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Bond Accountability Commission 2 Recommendations Page 85

CMSD Financial Considerations

On May 8, 2001, with 60.1% of votes cast, voters approved Issue 14, authorizing the Cleveland Municipal School District to issue $335,000,000 in bonds, and implement a tax levy, projected to average 3.7 mills ($3.70 per $1000 of assessed value, as one mill generates $1.00 per $1,000 of assessed value) over 25 years, to be used to pay debt service on the authorized borrowing. In addition to the 3.7 Issue 14 millage rate approved by voters, the District had an existing 2.4 bond retirement millage rate in place, making the aggregate bond retirement millage rate 6.1. Beyond that, the District receives General Fund revenue from ad valorem property taxes, with a millage rate in place approaching 59.0. To analyze financial considerations inherent in the District’s approach, we need to consider the goals under which the District operates. Beyond that conveyed to voters, according to the District, the overall strategy includes maintaining the aggregate Bond retirement millage rate at the 6.1 target ($6.10 per $1,000 of assessed value) for the District’s total Bond retirement tax collection.100

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The ballot language for Issue 14 was as follows— Shall the Cleveland Municipal School District be authorized to do the following: (1) Issue bonds for the purpose of renovating, rehabilitating, constructing, furnishing, equipping and otherwise improving school facilities and acquiring and improving their sites, in the principal amount of $335,000,000, to be repaid annually over a maximum period of twenty-five years, and levy a property tax outside the ten-mill limitation, estimated by the County Auditor to average over the bond repayment period 3.7 mills for each one dollar of tax valuation, which amounts to 37 cents for each one hundred dollars of tax valuation, beginning in 2001, first due in calendar year 2002, to pay the annual debt charges on the bonds, and to pay debt charges on any notes issued in anticipation of those bonds? (2) Levy an additional property tax for general on-going permanent

BAC2 Recomendations Final 04062010