Goodrich-A $15.4 million bond extension OK’d by the district last month may sweeten district coffers following a special school board meeting on Tuesday night.
By a 7-0 vote, the board passed a resolution to apply for Quality School Construction Bonds that if approved would drop the projected interest rate from about 5.125 percent down to 1.5 percent
‘We will still go to the people for a vote but with the QSCB we can reduce the interest significantly,? said John Fazer, district superintendent.
Fazer said the money is left over from the first round of the American Recovery and Reinvestment Act (ARRA). The money will be available to school districts that apply on a first come-first served basis. If the school receives the money it would raise the bond amount by about $4 million to $19 million.
According to the Michigan Department of Treasury, federal QSCB program provides eligible districts with an opportunity to save on interest costs associated with financing school renovations and new construction. The federal government provides eligible school districts with a reimbursement, up to 100 percent, of interest costs paid by the district on qualified school construction bonds.
All school districts and school buildings are eligible regardless of size or poverty levels. The bond proceeds may be used to finance new construction, rehabilitation, repair of public school facilities, the acquisition of land, and the acquisition of equipment to be used in such public school facilities. The district has until Oct. 8 to submit plans before a February 2011 vote on the bond extension.
Under the Obama Administration, Congress passed the American Recovery and Reinvestment Act (ARRA), which invested considerable funding into our education system. Under ARRA, Michigan received $2.2 billion statewide for special education, programs for at-risk students, and fixing the state’s education budget deficit. More than $296 million in financing will be issued statewide according the Michigan Department of Treasury.
Five years ago, board members considered a bond of $32 million for renovations to several buildings, but the proposal was tabled. Since then, a sagging economy has pushed the SEV (State Equalization Value) of area homes down, reducing the maximum bond amount the district can obtain to $15.4 million. District Superintendent John Fazer said if the board waits until May 2011 to vote, the area SEV will dip by a projected 8.6 percent, dropping the maximum amount to $1.1 million.
‘No new taxes. By using the School Bond Loan Fund (SBLF) we can keep our current millage rate of 7.75 mills,? said Fazer. ‘The SBLF supports smaller districts like Goodrich when the SEV is low. The key is we can extend the mills out without raising taxes.?