Road Funding in Auburn Hills

On Monday, March 2, 2020, the Auburn Hills City Council, upon recommendation from the city’s administration, adopted a resolution to place a ballot question before the citizens on Tuesday, August 4th, for the funding of roads.  After years of waiting and hoping for a solution at the state level, it appears that no such solution will be developed anytime soon.  As a result, many communities throughout Michigan have decided that the only way to control their own destiny is to fund their roads through a local revenue source.  Citizens in numerous communities throughout Michigan have already approved a local road millage.  The City Council and City Administration has worked diligently over the past year to come to a conclusion on a roads millage that is reasonable to taxpayers while at the same time addressing the needs of our road infrastructure.  An analysis conducted by our Department of Public Works, in conjunction with our consulting engineers, concluded that it would take approximately 2.25 – 2.50 additional mills to generate the kind of revenue necessary to keep up on the annual road repair, maintenance and reconstruction required for our roadways to remain in “good” or above condition.  Using a nationally recognized system called Pavement Surface Evaluation and Rating (PASER), City Council has established a policy standard to get all of the roads for which we are responsible to a PASER Rating of Six (6) or above.  Currently, there is over $75 million in local road maintenance, repair and reconstruction needed for roads rated at six (6) or below.  We’ve included those currently rated at six (6) in that $75 million figure because these will also decrease in their rating within the next couple of years. 

After careful consideration, City Council determined that a combined method of low-interest bonds (borrowing) based on our very favorable bond rating of AA+, could be leveraged in order to lessen the need for a 2.25 – 2.50 millage request.  As a result, the ballot question on August 4th will be for 1.5 mills, generating an estimated $2.677 million dollars annually for local road maintenance, repairs and reconstruction.  For a homeowner with a taxable value of $100,000 (this is the value on which taxes are calculated on your home), your tax bill would increase by $150 annually, or about $12.50 per month. 

Auburn Hills continues to enjoy a very low City tax rate and currently levies a total millage rate for all city operations of 11.2998, which includes the library, and is in the lowest third of all cities in Oakland County.  If the citizens are inclined to increase the total millage rate by 1.5 mills for investment in their local roads, our total millage will still remain in the lowest third of cities in Oakland County.

Despite the great recession of 2008 which caused substantial reductions in our revenues, the City has held off as long as it could to request these funds from its citizens.  Significant cost-cutting measures have taken place over the last decade, and operational efficiencies are continuously evaluated and implemented.  However, that does not change the fact that in 2008, the total taxable value of the community was about $2.6 billion.  That number in 2020 is now $1.7 billion.  In other words, the revenue generated from taxable value on which the majority of our operations rely upon has decreased by about one-third.  That situation can no longer be sustained if we are to maintain a quality road infrastructure. 

On Tuesday, August 4, 2020, you will be asked to consider a road millage to support your local roads.  Individually and collectively, the citizens of Auburn Hills will ultimately decide if this is an investment they wish to support. 

Over the next two months, you will receive further information about the millage election to inform you of the need for this request.  That information will be delivered by several means including social media, the City’s website and cable channel, and through printed materials such as the city’s newsletter, direct mail pieces, and inserts in your water bill. 

Tom Tanghe, City Manager

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