Will this bond raise my taxes?
No. The property tax millage will not change, mostly because these bonds will be issued as other bonds are paid off.
Why not include air-conditioning across the district?
Air-conditioning will be added at numerous classrooms under ongoing plans and as part of the bond work. Making all of our buildings air-conditioned throughout would cost an estimated $60 million, and air-conditioning is only really needed a few days each school year. The bond committee felt it more important to focus the limited funds on issues like aging boilers to heat our large buildings, renovating worn restrooms, ensuring we have enough space for all our students, and continuing to improve building security and safety.
Will my child’s school benefit?
Every school will see some improvements. The District Operations Department, along with Plante Moran Cresa representatives, met with principals and engineers in every building to learn what they felt were the priorities for their building and programs. The most common request? Restroom updates. On average, elementary schools will see about $4 million in projects, middle schools $8 million and $15 million at the high school level. See our school project list for more details about plans at your building.
Why pay for a special bond election in Dearborn?
Engineering News estimates project costs increase about 5 percent a year, so pushing the bond election back to the March 2020 primary would have resulted in more than $1 million in additional building costs. Waiting until the spring election also would mean the district could not begin most major construction work until the summer of 2021. It should be noted Dearborn Schools began planning for a possible bond vote months before it became clear the question might be the only item on the November 2019 ballot in Dearborn. District residents in Dearborn Heights are also having municipal elections.
Will the bond address the need for more high school capacity?
Yes. The District is planning to add space for special career-related programs, including space at the Michael Berry Career Center and possible purchase of the former SME buildings at Henry Ford College to house the three Early College programs. These career-focused programs relieve pressure on the three traditional high schools while giving all of our students a chance to explore and prepare for possible careers after graduation.
But why buy the SME buildings?
Starting this fall, Dearborn Schools offers three Early College programs. These full-time high schools allow Dearborn students to potentially earn both their high school diploma and an associate degree in five years at no cost to the family.
The original Henry Ford Early College focused on medical careers. The newer Advanced Manufacturing and brand new School of Education have yet to graduate their first classes. The addition of these programs means the Early College has outgrown its allotted space on campus at a time when Henry Ford College needs more room for its college students.
Situated on the edge of campus, the SME buildings would be an ideal facility for the Early College students as they transition into high school and then college.
The buildings would also provide classrooms for our Adult Education Program, freeing up more class space at Michael Berry Career Center. SME also might provide meeting space and rooms for other community programs.
Will the bonds be issued at once?
No. New bonds will be issued in two waves over six years, replacing existing bonds as they are paid off.
Here are the interest rates in the Bond financial information- 3.75 interest rate for first issue, 4.00 interest rate for second issue.
If the rates come in significant lower, the District could reduce the number of mills levy each year. The District has to be conservative to make sure we have the financial backing by the State to approve the plan. We need to be able to complete the projects listed in the application to the State.
Is there money for technology in the plan?
The proposal includes $14 million for technology.
Do good schools really help protect my property values?
Realtors say yes. People are willing to pay more for homes in good school districts. See the following articles:
Where is all the lottery money that goes to schools?
Revenue generated from the state lottery does go toward funding education in Michigan. However, the total amount provided by the lottery is only a small portion (7.5 percent in 2018-19) of the total $13 billion state education budget. Much more funding, about 47 percent, comes from the state sales tax. Bridge Magazine provided a good explanation of how the lottery money supports education in Michigan.
How are schools funded?
About three-quarters of the general fund revenues for Dearborn Public Schools comes from the State of Michigan. This state money comes from sales taxes, lottery revenues, property taxes and other sources. For property taxes, the State collects 6.0 mills from every homeowner in Michigan to help pay for education. Businesses and people with second homes pay an additional 18.0 mills towards schools. This and other revenue is allotted to public schools according to a per-student rate set by Legislators each year as part of the state budget.
Why can’t the school district use general fund money to pay for the projects proposed in the bond?
General fund revenue for Dearborn Public Schools and school districts across Michigan has not kept up with costs. Our per student foundation allowance from the state is still less than it was in 2008 before state funding cuts. There is simply not enough available money in the general fund to address the extensive work that needs to be done. That is why the Board placed the bond proposal on the ballot.
Bond money cannot be used for salaries or basic supplies like books. The funds would have to be spent for items such as building repairs or renovations and some capital expenses including buses and technology.
Bond proceeds cannot be used for the following items:
a) Staff salaries and wages;
b) General operating expenses, repairs and maintenance;
c) Classroom supplies and textbooks; and
d) Administrative costs.
Bond proceeds can be used for the following items:
a) Construction and remodeling of facilities;
b) Purchase of technology equipment and infrastructure;
c) Purchase of equipment and furniture;
d) Site improvements; and
e) Purchase of buses.
You say the bond proposal would keep the debt tax rate at 4.82 mills. Would my taxes go down in the bond fails?
School finances are complicated. The District’s debt millage rate has already fallen from 5.35 mills in 2014. That is due to several factors including prudent refinancing by the district, lower interest rates, and a larger tax base due to property development in the district and rising property values.
The District will also pay off some existing bonds in two years, which could lower the debt tax rates more, possibly dipping to 1.4 mills in 2022 under our projections.
Note, even if the new bond is approved, the District projects the debt millage rate would start declining again by 2026. For a more detailed explanation of how the bond and millage rates work, see our bond millage explanation.
The District’s debt millage is less than 10 percent of the total property tax bill in Dearborn or Dearborn Heights. See the property tax rate charts.
For how changing the millage would impact your bill, see this tax comparison.
Are there options to do all of this work without doing a voter approved bond?
Unfortunately there are no options that would generate the same amount of revenue in the same amount of time. There are methods to raise funds without going to the voters but the amounts generated would not be the same and repayment of the debt would come from the District’s general fund. For example:
- The District could borrow $85 million over a 20 year period. This would require at least $6 million a year from the General Fund to pay back this loan. 85% of the District’s General Fund budget goes for compensation. To set aside $6 million in the General Fund budget would require a 3.3 percent reduction in compensation or staffing over the next three years.
- Instead of making proactive repairs and replacements the District could make repairs as necessary to push out the replacement schedule over a longer period of time.
- The Board of Education could consider placing a different Bond proposal on the ballot but there would be no guarantees it would pass and improvement projects would be delayed for at least one year or more.
- The Board could consider placing a 2 mill Sinking Fund on the ballot which will generate $7 million each year. Projects would need to be prioritized and infrastructure only improvements would be phased in over a longer period of time. For example, the project at Lowrey has a total cost of $17.7 million and therefore would take almost three years to complete and no other funds would be available to address needs at other schools. In addition, Sinking Funds cannot be used for items such as busses, furniture, equipment, etc.
How are other schools addressing the aging condition of their schools?
Neighboring and peer districts have experienced the same issues of aging buildings, safety and security enhancement needs, and outdated technology and learning environments. Bond programs have been approved and implemented in several area school districts.
The following list includes bond programs that have been approved or proposed in other school districts.
Ann Arbor Public Schools:
2012 – $45.8 million
2015 – $32 million
2019 – $1 billion (proposed for 2019)
Detroit Public Schools Community District:
2009 – $500.3 million
Grand Rapids Public Schools:
2015 – $175 million
Livonia Public Schools:
2012 – $195 million
Plymouth-Canton Community Schools:
2013 – $114.4 million
Utica Community Schools:
2009 – $112.5 million
2018 – $155 million
But aren’t property values increasing in the district? That means the District is already generating more in taxes.
Total taxable value of properties in the District has climbed in the last few years both from new development and from rising values of existing properties. But the total value is still far below what it was 10 or even 20 years ago.
Total taxable value in Dearborn Public Schools this year is $3.54 billion. In 2009, it was $4.58 billion. In fact, the current total taxable value is still below 1997 when it was $3.58 billion. (Remember 1997? The year “Titanic” hit theaters.)
To be fair, the 2008 real estate crash was not the only thing that reduced values. A few years ago, Michigan started exempting manufacturing and other business equipment from property taxes.
If so-called “personal property” was still included, total taxable value in the District would be $3.94 billion. That is still slightly below its 2000 value. Currently, the State reimburses the District for the extra property tax we would have received to pay off bonds if personal property was still included. See the District’s taxable value chart.
Didn’t we just have a bond? Where did that bond money go?
The 2013 S.M.A.R.T. Bond raised $76 million for the district without increasing what was then the 5.35 debt millage rate. Those projects came in on time and on budget.
Major work under that bond included:
Many infrastructure improvements were made including new roofs and parking lots. Thirty buses were purchased, and thousands of computers provided.
Henry Ford Elementary School received a 10-classroom addition and a massive remodeling and reconstruction of the original building.
Geer Park Elementary received a six-classroom addition and a gymnasium addition.
River Oaks Elementary received a six-classroom addition and gymnasium addition.
Fordson High School remodeled the athletic field area including new bleachers, press box, restrooms and concession area.
Bryant Middle school received an addition for science classrooms.
Edsel Ford High School received a new field house with team rooms and concession area.
Major remodeling was also done at Dearborn High, DuVall Elementary, Maples Elementary, Smith Middle, Snow Elementary, Whitmore Bolles Elementary, Woodworth Middle, and Dearborn High schools.
Secure building entrances were added across the district with automatic locking doors and buzzer entrances.
See the full list of 2013 SMART Bond projects.
Why spend more money on old buildings? It seems it would be better for the District to tear down the existing schools and build new schools.
Building new schools is far more expensive than maintaining existing buildings, even with the aging infrastructure.
Plante Moran Cresa (PMC) provided a cost analysis for new construction of facilities for Dearborn Public Schools’ footprint of approximately 3,200,000 square feet. This analysis is based on the allowable square foot costs for new construction as defined by the Michigan Department of Treasury of $212 per square foot. With new construction, there is typically an allocation for additional costs associated with furniture, equipment, technology, contingencies, and other soft costs (professional fees, financing costs, issuance costs, etc.). For this analysis, PMC utilized 40% which equals $295 per square foot of total “new” building costs.
In summary, to rebuild 34 existing buildings with new K-12 facilities at $295 per square foot would total $931,500,000, almost four times as much as the $240 million BRICS Bond.
PMC also noted that rebuilding our oldest facilities, those over 90 years old, to get similar structures would cost about $395 per square foot. That means replacing just those 12 schools would cost approximately $482 million – twice the amount of the BRICS Bond.
Please note these costs do not include buying land to site new facilities. See the chart for the cost breakdown by school.
Who can vote in this bond proposal election?
Anyone who is a resident of the Dearborn Public School District, is a U.S. citizen, and will be 18 years of age or older on Election Day can vote. Residents need to be registered by Oct. 21 to vote at a polling place, but can register and vote until Election Day at their City Clerk’s office.
I remember hearing District buildings needed more than $500 million in repairs and work? Why aren’t you asking for the full amount?
The District keeps a running 10-year list of projects it knows it needs now or could need in a few years, like carpets, roofs and equipment nearing the end of their expected lives. The $576 million represents a 10-year projection including items that do not need to be addressed yet and a few that have already been, or will be, addressed through our general fund budget. That total is also based on full replacement cost. Often, we can significantly extend the life of items with proper maintenance, and some work on the list can be done in-house at no additional cost.
Both the board and the Infrastructure Task Force felt the District should NOT ask to raise taxes. The $240 million generated from the BRICS Bond would provide a funding influx that will allow the District to address the most critical and most expensive needs over the next six years. The District will then be better able to use general fund dollars to address other maintenance and repairs included in the much broader 10-year outlook. Some of the work included in the BRICS Bond could also help lower utility costs – such as new, more efficient boilers and lights – which could in turn help free up more funding for repairs.
The District has always, and will continue, to plan and prioritize future infrastructure, facilities, and operational needs.