Through fiscal responsibility & excellent planning we are able to pay-off our buildings by this April!
Taxpayers will see an immediate “bond property tax reduction” this year (2021)!
Important Details:
- Northwestern is in a position to pay-off our buildings by April, 2021
- Our final payment was originally expected to be in Dec., 2024
- We are providing an immediate “bond property tax reduction” that will provide some tax relief to our community! This means we are collecting a reduced .4 millage rather than the bond’s 1.2 mil anticipated effective millage this year. The original millage was 2.8 mils, which has gone down due to new construction and increased valuation
- The collection of this bond will be ZERO dollars after 2021!
- Continuing to collect the .4 millage for the remainder of this year is as a safeguard to have in an account to protect against the Rover appeal of a tax challenge to reduce their taxes – in case they would be successful in their appeal
- By refinancing our bond at a lower interest rate with the balloon payment terms we put in place in 2011 the district saved our taxpayers over $266,000 in interest over the past 10 years!
- By retiring the bond early we will save taxpayers an additional $21,000 in interest!
- The district will have an est. $340,000 remaining in the bond account at the time of pay-off, which the district will request the Wayne County Budget Commission transfer into Permanent Improvement in order to support the ongoing maintenance of our buildings and grounds
- We have been conservative in our expenditures
- We have proactively reduced this bond
- Now we all benefit!
Reasons why carryover had grown:
There are three main factors our carryover has grown and we are able to retire our bond early.
1. Refinancing our bonds at a lower interest in 2011
2. We elected a balloon payment schedule when refinancing in 2011. The balloon refinance and amortization with increasingly larger payments, followed by smaller payments the last years of the bond
3. Our increasing district overall valuation over time
Facts:
- Current bond carryover balance exceeds $1,139,000
- Current bond indebtedness (principle and interest) is @ $788,000
- Additional Good News: Our Emergency Levy will also be reduced - from the original 2.8 mils to an effective 2.5 mils this year (2021)!
The Process and Next Steps:
- We have already met with Wayne County Auditor Jarra Underwood and Bond Counsel regarding collecting only the reduced .4 millage instead of the full millage this year
- Feb. 15: The Northwestern Board of education is anticipated to approve a resolution to call-in and pay-off the bonds
- March 15: The Northwestern Board of Education is anticipated to request the Wayne County Budget Commission to transfer the remaining balance from our Bond Retirement account into our Permanent Improvement account
In the future:
- The district has been the victim of major funding reductions from the state for more than a decade, which has resulted in the district receiving less state revenue (which accounts for nearly 50% of our district budget) last year (FY 2020) and again this year (FY 2021) than we had in 2011. This has occurred during the same time period where insurance rates grew dramatically, salaries were steadily increased to remain competitive, and significant building facility HVAC, roof, and other systems needs we had to address as a district.
- Due to the reduced state funding, COVID, and increasing costs the district had forecasted a deficit this school year. We have made significant cost reductions to overcome the deficit as well as successfully sought additional grant funds and contributions. However, the district will likely need additional operating revenue to compensate for the lack of funding from the state.
- We are discussing the possibility of putting an emergency operating levy on the ballot Nov., 2021 for collection beginning in 2022. This would theoretically be replacing the bond revenue that was eliminated and would be essential for Northwestern to remain at the top of our game and maintain the excellent programming that we provide our students. It is a discussion for later, but an important part of this equation.
- The .5 mil required bond to maintain our buildings that was also passed in 2001 cannot expire prior to its final collection in Dec., 2023 according to state law. However, if we are sound financially at that time it expires the district would consider allowing that .5 mils to expire and not consider renewal of it.