You are voting to authorize the Worthington Board of Education and the Worthington School District to sell up to 37.5 million dollars worth of bonds. The bonds do NOT have to be sold, but if they are, they must be sold within 5 years and the proceeds from those bonds must be used within 3 years of the receipt of the money. The current plan is to sell at least 35 million dollars worth of bonds. The remaining 2.5 million is a contingency that will not be touched unless there is an urgent or unanticipated need. Many Worthington taxpayers own municipal bonds or municipal bond funds, and the Internet has tons of information about bonds. Here is a reasonably good primer.
Municipal Bond offerings are complex, but the concepts are not. We (Worthington Schools) are borrowing money for anywhere from 1 year to 15 years. We will pay interest on the debt and repay the debt when it matures. When you vote to authorize us to issue the bonds, you are voting to commit to repay the principal and interest. The millage required to repay the principal and interest in any given year is added to your property tax bill.
This bond issue is being marketed to you as a "no additional millage" levy. Here is why. In 2006, property owners paid 3.8 mills of property tax to fund principal and interest on our current debt, which is 47 million dollars. The Board of Education made a commitment, in writing, that the millage on both the current debt and the new debt associated with this levy will never exceed 3.8 mills. How can we do this? The board has control over many aspects of the process. First, we can simply not issue some of the bonds if the millage will exceed the 3.8 mill level. Second, we can refinance some of the current debt, stringing it out over 20 years and thus lowering the millage required in any one year. Third, we can sell premium bonds and use the proceeds to help pay principal and interest. With a bond levy, there are many things that can be done to maintain the millage level.
The bonds will be sold to individual investors and mutual funds. After the voters approve and the Board of Education decides to issue some of the bonds, an auction is held where our bond experts, R. W. Baird and Company, market our bonds to interested investors. If the taxpayers approve, the first step is to create a document of "general information" which describes the district's credit rating and current debt levels. We will not go to the expense of creating the document before the voters approve, but here is an example of such a document from the Olentangy School District.