Tecumseh roads millage renewal to go before voters in November

TECUMSEH — Voters in the city of Tecumseh will be asked in November to renew a millage that has been used to resurface many streets in recent years .

This will be the second renewal request for the millage, which Tecumseh officials sought 10 years ago due to inadequate funding for street repairs that is provided through the state's gas tax. This time around, the city council has directed the administration to explore capping the millage at 1.75 mills for another five years. The current millage has a cap of 2 mills, though city manager Dan Swallow said Monday the city has never had to levy the full amount to cover the bond payments each year due to the value of property within the city and how much it has increased each year. This year, the city will levy 1.4061 mills for the road millage.

The city has identified about $3.4 million in street and bridge projects that would be completed if this millage is passed. That amount includes the expected interest on the bonds and the administrative costs associated with selling them. A 1.75-mills tax would collect about $3.3 million. All of streets on the list are rated poor to fair on the rating system used to evaluate asphalt pavement.

If approved, the owner of property with a taxable value of $100,000 would pay $175 per year, if the city levied the maximum amount.

Like the previous millage requests, the council members expressed a preference to finance the proposed road work by selling bonds. Swallow told the council that he will ask the city's financial advisers what kind of interest rate the city can expect before the council makes a decision on whether to sell bonds or perhaps use the funding to pay as the millage is collected and the work can be completed.

Swallow told the council that in the current financial climate the city cannot expect to get as low of a rate as the 1.7% it pays on the bonds issued through the 2019 millage renewal. However, the city should get a favorable rate due to its A-plus bond rating. Swallow estimated it would be around 3% to 4%, if not a little more.

Still, even with the expected interest payments, Swallow and public works superintendent Troy Rohrbach told the council it is financially advantageous to sell bonds because that will allow the city to bundle the individual streets into a larger bid package, which will allow whichever contractor is awarded the work to complete it in the first two years after the vote.

"We've been lucky to get very good bids when we put out larger contracts," Swallow said. "…They're going to be less interested in two or three streets."

"They'll come in and do those two or three streets, but they're going to charge you quite a bit more money," Rohrbach said.

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Council member Brent Gnodtke said doing the work more quickly also avoids higher labor costs that can be expected if the work is done more than a couple of years from now.

Council members said their perception is that 1.75 mills would be easier to sell to voters than 2 mills, particularly since it is a renewal and at a lower possible maximum rate.

"Everybody seems to be really happy with what's been going on the last five years," council member Austin See said. "I'd be happy with either 2 mills or 1.75 mills, but if it's easier to pass 1.75 mills and 2 mills is a gamble, I'd rather see 1.75 mills."

Some council members expressed concern about the Tecumseh school district also having a millage request on the November ballot and how that might affect voters' attitudes. The school district will be asking voters to approve a 1.75-mills levy to create a sinking fund to pay for building projects, such as repairs to the community pool building.

Originally, the schools intended to place a bond issue on the August ballot to specifically address the pool building, but when their attorneys told them the state wouldn't let them pay for the pool repairs with a bond issue, they decided to seek a sinking fund, which could cover the pool building repairs. That delay caused them to miss the deadline to place the proposal on the August ballot.

"That was a consideration I had, but that wouldn't stop me from seeking this," Mayor Jack Baker said.

"I agree, but I'm thinking of the residents out there: How many millage increases am I looking at?" council member Ron Wimple said.

Baker said the council's reputation with managing the city's finances shows the residents trust them with the road millage.

Each year, the city receives about $890,000 in state funding to pay to pay for work on what the state classifies as major streets, such as Maumee and Adrian streets, and $313,000 for local streets, Swallow told the council. That money is used to pay for maintenance work, such as snowplowing and crack sealing; buying salt and other supplies; renting equipment; and paying the associated labor costs. After the maintenance is paid for, the city has about $114,000 left over for resurfacing major streets. The local streets funding does not cover the $576,000 in annual maintenance costs.

In 2023, it cost $42 per linear foot of roadway to do mill-and-fill resurfacing, where the top couple of inches of asphalt is removed and a new layer is applied to the street. That does not include replacing the curbs and gutters. With $114,000, the city can repave about 2,714 feet of roadway, which means it would take about 32 years to repave all of the major streets.

— Contact reporter David Panian at dpanian@lenconnect.com or follow him on X, formerly Twitter: @lenaweepanian .

This article originally appeared on The Daily Telegram: Tecumseh roads millage renewal to go before voters in November