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The $70 Million Dollar
Saginaw School Bond:
Property Owners Deserve Accountability
By Robert E. Martin
With approval by a mere 270 votes of the $70 million bond proposal for
the Saginaw School District in the August 3rd
primary election, issues of accountability along with the impact this bond will
carry on the city as a viable investment for future homeowners, and in terms of
attracting business, again comes to the forefront.
The
victory for supporters of the bond proposal comes less than 11 months after
voters rejected a $240 million facilities plan as too costly and
ill-advised, especially in a district that produces a high school dropout rate
three times higher than Saginaw Township and cannot get out of the bottom tier
of the MEAP test results.
Critics have long maintained that rather than concentrating on 'buildings',
educators should focus on supplies, computers, and the caliber of teachers
working within the district. Moreover, voters gave the schools a 20-year
building and grounds millage in 1982, opening a legitimate question of where did
all those millions go if the buildings in the school system are so bad?
Schools are important to all communities, but it is the quality of education
that goes on inside the building that is more important than the building
itself. And certainly the cost to property owners for constructing these new
buildings is at the forefront of concern.
With
the new proposal, the language states that the estimated millage
to be levied in 2004 to service this issue of bonds is 1.95 mills ($1.95
per $1000 of taxable value) and the estimated simple average
annual millage rate required to retire the bonds is 3.17 mills ($3.17 per
$1,000 of taxable value).
Moreover, the bonds may be issued in one or more series, payable in the case of
each series not to exceed thirty years from the date of issue of each series.
What The Proposal
Does Not Reveal
The new bond proposal is an estimated 3.17 increase - not a true value.
More disturbing is the fact that the bonds do not have an interest cap and can
be purchased for the going rate at the time of purchase. Therefore, it is highly
likely that the true millage rate will be 5 or 7 mills.
If
3.17 mills is added to the property taxes of a $30,000 home the added tax
burden would be $144 per year. At 7 or 8 mills, however, it would be an
additional $347.00 per year.
If
3.17 mills are added to a $75,000 SEV home, the added taxes would be $360
per year, but at 7 or 8 mills it is $867 more per year. Over 30 years the
owner of a $30,000 SEV home could pay $12,500 while the owner of a
$75,000 SEV home will pay $41,600.
The
School District plans to issue 3 series of bonds in 2004, 2006 and 2008. By the
time the $70 million bonds are paid for the cost will exceed
$134,240,000.
Additionally, the capacity of the schools is 22,000 students with
12,000 students enrolled. So, you might rightly ask, why do we need more
buildings?
What
is deceitful about this proposal that passed by such a narrow margin is that it
understates the true cost of the millage.
Moreover, it is a 'building only' millage and will not hire teachers. And what
about covering the costs for supplies, as mentioned at the outset of this
piece?
One
school principal noted on a basis of anonymity that hardly any money exists for
supplies at her school, so rather than lay off teachers it was decided to raise
the money through bake-sales and alternative fundraisers.
Finally, does it make sense to send Handley students to North & South
schools and then send North & South students to Handley? And do
Adams Blvd.
Residents really want or need a middle school in their neighborhood?
And
of course, we are back to the issue of trying to attract competent middle class
families back into our city.
Does
it make sense to add $50 to $80 per month to the property tax bill of Saginaw
residents with properties that are footing this 'rebuilding' when The Saginaw
Public Schools have the highest per pupil dollar cost with the lowest
educational performance of all the districts in Saginaw County?
The Saginaw School
Board Responds
After sending a Freedom of Information Act request to Director of
Information Services at The Saginaw Board of Education, Michael Manley,
The Review received the following response to these questions:
Review: With the closure of four buildings in the district, what
efforts have been made to sell or market these buildings to defray the expense
of the new bond proposal?
Manley: We are entertaining offers for the buildings. We have had
inquiries from several parties, including churches and a nursing home. No firm
offers yet. However, we are confident that some will turn into solid offers. We
are working with a developer to further market the properties. In the meantime,
we plan to maintain the facilities and the grounds. They will not become
eyesores. (Editor's Note: But they will become an additional expense).
Review: Why are the renovations for Arthur Hill, SASA and Handley
scheduled for the 'last phase' of development?
Manley: We have three phases to the implementation of the plan.
Stone, Kempton, Herig and Loomis are in the first phase. Houghton,
Zilwaukee, SASA/SCC and the two high schools are in phase two.
The new middle school on the Handley site is in the third phase. We have
established this sequence because of building needs and the planning time
needed, and also because of the payout schedule. Design teams will be meeting
this fall to begin the process.
Review: How do you address the hidden costs of this proposal given the
fact that the bonds do not have an interest cap?
Manley: This is not different than any other bond proposal presented
to voters. It was qualified through the Michigan Department of Treasury. They
were satisfied and confident that the proposal is fair and accurate. There are
no 'hidden costs'. We have been upfront with the public, and spent hours
reviewing the plan with groups and the news media. (Editor's Note: except for
The Review).
The rate structure should be less than inflation. We are working with a highly
reputable bond counsel and financial advisors. We have been good stewards of the
public's money. The 1981 bond issue was paid off 5 years in advance, saving the
taxpayers over $5 million. We plan to operate in the same responsible
manner this time.
Review: It has come to my attention that several witnesses are in the
process of filing complaints with the State Election Board because they viewed
certain city officials driving voters to the polls in city school buses. What
specific information do you have on public school buses being utilized in this
manner?
Manley: Absolutely NOT. No district busses were used. None. I can't
imagine where that rumor came from.
Review: Finally, and this is both unrelated and indirectly related to
this story, it has come to my attention that during President Bush's recent
visit to Saginaw that 21 Saginaw school buses were used to create a gauntlet
around the Saginaw County Events Center and that many union drivers refused to
partake in this endeavor. My question is how much money did the
Saginaw School District
expend or receive for use of the buses during this event?
Manley:
A request was made by the Secret Service, through the Saginaw Police Department,
to use our buses as part of the security during the President's visit. We agreed
to do so. The total cost was $875.20 - $278.24 for mileage and $596.96
for the five drivers. We played a small role in the security effort. The county,
city and township police also were involved. We provided paperwork to the SPD
for reimbursement.
To date we have not been reimbursed.
As It Stands
A recount of the August
millage vote is being requested by Kochville Township Supervisor Kenneth P.
Bayne who is also seeking a court order to delay the sale of the bonds that
would fund the construction.
Meanwhile, it looks like the promoters of this bond proposal are doing a fine
job at building their resumes before they move on to bigger & better things.
Hopefully, the impact of this proposal will not create further adversity in a
city that so many of us have called 'home' for so many years.
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