May 3, 2022 Bond Proposal
Frequently Asked Questions & Answers
The Comstock Public Schools community will have the opportunity to vote on a bond proposal on the May 3, 2022 election ballot. If approved by voters, this bond proposal would provide $39,430,000 for district-wide improvements. This bond proposal was developed as a part of a long-term master plan for district facilities. Proposed bond projects were prioritized through facility assessments, and community and stakeholder input including four surveys and six community forums.
What is a bond proposal and how can funds from a bond be spent?
A bond proposal is how a public school district asks its community for authorization to borrow money to pay for capital expenditures. Voter-approved bond funds can be spent on new construction, additions, remodeling, site improvements, athletic facilities, playgrounds, buses, furnishings, equipment, and other capital needs. Funds raised through the sale of bonds cannot be used on operational expenses such as employee salaries and benefits, school supplies, and textbooks. Bond funds must be kept separate from operating funds and must be audited by an independent auditing firm.
How would the bond proposal impact my property taxes?
If approved by voters, it is estimated that the debt tax rate would increase by approximately 0.50 mills over the current tax rate. Assuming that the taxable value is 50% of the market value, this equals an additional $25.00 per year for every $100,000 market value ($50,000 taxable value) home. An estimated tax calculator is available on the district website.
How does Comstock’s debt millage rate compare to neighboring districts?
Even with the passage of the 2016 bond proposal, Comstock Public Schools has the lowest debt tax rate of all school districts within Kalamazoo RESA. That would still be the case if this bond proposal is approved, which means the district has been prudent in their financial management of district funds.
All but one district in Kalamazoo RESA have active construction projects underway to improve their schools and facilities. Approval of this bond proposal would enable Comstock to have modernized facilities and to be more competitive regarding retaining and attracting families and staff.
Would the approval of the bond proposal have any impact on our current operational budget?
While funding from this bond proposal is independent of district’s general fund operating budget, the bond would likely have a positive impact on the district’s general fund by allowing the district to reallocate operating funds that are currently being spent on aging facilities, mechanical systems, and technology.
How much money would the bond proposal generate and would the funding be issued all at once?
The proposal would generate $39,430,000 which would be spent over six years on district-wide school building and site improvements. The bonds are proposed to be issued in 2 series (2022 and 2024). This allows for years of bond repayments to occur before a new bond issue is completed.
When will the millage for this proposal first be levied?
On the July 1, 2022 property tax bill.
Is the bond millage rate expected to be the same for the next 30 years?
No. The bond millage rate is estimated to initially increase by .50 mills in the first year, from 5.0 to 5.5 mills, then remain at 5.50 mills through 2029, thereafter it is estimated to decline due to bond repayment and expected taxable value growth.
What about the previously approved Sinking Fund? How does that impact the District?
In May 2019, voters approved a Sinking Fund that provides approximately $525,000 per year for 10 years for ongoing repair of school infrastructure and sites, and technology upgrades.
Sinking Funds can be used for remodeling or repairing facilities, improving sites, structures, athletic facilities, playgrounds, or other facilities and technology infrastructure. School districts are not allowed to use funds from a Sinking Fund for operating expenses such as teacher, administrator or employee salaries.
The Sinking Fund ensures that operational funding remains in the classroom for teaching and learning, instructional materials, and technology. The fund also provides resources to help districts maintain their buildings so that students and staff have warm, safe, and dry learning environments.
Are technology purchases going to be amortized over a 30-year period? Is there a technology replacement plan?
No. Technology purchases are required to be amortized over a 5-year period beginning at the time of installation. Yes, each bond series has an allowance for future technology purchases and updates.
Are businesses and second homes (non-homestead) and primary homes (homestead) treated the same regarding bond millage?
Yes, businesses and second homes (non-homestead properties) and primary homes (homestead properties) are treated the same regarding bond millage.
Are there property tax exemptions to anyone of any kind?
If a business has been granted an Industrial Facilities Tax ("IFT") credit then only half of the taxable value is subject to the bond millage. The business would need to verify if some of the taxable value has been designated for the IFT credit. One item a community member could research is the Michigan Homestead Property Tax Credit. The Michigan Homestead Property Tax Credit is a method through which some taxpayers can receive a credit for an amount of their property tax that exceeds a certain percentage of their household income. This program establishes categories under which homeowners or renters are eligible for a Homestead Property Tax Credit. We would recommend that community members consult their tax provider to determine if they are eligible for this tax credit.
Would money from the bond proposal be used to pay teachers’ salaries and benefits?
No. School districts are not allowed to use funds from a bond for operating expenses such as teacher, administrator or employee salaries, routine maintenance, or operating costs. Bond revenue must be kept separate from operating funds and expenditures must be audited by an independent auditing firm.
How would I know the bond funds would be spent the way they are supposed to be spent?
Every bond construction fund is required to have an independent audit, per Bulletin 7, Public Act 451 of 1976 of the Revised School Code, effective May 12, 2014 (revised September 12, 2017.) The objective of the audit is to determine if the bond proceeds have been expended in accordance with the stated purposes for which the bonds were authorized. The audit must be performed by an independent CPA, licensed with the Michigan State Board of Accountancy, and comply with generally accepted auditing standards as adopted by the American Institute of CPAs. A bond construction fund audit report is required after construction is completed as determined by a Certificate of Substantial Completion. This report is for the entire construction period, from the sale of the bond issue or the beginning of the project (whichever is earlier) through completion, and must include all activity in the fund for that period.
What oversights would hold the district accountable?
If approved by voters, the district’s Architect/Engineer would design the proposed projects and prepare construction documents and specifications for the projects. Once the projects are designed, the district’s Construction Manager will assemble bid packages and publicly advertise to solicit competitive bids for all work. This is required by law, as outlined in the Revised School Code. This process ensures that the district selects the lowest responsive and responsible bidder. All qualified contractors will have an opportunity to attend a pre-bid meeting to obtain additional information and project clarification. All qualified contractors will have the opportunity to participate in the competitive bid process.
At what point would the State of Michigan, as well as the local fire and police departments, provide input into the bond projects?
Each project will be required to be submitted to both the Bureau of Construction Codes (BCC) and the Bureau of Fire Services (BFS) for both plan review and permitting. These agencies will review the projects to ensure they comply with applicable codes, before any building permits are issued. Building plans and specifications must be signed and sealed by a Licensed Architect/Professional Engineer before submission. As of March 21, 2019, Michigan law requires school districts to consult on the plans for the construction or major renovation regarding school safety issues with the law enforcement agency that is the first responder for that school building. This consultation would happen after a bond proposal has been approved by voters, before construction documents are finalized prior to project commencement.
How do I register to vote?
Visit Michigan.gov/vote to register to vote online. It is recommended by the Secretary of State to register by mail by April 18, 2022 to participate in the May 3, 2022 election. Individuals may also register in-person at their local clerk’s office through May 3, 2022, with the required documentation. For assistance in obtaining the address of your local clerk, visit Michigan.gov/vote.
Are owners of property in the school district eligible to vote if they do not reside in the school district?
Owners of property are only eligible to vote if they are legally registered to do so. To be eligible to register to vote you must be:
- A Michigan resident (at the time you register) and a resident living within district boundaries for at least 30 days (when you vote)
- A United States citizen
- At least 18 years of age (when you vote)
- Not currently serving a sentence in jail or prison
If I rent a house, can I vote?
Yes, if you rent a house you can still vote. You must be a registered voter in the city or township you are living in and live within the district boundaries.
How is an absentee voter ballot obtained?
Registered voters must complete and submit the application to receive their absentee voter ballot. To vote by mail, fill out the application and sign it, and then return it to your local clerk. For assistance in obtaining the address of your local clerk, visit Michigan.gov/vote. When filling out the application, if you check the box to be added to the permanent absentee voter list, you will get an application mailed to you before every election.
If you registered to vote after absentee voter ballot applications were mailed, applications may be obtained online at Michigan.gov/vote. Absentee voter ballots are available by March 19 through May 3, 2022.
What are the key dates leading up to the Tuesday, May 3, 2022 election day?
Registering to vote:
- The last day for voters to register by mail is April 18, 2022
- Voters may register in-person through May 3, 2022 (election day) with the required documentation
Absentee Voting:
- Absentee voter ballots are available from March 19 until May 3, 2022
- Contact your local clerk with questions
Attend a public information community forum:
- March 7 at 7:00 pm (virtual) via Google Meet
- March 10 at 7:00 pm (in-person) at Comstock Elementary School,
423 N 28th St, Kalamazoo, MI 49048, in the multi-purpose room
Where and when will the vote occur?
Tuesday, May 3, 2022 is election day, but absentee voting can occur leading up to that date. All registered voters may cast an absentee voter ballot by mail. Voters may also cast a ballot at the polling location established by their city/township. If you have questions or do not know where you vote, please contact your city/township office. Polls will be open from 7:00 am to 8:00 pm on Tuesday, May 3, 2022.
What is the ballot language?
Shall Comstock Public Schools, Kalamazoo County, Michigan, borrow the sum of not to exceed Thirty-Nine Million Four Hundred Thirty Thousand Dollars ($39,430,000) and issue its general obligation unlimited tax bonds therefor, in one or more series, for the purpose of:
erecting, furnishing and equipping school buildings and additions to school buildings; remodeling, furnishing and refurnishing, and equipping and re-equipping school buildings; acquiring, installing and equipping and re-equipping school buildings for instructional technology and instructional technology equipment for school facilities; and preparing, developing, improving and equipping athletic facilities, athletic fields, playgrounds and sites?
The following is for informational purposes only:
The estimated millage that will be levied for the proposed bonds in 2022 is 2.45 mills ($2.45 on each $1,000 of taxable valuation) for a .50 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 2.80 mills ($2.80 on each $1,000 of taxable valuation).
The school district does not expect to borrow from the State to pay debt service on the bonds. The total amount of qualified bonds currently outstanding is $0. The total amount of qualified loans currently outstanding is $0. The estimated computed millage rate may change based on changes in certain circumstances.
(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.)
In the ballot language, the first paragraph states a not to exceed figure of $39,430,000 of general obligation unlimited tax bonds; what does this mean?
If this bond proposal is approved by voters, the maximum amount of bonds to be issued can be no greater than $39,430,000.
In the ballot language, it states that the estimated millage that will be levied in 2022 to pay the proposed bonds in the first year is 2.45 mills; what does this mean?
This means that the associated bond millage for this proposal to be levied in the first year (2022) is 2.45 mills.(2.45 mills new bonds + 3.05 mills existing bonds = 5.50 total estimated 2022 millage rate)
In the ballot language it states that the maximum number of years any series of bonds may be outstanding, exclusive of refunding, is not more than 30 years; what does this mean?
The school district plans to issue the bonds in 2 separate series, in 2022 and 2024. Each bond series would have a length of 30 years or shorter.
In the ballot language it states that the estimated simple average annual millage that will be required to retire each bond series is 2.80 mills annually; what does this mean?
This means that over the entire life of the bond proposal (2 bond series) that the annual millage rate associated with the bonds is estimated to average 2.80 mills.
In the ballot language it states that the amount of qualified bonds currently outstanding is $0 and that the total amount of qualified loans currently outstanding is $0. What does this mean?
The Michigan School Bond Qualification and Loan Program ("SBQLP") is a state program that assists school districts with voted bond issues by providing a bond rating credit enhancement which assists in reducing borrowing costs. At the time of the election the principal amount of qualified bonds is $0. The term “qualified bonds” refers to any school district bond qualified to participate in the SBQLP. Another State program known as the School Loan Revolving Fund ("SLRF") provides loans to school districts to assist with payments of principal and interest on qualified bonds, if needed. The term "qualified loans" refers to any SLRF loan balances outstanding. The school district has not needed to borrow from this program and therefore the balance at the time of the election is $0.
In the ballot language it states that the school district does not expect to borrow from the State to pay debt service on the bonds. What does this mean?
The bonds are qualified to participate in a State program known as the Michigan School Bond Qualification and Loan Program that assists school districts by allowing schools to receive loans from the School Loan Revolving Fund (“SLRF”) for bond payments. The school district does not anticipate borrowing from the SLRF for this proposal.
How much principal and interest remain to be repaid on the 2016 bond proposal? What are the final bond payment dates of these bond issues?
See the table below:
For the 2022 bond proposal, what are the estimated principal and interest amounts, and what are the estimated final bond repayment dates?
See the table below:
What is a "qualified" bond, as referred to in the ballot language?
The Michigan School Bond Qualification and Loan Program ("SBQLP") is a state program that assists school districts with voted bond issues by providing a bond rating credit enhancement which assists in reducing borrowing costs. The school district does not have existing bonds outstanding that are qualified by the SBQLP.
The ballot proposal indicates that “the total amount of qualified bonds currently outstanding is $0” because the school district does not have existing bonds outstanding that are qualified by the SBQLP.
What is the projected enrollment for CPS? With the K-12 population in Michigan on the decline, how many students are you projecting to serve with the expansive improvements contained in the proposed plan? Will the school system end up with an excess of resources if enrollment declines further?
For only the second time in 30 years, our fall 2021 enrollment this year actually increased (+19 students). Additionally, it is important to know that the bond the District is seeking is a "qualified" bond through the School Bond Qualification and Loan Program (the “Program”). The Program provides the financial backing and support of the State of Michigan and helps districts like Comstock obtain favorable interest rates. Ultimately, the Program is expected to produce savings for our taxpayers and community over the 30-year repayment period of the bond. To ensure we had enough time to complete the extensive qualified bond application process, we formed our exploratory committee in December 2020 about 18 months in advance of the planned May, 2022 election.
As a part of the application process for the Program, the District was required to have an enrollment study completed which was done by an independent firm out of Lansing. In their final report, these consultants, Stanfred Consultants, predicted our enrollment would increase by 4.81% over the next five years, in part because Kalamazoo is one of nine counties in the state seeing an increase in student enrollment in public schools. In addition, applications to the Program undergo a mandatory 30-day review by the Department of Treasury (DOT) which DOT completed in January, 2022. Through this review, the State ensures the District is not "overreaching" with its bond request and perhaps building facilities that do not match enrollment needs.
Please note that districts have the option of seeking "non-qualified" bonds which do not require an enrollment study and have no required review or oversight by DOT. It is not uncommon for districts to seek non-qualified bonds - as an example, the District's 2016 bond was non-qualified.
Our municipal advisor recommended and our committee agreed that our District would seek a qualified bond - we wanted voters to know the District was seeking the best rates, that our process included DOT oversight, and that we were building to our needs, not our wants.