Council approves $2 million sidewalk bond proposal for Nov. ballot

By: Victoria Mitchell | Royal Oak Review | Published August 1, 2017

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CLAWSON — On July 18, members of the Clawson City Council unanimously approved placing a $2.125 million sidewalk improvement bond proposal on the Nov. 7 ballot.

Mayor Penny Luebs said options that the council considered included putting the millage on the November ballot to borrow money to complete the sidewalk program in five more years; waiting until 2020, when the large drain debt is retired, and then going out for a millage that would include all infrastructure, including roads, water, sewer and sidewalks; or continuing to move forward with the annual $25 sidewalk replacement fee. 

“Council elected to move sooner rather than later to repair sidewalks with the sidewalk bond on the November ballot,” she said.

Money from the approximately 0.058 mill tax levy would be used only to complete the city’s current sidewalk repair and replacement program. If approved in November, city officials would borrow general obligation tax bonds in an amount not to exceed $2.125 million.

City Manager Mark Pollock said the average taxable value in Clawson is about $54,000, so if the bond is approved, it would cost the average homeowner about $32 a year. He said the money would be collected from residential and commercial property owners.

Pollock said bond approval would change the financing of the city’s sidewalk program from collecting a $25 annual fee from all residents to issuing unlimited tax general obligation bonds.

Pollock said the city’s bond adviser is working on a repayment schedule that would make sure residents’ taxes would not increase even if the bond proposal is approved.

“One of the points, one of the items council wanted to make sure of with the proposal is that our debt millage would continue to go down,” he said.

Pollock said the debt millage last year was at 7.8.

“It will start off at 7.65 this year, and they estimated it would go down to close to 7.45 next year and will continue to maintain at least at or below that level,” he said.

The city manager said the North Arm Drain debt and the library bond would fall off in 2021, further reducing the overall debt collection.

“The debt millage would continue to drop each year until the estimated millage in the final year of this bond repayment is 4.13 mills,” he said.

Pollock said the bond proposal would have two separate issues, one for $1.275 million in 2018, and another for $850,000 in 2021.

“So even though this is a 0.058-average levy — and that is estimated over the 11-year term — the overall debt millage that taxpayers are paying will continue to go down,” he said.

Pollock said three recent bond refinances — each saving the city about $200,000 — also contributed to the city’s declining levy.

The existing sidewalk program was approved by City Council in 2007 for six years, and was approved again in 2013 for an additional six years. Residential property owners have paid $25 per year, which will stop with the summer 2017 tax bill.

Since the program began, 40 percent of the targeted sidewalks have been replaced. City officials were not planning on still having 60 percent of the work outstanding.

“The $25 was great, and I think when we started it, we believed we would be done in 15 years, and the costs just don’t go very far anymore,” Pollock said.

Pollock said that if the city continues to run the program in the same way, it would take another 17 years to complete. If the bond is approved, the program would be completed in five years and work would begin in 2018.

“That was one of the key features with this, was to try and make sure that we would get this done in five years and have the millage continue to go down,” Pollock said.

City officials said a dramatic increase in concrete prices was a large factor in the money collected not stretching as far as city administrators initially estimated.

Pollock said that when the initial sidewalk program was established, City Council members did not want a program in which individuals would be assessed for the slabs in front of their homes, because that often results in large costs. Pollock said that instead, they wanted a program in which the cost would be spread out. He said a bond proposal would achieve that objective.

“Anyone who has a bigger lot or a corner lot knows that it can be very expensive — an expensive proposition into the thousands — so sharing it certainly makes a lot of sense,” he said.

Pollock said he hopes that people who have already had their sidewalks repaired would support the ballot initiative.

“It’s going to fix the sidewalks all throughout the community,” he said. “A lot of people bike, walk, and they say it’s great going in the areas that have already been done, because you have really good sidewalks.”

The bond funds would also pay for Americans with Disabilities Act-compliant ramps.

“So with the $25, really, with not levying that, and now with the additional being $32, $31, really, the only increase is $7, but yet their taxes will still go down and we should have the sidewalks done in five years,” said City Councilman Jim Horton.

Pollock said there will be FAQs regarding the proposal, along with the city’s proposed five-year sidewalk plan, online at cityofclawson.com.

Pollock said that after the sidewalk program is completed, the city administration would then review it and do whatever the City Council and the residents feel is the best plan going forward.

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