Lansing residents to see smaller tax bill for public safety complex

LANSING – Lansing taxpayers will pay a slightly less for the new public safety campus than what voters approved last fall because of improving financial ratings for the city.

Mayor Andy Schor announced Tuesday that the city sold $175 million in bonds to fund the campus that will include the headquarters of the Lansing Police Department and the city’s jail, Lansing Fire Department, 54A District Court, a new fire station, a new fire training area and pay for improvements to other fire stations.

About 54% of voters approved a tax levy of 3.9 mills for 30 years in November, or about $153 a year on a home with a taxable value of $38,300.

City officials estimated the interest rate for 30-year bonds would be 5% when the issue was submitted to voters. Ultimately the city was able to get an interest rate of 4.11% for 25-year bonds, Lansing's Director of Communications Scott Bean said.

Schor said he recently met with two bond rating agencies. Standard & Poor's Global Ratings upgraded the city’s rating to A+ and a stable outlook; the Kroll Bond Rating Agency rated the city AA- and a stable outlook. The city's previous rating from S&P was "negative."

Bean said the agency's decision to upgrade the city's outlook was based on a more optimistic view of Lansing's local economy.

"The stable outlook reflects S&P Global’s view that Lansing's budget position is improving and that it retains flexibility with reserves and stimulus funds that can offset a lingering imbalance for a short period before the financial profile becomes more vulnerable," Standard & Poor's said in raising Lansing's rating. "Management remains committed to maintaining reserves above its 12% policy floor."

Bean also cited General Motors' continued investments in the region and increased taxable value growth.

The better financial rating reduced interest rates for the city, which now needs to levy 3.5 mills to pay off the bond obligations rather than 3.9 mills. Officials estimate annual tax costs for the millage to now be about $147 a year for the average homeowner.

“Lansing is on the right track and our financial future is bright,” Schor said. “By working with our financial team of advisors and experts, we have improved our ratings outlook, which is great news for our overall fiscal health.”

The City Assessor's office estimated the change would save taxpayers about 10% over what they approved at the ballot box, according to Schor.

Police and fire officials have said the new facility will help recruiting and retention and would make it safer and easier for the officials to work with the public.

Showing officers that the city is investing in them should help with a staffing shortage in Lansing, an issue facing most large cities nationwide, Lansing Police Chief Ellery Sosebee said after the election.

For firefighters it has been a long time coming, said Lansing Fire Chief Brian Sturdivant. He said the baseline would include separation of toxic firefighting materials from living quarters and separate living space for female firefighters.

The campus will be located on South Washington Avenue, south of Mt. Hope Avenue.

Organizers of the proposal estimate that LPD's new station will cost around $73.3 million, while the fire station replacement will cost $13.8 million. Other fire station renovations and administrative costs make up $23.6 million and the District Court's relocation will cost $33.1 million.

The proposal also has $14.4 million set aside for contingency plans and $16.6 million set aside for predicted inflation.

Organizers estimated in late October that renovations of current fire stations would begin in 2024, along with the construction of the new public safety facilities. They estimate that renovations and construction of the new consolidated campus will finish throughout 2025 and 2026.

The Lansing Police Department is contained within Lansing City Hall, as is the city’s lockup and 54A District Court. The city has long wanted to replace City Hall, and in the latest state budget officials got a one-time $40 million allocation for a new city hall, part of about $150 million in pork spread across projects in Greater Lansing. The city has not yet said how it plans to spend the funding.

This article originally appeared on Lansing State Journal: Lansing's bond rating means less in taxes for public safety complex