Capital Improvements Millage Proposal
“Shall the City of Novi, Michigan, be authorized to levy a new additional millage on taxable property within the City, not to exceed the annual rate of 1.0 mills ($1.00 per $1,000 of taxable value) for a period of 10 years, commencing in 2017, for the purpose of funding pathways, sidewalks, parks, buildings and other capital improvements and capital projects, including, but not limited to, parks and facilities, land acquisition, pathways and apparatus (such as a fire truck, heavy equipment). These funds shall not be used for operations or payroll. The estimated amount of revenue that will be collected by the City in the first year that the millage is authorized and levied is $3,284,805.”
What is the Capital Improvement Program?
The Capital Improvement Program (CIP) is a planning tool used by the City to identify and schedule capital improvements needed to service residents and businesses. Novi’s CIP is a six-year plan (FY 2017-2022) that addresses projects that are needed, or will be needed, across a broad spectrum of areas. The projects within the program are defined as any new equipment, construction, acquisition or improvement to public lands, buildings or structures in excess of $25,000. The City’s CIP currently identifies some $97 million worth of capital improvements. The program is approved by the City Council and included in the budget.
Why is a Capital Improvement Millage being proposed?
A dedicated Capital Improvement Millage would allow the City to invest in those improvements that have been identified as necessary and required in the City’s long-term planning process. The millage amount reflects those anticipated costs. If it doesn’t pass, many of these projects will not have the funds to be actualized.
Why is the Capital Improvements Millage being proposed instead of a bond?
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An increased millage would allow the City to “pay as they go” for needed capital improvements and capital projects with $3.2 million added to the general fund each year for 10 years. If the City were to issue a bond for $32 million for the same amount of projects, the City would pay off the bonds over a period of 15 years with interest, making the total cost for the same projects $40.2 million.
What would a CIP millage pay for?
An increased millage would generate an estimated $3.2 million of additional revenue annually to support capital projects including design and construction, as well as the acquisition of land and the purchase of capital assets.
Some Projects in the Current CIP
Lakeshore Park Pavilion and Activity Center
Construction of a new building to accommodate all program requirements as well as new concession space, meeting room and public restrooms. Park entry/arrival redevelopment is recommended as part of the plan to improve park circulation patterns. Also recommend replacing north shelter, adding a barrier free walk, new concrete pad and electrical distribution. ($3 million)
Land Acquisition and Replace Fire Station #1
Station is in need of significant renovations and repairs to service a 21st century fire department. City looking to forge a public/private partnership to develop a new station on same parcel of current facility. The fire station would occupy the first two floors of the new building and a private entity, possibly a residential apartment would fill the remaining floors. ($5.5 million)
ITC Community Sports Park Update
Fields originally constructed using "crown" method of draining. Based on current field conditions, need to install proper draining system on all soccer fields (2 regulation, 2 junior and 6 youth) as well as re-grading them to make them level. Also replacing existing benches, picnic tables and waste receptacles. ($671,800)
ITC Community Sports Park Trail
Develop a 3,709 linear foot non-motorized trail through ITC Community Sports Park. Trailhead and trail will tie into the proposed ITC corridor regional trail to the north and Maybury State Park regional trail system to the south. Trailhead items will include bike racks, park benches, signage and information kiosk. ($439,637)
Fire Truck Replacements
The City has identified the need for replacing a ladder truck ($1.8 million), two fire engines ($1.6 million) and a tanker. ($433,335)
Update Antiquated Department of Public Works Facility
There is a lack of space for vehicles, equipment, materials and personnel at the current facility. Inadequate space for poor condition of yard circulation, storage, staging and parking areas. Lack of fixed specialty equipment, which results in waste of DPW’s operational resources. Project calls for 28,706-square-foot expansion of the main DPW building, 2,400 square feet of covered outdoor vehicle and material storage, reconstruction and rehab of existing concrete and asphalt yard pavement, conveyor system for salt dome and automated truck wash. ($7 million)
What can the millage be used for?
The millage can be used for any capital improvement in excess of $25,000. It WILL NOT be used for roads, drains or sewers, and CANNOT be used for operations or payroll.
How much would this cost me?
The approximate annual property tax increase, for CIP millage purposes, to the owner of a home having a true cash (market) value of $250,000 (taxable value of $125,000) would be $125.
How will this impact the City’s overall millage rate?
The City’s Summer 2016 tax rate is was recently lowered from 10.2 mills to 9.95 mills thanks to a one-time .2500 mill reduction to drain mills. Assuming the CIP millage is approved, the Summer 2017 tax rate will be 10.5376 mills. That rate factors in the expiration of the 2002 debt mills of .3250 and 2010 debt mills of .3374 plus the new 1 mill CIP millage for a net millage increase of .3376 mills. Even with the millage, Novi’s tax rate would remain among the lowest in Oakland County.
How long would an increase millage last?
The proposed millage would last for a period of 10 years.
If a millage is approved, when would it take effect? When would capital projects begin?
If approved, the millage would be effective on the July 2017 summer tax bill.
How will the City determine what projects will take place?
The various projects will be selected based on the goals set by City Council as well as the replacement costs associated with each project.
What if the millage does not pass?
If the millage does not pass, several of the projects will be delayed or shelved completely due to a lack of funding.