AG Office rejects city road funding ballot proposal language

By: Sherri Kolade | Farmington Press | Published September 12, 2017

FARMINGTON HILLS — The offices of the state attorney general and Gov. Rick Snyder hold the answers to what Farmington Hills officials can do next with a charter amendment ballot proposal, after the Attorney General’s Office rejected the charter amendment ballot language.

Assistant City Manager Gary Mekjian said the ballot language sent to the state Attorney General’s Office was designed to exempt property owners currently involved in an active special assessment district from a pending road millage until their SAD has expired.

“The Attorney General’s Office did not like that language,” Mekjian said, adding that it is the city’s understanding that under the state constitution, one cannot exempt taxpayers from paying a specific tax.

“I know that there is an effort to perhaps address this from a legislative perspective and perhaps get some laws in place that allow local jurisdictions to explore those exemptions.”

He said that the city is waiting to hear back from state Attorney General Bill Schuette to see what options might be available.

Mekjian said officials hope to receive an answer by December.

“If the decision doesn’t come back in our favor from the Attorney General’s Office, I think (the City) Council is undecided on which way they may go as it relates to the road millage. … Clearly ... the topic of funding for neighborhood street reconstruction is a very high priority to the City Council,” Mekjian said.

Per the city’s directed special assessments for road improvements policy — approved by the City Council in April 2015 — local roads are given priority to be improved based on a pavement condition rating and a number of other factors, like housing density, Department of Public Works upkeep and public interest.

Under that road improvements policy, the city is responsible for paying 20 percent, while residents in the assessment district pay 80 percent of the project cost. Paying for roads through SADs has been in the city charter since the city’s inception, officials said, though the criteria for ranking road repair needs changed recently, which has caused contention among some residents facing assessments.

Farmington Hills Mayor Ken Massey said previously that SADs have been running anywhere from $10,000 to upwards of $19,000 per home.

During a special Aug. 10 meeting at City Hall, City Council members discssued the charter amendment ballot proposal — which council approved unanimously July 24. City Councilman Michael Bridges was absent during the Aug. 10 meeting. 

City Attorney Steve Joppich confirmed during that meeting that Snyder has yet to issue any opinion, and the city only has the Attorney General’s Office letter. 

“At this point … there is no objection from the governor yet,” Joppich said.

Massey said that the charter change would effectively be moving the city from an SAD mechanism paying for local roads to a millage-based system of paying for local roads.

“What we had all desired was that there be an exemption in place for the group of residents who are currently paying on a special assessment district, that they would not have the millage levied on them until after they had paid off of that,” Massey said. “And as part of the process after we approved the ballot language that had been developed by the city attorney, those two questions had to go to the Attorney General’s Office.”

Massey said that the Attorney General’s Office makes a recommendation to Snyder as to whether or not to accept the ballot language.

He added that the Attorney General’s Office did not have a problem with a charter change to pay for roads through millages instead of SADs or the estimated 2.5-mill tax proposed to improve the roads. 

“But they did not agree with our logic on the exception,” he said. “This has been a little frustrating because we are looking at something that for a logical reason is only the transitional period to move us from what was in our charter to move us to something new, to ensure that we don’t have the perception that we are charging people twice for their roads.”

Farmington Hills resident Thomas DeWard, who currently pays on an SAD, said in an email statement that the City Council claimed it was reviewing proposals to move from SADs to a road millage as early as January 2016.  

“In spite of this, they chose to sue the residents of Independence Commons that had filed an appeal of the SAD with the Michigan Tax Tribunal. The suit was filed in the Oakland County Circuit Court, and the city lost. Thus, the city has placed itself in a box,” he said.

Oakland County Circuit Court Judge Phyllis McMillen oversaw a city of Farmington Hills lawsuit against about 80 Independence Commons subdivision residents earlier this year on a city road improvement policy that would require homeowners to pay roughly $12,000-$18,000 each over 10-15 years based on average abutting frontage. She decided that it would violate the Michigan Constitution. McMillen stated in the Feb. 21 lawsuit dismissal that the city is not permitted, even as a home rule city, to institute policies that violate the state constitution.

DeWard said in the email that the city’s new proposal shifts all road funding to the taxpayers.  

“Previously, funds for roads came from the general fund,” he said via email. “This leaves more money in the general fund to increase wages and benefits while placing the higher tax burden on the taxpayers.”

He said that if the charter amendment proposal were to have passed, it would be up to the city to decide who gets new roads and when.  

“Will the city replace existing roads as they existed, or will they choose a cheaper alternative such as replacing concrete with asphalt? And what about subdivisions that paid for new roads through an SAD in, say, the last 15 years and the roads are in need of replacement? Will they go to the back of the list?” DeWard asked.

The Attorney General’s Office rejection of the ballot language gave little room for the city to turn around a new proposal; the Aug. 15 November general election deadline to submit new ballot language has since passed.

City Councilman Richard Lerner said he thinks the city “rushed” the matter.

“ I think they could help us out with this home rule — I doubt we are the only city in Michigan that is looking to move from SAD format to millage for roads. … There ought to be a way to work around this somehow. … One of the conditions had to be ‘do not hurt the people currently paying off SADs,’” Lerner said. “There may be some options out there that we didn’t know were available to us as legislative fixes.”

City Councilwoman Valerie Knol said that the city needs a clear opinion from the Attorney General’s Office and the governor. She added that a legislative fix could take months. 

“A legislative fix is not quick, so I don’t have too much confidence in that, but I want to put all the options out there,” she said, adding that she does want to pursue the option of changing the charter to allow for current SADs to be dissolved. “If you’re five years into the SAD (on a 10-year agreement), you’re dissolved at that point. … Going forward, for (the) next five (years), you would pay for a millage. Then you don’t run into the issue of uniform taxation, because they are no longer paying the SAD.”

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