Wayland Schools provides Q & A on May 2 bond issue

Wayland Union School District officials recently have released a question and answer guide for the May 2 bond proposal and included an explanation of how the questions will be presented on the special election ballot.

Voters will be asked to approve a $49.7 million bond proposal to build a new swim pool, expand the high school to accommodate the instrumental music program and choral program, the wrestling program industrial arts and perform updates and repairs to all other buildings in the school system.

A similar proposal last August was defeated by 225 votes.

The following is a sketch of the Q & A material published:

Q: Why doesn’t the district just save up for these projects?

A: Schools have two ways to set aside funds (save) from a budget year.

• The Fund Balance — If a district has money leftover from a budget year, those funds go to the fund balance, which is used for years when the budget is too slim to cover all operating expenses to include wages, benefits, transportation, maintenance, security – all items that are needed to educate the students. When a fund balance is too low, the district must borrow money to meet cash flow due to State Aid timing.

• PA 177 — Wayland Union Schools set up the ability, through a Public Act 177, to set aside Gun Lake Casino revenue in lieu of taxes funding in the years where all casino revenue is not entirely spent. PA 177 can only be used for capital outlay. The district tries to set aside $200,000 a year for unexpected capital outlay expenditures, and $50,000 for the replacement of the turf field after 10 to 12 years of use.
• Q: What IS a bond proposal and how can funds from a bond be spent?

A: A bond proposal is how a public school district asks its community for authorization to borrow money to pay for capital expenditures. The State of Michigan has legislated that bond issues are HOW schools are allowed to fund large infrastructure projects. Schools are not allowed to save up large sums of money — they are tasked, rightfully so, with spending state tax dollars on educating students.

Voter-approved bond funds can be spent on new construction, additions, remodeling, site improvements, athletic facilities, playgrounds, furnishings, equipment, buses and technology. 

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

The bond proposal on the May 2 ballot will be worded as such:

“Shall Wayland Union School District, Allegan, Barry and Kent Counties, Michigan, borrow the sum of not to exceed Forty-Nine Million Seven Hundred Thousand Dollars ($49,700,000) and issue its general obligation unlimited tax bonds therefor, in one or more series, for the purpose of: erecting, furnishing, and equipping additions to school buildings; remodeling, including security improvements, furnishing and refurnishing, and equipping and re-equipping school buildings; acquiring and installing instructional technology and instructional technology equipment for school buildings; and equipping, developing, and improving athletic fields and facilities, parking areas and sites?”

The following is for informational purposes only:

The estimated millage that will be levied for the proposed bonds in 2023, under current law, is 0.00 mill ($0.00 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 twenty-five (25) years.

The estimated simple average annual millage anticipated to be required to retire this bond debt is 2.23 mills ($2.23 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 $1,599,733 and the estimated total interest to be paid thereon is $1,211,188. The estimated duration of the millage levy associated with that borrowing is 7 years and the estimated computed millage rate for such levy is 8.4 mills. The estimated computed millage rate may change based on changes in certain circumstances.

The total amount of qualified bonds currently outstanding is $40,725,000. The total amount of qualified loans currently outstanding is approximately $4,055,854.

(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.)

Patricia Velie, assistant superintendent for finances and operations, has promised that the 8.4-mill levy will not be increased during the bond period, but the length of years it can be applied will be more than before.