Residents, officials weigh in on Greenville school bond proposal


By Emilee Nielsen • Last Updated 8:37 pm on Monday, March 13, 2017

GREENVILLE — Six years have passed since Greenville Public Schools last asked voters to pass a bond for district improvements.

School officials have spent the last several months in the planning stages of another bond proposal, which is set for a May 2 vote. They’ve worked collaboratively with Holland-based GMB Architecture + Engineering and others to craft a plan for districtwide improvements focusing on three components: Safety and security, educational technology and enhancing programming and learning environments.

If passed, the general obligation bond would bring $52,315,000 over the next 30 years. A general obligation bond is backed by the full faith, credit and taxing power of the issuing body and is considered public debt. In this case, the lending body would be organizations willing to invest.

According to Greenville Public Schools Director of Finance John Gilchrist, the bond will likely to be purchased by institutional investors “like insurance companies and other firms that are looking to hold fixed income debt.”

 

BOND HISTORY 

In September 1999, voters passed a bond proposal for $13,925,000 by a margin of just 50 votes (967 “yes” votes and 917 “no” votes). At the same time, voters defeated a 1/2-mill building and site fund by 83 votes (930 “yes” votes and 1,013 “no” votes).

The successfully approved bond in 1999 generated funds for the purpose of improvements to buildings in the district, a broadcast room at the high school, a new central services building, school buses, and in part for a new track, a new concession building and additional toilet facilities.

Taxpayers are still paying off that debt, which will expire in 2024. Over the years, the district has refunded the bond several times in order to have the most competitive interest rates based on the state of the market.

In May 2011, voters passed an additional bond for $14,570,000 by just 159 votes (1,507 “yes” votes and 1,348 “no” votes) for additions and remodeling to school buildings, furnishing and refurnishing, equipping and re-equipping school facilities, some upgraded technology installations and constructing and developing athletic/physical education facilities and play fields.

Taxpayers are continuing to pay on that debt as well and will continue to do so until it expires in 2031. The district will be eligible to refund previously issued bonds in 2018, 2020 and 2021 to obtain a new and ideally lower interest rate.

While taxpayers are continuing to pay on the debt incurred from these bonds, the millage rates at which they are taxed are set to decrease over the years so taxpayers aren’t paying as much on the debt from year to year as the principal of those bonds falls over time.

 

CURRENT BOND  

The May 2 ballot proposal, if approved, would increase the tax millage rate from 6 mils to 7.44 mills — a $1.44 per $1,000 of taxable property value for Greenville-area residents. The bond would expire in 2047.

The 7.44 millage rate is not permanent, Gilchrist noted. If this bond were to pass, the millage rate would fall over time with a major fall off in 2039 to less than 1 mill.

The increase in millage rates still address the aforementioned bonds. The 7.44 millage rate is divided into portions, with “2.31 mills attributable to the new debt” and the remaining 5.13 mills allocated to paying old debts from the previous bonds.

Gilchrist said there have been questions about why millage rates were allowed to fall in the first place if the district had improvements to make. He said the district kept its word to taxpayers to let that millage rate fall as opposed to putting new debt on to maintain the same millage rate.

“We weren’t looking to do additional work (in 2013 when the millage rate dropped). We don’t just renew millages for the sake of renewing the millages,” he said.

 

CRITICAL FEEDBACK 

Some residents have expressed criticisms of the bond proposal.

Phil Mathews said he thinks the district “keeps coming to the well and it’s drying up.”

“(I) look at my neighbor who is 86, on Social Security and couldn’t even afford a $25 increase to our association dues, he is so tight on money,” Mathews said. “These types of people didn’t seem to figure into the school’s idea of raising taxes.”

Mathews urges taxpayers to vote “no” on the proposal.

“This district is not a Rockford, Okemos, Auburn Hills,” he said. “It is one of the poorest counties in Michigan and needs to address the needs of all of their citizens, not just the students.”

Rostan Eaton, who has a child in middle school, is also critical of the bond. He believes there are other options for the district, including taking out shorter-term bank backed bonds to save on interest payments.

Gilchrist said this option isn’t as cost effective as it seems as there are fees incurred when bonds are issued which would outweigh savings on interest in the long run.

Eaton believes the proposed improvements are regular maintenance issues and should have been taken care of as time went on rather than as part of the largest bond proposal the district has ever seen.

Greenville Public Schools Superintendent Linda Van Houten touts the fiscal responsibility of the district, the commitment to ongoing maintenance in the buildings and the commitment to putting the needs of students first.

“We’ve been functioning well in buildings that are 60 years old and 40 years old. We did take care of these things,” she said. “Our maintenance and custodial staff have been unbelievable at their jobs. This is so much more than just maintenance.”

She said the district prioritizes students above all and is hesitant to take money from the general fund if not absolutely necessary.

Eaton noted two other bonds are still being paid off by taxpayers and questioned the timing of the bond proposal.

Van Houten equated the bond with a car loan.

“You take a loan out on a car and you want a new car before that’s paid off. You still have to pay off the old loan,” she said. “(We’re) building upon a current debt. Our management of our debts has been incredible.”

Van Houten said the district has saved taxpayers $900,000 since 2010 by refunding old bonds for lower interest rates.

Eaton also expressed concern about the tax base being maxed out in the event the district would need more funds to build a new building, such as the high school.

Van Houten said there was a conscious decision made by school officials to move forward with improvements to existing structures rather than build something new. She said she wouldn’t want to focus all of the funds from a bond on building a new structure that would only benefit a certain portion of the student population at a time.

“We want the first round of the bond to touch every single student in our schools,” she said.

If approved by voters, the first round of the bond will be sold for $14 million in June. The remaining $38 million would be sold sometime in 2018.

Van Houten encourages members of the community to continue asking questions and to learn all they can about the bond proposal. She said the district is working to be as transparent as possible so people can gain a true understanding of what’s being asked of them.

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