FREQUENTLY ASKED QUESTIONS

Many school districts in the State of Michigan typically seek approval for bond proposals every 5-10 years. This allows for significant building improvements to occur and keep district facilities current. The last successful bond proposals passed in the Bronson Community Schools District were in 1986 and 1997.

The Board of Education and district administration would like to pursue a bond proposal in order to gain momentum on implementing major facilities updates. The desire for continuous facilities improvements is driven by the district strategic plan. Overall, a key goal for the district is to create safe and caring environments that develop the whole child.

Due to the size and scale of school buildings, maintenance, updates, and replacement of facilities is costly and often not possible through the traditional funding received by school districts. Our district has a number of growing needs that require large sums of money to undertake. The Board of Education has determined that a bond proposal is their approach to making the significant updates and improvements needed at BCS.

Schools receive funding from a number of sources. A simple breakdown of the sources is as follows:

Foundation Per Pupil Allowance*

The State of Michigan provides a per pupil amount of funding to school districts. Currently, the amount received per pupil is $9,608.

Operational Millage (Non-Homestead tax levy)**

This is a voter-approved tax levy that provides operational funding to support the annual school budget. The current Non-Homestead levy in the Bronson Community Schools District is 17.73 mills. These are taxes paid by owners of commercial properties, investment properties and residential properties that do not serve as the owner’s primary residence (rental properties and vacation properties).

* Staff salaries and benefits account for approximately 80-85% of the use of Foundation Allowance and Operational Millage funding. The remainder of these funds are typically used for operational costs of educational programs, building maintenance and operation costs, and supplies. This leaves very little funding available for facility improvements.

# In the State of Michigan, there is not adequate funding for major school infrastructure projects included in the Foundation Per Pupil Allowance. Funding for school infrastructure improvements is obtained primarily through local voter support.

Voter-Approved Sinking Fund Millage

Voter-approved sinking funds provide an annual collection of taxes based on property values. Typically, the collection provides a smaller amount of funding that allows for minor facilities improvements and renovations. Under new legislation, sinking funds can pay for student technology, safety/security improvements, and student transportation vehicles. Sinking funds cannot be used for the purchase of furniture or equipment. Bronson Community Schools currently levies a 5-year, 1.97 mill sinking fund millage that was renewed by voters in November of 2023.

Voter-Approved Bond Proposal

A bond proposal is a borrowing process for a set scope of projects. When voters approve a bond proposal, the school district sells bonds in the authorized amount and uses the proceeds of the sale to pay for those projects identified in the bond proposal. Bond proposals provide a funding source for larger-scale facility improvement projects.

In many ways, the bonding process is like a homeowner obtaining a mortgage and making payments over a period of years. The current levy for bond debt in the Bronson Community Schools District is 0.00 mills. The proposed debt levy associated with the November 2025 proposal is estimated to increase the debt millage tax rate by 4.98 mills.

The Milliman Trust funds (approximately $450,000) were intended to support the students of Bronson Community Schools.

• $50,000 was used to establish an endowed scholarship fund with the Branch County Community Foundation. This scholarship will be offered to future BHS graduates for years to come.

• $384,048 was used to purchase student furniture for all students district wide.

• $20,000 was used to offset the cost of one of the new vans purchased by the district to support BCS students experiencing homelessness and smaller groups of students to academic and athletic contests.

When the state's 12d grant was announced in November of 2024, we did not apply because it was our understanding that we were not eligible. The grant was titled an “Internal Consolidation Grant” and our project included the addition of approximately 41,000 square feet to our district facilities without the removal or demolition of current buildings as part of “consolidation”. Eligibility factors also included declining enrollment, and our enrollment had increased last year.

Bronson Community Schools receives and monitors approximately $2 million annually in grant funding to support student learning and well-being, without a grant writer or Curriculum Director on staff. We will continue to monitor for opportunities that would contribute to the betterment of the district.

No, by law, bond proposal funds cannot be used for employee salaries and benefits or student programming. They also cannot be used for repair or maintenance costs or other operating expenses. Bond proposal funds must be used only for purposes specified in the ballot language, and as required by state law, they must be independently audited.

We have made every effort to be good stewards of the dollars provided through the renewal of the sinking fund. People often wonder why our levy is higher compared to some of the larger surrounding districts. The simple answer is that our tax base is smaller comparatively and requires us to levy a higher millage rate to generate funding through bonds or sinking funds to support facilities projects. The graph below highlights the comparison of the revenue generated per 1 mill of levy with many of our neighboring and comparable districts.

If approved, the ballot proposal would allow the district to sell bonds in the amount of $29.91 million requiring an estimated 4.98-mill net increase over the current debt millage of 0.00 mills.

November 2023 Sinking Fund Levy 1.97 mills

May 2025 Bond Proposal 4.98 mills (expected)

Total Levy 5.97 mills (4.98 mill net tax increase)

Use the calculator below to better understand the impact of the 2025 bond. Tax Impact is based upon Taxable Value. Be sure to enter your Taxable Value when using the Tax Calculator.

Tax Calculator: https://pfmtaxcalc.com/BronsonCommunitySchoolDistrict/default.aspx

Approximate net tax impact by home value ($212,780 = median home value in Bronson Community School District):

Some community members may be eligible for the Michigan Homestead Property Tax Credit. This tax credit indicates that households that pay homestead property taxes greater than 3.2% of their annual income may be eligible. Eligible households may deduct up to 60% and senior citizens may be eligible to deduct up to 100% of the millage increase cost up to a $1,800 Homestead Tax Credit limit. The eligibility for the credit begins to decrease after the household income exceeds $60,701 and ends completely after the household income exceeds $69,701. To understand how this applies to your situation, please consult your account or tax advisor or preparer to determine the actual impact on your taxes.

General Credit Reduction Senior Credit

Resources % of credit Resources % Credit

$60,700 100.00% $21,000 100%

$60,701 90.00% $21,001 96%

$61,701 80.00% $22,001 92%

$62,701 70.00% $23,001 88%

$63,701 60.00% $24,001 84%

$64,701 50.00% $25,001 80%

$65,701 40.00% $26,001 76%

$66,701 30.00% $27,001 72%

$67,701 20.00% $28,001 68%

$68,701 10.00% $29,001 64%

$69,701 0.00% $30,001 60%

The millage will impact all real properties that you own that are located within the Bronson Community Schools District boundary.

The bonds may be sold in series. A series bond means that voters are asked to approve the overall bond amount once at the November 4th, 2025 election. Approval at this election authorizes the district to sell bonds up to the amount of $32.33 million over the next few years. Timing of the sale of bonds is monitored and suggested by the district’s financial manager, PFM Financial Advisors. Following a successful election, the first series would be sold in 2026 and the second series is anticipated to be sold in 2027 and a third series in 2028. This approach is an opportunity to save in interest costs, and it also staggers cash flow for the project, so it is received when needed for construction to align with the potential staggered start and completion dates of the proposed projects.

Please visit https://www.bronsonschools.org/page/sinking-fund-report for a full list of completed projects.