West Bloomfield

Refinancing to help schools, Sylvan lower millage rates

By Eric Czarnik
C & G Staff Writer

WEST BLOOMFIELD — Property owners in the West Bloomfield School District’s boundaries and in Sylvan Lake may have reason to cheer soon: Officials expect refinancing to reduce their millage rates.

Late last month, the West Bloomfield School District announced that it has successfully refinanced bonds to cut down interest rates from 5.24 percent to 2.2 percent on $18.2 million in bonds issued in 2001, Deputy Superintendent for Business and Operations Tom Goulding said.

He added that the total savings came to more than $2.6 million, which will drop the millage rate by about 1.6 mills over the nine-year term of the refinancing. “On a home with a $200,000 taxable value, their savings over this time period would be about $322,” he said.

“That savings could be greater depending on what happens to the tax base. If the tax base is rising, I might be able to lower that millage rate a little beyond the 1.6 mills.”

Meanwhile, Sylvan Lake officials hope that debt refinancing plans can soon offer the city’s taxpayers a decrease in their overall millage rates.

City Manager John Martin said the idea came while he was talking about debt with an accountant who works at H.J. Umbaugh and Associates at a recent conference.

“They do this kind of stuff all the time,” Martin said. “He went back to his office, took a look at what he had and said, ‘Hey, you can save a substantial amount of money by refinancing these bonds.’”

Martin brought the news to the Sylvan Lake City Council Feb. 8, and the council agreed to proceed with the plan. According to Martin, the plan is to refinance the debt on water and sewer infrastructure project bonds, as well as bonds from a street and drainage project.

The current low interest rates combined with the city’s AAA credit rating could save around $328,000 over the life of those bonds, Martin predicted.

“Were hoping that if things go as planned, we’ll be able to lower our millage rate by maybe 0.6 mill next year because we have lowered the cost that we have to repay … the debt,” he said.

Martin said the City Council could produce a resolution on the refinancing proposal in March and handle bond pricing toward the end of April. Working quickly could still allow the city to make a change on this tax bill, he said.

He said the refinancing would have no direct, upfront cost to the city. “It is kind of like refinancing your house,” he said. “The costs are included in that remortgage.”

You can reach C & G Staff Writer Eric Czarnik at eczarnik@candgnews.com or at (586)498-1058.