Ann Arbor DDA approves parking agreement and repayment of $473K in excess tax revenue
The Ann Arbor Downtown Development Authority voted today to approve a new parking agreement with the city of Ann Arbor that will include a broad transfer of duties from the city to the DDA regarding parking management in Ann Arbor.
The board also voted to return about $463,000 in excess tax revenue to local taxing jurisdictions.
The parking agreement approval came with an amendment: the city will get 17 percent of parking revenue from the DDA if the city agrees to underwrite DDA obligations, providing a financial backstop if the group’s fund balance gets too low.
Concerns arose regarding the DDA fund balance—a reserve fund containing money that has not been budgeted—after a discovery in early May that the DDA owed money to local taxing jurisdictions from excess tax revenues.
The Ann Arbor DDA, pictured at a meeting in April, voted to approve a parking agreement with the city and to pay local taxing jurisdictions $473,000 in excess tax revenues.
According to an unobserved city ordinance, the DDA, which is partially funded through tax-increment financing downtown, collected more money through TIF than it should have been allowed to keep.
The city code reads, "If the captured assessed valuation derived from new construction, and increase in value of property newly constructed or existing property improved subsequent thereto, grows at a rate faster than that anticipated in the tax increment plan, at least 50 percent of such additional amounts shall be divided among the taxing units in relation to their proportion of the current tax levies."
According to a previous report, DDA officials acknowledged TIF income has grown to nearly $4 million annually since 2002 due to new developments downtown.
This prompted an excess TIF capture of over $1 million, which the DDA will now partially return to three local taxing jurisdictions. Washtenaw County will receive about $242,000, Washtenaw Community College will receive about $156,000, and the Ann Arbor District Library will receive about $75,000.
Although the DDA would also owe the city about $700,000, the resolution acknowledged that the city of Ann Arbor has already effectively been paid through grants the DDA has given to the city amounting to more than $7.5 million.
The payment will occur before the end of June, according to the resolution.
The term of the parking agreement that was approved by the DDA is through June 2033, with a clause that allows either the DDA or the city to opt out after 11 years. The agreement still has to be approved by the Ann Arbor City Council.
Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at or 734-623-2584 or at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.
Comments
genericreg
Sat, May 21, 2011 : 2:38 p.m.
so much embezzlement here. now just like parking structure city backs dda mistakes. city sue dda, dda have legal oblication city agreed to back. city pay for dda defense against city. corrupt, corrupt.
David Cahill
Sat, May 21, 2011 : 2:37 p.m.
Cognoscenti of esoterica should check out Michigan Compiled Laws 125.1665(2), which is included in the state act governing all downtown development authorities. It says in part: "The authority shall expend the tax increment revenues received for the development program only pursuant to the tax increment financing plan. Surplus funds shall revert proportionately to the respective taxing bodies." Our own DDA has a duty to return all surplus funds. Neither the DDA nor the City Council has the power to say the DDA will only return part of the funds. It appears from this article that the other taxing bodies should get more than the DDA says it will give them.
SonnyDog09
Sat, May 21, 2011 : 12:51 p.m.
So, the DDA broke the law. Who from the DDA will be going to jail for that?
Carole
Sat, May 21, 2011 : 12:34 p.m.
Frankly, I believe that the DDA should be dissolved, all funds should be going to the city to provide the marvelous city of Ann Arbor with what is "really" needed. That is what the Administrators of Ann Arbor should be doing! There are just too many layers and tax payer dollars going into the pockets of too many administrators. Troubled by the fact that DDA will approve 17% parking fees being returned to the city only if the city will underwrite DDA financial obligations get low. It appears that they have no problem obtaining funds, but have somewhat of a difficult time of fulfilling their obligations of distributing overages to the three taxing jurisdictions. I would love to see extremely competent independent auditors come in and do a complete audit of the city, DDA, and AAPS. When I was working with tax payers dollars, was audited at the end of each year -- never failed any.
Dog Guy
Sat, May 21, 2011 : 12:34 p.m.
This dance with one's shadow reminds me of W. C. Fields' juggling act, but with buckets.
snapshot
Sat, May 21, 2011 : 4:21 a.m.
This is even more reason we need independent auditors. The County Commissionors are questioning why we should spend money on an independent audit.......Commissionors.....this is why! Too many middlemen in Michigan government. Let's start streamlining....no DDA, fewer legislatures, eliminate Townships, and just have cities and counties with state representation.
Edward R Murrow's Ghost
Sat, May 21, 2011 : 12:03 a.m.
"This prompted an excess TIF capture of over $1 million, which the DDA will now partially return to three local taxing jurisdictions. Washtenaw County will receive about $242,000, Washtenaw Community College will receive about $156,000, and the Ann Arbor District Library will receive about $75,000." Why a partial repayment? Wonder if I can get away with a partial repayment of my debts? Time to dissolve the DDA. Good Night and Good Luck
Edward R Murrow's Ghost
Sat, May 21, 2011 : 1:12 p.m.
I thought that, too, but that's not what the article says. If it's what it means, it is very poorly written. But, I guess, that wouldn't surprise. Good Night and Good Luck
Brian Kuehn
Sat, May 21, 2011 : 11:19 a.m.
I was wondering about the partial payment too. Then it dawned on me the the other part of the payment would have gone to Ann Arbor. As the article stated, since Ann Arbor already had received a huge pile of money from the DDA, Ann Arbor's share of the excess money was considered to have been included in the previous payments.
Maxwell
Fri, May 20, 2011 : 10:13 p.m.
"Although the DDA would also owe the city about $700,000, the resolution acknowledged that the city of Ann Arbor has already effectively been paid through grants the DDA has given to the city amounting to more than $7.5 million" Wish I could choose where my tax dollars were spent so directly...