Thursday, August 22, 2019

As we get closer to the critical bond proposal vote in November, I'd like to take the occasional opportunity to provide information and clarification regarding questions and concerns brought forth in the community.  
One of those points of confusion surrounding bond proposal votes often is the bond monies themselves. What can they or can't they be legally used for???
Generally speaking, a bond is the mechanism by which school districts pay for large-scale projects, including new facilities and major renovations. All bond proposals are approved by the state only for a set scope of projects and nothing more. Once a bond proposal is passed, the school district sells one or more bonds in the authorized amount and uses those funds to pay for only the projects listed in the proposal.  
In this way, bonds are not unlike a mortgage on a home as they are typically paid off over the course of 20-30 years. Just as most homebuyers cannot afford to buy a home outright, the vast majority of school districts fund new and renovated facilities using bonds.
Bond funds cannot be used for employee salaries or employee compensation of any kind. In addition, bond funds cannot be used for operating costs including the costs for basic repair and maintenance.  For instance, we could use bond funds to replace HVAC systems in our building, but could not use bond funds to change out our furnace filters in buildings.  Bond funds can only be used for new construction, additions, renovations, energy conservation improvements, land purchases, bus purchases, site development, debt refunding and direct bond program costs (professional fees, audit fees, etc.)
Michigan is somewhat unique as we are among a handful of states that does not directly provide for capital projects / expenditures except through locally passed millages.  Therefore, the vast majority of districts levy some sort of millage to pay for bonds to fund major projects.  The average millage for such projects in our state runs somewhere in the neighborhood of 5-5.5 mills.
As always, please feel free to contact me at or call our Central Offices at (231) 882-9653 if you have any further questions.  Go Huskies!

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