1. Nick Khouri, Michigan’s School Bond Loan Fund: A Program in Need of Repair (Lansing, MI: Public Sector Consultants, Inc., July 11, 1997), p. 4.

2. United States General Accounting Office, School Facilities: Condition of America’s Schools, February 1995.

3. J. Flanigan, M. Richardson, D. Stollar, Managing School Indebtedness: A Complete Guide to School Bonding, 2nd edition (Lancaster, PA: Technomic Publishing Co., 1995). See Chapter 4 for a presentation of this view.

4. MCL 141.421 ("Uniform Budgeting and Accounting Act"). Sec. 15 requires schools to include in their annual budgets a three-year projection of the added operating costs associated with new capital projects.

5. James C. Joseph, Debt Issuance and Management (Government Finance Officers Association, 1994), pp. 5-12.

6. For more on these subjects, please see the following:

  • Terence P. Pare, "The Big Sleaze in Muni Bonds," Fortune, August 7, 1995, pp. 113-120.

  • Jeffrey L. Esser, "Competition, Negotiation and the Public Trust," Government Finance Review, December 1994, p. 3.

  • "Competitive and Negotiated Issuance of Bonds," Government Finance Review, December 1993, pp. 30-32.

  • Jeffrey L. Esser, "Campaign Contributions and Municipal Bonds," Government Finance Review, August 1993, p. 3

  • Arthur Levitt, Jr., "The State of the Municipal Securities Market," Government Finance Review, December 1993, pp. 33-35.

  • Amy B. Resnick, "IRS Looks for Yield Burning in 22% of 206 Ongoing Muni Bond Audits," The Bond Buyer Online, April 17, 1998, available on Internet at http://www.bondbuyer.com.

  • Louis H. Schimmel, Reasons for Selling Bond Issues at a Competitive Rather Than a Negotiated Sale, May 2, 1993. Unpublished paper available from the Mackinac Center.

7. MCL 169.257 (P.A. 264 of 1995).

8. OAG 1965 No. 4291; OAG 1987-1988 No. 6423; OAG 1993 No. 6763.

9. Municipal Advisory Council of Michigan, "Michigan School Bonds," pamphlet, n.d..

10. Khouri, op. cit., p. 2.

11. MCL 408.551 (P.A. 166 of 1965).

12. Flanigan, Richardson, Stollar, op. cit., p. 123 (figure 24).

13. Ref. Department of Treasury, School Bond Loan Program, State of Michigan, Projected Annual (Borrowings)/Repayments for All SBLF Clients on a Fiscal Year 7/1 - 6/30 Basis, Stauder, Barch & Associates, Inc., September 18, 1995.

14. Joel Thurtell, "Michigan Schools Load the Future With Debt," Detroit Free Press, April 5, 1993, p. 1A.

15. Richard Wilson, Executive Director, School Equity Caucus, quoted in Gongwer News Service, Inc.’s Michigan Report, August 30, 1996, p. 2.

16. Constitution of the State of Michigan of 1963, Article IX, Section 16.

17. MCL 137.1a.

18. Ref. Howell Public Schools Debt Retirement Fund Statements from Audited Financial Reports, FY Ended June 30, 1991 through 1995, for an illustrative example.

19. MCL 380.1351a.(1).

20. For example, see Matthew Bach, "How Did This Happen?" Livingston County Press, December 25, 1996, p. 12A and id., "State Questioning Past Bond Issues in Pinckney," Livingston County Press, December 11, 1996, p. 1A.

21. MCL 380.1351a.(3).

22. Ref. Byron Area Schools Application for Preliminary Qualification of Bonds, July 10, 1995, and also Howell Public Schools Application for Preliminary Qualification of Bonds, November 24, 1997, for illustrative examples.

23. MCL 380.1351a.(2).

24. Thomas Lynch, Public Budgeting in America, 3rd edition (Englewood Cliffs, NJ: Prentice-Hall, 1990), p. 270.

25. Pontiac School District v Miller Canfield Paddock & Stone, Michigan Court of Appeals No. 180757. See also Bill Johnson, "Will Cleveland School Bond Controversy Affect Detroit?" The Detroit News, May 16, 1997, and "Conflict or Coincidence?" Editorial, The Detroit News, October 5, 1995, p 12A.

26. See, for example:

  • Ben Hayllar, "Preparing a Municipal Debt Policy," Government Finance Review, June 1994, pp. 34-35.

  • Municipal Treasurers’ Association of the United States and Canada, Debt Policy Handbook, 2nd edition, 1994.

  • Joseph, op. cit..

  • Flanigan, Richardson, Stollar, op. cit..

  • Government Finance Officers Association, Debt Management Recommended Practices, cited April 27, 1998, available on Internet at http://www.gfoa.org/practice/rp_debt.htm.

  • Catherine L. Spain and Jeffrey S. Green, "The New SEC Disclosure Rule 15c-12: Questions and Answers," Government Finance Review, February 1995, pp. 30-34, 40.

  • Lennox L. Moak and Albert M. Hillhouse, Concepts and Practices in Local Government Finance, Municipal Finance Officers Association of the U.S. and Canada, 1975.

27. MCL 380.1351.(3).

28. Standard & Poor’s Corporation, ref. in Flanigan, Richardson, Stollar, op. cit., p. 83.

29. Joseph, op. cit., pp. 33-35.

30. See Jude Westerfield, et al., "The Crises of Orange County," Public Issues, Spring 1995, pp. 2-13 and "SEC Actions in Orange County Investigation," Government Finance Review, April 1996, pp. 13-15.

31. Joseph, op. cit., p. 48.

32. See Lynn Stevens Hume, "ABA Task Force to Finish Pay-to-Play Report by Early June," The Bond Buyer Online, April 21, 1998, op. cit..