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Local Road Improvements (Your Tax Dollars at Work!)

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City of Farmington Hills Ballot Proposal for Transitioning to a Local Road Millage

Paving, rehabilitating, and repairing the public local road infrastructure in the City has historically been funded primarily through a patchwork of special assessment districts (SADs) imposed against properties within neighborhood districts.  However, based on the current condition of the local roads in the City and feedback from residents during the process of establishing these SADs over the years, the City has concluded that SADs have become an impractical, unreliable, and less than effective and efficient method of supporting the proper maintenance of these local roads.  This ballot proposal is requesting voter approval to transition away from SADs, and instead fund this part of the City’s public infrastructure with a City-wide local road millage of up to 2.75 mills annually.

2018 Local Road Ballot Proposal

“Shall the city charter be amended to authorize the levy of a perpetual additional special tax rate of up to 2.75 mills ($2.75 per $1,000 taxable value), starting with the July, 2019 levy and raising approximately $9,272,000 in the first year, for improving, rehabilitating, repairing, and maintenance of local subdivision road infrastructure, and partly funding debt retirement and special assessment refunds, and eliminate limits on City payments toward local road special assessments, and amend unexpired special assessment rolls to zero out unpaid balances and provide refunds for properties that have paid off the special assessment as of November 6, 2018?”

 

 

Frequently Asked Questions

What is this proposal?

Paving, rehabilitating, and repairing the public local road infrastructure in the City has historically been funded primarily through a patchwork of special assessment districts (SADs) imposed against properties within neighborhood districts.  However, based on the current condition of the local roads in the City and feedback from residents during the process of establishing these SADs over the years, the City has concluded that SADs have become an impractical, unreliable, and less than effective and efficient method of supporting the proper maintenance of these local roads.  This ballot proposal is requesting voter approval to transition away from SADs, and instead fund this part of the City’s public infrastructure with a City-wide local road millage of up to 2.75 mills annually.

When is the vote?

This proposal will be on the ballot for the November 6, 2018 Election.

Why do we need a millage for local roads?

The City currently maintains 299 miles of roadway, of which 219 miles are paved neighborhood streets (local roads).  The City has undertaken studies using the standard Pavement Surface Evaluation and Rating (PASER) method to determine the condition of the public roads in the City.  The PASER rating is on a scale of 1 to 10, with 1 being the worst condition and 10 being a new road.  According to the most recent PASER Study performed in 2017, over 58% of the City’s local roads are in “poor” condition with a PASER rating of 4 or less.  If the ballot proposal passes, allowing a transition into a local road millage funding method, the goal will be to improve the City’s overall average pavement condition on its local roads to a PASER rating between a 6.0 and 6.5 within the first ten years.

How did the City determine the amount of funding needed?

Per the 2017 PASER study described above, 58% of the City’s local neighborhood streets are in poor condition and need to be reconstructed.  This 2017 study was used to develop a model with recommendations to the City about the amount of funding needed to improve the overall pavement conditions.  The model recommended $10 million to $11 million annually to achieve the goal of improving the City’s local neighborhood streets.  The City needs to levy 2.75 mils annually to help meet this funding need.

How does the City currently pay for the reconstruction of local roads?

Currently, the City Charter requires Special Assessments Districts (SADs) to fund local road reconstruction and prohibits the City from contributing more than 20% toward the costs of local road improvements, thereby requiring the remaining balance of costs (at least 80%) to be paid for by the properties within the neighborhood.  Once established, SADs require property owners to either pay the full assessment amount up front or pay it in annual installments with interest over a period of time established by City Council, which is typically 10 to 15 years.  The total assessment amounts for neighborhood road improvement projects in the last three years have ranged from approximately $8,000 to $24,000 per home site.  

Based on the current poor condition of these roads, feedback from residents, and the City’s experiences in establishing and administering SADs, this process has not been working effectively and is adversely impacting property values throughout the City.  As an alternative to SADs for local road reconstruction, the City is proposing to transition to a more sustainable local road millage.  The ballot proposal, if approved, would eliminate the above-described 20% limitation, and the funding generated by the local road millage would be able to be used to fund 100% of local road improvement projects.  

Didn’t the City just pass a road millage in 2014?

Yes, but the funding from the 2014 road millage is spent specifically for reconstruction of major roads, improved preventative maintenance on major roads and residential streets, and ensuring the City can continue to contribute up to 20% toward the funding of residential road reconstruction SAD projects per the current City Charter.  The 2014 millage did NOT eliminate or provide an alternative to the SAD process for residential road reconstruction. If the ballot proposal passes, approximately $2 million of the funding generated by the 2014 millage will be combined with the revenue from the proposed 2018 millage to fund the local road improvement program.

Why aren’t the taxes I pay enough to cover the cost for local road reconstruction?

Only about 33% of the taxes you currently pay stay with the City of Farmington Hills.  The remaining 67% is paid out to the County and for Education.  The City funds the vast majority of local road construction and maintenance utilizing revenue received from the State of Michigan under Act 51 (generated by fuel taxes and vehicle registration fees), NOT CITY GENERAL FUND DOLLARS. These funds received by the City from the State are used to fund operational costs for the City’s Division of Public Works, which maintains the 299 miles of major and local roadways and storm sewer systems throughout the City.  State and federal road funding is not keeping pace with the increased costs of maintaining our roads at acceptable levels, so the City continues to do more with less.  The lack of road funding is becoming evident as the City’s overall pavement condition continues to decline.

How will the funding from the local road millage be used?

If the millage proposal passes, approximately $8 million per year will be used toward the maintenance, rehabilitation, and reconstruction of neighborhood roads.  In addition to that amount, $1 million per year will be set aside annually for paving gravel roads; the City has 21 miles of roads that are currently gravel.  This gravel road conversion will only be considered in those neighborhoods where it is requested by a majority of the property owners.  Additionally, as part of the process of transitioning from the SAD funding method to the local road millage funding method, a portion of the funding will be used to partly fund SAD-related debt retirement and special assessment refunds for SADs that are unexpired as of November 6, 2018.

Which roads will benefit?

Each year the City develops a five-year Capital Improvements Plan (CIP) that prioritizes local roads in need of reconstruction based upon a number of variables.  The City will continue to utilize this CIP program and the roadways identified on the top of the list will be considered first for reconstruction using the local road millage funding.  To see the copy of roadways or neighborhoods currently on the CIP, go to www.fhgov.com/localroadballotproposal and select Roadways or Neighborhoods Currently on the Capital Improvements Plan.

How much will the local road millage cost me?

The average market value for a home in the City of Farmington Hills is $230,000, with a taxable value of $90,000.  If the full 2.75 mills are levied, it will cost the average homeowner approximately $248 per year, or about 68 cents per day.

To determine the millage cost for your individual property, go to www.fhgov.com/localroadballotproposal and enter your property information into the interactive calculator.

If the proposed transition to a local road millage is approved, when would it take effect? When would the road improvements begin?

If approved, the local road millage would be effective on the July 2019 summer tax bill.  Local road improvements would be included in the Fiscal Year 2019-2020 budget and could begin as early as summer 2019.

If my neighborhood streets were recently repaved as part of a Special Assessment District, will I still have to pay the local road millage if it passes?

Yes, but there are transition provisions contained in the charter amendment ballot proposal that will amend unexpired special assessment rolls to zero out unpaid balances and provide refunds for certain properties that have paid off the special assessment early.  In other words, if this ballot proposal is approved by the voters, you may not have to make your special assessment payments any longer, and if you paid off your assessment early and others in your neighborhood are still making SAD installment payments, you may be entitled to a partial or full refund.  For more information, go to www.fhgov.com/localroadballotproposal and select Amended Charter Provisions.

If I pay my road SAD in installments and sell my property, will the full amount of the assessment have to be paid in full at the time of the sale?

Maybe. This is a very common question from residents.  There are no City ordinances that require the SAD to be paid off in these instances.  Instead, in most instances, it is the mortgage lender and/or title insurance company that will require any special assessment balances to be paid off at the time of closing on the sale of property.  Other times, the purchaser of the property may require it to be paid off at closing.  In all events, this will become a non-issue if the ballot proposal passes, allowing the City to transition to a local road millage, because the ballot proposal includes amendments to the City Charter that will amend unexpired special assessment rolls to zero out unpaid SAD balances.

What happens if this ballot proposal is not approved?

If the ballot proposal is not approved, the current City Charter dictates that local road improvement projects would continue to be implemented through the Special Assessment District process.  The City would continue to be limited to contributing up to 20% toward each project, with the neighborhoods responsible for paying the remaining 80% or more.  Those neighborhoods identified on the Capital Improvements Plan would be considered first for reconstruction utilizing the SAD process.  

How and why are roads chosen for reconstruction?

The pavement is rated by members of the City’s engineering staff, who are specially trained in evaluating pavement conditions.  The City uses the services of an outside civil engineering consultant to review these ratings for quality assurance and quality control.

Without reconstruction, local roads that are in poor condition will continue to deteriorate and can lead to unsafe driving conditions, have negative impacts on the appearance and value of properties, and cause expensive wear and tear on vehicles.  Deteriorated roads can make it difficult to control your vehicle and can contribute to auto accidents.  Additionally, poor roads, especially in neighborhoods, can create hazards for pedestrians and cyclists.

Good local roads improve the overall attractiveness of the City’s neighborhoods, improve property values, and help to attract new businesses and retain existing ones.

*These FAQs have been developed by the City based on questions that the City has received from residents and other interested persons. We welcome any other questions you may have regarding the proposed charter amendment proposal and invite you to contact the City Manager’s Office at (248) 871-2500.   Additionally, you are advised that the City cannot, and is not intending from its above answers to FAQs, to provide legal advice, financial advice, or tax advice.  You should consult with your attorney, financial advisor and tax advisor for answers to and advice regarding the questions above.  Furthermore, nothing in the above answers to FAQs should be considered to supersede, change, interpret or set policy regarding the provisions contained in the City Charter, proposed amendments to the Charter, applicable City Ordinances or City Policies. If there is a conflict between what is stated in the above answers to FAQs and the provisions of the City Charter, proposed amendments to the Charter, applicable City Ordinances (current and future) and/or applicable City Policies (current and future), then the provisions of such City Charter, proposed amendments to the Charter, applicable City Ordinances and City Policies shall apply.

To determine your investment in the 2018 Local Road Millage, please fill in the fields below:


What will this cost me?

 

 

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$

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(Taxable Value x 2.75)/1000

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Tax Increase/365

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