GPPSS Bond Update
On the November 6, 2018 ballot, the GPPSS bond proposal of $111,040,000 was approved by voters.
Bond Oversight Committee Appointed
November 26, 2018, the Board of Education unanimously passed their Bond Oversight resolution and 24 highly qualified residents applied. Skill sets and backgrounds were varied and included architects, contract managers, senior IT architects, accountants and engineers. The five chosen for the committee are: George Bailey, Matthew Jewell, Wilson Moin, Garrett Myers, and David Walenga. The district thanks all who volunteered to serve in this important capacity.
Over the next few months, the Administration in conjunction with our Owner’s Representative, Plante Moran Cresa (PMC), worked to hire professional staff to implement the bond program.
The first professional firm to be hired was the Architect/Engineering firm. There was broad coverage to seek out firms interested in responding to the Request for Proposal. Six responded and based on the criteria established, four were selected for interviews. Administration and PMC recommended and the BOE approved hiring French-Ehresman Architects at a total cost of $4,002,000.
Selling of the First Series
January 14, 2019, the BOE approved a resolution prepared by our Bond attorney, Miller-Canfield authorizing the sale of bonds. The amount of the first series sale is not to exceed $68,000,000. The resolution also authorizes the refinancing of the 2007 Refunding Bonds ($8,170,000) for the purpose of taxpayer savings of approximately $300,000. The resolution also designates the authorized officers (underwriters) to negotiate the sale are J.P. Morgan Securities, LLC (Senior Manager) and Raymond James, & Associates Inc. (co-managing). The bonds were sold on February 6, 2019 and the final closing and proceeds were disbursed to the District the week of February 25, 2019.
Investment Advisor Firm
The next step taken by the BOE on February 11, was to secure the services of an Investment Firm to assist the District in managing bond proceeds. Administration’s focus in the hiring of an investment firm was their understanding of current Michigan legal requirements for investments of bond proceeds, security of the proceeds, and expertise in managing the optimum yield while providing liquidity for cash flow needs. Administration also reviewed the proposed fees for services provided. Administration interviewed three firms and recommended Umbauh Cash Advisory Services, LLC.
Also on February 11, the Board approved Turner Construction with a fee of 2.85% for the scope of work described in the Request for Proposal plus preconstruction staffing of $452,766. The other CM costs will be finalized in a future Guaranteed Maximum Price (GMP) amendment at each phase of the project when it is bid and awarded.
Technology Design Firm
The final professional firm to be hired was the Technology Design firm. There was broad coverage to seek out firms interested in responding to the Request for Proposal. Five firms responded and based on the criteria established, four were selected for interviews. District administration were on the interview committee including two members of our Technology staff, along with two members from the bond oversight committee. The proposal was reviewed by our attorney from Clark-Hill. Although Plante Moran is independent of Plante Moran Cresa (PMC), the District made the choice to not include PMC in the interview process. In addition, administration provided a letter from Plante Moran Cresa outlining the independence between PMC and PM as the Technology Designer. BOE approved hiring low bidder Plante Moran at a total cost of $671,000. Plante Moran has extensive K-12 experience and will be an integral partner as we plan for infrastructure upgrades, instructional classroom equipment, security, and communication across our school buildings.
Timeline of Bond Highlights
- November 6, 2018 – GPPSS bond approved by voters
- November 26, 2018 – Bond oversight committee appointed
- December 17 – BOE approved architect (French-Ehresman partnership)
- January 14, 2019 – BOE approved resolution authorizing the sale of bonds
- February 6, 2019 – First series of bonds sold
- February 11, 2019 – BOE approved investment advisor firm (Umbauh Cash Advisory Services, LLC) and construction manager (Turner Construction)
- Week of February 25, 2019 – bond proceeds disbursed to the District
- March 11, 2019 – BOE approved technology design firm (Plante Moran – independent of PMC)
- March 11, 2019 – BOE approved South track reconstruction ($398,791 from Sinking Fund, $220,864 from bond fund)
- April 22, 2019 – BOE approved district-wide door access control project – intercom system as a combination of a Michigan State Police Grant ($79,593) and bond ($102, 990) funds
Frequently Asked Questions
What is the district's response to postings at the polling places?
STATEMENT OF THE GROSSE POINTE PUBLIC SCHOOL SYSTEM REGARDING BOND-RELATED POSTINGS AT SCHOOLS USED AS POLLING PLACES
The Grosse Pointe Public School System (“GPPSS”) has become aware of citizen complaints about bond-related postings that were up at certain GPPSS schools used as polling places during the election on November 6, 2018. The complaints relate to informational items that were posted in my many schools prior to “back to school” nights held in September, and that have remained posted since then. The items did not advocate voting for or against the bond. They merely described what areas of the various schools would be worked on should the bond pass.
GPPSS makes nearly all of its buildings available to the clerks of the jurisdictions in which it has school buildings for use as polling places. Those buildings are essentially turned over to the cities on election day. On November 6, there were no GPPSS employees or students in the buildings for the majority of the day. No classes were held that day, and all teachers and staff were at Grosse Pointe North High School (the only GPPSS building which is not a polling place) for professional development. When complaints about the bond-related postings were made, election workers at several of the schools themselves removed the postings. At other buildings, assistance from GPPSS employees was requested, and the bond-related postings were promptly removed.
The complaints about these postings are apparently based on MCL §168.744(3), which provides in pertinent part:
On election day, a person shall not post, display, or distribute in a polling place, in any hallway used by voters to enter or exit a polling place, or within 100 feet of an entrance to a building in which a polling place is located any material that directly or indirectly makes reference to an election, a candidate, or a ballot question.
It is not at all clear that this statute applies to the postings in question. As explained above, none of the postings at issue was posted “on election day;” rather, they all had been posted in September, and left up since then. It honestly did not occur to anyone from GPPSS, or to any of the election workers from the various cities, that the presence of these postings was a problem until complaints were made, at which point the postings were promptly removed. There was no intention to influence voters as they moved to the polls, and there is no reason to think that any voters were actually influenced, one way or the other, by these postings.
When is the election?
The election is Tuesday, November 6, 2018. The polls will be open from 7 a.m. until 8 p.m. Absentee ballots will be available after September 22.
What is on the ballot?
Registered voters residing within the boundaries of the Grosse Pointe Public School System (GPPSS) will vote on a $111,040,000 bond proposal.
Why has the school district scheduled this bond election?
The bond proposal being requested addresses school district-wide safety, security, and infrastructure improvements.
The proposed project list was developed as part of the district’s strategic facility management program which featured a study by a Blue Ribbon Facilities Committee, a facilities assessment by nationally recognized Plante Moran Cresa, and a series of Town Hall meetings attended by more than 300 school district residents.
If approved by voters, projects funded through the bond proposal will affect all GPPSS students and every GPPSS school.
What’s included in the bond proposal?
Bond proposal projects fall into four major categories with the overall goal of keeping our students safe, warm, dry, and connected.
Keeping Students Safe: The school district will implement safety and security improvements that include constructing secure vestibules to existing school district buildings, installing security cameras, updating PA systems, completing asbestos abatement in ceilings where energy efficient lighting is being installed, and installing door locking systems in all GPPSS buildings. Inaddition, the district will make improvements to building sites, including paving, fencing, and emergency lighting at GPPSS facilities;
Keeping Students Dry: The school district will equip, furnish, re-equip and refurnish GPPSS buildings, facilities, and structures. The focus will be on roofs, energy conservation, and mechanical system improvements;
Keeping Students Warm: The school district will install efficient HVAC systems (boilers/air handlers/electrical upgrades).
Keeping Students Connected: he school district will acquire and install technology infrastructure (building-wide wiring to support instructional technology equipment). The bond proposal will not provide one-to-one technology.
How will the bond proposal affect each school?
The bond proposal projects at each school can be summarized in four categories: safe, warm, dry, and connected.
Bond items related to safe include:
- secure vestibules
- doors that lock from inside the classroom not the hallway
- integrated security camera systems
- more security cameras throughout the buildings and grounds
- updated public address (PA) systems
- technology infrastructure (NOT end-user devices like student computers or chrome books)
- asbestos abatement (particularly where energy efficient lighting is being installed in ceilings)
Bond items related to warm include:
- efficient HVAC systems (boilers, air handlers)
- electrical upgrades
Bond items related to dry include:
- replacing roofs
- masonry and tuck-pointing work
- updating bathrooms
Bond items related to connected include:
- instructional technology infrastructure (wiring, cabling, and classroom technology)
What will the bond proposal cost?
If approved by voters, there will be a 1.5 mill increase in the current tax rate. The bonds will be sold in two series to reduce overall interest costs.
What will the bond proposal cost homeowners if it is approved?
To determine your annual cost, multiply 0.0015 x the State Equalized Value (SEV) of your home. (Your SEV should be approximately one-half the market value of your home. Hence, if your home would sell for $300,000, the SEV is $150,000.)
Some examples of homeowner cost appear below:
Home Market Value Annual Cost Monthly Cost $ 200,000 $ 150 $ 13 $ 300,000 $ 225 $ 19 $ 400,000 $ 300 $ 25
How does the bond issue address the educational needs of the GPPSS?
The November 6 bond proposal was developed to support the Grosse Pointe Public School System strategic facilities management program. The renovations and upgrades support the school district’s efforts to enhance security and student safety, to support the district’s instructional program and to protect the community’s investment in its schools.
Many of the upgrades and renovations in the bond proposal are dictated by the school district’s aging facilities. (The average age of a Grosse Pointe school is 77 years!) These upgrades and renovations are designed to accommodate advances in energy efficiency and technology, and to replace items that are at or beyond their life expectancy.
What is the schedule for bond proposal projects?
Work on the projects will begin shortly after voter approval of the November 6 bond proposal.
What will happen if the bond proposal is not approved by voters?
The bond proposal projects will not be completed as proposed.
Can any of the bond proposal funds be used for operating expenses, such as salaries
No. Bond proposal funds cannot be used for operating costs, such as staff salaries and benefits (as is indicated at the bottom of the ballot proposal). They also cannot be used for repair 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.
If the bond proposal is approved by voters, will property values be impacted?
The bond proposal was designed to continue protecting the community’s investment in its schools. According to area realtors, the strength of the GPPSS is a primary reason that home buyers are interested in residing within the boundaries of the GPPSS.
Does the school district have any buildings it can sell?
Plante Moran Cresa prepared a real estate assessment for the Blue Ribbon Facilities Committee. It indicates that the sale or leasing of property would not generate enough money to address the projects in the bond proposal. The district continues to entertain lease and sale opportunities and the Board of Education approved parameters on June 11, 2018 for a plan to address declining student enrollment.
The school district will use the Plante Moran Cresa data in future discussions about right-sizing the school district for current and future enrollment.
What is the difference between a bond and a sinking fund?
A bond is a State-approved funding 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 in the bond proposal. Bonds are usually paid back in 20-30 years. In many ways, the bonding process is like a homeowner obtaining a mortgage and making payments over a period of years.
Bonds can be used for:
- Constructing new school buildings
- Constructing additions to existing school buildings
- Remodeling existing school buildings
- Energy conservation improvements
- Land purchases
- Site development and improvements
- Athletic and physical education facility development and improvements
- Playground development and improvements
- Refunding debt (if new present value savings can be demonstrated)
- Direct bond program costs such as professional fees, election fees, issuance costs, qualification fees, insurance fees, final audit costs
- School bus purchases
- Purchasing loose furnishings and equipment (including administrative technology)
- Technology purchases limited to hardware and communication devices that transmit, receive or compute information for pupil instructional purposes only. The initial purchase of operating system and customized application software is allowed if purchased with the initial hardware.
Bonds cannot be used for:
- Salaries, service contracts, lease payments, installment contracts, and supplies
- Repairs, maintenance, or maintenance agreements
- Purchasing automobiles, trucks, or vans
- Portable classrooms purchased for temporary use
- Upgrades to an existing computer operating system or application software
- Computer training, computer consulting, or computer maintenance agreements
A sinking fund is a pay-as-you-go method of generating tax revenue. As a matter of comparison, a sinking fund is like a savings account into which a school district can deposit voter-approved local millage to pay cash for urgent building projects or repairs as they arise. Sinking funds are usually 5-10 years in length, are capped by law at 3.0 mills, and are not intended to finance major projects.
Why not increase the sinking fund instead of requesting voters to approve a bond proposal?
GPPSS’ current 1.0 mill sinking fund generates approximately $2.5 million per year. This sinking fund will expire in 2019.
If the school district asked voters to approve the maximum allowable 3.0 mills for a sinking fund, the 3.0 mill sinking fund would generate $7.5 million per year, taking almost 15 years to fund the projects contained in the bond proposal.
Who can vote in this bond proposal election?
Residents of the Grosse Pointe Public School System who will be 18 years of age or older on Election Day and are registered to vote by October 9, 2018.
Where can I get information about voting (such as how to register, where to vote, and absentee voting)?
Go to the Michigan Voter Information website (webapps.sos.state.mi.us) or call the Clerk’s Office where you reside.
Do I need to update my voter registration?
If you have changed your name or address since the last time you voted, you need to update your voter registration. Do this at any Secretary of State Office or at the Clerk’s Office where you reside.
Can I vote by absentee ballot?
Registered voters can vote by absentee ballot if they meet one of the following criteria:
- They expect to be out of town on Election Day.
- They are 60 years of age or older.
- They are unable to vote without assistance at the polls.
- They cannot attend the polls due to religious reasons.
Absentee ballots will be available to voters after September 22. The Clerk in each GPPSS community will mail absentee ballot applications to residents on the permanent absentee voter list shortly before or shortly after that date.
Between September 22 and 4:00 p.m. on November 3, voters can complete their absentee ballot application and vote in one stop at their Clerk’s Office.
Addressing Incorrect Information
Does the GPPSS Board of Education waste money?
No. GPPSS has again received a “clean and unqualified” audit of district finances (as formally presented at the October 8th Board of Education meeting). The independent audit confirms that school district expenditures are appropriately documented. One of the highlights of the independent audit is confirmation that the school district has grown its fund balance from a low of two percent to the Board of Education-established target balance of slightly more that 10 percent.
Will Bond Funds will be used for Teacher Pensions?
No. By law, bond funds cannot be used for employee salaries or benefits. Bond funds have never been used to pay teacher pensions in Grosse Pointe.
Has there been a $2 million offer to purchase the administration building at 389 St. Clair?
No. There has never been a $2 million offer for the 389 building. If and when any offers are given to the GPPSS Administration, they would be brought before the Facilities Committee, and would ultimately be presented for Board of Education consideration and approval in an open meeting.
There have been three interested parties for building use that have been entertained. First, Beaumont Hospital did inquire about leasing the 389 building for office space. Beaumont had initial interest but after a new CFO was hired, the Southfield location became the central location for the organization. Second, the City of Grosse Pointe explored occupying the first floor of 389 St. Clair. After reviewing three different options, the city council passed a resolution to build the DPW building on their current location. The third inquiry was a private developer who wanted to put 17 apartments in the 389 St. Clair building which is currently zoned residential. The talks are ongoing, but no offer has been given to the GPPSS Administration, Facilities Committee, or the Board of Education.
The Board of Education has asked the GPPSS Administration to continue considering Requests for Proposals for the 389 St. Clair building.
Is GPPSS is planning to implement School of Choice?
That is NOT True. The Board of Education has semi-annually voted 7-0 for NO SCHOOL OF CHOICE. Each year School of Choice was voted down in July and again in the Board Parameters in January. No Board Member or Board candidate has indicated he/she would want School of Choice.
Will Bond Funds be wasted on buildings that will close?
The district feels security for all students must be addressed as soon as possible. The majority of Elementary and Middle School construction would be delayed until the community learns if the new Board parameters for school closing are triggered, and after a study is done to determine the least disruptive plan for school closure using specific data points spelled out in this summer’s Board of Education resolution. Aside from security and major known issues, the elementary and middle school work is to be primarily done in the second series of bonds after these studies are conducted.
Does the High Speed Rocket Fiber Connection Mean the Administration Building could Not Be Sold/Leased?
The High Speed Rocket Fiber Project has nothing to do with the bond proposal or the sale of property. The original 2016 High Speed Rocket Fiber Project bid had all of the current school buildings and the administration building (389 St. Clair) included. Once the final contract is issued and approved by the Board of Education, the connection to 389 St. Clair may no longer be needed or might no longer be an option. The idea of a High Speed Fiber Ring was to have dead ends at the North and South end of GPPSS. Grosse Pointe South High School would be the best alternative if 389 St. Clair is no longer an option for the south end of the district. Until a final contract is issued, the connections are still shown as in the original bid document.
To get more information about the bond proposal and answers to your questions..
Call any school principal
Contact Superintendent Gary Niehaus at 313/432-3010