One of the most frequent questions I receive as a treasurer is, “What is a bond levy? A simple way is to remember “Bond is for Building”. This could mean the construction of an entire building, building expansion, or building improvements and general upgrades such as plumbing and electrical.
Bonds are certificates of debt, most commonly associated with “stocks and bonds”. When your school district passes a bond levy, we work with a noted financial institution to sell bonds with an acceptable interest rate. In essence, the school district is borrowing money from investors to complete necessary building projects in a 3-7 year timeframe. Through the collection of property taxes the bond levy generates enough money to repay both the principal and the interest on the original bonds. A set timeframe in which to make the repayment is part of the bond levy language and the total collection is usually completed in 20-25 years.
Bond levies are necessary for school districts to do large construction projects. Revenue for your schools is usually a fixed amount and unlikely to increase without passage of new levies. Just as in your home, the cost of improvements is always a source of serious consideration. Putting on a new roof, doing foundation repairs, updating heating and cooling are all a part of the annual maintenance of your home and your school district. Sometimes these financial decisions may rest on whether it is more costly to maintain or build new.
The Sylvania Schools is currently considering what may be needed in the next “Bond is for Building” Levy. With your help, we will be going through the process of how best to maintain and improve your schools.
