Possibility to bond to improve Birmingham parks
Birmingham City Manager Joe Valentine explained to city commissioners at their meeting on Monday, June 4, that a funding opportunity has arisen to take advantage of the city's financial position and reinvest in the city's parks through a parks and recreation bond, and commissioners unanimously directed the parks and recreation board to review their 2018 master plan's five-year capital improvement plan and prioritize projects so the city can issue a $20 million bond proposal for voters to approve.
“There's a unique opportunity,” Valentine said regarding the parks and recreation master plan, which the commission adopted in March of 2018 to “plan for future park improvement projects and comply with the Michigan Department of Natural Resources (MDNR) best practices. Adoption of this plan also makes the city eligible for MDNR grants as they become available.”
He said the plan outlined several park improvements with costs of several million dollars, but city funding limitations have “have relegated these parks improvements primarily to grant availability.”
During the annual budget process this spring, he said staff identified an additional funding option – bonding to raise the needed capital.
“Just about every park needs a touch up,” he said, noting some parks and facilities haven't had renovations since the 1990s. “The city is AAA-bonded, we have low debt, and municipal bonds are attractive and allows us to do it in the short term. The last parks and recreation bond was authorized in 2001.”
He said currently, the city's bond capacity is 10 percent of its total assessed valuation.
“Currently, we have utilized about six percent of our debt limit as of June 20, 2017,” Valentine said.
The city will begin having diminishing bond obligations, with sewer bonds paid off in 2021-2022; and in 2023-23, the last payment on the first parks and recreation bond will be paid off.
He said if there is bonding for a new parking structure, that would be paid off from the parking system revenues, which is not park of the city's debt.
He asked commissioners to direct the parks and recreation board to review the 2018 parks and recreation master plan five-year capital improvement program and determine which parks facilities need improvements, and to conduct public engagement programs. It would then be brought back to commissioners for final approval, along with ballot proposal language to ideally be put on the November 2018 ballot, Valentine said.
However, to be approved for the November election, ballot language would have to approved by Oakland County by early August.
Commissioner Rackeline Hoff asked if Valentine had any thoughts about bond amounts. He said between $10 and $12 million, for projects which could be completed in a five-year time line.
“I think it's a very good idea, but I would not suggest the parks and rec board rush this for August for the November ballot,” Hoff said. “I think this should take some time.”
Other commissioners agreed, noting it might not make the November ballot.