School election – Rapid River
RAPID?RIVER – The Rapid River School District is asking voters to approve a bond proposal Tuesday, which would reduce the tax levy and provide the district with more than $3 million for facility improvements.
Under the proposal, the district would borrow the sum not to exceed $3,060,000 and issue its general obligation unlimited tax bonds. Funds received from the bonds would be used for remodeling, equipping, and furnishing the school building; building an athletics storage building; purchasing and installing instructional technology in the school building; purchasing busses; and developing and improving playgrounds.
The estimated millage that will be levied for the proposed bonds in 2013 is 1.76 mills, or $1.76 on each $1,000 of taxable value. This is a 0.35 mill decrease from the prior year’s levy.
“We would immediately be able to lower the tax levy and not change the length of our debt,” said Rapid River Superintendent Jay Kulbertis.
The amount of interest owed on debts currently held by the district is roughly the same as the amount which will be raised by the bond proposal. Because the proposal will allow the district to refinance, the funding can be used elsewhere.
“By refinancing we can avoid those costs and use that money for our building,” said Kulbertis. “It’s essentially avoiding those interest payments,” he added.
The district plans to evaluate current building needs and attempt to predict needs that will arise in the next 10 years. Building projects funded with the money will take place during the next three years.
By law the proceeds from the bonds cannot be used for repair or maintenance costs; teacher, administrator, or other employee salaries; or operating expenses. The proposal will, however affect the budget as a whole.
“This (proposal) protects our educational programming; it protects jobs, because we won’t have to pay for our facility out of the general fund,” said Kulbertis.
The bonds may be outstanding for a maximum of 19 years. During that time, the estimated simple average annual millage needed to pay off the debt is 1.79 mills.
If the school district borrows from the state to pay debt service on the bonds, the district may be required to levy mills beyond the term of the bonds. Funds raised during that time will be used to pay off the debt to the state.