Parks & Rec Bond Background Information

Birmingham’s Parks and Recreation Master Plan ensures that the city’s 26 parks, recreational facilities, playgrounds and two miles of Rouge River trails are well maintained and appropriately upgraded, enhancing the lives of city residents and the value of our community.  Birmingham voters last approved bond funding for parks in 2001.  Those bonds were issued in 2002 and 2008, for $16.1 million and $4 million, respectively, and will be fully retired in 2024.

Birmingham’s Parks and Recreation Master Plan is updated periodically, most recently in 2006, 2011 and 2018.  The plan is updated using a comprehensive process that includes extensive public engagement, leading to a prioritized list of potential projects and estimated costs.  In addition to community input, other criteria for project selection included: project readiness, facility conditions and staff recommendations.  The potential project list covers improvements including but not limited to: numerous parks, the Birmingham Ice Arena, the Springdale Golf Course, trail system amenities, a new pickleball court and a new Splash Pad (location for both to be determined based on community input).

In November 2019, the Parks and Recreation Board recommended proceeding with the bond project priority list. In January 2020, as part of the City’s Long Range Planning meeting, a parks bond discussion took place to consider options for funding much-needed improvements. At its regular meeting of July 20, 2020, the Commission approved putting the parks bond proposal before Birmingham voters on the November 3, 2020 ballot.  The Commission approved a total bond amount of $11,250,000 which, if passed, could be issued in two series; the first in the amount of $4,750,000 in 2021 and the second series in the amount of $6,500,000 in 2024 as existing bond debt will be retired in these respective years.

If the bond is approved, the City Commission will have permission to move forward with improvements at numerous City parks, playgrounds, the Rouge River trail system, and additional amenities including potentially a pickleball court and splash pad. In addition, projects may include capital improvement upgrades within our parks system, such as an expanded irrigation system at Springdale Golf Course and new locker and meeting rooms at the Birmingham Ice Arena. Projects identified evolved from the Parks & Recreation Master Plan and from community-wide input. The bond will allow for funding to advance these and other projects.

If voters approve the bond, they will be granting Birmingham permission to move forward with planning for additional parks and recreation improvements.  Approval will initiate a renewed planning process, which will engage the community to determine the best use of bond funds and ensure all Birmingham residents benefit from the improvements. The City and the Parks and Recreation Board intend to review the projects outlined in the master plan to update, develop budget projections and sequence the projects with community input.  If approved, bond funds will support the planning work and will provide a solid framework for budgeting and implementing each project.  Every parks proposal will receive due diligence by the Parks and Recreation Board and the City Commission before moving forward.  Because parks are critical to the quality of life in our community, the City and Parks and Recreation Board are committed to ensuring full resident participation in the planning process pending bond approval in November.

Capital improvements, by definition, are large projects that extend over multiple years.  The costs cannot usually be accommodated within a municipality’s annual budget, and bonding ensures a reliable funding stream over the years.  Financing these parks and recreation capital projects through a bond issuance is comparable to a family acquiring a home through a mortgage.

The City of Birmingham presently enjoys the highest municipal credit rating available, ‘AAA,’ and a low overall debt burden.   This enables the City to take advantage of very low interest rates and a favorable environment for borrowing.

It is anticipated the total $11,250,000 in bonded funds will finance improvements to numerous City parks, plus other improvements to the City’s trail system, playgrounds, the Birmingham Ice Arena, and Springdale Golf Course. 

Yes. Well-maintained parks increase property values and the local tax base.  A Texas A&M review of 25 studies on parks and property values found that in 20 of 25 studies property values were higher with a park nearby.  Parks and recreation programs generate revenue directly from fees and provide significant indirect revenue from tournaments, events and festivals.  Economic activity from hospitality expenditures – recreation equipment sales, fuel and tourism purchases – provide on-going, sustained value to local economies.  Additionally, quality parks and recreation are cited as one of the top three reasons cited by businesses in making relocation decisions.

It is anticipated some projects could begin as early as the spring of 2021.

No.  These are separate parks and recreation funding proposals – one focused on Birmingham, the other in parks in the Oakland County system.  In August, the Oakland County Commission approved a millage proposal for county parks for the November ballot after Birmingham’s City Commission approved the City’s proposal.  It is a millage replacement and increase to improve, operate, and maintain parks, open space areas, trails, and recreation activities in Oakland County.

All funds generated by Birmingham’s Parks and Recreation Bond will go directly to Birmingham parks and recreation facilities.  If Birmingham's bond is approved, residents will see new playground equipment at many neighborhood parks, improvements to the Rouge River trails and amenities including potentially pickleball courts and a splash pad.

Information about the Oakland County Parks and Recreation Millage can be found at https://www.oakgov.com/parks/2020Millage/Pages/default.aspx.

The Birmingham Parks and Recreation Bond Proposal is the very last proposal on the ballot.  Please be sure to turn your ballot over and vote to the very end of your ballot to cast a vote on this proposal.

The following parks are highlighted areas we anticipate this bond benefiting (among other various sites):

• Adams Park
• Booth Park
• Lincoln Well Park
• Pumphouse Park
• Linden Park
• Pembroke Park
• St. James Park
• Springdale Park
• Crestview Park
• Howarth Park
• Poppleton Park
• Kenning Park

Possible Other Parks & Recreation Projects:

• Ice arena building improvements
• Pickleball courts
• River Rouge Trail improvements
• Splash Pad

If the bond is approved, development of Adams Park is slated first because a site plan and construction estimates have been developed for that project.  The Booth Park corner feature has moved into conceptual drawings and could be next given it is the final phase of work in Booth Park.  Sequencing of other projects will be determined during the renewed planning process.

The location of the new pickleball courts is to be determined based on feedback from the community.

The location of the new Splash Pad is to be determined based on feedback from the community.

The current ice facility is 47 years old and is in need of renovations due to its age and outdated site amenities.  The Birmingham Ice Arena welcomes approximately 6,500 people each year. There is a cross section of community users who rent the ice and return year after year as loyal Birmingham Ice Arena fans.  The variety of users include figure skating clubs, hockey associations, many Birmingham residents,  schools and the joint hockey teams (varsity and junior varsity) from Groves and Seaholm high schools.

The estimated $3.1 M portion of the bond for the Ice Arena improvements include the following:

• Locker Room Expansion and Remodel of Existing Locker Rooms
• Adding a Female and Team Locker Room
• New Observation Area and Meeting Room Space
• New Concession Area Upgrades

The Springdale Golf Course would receive an entirely new and improved irrigation system under the proposed plan. 

The Commission approved a total bond amount of $11,250,000 which, if passed, could be issued in two series; the first in the amount of $4,750,000 in 2021 and the second series in the amount of $6,500,000 in 2024 as existing bond debt will be retired in these respective years.

For the average homeowner with a taxable property value of $250,000, the annual cost would be $51.60, averaged over the 21-year life of the bonds.

Birmingham Parks & Recreation Bond Opportunity

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Two existing bonds will be retired by 2024: a sewer bond will be retired in 2021 and the 2001 parks bond will be retired in 2024. If approved, the new added debt will be less than retiring debt, resulting in lower annual debt service payments and lower debt millage levies.

 

No.  Two existing bonds will be retired by 2024: a sewer bond will be retired in 2021 and the second round of the 2001 parks bond will be retired in 2024.  Retiring those bonds will eliminate much of the City’s current debt burden, resulting in a net reduction in debt and a lower debt millage level when averaged over the 21-year period of the parks bond. 

No. The City Commission will determine the park improvement projects to be funded by bonds and the timing and amount of the bond issuances up to the authorized amount of $11,250,000. The preliminary plan is to issue the bonds in two series; the first in the amount of $4,750,000 in 2021 and the second series in the amount of $6,500,000 in 2024 as existing bond debt will be retired in these respective years.

Residents will see a change in their 2021 tax bill. This change will be a decrease in taxes regardless of whether or not the Parks & Recreation bond passes due to existing sewer bond debt set to expire. A second existing bond will be retired by 2024. If approved, the new debt that is added will be less than what is retiring, resulting in lower annual debt service payments and lower debt millage levies.

The City’s operating millage is near the maximum it can levy under state law (Headlee Amendment). There is no funding available in the current budget structure to pay for these improvements. Therefore, the City would have to increase the current operating millage to the Headlee maximum allowed under state law. There are several reasons why this approach is not recommended.

First, it will take longer to fund the park projects than under the bond method. Based on the City’s projected millage limitations, it would take approximately 11 to 12 years to raise the same amount of funds, not accounting for inflation, versus obtaining the necessary funding in the next year to begin implementation. Further, all projects could be completed in six years. Additionally, each year the Headlee maximum millage is reduced which could further lengthen the time to raise the required funds. The only way to generate additional property taxes is to have an election for a Headlee override which would reset the maximum millage amount the City could levy for operating purposes.

Second, levying the maximum operating millage does not provide the City with access to available financial resources should they be needed for an emergency or for other unforeseen financial obligations.

Third, levying the maximum operating millage will have a negative impact on the City’s credit rating, currently at AAA, the best available. The rating agencies not only look at the financial health of a City, but also what happens in a potential crisis. This is where the rating agencies like to see what resources are available and the ability for the City to raise additional taxes if needed.