Home   Infrastructure   November 2022 Millage Proposal

On November 8, 2022 Park voters were asked to consider a millage to invest in our water and sewer infrastructure.  This page contains materials about the millage.

Resources
Official Ballot Language (page 3)
July 2022 Millage Presentation

Frequently Asked Questions (last updated 10/17/22)

Questions added 10/17/2022

How were the Water Infrastructure Projects Prioritized in the Drinking Water Revolving Fund Plan (DWRF) submitted to the State?
Three considerations were used in developing the project areas.

1. Concentration of lead service lines.
2. City-wide water pressure and reliability benefits associated with new water mains.
3. Age and condition of the street.

The City of Grosse Pointe Park placed #62 out of 110 communities that submitted applications to the FY 2023 Drinking Water Revolving Fund. Wasn’t there additional funding this year?
EGLE scores DWRF applications using the following categories:

• Compliance
• Treatment Facilities
• Storage Facilities
• Transmission facilities
• Population
• Disadvantaged status
• Consolidation
• Source water protection plans.

Grosse Pointe Park can only be awarded points in the compliance, transmission, population, and source water projection plan categories. This is because the City does not own/operate treatment or storage facilities, has a high median household income, and is already consolidated (we are a GLWA customer).

The regular allotment of DWRF funds was exhausted at application #24. There were additional funds that were awarded by for lead service line replacement activities to applications outside of the regular fundable range; however, those were only given to communities that qualified as disadvantaged.

How much will it cost to replace all water mains, rehabilitate all sewer lines, and replace all lead service lines?
It is estimated that an investment of $91 million would be required to replace all water mains, lead service lines, and rehabilitate all sewer mains. This does not include future improvements to the City’s pump stations or costs of maintenance equipment.

What will be the disruption to streets, yards etc. when service lines are replaced?
Replacing the water mains, lead service lines and lining of the sewers will require most excavation to take place in the easement between the road and sidewalk. There are a few methods that can be used with different levels of disruptiveness. Open trench requires digging up everything, while directional drilling uses a few holes in the ground. To replace the service line, they must dig where the service line meets the main, and where the stop box is located. They pull the new line through the ground from these two locations and in the basement, so the process does not require trenching through yards.

I have decorative paving or other improvements in my yard, will they be replaced/restored?
The City will be doing basic restoration and will strive to limit disruption to a minimum whenever possible.  However, it is unlikely that we will be bearing the extra cost for restoration of higher-level improvements such as expensive landscaping, blue stone pavers, etc. Those repair costs will fall to the homeowner. The City legally cannot pay for bespoke restoration work on private property.  The city will try and be as conscientious as possible of homeowners to the extent possible.

What do I need to do to prepare for lead service line replacement?
For now, nothing. You will want to make sure that your water meter remains accessible in the basement and is not blocked by walls or other obstructions. You should also keep in mind that the area around the stop box in your yard will eventually be dug up if you have a lead service line and any landscaping or hard scape improvements will not be replaced, other than with standard concrete or sod.

Will you use grass seed or sod for any lawn that is torn up?
If a small area is affected grass seed will be used but if the project has significant yard disruption, we will replace with sod.

Why do we need to replace the water mains, they have worked for 100 years?
Water mains have currently exceeded their life expectancy at 80 years.  Operating beyond end of life can lead to increasing risk of failure and breaks over time, risk of failure when tapping old mains multiple times for lead service line replacement, disruptions of service or service quality, reduced water flow impacting fire hydrant pressure, and/or water discoloration due to corrosion and iron buildup.

If you were to receive funding for Lead Service Lines through the State will this assist the city?
Yes, we can then prioritize more on water mains and sewer work throughout the duration of the millage.  The millage and planned projects allow for adjustments and acceleration of work if additional funds are secured.  

Can I get a credit or reduce my millage portion if I have a copper service line, I already replaced my private lead service line or the water main and sewer was replaced or repaired on my street?
Grosse Pointe Park is appreciative of any and all independent actions modernizing our collective system.  Unfortunately, given the scope of what remains before us, we cannot provide a credit for these individual homeowner actions.

Questions Regarding Financial Reasoning for a Millage (updated 8/29/2022)

Why is a water/sewer infrastructure millage on the November 2022 ballot?
The City of Grosse Pointe Park is a mature city; the vast majority of its water/sewer infrastructure was built in the 1920s. Sewer and water mains, largely comprised of cast iron and vitrified clay, have an identified service life of approximately 80 years. Our community has experienced first-hand the challenges of aging infrastructure through frequent water main breaks, pressure issues while fighting fires, and a sewer system that struggles to handle major storm events. These events that are only expected to increase in frequency. The City Council has heard the concerns of our community and is committed to investing in infrastructure. This investment is necessary to ensure our infrastructure can meet the needs of our community both today and one hundred years from now. The City cannot afford to continue to bear the financial and operational burden that comes from service interruptions and system failures. 

What would the millage pay for?
The millage would allow for the City to make substantial and proactive investments in our water and sewer systems. These include:

• Funding an annual water main replacement program which increases the reliability of the water distribution system.
• Investing in the resiliency of our sanitary and storm sewer systems. Work could include lining of sewer pipe, separating alleyways, and replacing/upgrading our sewer pumping stations.
• Funding our annual required replacement of lead service lines.

Delays in undertaking these projects would result in greater financial cost to the City and more service disruptions to residents. A millage approval in November would allow the most proactive and aggressive stance for the City to begin undertaking this necessary and critical work.

May funds from the millage be used to support other City services such as recreation or general City operations?
No. All money collected from the millage may only be used for improvements to the water and sewer systems and the maintenance thereof. If approved, the funds would be tracked separately from other funds.

Who decides what projects the funds are spent on?
The City administration, Public Works, and outside consultants are constructing a long-term capital improvement plan to act as a guiding document for future planning.   This long-term capital plan is being structured so there are sets of projects going forward over multiple years. This will allow the City to rapidly adjust the scope or timeline of work based on the possibility of additional funds through federal or state grants and the changing conditions of the water and sewer systems.

Why not take out a bond and fix everything at once?
Interest rates have increased dramatically under current market conditions. Future rates are uncertain at best and expected to rise at worst.  A bond would result in significant interest payments and the total cost to residents would be greater, especially when considering a larger scope of work. The current supply chain and market conditions make it logistically difficult to construct a City-wide rebuild, will require the City to buy labor/materials at a premium, and carry a risk that borrowed funds would be insufficient once bids are received. The best way to begin addressing the magnitude of our infrastructure needs will require a measured and data-driven approach in identifying the projects that carry the greatest benefit for the community. It is simply not practical to plan to replace our infrastructure all at once.

If taxes are not used to currently fund the water/sewer systems, why are they being considered now? How much would water rates need to increase to generate the same amount of funds as the millage?
To address just the most critical infrastructure projects, a significant amount of new revenue is required. It is estimated that at a minimum a 30-40% increase in water/sewer rates would be needed to raise the equivalent funds as the proposed millage. This magnitude of a rate increase would disproportionately impact lower income residents, which would be compounded with the current environment of historic inflation.

Why not finance the improvements through special assessments?
A special assessment is a justifiable financing mechanism which may be used on projects where only a select few properties benefit from the infrastructure improvement. However, the projects contemplated by this millage are largely improvements to the existing water and sewer system specifically designed to benefit the community as a whole. Given this, special assessments are not an option for financing.

Why is the millage only 2.5 mills (approx. $17.5 million dollars over 10 years) if we have so many infrastructure needs?
We are acutely aware of what a request for an additional millage means for our residents.  The 2.5 mills correlates with the tax burden homeowners experienced in the past. In 2018, the road millage was 0.75 mills higher, and the minimum equivalent mills of the sewer separation charges was 1.8 mills, for a combined total of 3.5 mills. This means that homeowners on average would still be paying less in equivalent mills with the infrastructure millage than they were in 2018. See below for a calculation.

• A: 2018 City Tax Rate: 18.42 mills
• B: Equivalent mills of the lowest separation charge for average property value: 1.8 mills
• C: A+B= 20.23 mills
• D: 2022 City Tax Rate: 16.51 mills
• E: 2022 City Tax Rate + Proposed Millage: 19.01 mills
• C-E=1.22 mills

Furthermore, as it is not practical to replace everything all at once, we believe that this amount will allow us to begin consistent annual upgrades of our system. These upgrades will not only stabilize the aging system, but also allow a continuous reduction in maintenance costs, improve service to residents, and keep the City compliant with regulatory mandates. This conclusion was determined through consultation with the City team as well as our outside partners.            

Additionally, we are aggressively seeking grants and funding from state and federal government and other entities; this is coupled with income from water rates.  Together these factors allow us to create an infrastructure capital improvement plan.

Has the City used a millage for infrastructure before?
Yes, in 2014 the voters approved a road millage and subsequently extended it in 2018. The City’s roads are rated using the PASER method. This is a numerical rating system where a road is assigned a value from 1 to 10, with 1 being a failed road and 10 is a newly constructed road. The City enjoys an average PASER rating of 7/10, which is considered “GOOD” condition. From just 2020 to 2021, millage funds were used to increase 3.49 centerline miles (6.98 lane miles) from “POOR” to “GOOD.” This is 9.5% of all roads within the City.

The road millage has received strong community support and has proven to be an effective way of maintaining and enhancing our roadway infrastructure. The City intends to use the proceeds of the water/sewer millage just as successfully as it has the road millage.

If the millage were approved, when would it take effect? When would infrastructure improvements begin?
If approved, the increased millage would be effective on the December 2022 winter tax bill. The current dynamic infrastructure plan would allow scheduling and planning to occur immediately after the passage of the millage, with construction beginning in spring. Additional projects would be immediately incorporated into future fiscal year budgets.

How much would this millage cost me?
If the City levies 2.5 mills, the owner of a home with an average market value of $340,000 (taxable value of $170,000) would pay an additional $425 in property taxes per year for 10 years. To determine your exact cost, review your current Notice of Assessment, Taxable Valuation, and Property Classification and multiply the 2022 taxable value by 0.0025.

If the millage is not approved, what will happen?
If the millage is not approved, the City will continue patching water mains instead of replacing whole sections of water mains. In the last 10 years, the City has lost over 1 million dollars due to water main breaks, and this will likely rise as infrastructure continues to age. Any proactive maintenance of sewers including lining, improvements to the Patterson Park Pump Station, and manhole rehabilitation will have to pause until other funding is provided.

Significant increases to water/sewer bills will need to be considered to replace the City’s aged water and sewer infrastructure and comply with the State’s unfunded mandate to replace all lead service lines. 

Why are you requesting a 10-year millage?
When putting the millage language together, many factors were considered in choosing the initial term of 10 years. First, City voters have favored 10-year terms before, such as with the Public Safety Millage. Second, when considering potential changes in infrastructure costs over time, it was thought that a 10-year term was more beneficial than a longer one in case the millage rate needs to be reevaluated. The uncertainty in future costs beyond a 10-year period was deemed too risky to seek a longer term. Third, millages are often reduced over time through a process called a “Headlee Rollback.” As property values have risen quicker than inflation (which they have historically done in the City), the millage rates are required to be reduced. With a longer term, there is a higher likelihood of the millage rate having to be reduced. For example, the voters originally approved a 2.75 mill Public Safety Millage in November of 2018. In 2022 this millage has already been reduced to 2.59 mills, a 6% reduction.

Questions about Grosse Pointe Park Infrastructure Needs

What is the average life expectancy of a water/sewer main?
Nearly all of the City’s existing water mains are cast iron which has a lifespan of 80 years. Almost all of the City’s water mains are over 80 years old. The City’s sewer mains are a combination of vitrified clay pipe, brick, and concrete, all of which have a similar lifespan to cast iron, and nearly all have exceeded their life expectancy. Having a system that has exceeded its life expectancy leads to reliability issues, and a significant amount of our non-Great Lakes Water Authority (GLWA) budget is spent on repairs. The millage would fund water/sewer main replacement using PVC piping which has a life cycle of 100+ years.

Why does the City have to replace Lead Service Lines?
The State of Michigan recently adopted new lead and copper rules that require cities to remove and replace lead service lines at public cost. The service line is the pipe that runs from the water main into the house. These replacements must be completed within 20 years.

Does the City have a problem with lead levels in our water?
No. Our water quality meets and exceeds all Federal and State standards, including lead levels. Replacing lead service lines will eliminate lead from our water system, but in the meantime, residents can be assured that our water quality is good. Refer to the following link for the latest water quality report for the City of Grosse Pointe Park: Click Here.

I already know that my service line is copper. Can it remain?
Yes, any copper service lines will remain. Galvanized steel lines (if currently or previously connected to lead) and all lead lines will be replaced.

When is the last time the City completed a water main replacement project? 
The City completed water main projects in 1984 at Cadieux North of Jefferson and in 1985 at Jefferson and Somerset. Since this time, the City has relied upon patching water main breaks, and as the mains are past their life expectancy, the frequency of the breaks is increasing.

Questions about Grosse Pointe Park Current Finances

Why aren’t the taxes I pay enough?
Only 33% of the taxes paid by homeowners stays with the City. The rest is sent to the State, County, the local school district, and other entities. Currently, no taxes are used to support the water and sewer systems. Additionally, much of our capital needs stems from the age of our water and sewer systems, the vast majority of which were installed in the 1920s. Repair and maintenance work funded by water/sewer rates is no longer adequate to meet our needs.

How do my taxes compare to the other Grosse Pointe communities?
Grosse Pointe Park currently has the lowest city property tax rate of all the Pointe communities.

City	2022 Total City Millage Rate (General + Special Millages)
Grosse Pointe Shores	18.7031 mills
Grosse Pointe City	16.9194 mills
Grosse Pointe Woods	16.7360 mills
Grosse Pointe Farms	16.7156 mills
Grosse Pointe Park	16.5137 mills

 

What is the City’s current budget for water and sewer infrastructure?
Water and sewer rates generate approximately $5.7 million in annual revenue. Of this, $3.4 million or 60% is used to purchase water supply and sewage treatment services from GLWA. The remainder is largely dedicated to personnel, equipment, and repair costs associated with maintaining the water and sewer systems, including the pump stations.

Why not use the Water/Sewer Fund Reserves?
Currently the City has roughly $1.8 Million in Water/Sewer reserves. The City has projects planned this year that will reduce that amount to roughly $1.1 Million. This remaining balance will be saved for severe emergencies and represents 16% (or two months) of our annual water/sewer fund expenditures.

Planned projects for this year include our annually required lead service line replacements, water main replacement on Mack Ave between Cadieux and Three Mile, water main replacement and sewer separation at St. Clare of Montefalco, and sewer separation in several alleyways, including behind the new Public Works building.

Are we eligible for federal, state and other grants that can assist us in meeting our infrastructure needs?
The City continues to seek outside funding sources for assistance; however, the challenge is competition from other communities seeking the same funding. In the last two years, the City has applied for the State Drinking Water Revolving Loan Fund (DWRF) and has been scored 88th and 55^th, placing the City outside of funding range by the State.

Grosse Pointe Park is a community with an above average median household income. This significantly reduces our ability to score high on applications for state loans and grants. Competition for the DWRF program is tough. In 2021, $250 million was available and 78 municipalities requested $768 million.

In addition, the DWRF program is a loan program, albeit one with a low interest rate of 2%. The City’s denied application would have required the average utility bill to increase by $66 or $396 per year. This would have been for a period of 20 years and would only have addressed some water mains, lead service lines, and meters. There is a loan program for sewer improvements, and this is a funding source the City will pursue after analyzing the data from the recently completed sewer televising and cleaning program. However, the scoring method is similar to the DWRF program, which places Grosse Pointe Park in a disadvantage.

The City applied for the FEMA Building Resilient Communities Grant for funding of the Extreme Emergency Relief Valve, but was not awarded funding. Only 53 out of 788 applicants nationally were awarded funding. 

The City will continue to apply for State funding in the loan program for water and sewer. If a project is awarded funding from the State or Federal Government, it would take more than a year to start the project after all approvals and regulatory compliance are reached.