In the previous proposal, generating $88 million for project costs required a 7.48 mill secured debt levy from 2011 through 2041. The current proposal generates $59.9 million with a secured debt levy of 7 mills from 2012 through 2029 and a steadily reducing rate from 5.02 mills in 2030 down to 2.29 mills in 2041.
The previous proposal would have levied a higher rate for a much longer period of time. The current proposal levies additional mills for seventeen years and then reduces steadily over the next twelve years.
Another reason the mills only reduced by .48 mills has to do with participation in the School Bond Qualification and Loan Program (SBQLP). The State of Michigan developed the SBQLP to help school districts even out the amount of millage needed to make improvements to school facilities.
There are two important components to this program.
First, by participating in the SBQLP, the district is able to access the State’s credit rating and thereby reduce the interest paid on the loan.
Second, the program helps stabilize the maximum amount of millage required to retire the debt. Without participation in the SBQLP, the millage levy required to retire all debts would start at 8.26 mills in 2012, peak at 8.89 mills in 2014 and drop below 7 mills in 2020. With SBQLP participation, the levy is evened out at 7.0 mills from 2012 to 2028.
So in the first 9 years (2012 – 2020) the district borrows from the SBQLP and in the last 8 years (2021-2028), the district pays back the SBQLP. In the past proposal, the maximum levy would have been 7.48 mills from 2011 through 2040, borrowing from the state for the first thirteen years and paying back the State for the last seventeen years.