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Center Line, Warren

December 5, 2012

Building updates in store for CLPS

By Maria Allard
C & G Staff Writer

WARREN/CENTER LINE — Several capital improvement projects slated for two Center Line Public Schools bond proposals that failed at the polls in August 2011 and again in February 2012 have become a reality.

Although the voting majority turned down both bond initiatives — which would have taxed district residents, had they passed — school officials recently announced the sale of its 2012 School Building and Site Bonds in the amount of $6 million.

The bonds will be used to make various capital improvement projects at the district’s five schools: Center Line High School, Wolfe Middle School, and Crothers, Peck and Roose elementary schools.

“We had our bond issues that didn’t pass, but we still had work that needed to be done,” said Cindy Schwark, district director of business services. The 2012 School Building and Site Bonds will allow for several projects to occur. “We don’t have any capital outlay to do any building projects. This was a good option for us.”

The school district is receiving the money through the Qualified Zone Academy Bond (QZAB) Program. According to the Michigan Department of Education’s website, eligible public schools in the state can take advantage of the program to finance the equipping and/or renovating of school facilities on an interest-free basis through the allocation of tax credits.

School districts must have a proposal in place on what will be renovated and also an educational entity that will back it with a 10 percent match in services. Therefore, the National Education Foundation will provide CLPS with $600,000, otherwise 10 percent of the bond.

“The actual QZABs is a federal program that enables school districts to do upgrades and repairs to the buildings, interest free,” Schwark said. “It’s kind of like an interest-free loan.”

The district’s residents will not be taxed on the 2012 School Building and Site Bonds.

The district will have to re-pay the $6 million throughout the life of the bonds, which Schwark said is 15 years. The district, however, will not have to pay interest on the $6 million. The money to pay back the bonds will come from the district’s operating budget. School officials will have to budget the money each year until it is paid off. The bond money, in one lump sum, already has been distributed to the district.

“We got the bonds up front,” Schwark said. “The bonds have been sold.”

School officials had to finalize some paperwork at the end of last week.

According to the MDE website, QZABs — created by the Taxpayer Relief Act of 1997 — are obligations issued by state or local governments to renovate and improve certain eligible public schools. These obligations may be used on behalf of schools or programs that meet a few eligibility criteria.

For example, the school must be located in an empowerment zone or an enterprise community, or it must have at least 35 percent of its students eligible for free or reduced-cost lunches, under the National School Lunch Act. An eligible school must have an education plan that is approved by its school district, and its students must be subject to the same standards and assessments as other students in the district.

The rate of the tax credit and the maximum term of the bond are determined by the U.S. Treasury Department, according to the MDE. The tax credit mechanism eliminates the cost of interest only, not the bond principal.

Center Line’s financing was conducted by the Michigan investment banking office of the brokerage firm Stifel Nicolaus; the financial advising firm of Stauder, Barch & Associates, Inc.; and the law firm serving as bond counsel, Clark Hill PLC. The district’s 2012 School Building and Site Bonds were sold at a 0 percent interest rate.

“Center Line Public Schools bonds were well received by the bond market,” Stifel Nicolaus Managing Director Brenda Voutyras stated in a district press release. “We were able to take advantage of historic low rates that met the goals of the district and provided a cost of financing below original estimates.”

The bonds will be divided as follows: Crothers will receive $1 million; Wolfe will receive $2 million; CLHS will receive $2.8 million; and Peck and Roose will each receive $92,000. Updates will include lighting, mechanical and electrical improvements, energy-saving upgrades, roof repairs, door repairs, and carpeting and flooring updates.

Crothers, Wolfe and the high school will each get a secure front entrance. Although an expansion was planned at Crothers, had the bond issue passed, there are no plans to expand at the school with the building and site bonds. 

The projects are slated to begin in early 2013. PARTNERS in Architecture, PLC, in Mount Clemens, will be the architects. E. Gilbert and Sons, based in Utica, will be the construction managers.

“A lot of work will be done next summer,” Schwark said. “We hope to have everything completed by the end of 2014.”

School officials have three to five years to spend the bond dollars.

On Aug. 2, 2011, a $45 million bond proposal — for capital renovations and technology updates in the district — failed at the polls. On Feb. 28, 2012, voters again said no to a tax increase by turning down two initiatives — Proposal 1 for $39.9 million and Proposal 2 for $3.8 million.

You can reach C & G Staff Writer Maria Allard at allard@candgnews.com or at (586)498-1045.