Sterling Heights adopts $319.9 million budget, approves 17.5323 millage; debates $40M bonding for parks plan

Sterling Heights City Council on May 6 adopted the 2025–26 annual appropriations ordinance setting a total property tax levy of 17.5323 mills and a total fund budget of $319.9 million, including $56 million tied to the voter-approved Pathways to Play & Preservation (PPP) millage.

Finance and Budget Director Jennifer Varney presented the budget during the required public hearing and said the general fund budget totals $133 million, a 2.8% increase largely driven by personnel costs, police and fire pension contributions, and health insurance. "The proposed city millage rate for the tax year of 2025 is 17.5323 and it's due to the 0.95 millage increase due to the voter-approved pathways to play and preservation millage," Varney told the council.

The ordinance preserves funding for public safety positions, Fire Station 5 renovations and a jail facility renovation, and allocates $12 million for major road improvements. It also includes $5.6 million in annual revenues from the PPP millage and a planned use of fund balance of $1.3 million. Varney said the city continues to maintain a healthy general fund balance of about $39.2 million, roughly 30% of expenditures.

Why it matters: Council and the public debated the city’s plan to issue bonds — previously authorized by council — to front-load PPP projects now rather than pay-as-you-go. Varney said the city has authorized bonding of up to a "not to exceed" $42 million for PPP and that staff currently estimate borrowing about $40 million to accelerate projects, with annual debt service estimated at roughly $3.6 million and a 15-year term. Councilman Yanez questioned the interest cost and the long-term burden: "We're going to borrow the money and pay interest on that. I know I don't know that that's a good expenditure of our our dollars," he said.

Supporters of bonding, including Councilman Radke and Mayor Taylor, argued front-loading projects provides residents immediate access to amenities and protects against future inflation-driven cost increases. Radke said the bond payments are tied to dedicated millages, limiting general fund exposure, and Mayor Taylor said, "there's an incredible value to the residents by front loading as many of these projects as we can." Opponents warned about mounting debt service and uncertainty in future economic conditions; Yanez said he had not decided how to vote until roll call.

Council action and vote: Councilman Radke moved to adopt the annual appropriations ordinance and the millage schedule (operations 9.494 mills; refuse 1.2462; police & fire pensions 2.5803; safe streets 2.3542; recreation 0.9137; pathways to play & preservation 0.9439; total 17.5323). On roll call the measure passed 5–1 (Councilman Yanez voted no). Varney and staff noted the PPP bond amount will be finalized when project estimates and engineering are complete and bonds are issued.

Other items tied to funding: The budget funds a fire engine, 17 police vehicles, a first-responder drone program, a zoning rewrite, ADA bleachers at Donovan Park, and several pathways-to-play projects. The council also approved a $40–$45 million potential future bond for Lakeside site development in a separate action; staff noted that Lakeside bonding would be paid from tax increment capture tied to the Lakeside development rather than general property tax millage.

What's next: The appropriations ordinance is effective for fiscal year 2025–26. Bond issuance timing and the final PPP borrowing amount will be determined once engineering estimates and market conditions are known. Council asked staff to provide more detailed amortization and interest projections before final bond issuance.