(A) Development plan. The development plan for the development area, prepared in accordance with § 17 of the Act, is set forth in § 154.36.
(B) Detailed explanation of the tax increment procedure.
(1) Tax increment is a procedure which allows newly created value within the development area to be captured by the Downtown Development Authority, rather than by other units of government which normally receive property tax revenues. It is not a raise in tax rates. It does not reduce the amount of revenue available to other units of government, but it does restrict the increase in revenue that those units of government might receive if property values in the development area increase. At a time as the purposes of the tax increment financing plan are accomplished, the tax increment financing plan may be abolished by the governing body; except that, the tax increment financing plan may not be abolished until the principal of, and interest on, any bonds issued pursuant to § 16 of the Act have been paid of funds sufficient to make the payments have been segregated. At a time as the tax increment financing plan is abolished, the tax increment revenues which have been captured by the Authority pursuant to this tax increment financing plan will revert proportionately to all taxing jurisdictions with property in the development area.
(2) The tax increment financing procedure as outlined in the Act requires the adoption by the township, by ordinance, of a development plan and a tax increment financing plan. Following the adoption of that ordinance, the Township and County Treasurers are required by law to transmit to the Authority that portion of the tax levy of all taxing bodies paid each year on the "captured assessed value" of all eligible real property located in the development area. The amounts so transmitted are hereinafter referred to as "tax increment revenue". The
CAPTURED ASSESSED VALUE is defined as the amount in any year by which the current assessed value as equalized, of all eligible real property in the development area (including the assessed value that appears on the tax roll under Pub. Act 198 of 1974, as amended, Pub. Act 255 of 1978, as amended, Pub. Act 224 of 1985, or Pub. Act 438 of 1976, as amended) exceeds the assessed value, as equalized, of all eligible real property in the development area as determined on the assessment roll of the township then in effect on the date of the approval of the ordinance. The assessed value as of 12-31-1987 of all real property in the development area ("initial assessed value") $337,985.85. While the act permits the Authority to capture that portion of the tax levy of all taxing bodies paid each year on the captured assessed value of all eligible personal property located in the development area, this tax increment financing plan specifically excludes the capture of personal property taxes.
(a) Preparation of base year assessment roll.
1. Within 60 days of the effective date of the ordinance adopting the tax increment financing plan, the Township Assessor shall prepare the initial amended base year assessment roll for the addition to the development area. The initial base year assessment roll shall list each taxing jurisdiction in which the development area is located, the initial assessed value of the development area on the effective date of this chapter and the amount of tax revenue derived by each taxing jurisdiction from ad valorem taxes on the property in the development area.
2. The Township Assessor shall transmit copies of the initial base year assessment roll to the Township Treasurer, County Treasurer, the Authority and each taxing jurisdiction, together with a notice that the assessment roll has been prepared in accordance with this tax increment financing plan, and the development plan, approved by this chapter.
(b) Preparation of annual base year assessment roll. Each year, within 15 days following the final equalization of property in the development area, the Assessor shall prepare an updated base year assessment roll. The updated base year assessment roll shall show the information required in the initial base year assessment roll and, in addition, the captured assessed value for that year. Copies of the annual base year assessment roll shall be transmitted by the Assessor to the same persons as the initial base year assessment roll, together with a notice that it has been prepared in accordance with this tax increment financing plan and the development plan.
(c) Establishment of project fund; approval of depository. The Treasurer of the Authority shall establish a separate fund which shall be kept in a separate depository bank account or accounts in a bank or banks approved by the Director of Finance of the Township, to be designated Authority Fund. All moneys in that fund and earnings thereon shall be used only in accordance with this tax increment financing plan and the development plan.
(d) Payment of tax increment to Downtown Development Authority. The Township and County Treasurers shall, as ad valorem taxes are collected on the property in the development area, pay that proportion of the taxes, except tor penalties and collection fees, that the captured assessed value bears to the initial assessed value to the Treasurer of the Authority for deposit in the project fund excluding millage specifically levied for the payment of principal and interest approved by electors or obligations pledging the unlimited taxing power of the particular local governmental authority. The payments shall be made on the date or dates on which the Township and County Treasurers are required to remit taxes to each of the taxing jurisdictions.
(C) Bonded indebtedness.
(1) The maximum amount of bonded indebtedness to be incurred by the DDA and/or the township for all bond issues, for projects listed in the development plan, or loans, including payments of capitalized interest, principal and required reserve shall be $8.2 million. This $8.2 million limitation only applies to bonds issued solely in the name of the DDA and bonds issued jointly with the township or any other governmental unit or agency may exceed this limitation if allowed by the financial advisor and bond counsel. Actual bonded indebtedness to be incurred will be limited by the amount of revenues anticipated to be received each year that will be available for servicing the debt load. The bonded indebtedness proceeds will be sufficient to pay the estimated costs of the development, plus any associated costs of accompanying professional services prior to March 31, 2064. The township must approve any bonds or indebtedness, which pledge the full faith and credit for the township. The Township Board may deny approval of loans or bonding for the projects in the township’s name without any legal recourse by the DDA.
(2) Because a project is listed in the development plan shall not guarantee that the project will be implemented.
(D) Duration of the program. The development/tax increment financing plan as amended by this chapter shall expire at the end of DDA fiscal year 2064. The Township Board may amend or modify the duration of the program in time in the future as allowed by law. As future development activities are within all or part of the development district are needed or identified, are feasible and meet the eligibility requirements of the Act, this term may be extended by an amendment to this code and an amendment to the township’s DDA development plan and tax increment financing plan as amended or modified in the future by ordinance of the governing body and attached to the ordinance codified herein as Exhibit B and is incorporated by reference hereto.
(E) Statutory compliance. This tax increment financing plan shall be administered in compliance with § 15 of the Act, being M.C.L.A. § 125.665. The section includes, among others, requirements that:
(1) The Authority shall expend the tax increments funds received for the development plan only pursuant to this tax increment financing plan, and surplus funds shall revert proportionately to the respective taxing bodies;
(2) The tax increments received by the Authority shall not be used to circumvent existing property tax limitations;
(3) The governing body may abolish this tax increment financing plan when it finds that the purposes for which it was established have been accomplished; provided that, the tax increment financing plan may not be abolished until the principal of, and interest on, bonds, if any, issued pursuant to § 16 of the Act have been paid or funds sufficient to make payment have been segregated; and
(4) Annually, the Authority shall submit to the governing body a report on the status of the tax increment financing account which report shall include the information required by § 15(3) of the Act and shall be published in accordance with the requirements of that section.
(F) Estimated impact on the assessed values of all taxing jurisdictions in which the development area is located. The assessed value in the original downtown development authority district is $9,972,450. The assessed value in the expanded downtown development authority district is $54,919,752. The tax increment financing plan will not reduce the assessed valuations of any of the taxing jurisdictions, as it captures only taxes on newly created property values. Inasmuch as the development plan is intended to provide for the orderly development of the development area, which should benefit areas not included within the development area as well, the long term impact on assessed valuations should be to arrest current deterioration of property within the area and preserve, if not increase the values of property both within and adjoining the development area. Consequently, the long term impact is to benefit the affected taxing jurisdictions.
(G) Portion of captured assessed value to be used.
(1) The estimated cost of the activities enumerated in the various development stages contemplated by the development plan is established herein, as amended or modified in the future by resolution of the governing body and attached to the ordinance codified herein as Exhibit B and is incorporated by reference hereto.
(2) The tax increment revenues generated by the development area pursuant to the development plan, as it now exists or is hereafter amended, will be used to pay for all or a portion of these activities which include:
(a) Payment of administrative and operating costs of the Authority and township for the development area, including planning and promotion, to the extent provided in the annual budget approved by the township;
(b) Payment, to the extent deemed desirable or necessary by the Authority as determined by its inclusion in its annual budget, of the costs of any studies contemplated by the development plan;
(c) Payment, to the extent deemed desirable or necessary by the Authority as determined by its inclusion in its annual budget, of the costs of any of the public improvements contemplated by the development plan to the extent those improvements are not financed by the participation of the federal and state governments, private grants, and/or in-kind donations;
(d) Payment, to the extent deemed desirable or necessary by the Authority as determined by its inclusion in its annual budget, of the costs of any of additional improvements, public or otherwise and including assistance to “distressed properties” in the development area deemed desirable by the authority, as contemplated by the development plan in furtherance of the development plan on an actual cost basis, including overhead;
(e) Reimburse other units of government for services performed in the furtherance of the development plan on an actual cost basis, including the cost of overhead;
(f) Reimbursement of the township for funds advanced to acquire property, clear land, make preliminary plans and construct improvements necessary for the development of the development area in accordance with the development plan;
(g) Payment, to the extent deemed desirable or necessary by the Authority as determined by its inclusion in its annual budget, of the costs of hiring staff, legal counsel, certified public accountants and other professional assistance, as deemed necessary and appropriate by the authority in accordance with the tax increment financing plan for the development area;
(h) Payment, to the extent deemed desirable or necessary by the Authority as determined by its inclusion in its annual budget, of the costs of hiring appropriate consultants, engineers, legal counsel and the like for the purpose of implementing the development plan; and
(i) Provide for the safety of individuals, business owners, and businesses in the DDA District by providing law enforcement protection, fire protection and any other services that are public safety in nature.
(3) The tax increment financing plan contemplates the use of the entire captured assessed value by the Authority.
(Ord. 89-6DDA, passed 5-1-1989; Ord. 93-4-DDA, passed 8-16-1993; Ord. 02-02-DDA, passed 5-21-2002; Ord. 06-09 (DDA), passed 7-21-2006; Ord. 09-03 (DDA), passed 9-15-2009; Ord. 14-10, passed 12-10-2014)