Although the 7 mills levied to property owners in the district won’t change, the strategy alters how the bond payment is structured for the nearly $54.3 million in improvement projects.
Jesse Nelson, a certified public accountant for H.J. Umbaugh & Associates, recently told the Spring Lake school board that it’s a “very efficient plan.” Nelson said 95 percent of the bond issue will be repaid by May 2021, significantly reducing the bond payment in 2022.
Instead of making a principal and interest payment on May 1 of each year and interest-only payments on Nov. 1, principal and interest will be paid at both times, beginning with the first payment this coming Nov. 1.
The recent bonds are projected to be paid off in 2042.
Nelson explained the tax bill is distributed on July 1, and most of the district’s taxes are collected in September. The amounts paid in November and May will depend on the amount of taxes collected in September.
“Given the best- and worst-case scenarios, this option repeatedly outperformed the traditional model that districts in Michigan have used to manage bond and School Loan Revolving Fund debt,” said Dennis Furton, superintendent of Spring Lake Public Schools.
School board Trustee Keith Frifeldt said the plan makes sense, but he wonders why other districts aren’t following similar strategies.
Nelson said the payments are one of the things that’s always been done a certain way. He said the Spring Lake plan is a “unique strategy,” but he expects it to become more common.
Read the complete story in Saturday’s print or e-edition of the Grand Haven Tribune.