Sunday, March 18, 2007

Bloomfield Hills offering teaser rate for bond issue

This ran in the the Oakland Press on Sunday, March 18. Everything I've seen suggests it is 100% accurate. Has anyone seen anything that would suggest that it is wrong? Is anyone as bothered by it as I am?

Bloomfield Hills offering teaser rate for bond issue

Explaining the change in the bond issue supporting the $140 million, twin-high school building project, the Bloomfield Hills Assistant Superintendent for Business Services states, “We have factored a reasonable increase in property values (4 percent) and have calculated that after the first-year millage at 1.29, the average rate is 1.41.”

The problem is, the district has promoted the 1.29 rate. They stated in their internal February 2007 “State of the Staff” bulletin, “The Board of Education agreed to ask the voters for 1.29 mills.” It has also appeared in local newspapers.

What do we have here? The district is quoting 1.29 mills knowing it will average 1.41 mills after the first year. Subprime mortgage lenders use “teaser” rates. I thought Bloomfield was better than that.

The “reasonable increase in property values (4 percent)” compares with the average of 2.5% in the last 13 years reflected on our property tax statements. If this thinking reflects the quality of the proposal, it should be voted down.

Pat Guidone
Bloomfield Hills