Royal Oak residents face potential $5 million annual road tax in November

By: Victoria Mitchell | Royal Oak Review | Published October 20, 2014


ROYAL OAK — Royal Oak residents must decide in November the dollar value they place on city roads.

Voters will be asked Nov. 4 if they would approve an amendment to the City Charter allowing the City to levy a tax of up to 2.5 mills for a period not to exceed 10 years.

If approved and levied in full, the city would generate $5 million annually to put into the roads for capital improvements, including road repair, surface road replacement, curbs and gutters, and drain improvements. This would cost a resident with a taxable home value of $72,000 about $180 annually for 10 years.

“Voters will have to decide whether or not it is worth 2.5 mills to have their street improved,” said Mayor Jim Ellison. “The roads are built by the community, and the condition of the roads helps define your community.”

Royal Oak resident Jane Hilary is against the proposal for numerous reasons.

“I just don’t know why they would have such a small pool of taxpayers pay for all of the road repairs,” she said. “I live by 14 Mile, and I see the heavy traffic going by.”

Hilary feels the amount of nonresidential traffic that she sees on the mile roads is proof that the county or state should be chipping in on the bill.

“And it is the 10-year thing that really knocks me over the head,” she said.

Hilary said it is too much, for too long and asks the wrong people to foot the bill.

Ellison said a “yes” vote does not guarantee the city would tax the full amount each year. If the state of Michigan came through with a source of funding for local roads, then the mayor said the city would levy zero to less than 2.5 mills. But he is not optimistic local municipalities will see state funding for local roadways and believes this bond proposal is necessary to maintain city roads and maintain the city’s property values.

Ellison said elected officials were presented in 2013 with a Pavement Surface Evaluation and Rating system report, which was an analysis looking at every road in the city. 

According to City Engineer Matt Callahan, the city’s average roadway rating is 4.8, based on a scale of 1 to 10, with 1 being the worst condition and 10 being new pavement.

Callahan said if the millage does not pass, roads will continue to deteriorate to a 3.6 rating at the end of 10 years.

“We came up with a 10-year plan that could get the bulk of the work done,” Ellison said.

Callahan said at some point,  deteriorating roads become unsalvageable, which becomes far more expensive to repair or replace.

The City of Royal Oak has about 215 miles of road and more than 147 miles of local streets. Callahan said the vast majority of the millage funds would go toward the 147 miles of local streets. Callahan said by state law, the remaining major roads already have some funding set aside and new millage money would be used as an enhancement.

The City of Royal Oak major roads are on a 20-year improvement plan, while local roads have received zero funding and therefore no improvement plan since the 1980s.

Residents approved a road millage in the 1980s generating about $20 million. The money was used to address roads in poor condition at that time. This was the last time money was spent on local neighborhood streets.

Currently, the city has about $3 million to spend on roads with more than half of that amount going to the DPS for snow removal, pothole patching, sweeping, signs and signals. Callahan said of the remaining $1.3 million, only 25 percent can be used for capital improvements and local streets. Funding comes from Act 51 money collected by the state as part of vehicle registration fees, and gasoline and diesel fuel tax. Royal Oak’s tax rate has not allowed any property tax revenue or any other general revenue to be spent on local or major streets.

City officials are waiting for the election results before determining a road repair action plan.

Ellison said the plan would look at fixing decaying roads and maintaining newly paved roads to maximize life expectancy of newer roadway investments. The average life expectancy of roads is about 20-30 years, but each road is impacted by outside forces such as weather and traffic.

“That is where the balancing act comes in,” he said.

Callahan said some work would begin in 2015, if the millage passes, but most work would require planning, design, bidding and approval, and therefore a long list of street work would start in 2016.

If Charter Proposal A passes, taxing would begin on the December 2014 winter tax bill. The money generated through the millage could only be used for Royal Oak streets. It could not be used for any other purpose.

City of Royal Oak Community Engagement Specialist Judy Davids said city officials decided to come to the public, as a 2013 study showed 67 percent of a random sample of residents polled indicated that road maintenance should be near the top of the list for funding, coming in second to police services.