the bond proposal specifically)

5) If the bond question is approved would it result in an increase in our school debt millage?

We currently levy 7.9 debt mills annually on all school properties. The bond proposal is not expected to increase the 7.9 mill annual debt levy that the district currently collects for previous building projects, but it will extend the number of years that the levy will be collected by three years. If approved, the sinking fund millage proposal would increase taxes on all school properties due to the proposed .75 mills each year over five years. For example, this sinking fund proposal would increase annual taxes on a property with a taxable value of $100,000.00 by $75.00

6) Can the district debt tax rate be reduced to a lower rate, such as 7.0 or 7.5 mills, as a part of this bond proposal?

The current school debt tax rate of 7.9 mills was established when the district first entered into the State of Michigan School Bond Loan Fund. The school district must continue to levy 7.9 mills until all the outstanding loans from the School Bond Loan Fund are repaid. Any accelerated growth in taxable values will shorten the number of years we will be required to levy 7.9 mills.

7) What are the major features of these proposals?

Bond fund components include mechanical (AC, air handlers, etc.) and site work/infrastructure updates (parking lots, sidewalks, exterior lighting), new buses. Sinking Fund components include mechanical and site work/infrastructure updates, instructional technology, and building security updates.

8) If approved, would these ballot questions help to retain current students and attract new ones?

Public schools in Michigan receive their funding from the State on a per-pupil basis. Simply put, the more students that attend schools in our district, the more programs and classes we can offer. Since parents have choices regarding where their children go to school, we need to make Oxford Community Schools as attractive as possible to prospective homebuyers. We also must maintain the exceptional quality of teachers and staff and instruction opportunities on which our District’s positive reputation is based.

9) If approved, would money from the bond or sinking fund proposals be used to pay teacher salaries and benefits or operational costs?

No. By law, school districts are not allowed to use funds from either a bond issue or a sinking fund for operating expenses such as teacher, administrator or employee salaries or other operational costs. Bond and sinking fund dollars must also be kept separate from school operating funds.

10) How would passage of both the bond and sinking fund improve the quality of our students’ learning experiences?

The funds from the bond and the sinking fund would pay for improvements that would greatly assist in not only maintaining prior investment in our facilities but also provide a comfortable, safe/secure learning environment for our students.

11) How would these proposals benefit residents who don’t have students in the district?

There are numerous benefits for residents without school-aged children. District facilities and sites are regularly used by community members who do not have children attending District schools. Oxford Community Schools takes pride in its role as an important community resource and partner. It is our belief that the value and vitality of our community significantly depends on the quality and marketability of our schools. Great schools help to maintain local property values. We believe it is in our community’s best interests to protect its investments and to attract families and businesses to our area.

12) What key dates lead up to the November 7, 2017 vote?

           

Final day to Register to Vote by 5pm, Oct.10, 2017

Absentee Voter Ballots must be available on or before Sept.23, 2017

Absentee Voter Ballot Application Requests must be returned by 2pm, Nov. 4, 2017

Electors qualified to obtain an absentee Ballot for election may vote in person in clerk’s office 4pm, Nov. 6, 2017

Absentee Voter Ballots due to clerk’s office 8pm, November 7, 2017

Election Day 7am - 8pm, November 7, 2017

13) Where and when do I register to vote?

To register to vote, a person must be:

  • a U.S. citizen

  • at least 18 years of age by election day

  • a resident of Michigan for not less than 30 days and a resident in the city or township where you are applying to vote

  • not serving a sentence in jail or prison

You may obtain the application at one of the following:

  • Your local Secretary of State branch office

  • Your local county, city, or township clerk's office

  • Offices of several state agencies, like the Department of Human Services, the Department of Community Health, and the Department of Labor and Economic Growth

  • Military recruitment centers

  • Voter registration drives

  • Online at www.Michigan.gov/sos

To vote in the November 7, 2017 School Election, a person must be a resident of the Oxford Community Schools and registered to vote by 5 p.m. on October 10, 2017.

14) What is the wording of the two proposals as it will appear on the ballot?

OXFORD COMMUNITY SCHOOLS

BONDING PROPOSAL

Shall Oxford Community Schools, Oakland and Lapeer Counties, Michigan, borrow the sum of not to exceed Twenty-Eight Million Two Hundred Eighty Thousand Dollars ($28,280,000) and issue its general obligation unlimited tax bonds therefor, in one or more series, for the purpose of:

remodeling, furnishing and refurnishing and equipping and re-equipping school buildings; purchasing school buses; and developing and improving playgrounds, parking areas and sites?

The following is for informational purposes only:

The estimated millage that will be levied for the proposed bonds in 2018, under current law, is 0.39 mill ($0.39 on each $1,000 of taxable valuation) for a 0.00 mill net increase over the prior year’s levy.  The maximum number of years the bonds of any series may be outstanding, exclusive of any refunding, is thirty (30) years.  The estimated simple average annual millage anticipated to be required to retire this bond debt is 1.01 mills ($1.01 on each $1,000 of taxable valuation).

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 $2,671,534 and the estimated total interest to be paid thereon is $12,513,139.  The estimated duration of the millage levy associated with that borrowing is 18 years and the estimated computed millage rate for such levy is 7.90 mills.  The estimated computed millage rate may change based on changes in certain circumstances.

The total amount of qualified bonds currently outstanding is $112,975,000.  The total amount of qualified loans currently outstanding is approximately $19,813,569.

(Pursuant to State law, expenditure of bond proceeds must be audited, and the proceeds cannot be used for repair or maintenance costs, teacher, administrator or employee salaries, or other operating expenses.)


II.  OXFORD COMMUNITY SCHOOLS SINKING FUND MILLAGE PROPOSAL

Shall the limitation on the amount of taxes which may be assessed against all property in Oxford Community Schools, Oakland and Lapeer Counties, Michigan, be increased by and the board of education be authorized to levy not to exceed .75 mill ($0.75 on each $1,000 of taxable valuation) for a period of 5 years, 2018 to 2022, inclusive, to create a sinking fund for the construction or repair of school buildings, for school security improvements, for the acquisition or upgrading of technology and for all other purposes authorized by law; the estimate of the revenue the school district will collect if the millage is approved and levied in 2018 is approximately $801,000?

15) If approved, when would improvements/construction begin?

  • Spring/summer 2018

16) Will there be meetings I can attend to learn more about what the district is proposing for the bond and sinking fund?

Yes, currently scheduled at the Board Office located at 10 N. Washington for the following dates:

  • 8:30 am on Monday, September 18, 2017

  • 9:00 - 11:00 am on Saturday, October 7, 2017

  • 6:00 pm on Monday, October 30, 2017

18) How can I request a district representative to speak at a neighborhood, service club or business organization meeting?


Please contact Superintendent Tim Throne at tim.throne@oxfordschools.org or call him at 248 969 5114..

17) Why are we planning to purchase buses with bond proceeds?

Each school day, approximately 2,400 of the district’s more than 7,200 students are transported to school via the school district’s fleet of buses. The district has found that, as buses reach nine years of use or 150,000 miles, replacement becomes necessary so that the district avoids increasing maintenance costs and downtime. Historically, the district has purchased buses through the use of bond funds. By using bond proceeds for the purchase of buses, the district avoids diverting funds from our general operating budget that could otherwise be used to support classroom instruction. Over the proposed series of bonds, approximately 15 buses will be replaced, representing approximately one third of the fleet. Even though we typically use our buses for about nine years each, the bond funds that would be used for buses will be paid back within six years of purchase so we will not be paying debt on exhausted buses.

18) Why doesn’t the district use the general fund to pay for all of this?

Quite simply, the general fund cannot afford to pay for these large capital investments. Even during times of significant student growth and more robust per student state funding, the district has always relied on support from taxpayer-approved bond issues.

19) Does it make financial sense to present this bond program to the voters at this time?

  • The plan would enable the district to upgrade facilities to meet our current and future educational requirements at no projected increase to our current debt millage rate.

  • The plan would allow the district to preserve general fund dollars for instruction and classroom needs by providing a dedicated funding source to address identified and prioritized site, facility, playground, and equipment upgrades

  • Current interest rates are very low, near historic lows, translating to a relatively low cost of borrowing money for both the district and taxpayers.

  • Construction costs are rising. Extended delay may raise overall costs of the planned projects.


20) Explain what bond money cannot cover and what it can cover.

Bond proceeds cannot be used for the following items:

  • Staff salaries and wages;

  • General operating expenses, repairs and maintenance;

  • Classroom supplies and textbooks; and

  • Administrative costs.

  • Bond proceeds can be used for the following items:

  • Construction and remodeling of facilities;

  • Purchase of technology equipment and infrastructure;

  • Purchase of equipment and furniture;

  • Site improvements; and

  • Purchase of buses.


21) What is the difference between a sinking fund millage and a bond proposal?

A bond is a lump-sum dollar amount that a school district borrows through the sale of bonds, in order to fund capital projects. Taxpayers pay the bond money back over a period of years with interest – similar to a home mortgage – by way of an unlimited tax debt millage levied by the district. This provides the district with the ability to fund major capital projects and program improvements without impacting the general fund.

A sinking fund millage is a limited property tax considered a pay-as-you-go method for addressing smaller building repairs and improvements. No debt or interest payments are incurred with a sinking fund. A district can levy a sinking fund millage for a limited number of years, as provided in the ballot proposal.

22) What if the bond proposal doesn’t pass?

Over the past decade, severe cuts in school funding coupled with the rising cost of operating the school system have put tremendous pressure on the district’s general operating fund. Failure to approve the bond proposal will mean the district will have to delay much-needed improvements, and that any emergency improvements to address potential safety issues at the district’s facilities will likely have to be paid for with general operating funds that would otherwise go to support educational programs for students.


23) What if only the sinking fund passes?

The District will have to re-prioritize the items that were identified associated with the gap-funding in the sinking fund dollars.