The Hillsdale City Council voted 8-0 to repeal a policy requiring the use of special assessment districts to fund road repairs at its March 16 meeting. 

SADs designate dilapidated roads for repair and charge residents on that road up to $5,000 per parcel. The council’s new approach is to leave SADs as an option for interested districts, but to also use alternative sources of funding. 

At the March 16 meeting, city staff presented the council with two alternatives to special assessments: raising property taxes by increasing millages or reducing costs by decreasing the scope of individual projects. 

The change comes after residents voted down the three proposed SADs for 2026, leaving the city with a $935,000 funding gap in road repair funds. 

Before the city could move forward without special assessments, the council voted to repeal the city’s previous policy, set in 2025, which required that the city use SADs to fund road repairs beyond light preventative maintenance. 

“We’re seeking updated policy direction from council on how to proceed with funding road projects,” Assistant City Manager Sam Fry said. “If special assessments are not going to be used as a funding mechanism for those three projects, then that revenue has to be replaced through another means or the scope of the projects will need to be adjusted.” 

Ward 2 Councilman Matthew Bentley said he was glad the council ended the mandate for SADs.

“It’s as encouraging that Council unanimously directed that the Oak and South street repairs be undertaken, as it is disheartening that no one on Council or staff would take responsibility for the debacle that was SADs,” Bentley told The Collegian. 

Fry said the council could consider using both of the options that city staff presented in order to bridge the funding gap. 

“We want to emphasize that these are not mutually exclusive,” Fry said. “The idea is you could use one and not the other, or potentially both, on an as-needed basis.”

The city council is able to authorize the Street Sinking Fund millage, according to Fry, which would generate an additional $310,000 annually to go toward road repair. 

“That’s something that could be levied on an annual basis by council if we needed the funds that year to complete, let’s say, a larger project or if there was a gap between the funds we had available to do a reconstruction and what the project costs were estimated to be,” Fry said. 

The Hillsdale City Charter caps millages, the local property tax rate, at 20 mills. A mill is a $1 tax for every $1,000 of a property’s assessed value. Hillsdale could levy an additional 1.4 mills under the Street Sinking Fund before reaching its maximum, according to City Manager David Mackie. 

Fry also suggested that city staff could adjust the scope of proposed road projects to help bring down the cost. 

“Really, the most practical way to reduce the project cost we came up with is to remove some of the property-enhancing features that were designed into the project scope,” Fry said.

Curb and gutter replacement, sidewalk repairs and replacement, and driveway approach replacement, all considered property-enhancing, would be cut under this proposal. These account for nearly a quarter of the cost of the 2026 special assessments, which would save the city roughly $918,000, accounting for most of the deficit. Rather than doing a full road reconstruction as was originally planned, Fry said, the city would just replace the pavement. 

“Under this approach, what we’re proposing is that affected streets would receive new pavement from curb to curb,” Fry said. “That would get us, approximately, 15 to 25 years of extended life out of those streets.”

City staff, including City Engineer Robert Stiverson and Director of Public Services Jason Blake, will approach each district on a case-by-case basis.

“Each project, as Rob said, will be different. So each road will probably need a different tweak, and Rob and Jason have been very active in reviewing these projects to make them fall within our budget, and they’ll continue to do that,” Mackie said. 

As part of scaling back the work included in the proposed 2026 road repairs, city staff suggested dropping the optional add-ons of Proctor Drive and Oak Street from Fayette to College streets. 

Ward 4 Councilman Robert Socha expressed his concern about neglecting the Oak Street add-on. He proposed that the city authorize the use of half a mill to complete the optional add-on, but the motion failed 3-5.

Bentley said the move away from SADs represents lawmakers doing the will of the city’s residents.

“Staff would be well advised to recognize that council represents the people, and waste less energy attempting to police the discourse,” Bentley told The Collegian. 

Bentley moved to direct the city to continue to look into funding options for the Oak Street add-on, which would include repaving more of the road near the Roche Sports Complex. Bentley’s motion passed 8-0.

Ward 1 Councilman Jacob Bruns said that, though he supported the plan, it was “imperfect” and would need to be revisited down the road. 

“Our road millage goes to 2031,” Mackie said. “That would be a good place to review, just because we will be reexamining the road program and whether we want to go back to voters for a millage. Or it could be done anytime in between.”