DDA: No TIF Recalculation

At a special meeting held on July 27, 2011, the Ann Arbor Downtown Development Authority board passed a resolution stating that it was accepting the general guidance of its legal counsel, Jerry Lax: The DDA will not be changing the calculations on which it based the return (earlier this year) of excess taxes captured through its tax increment finance (TIF) district. The decision came after a closed session with Lax that lasted nearly an hour. The language of the resolution is somewhat vague, stating that “no redistribution to relevant taxing authorities is required.”

Some background: At its May 2, 2011 meeting, as it was poised to ratify a new contract with the city of Ann Arbor, under which it would continue to manage the city’s public parking system, the DDA board was informed of a previously unnoticed provision in the city’s DDA ordinance – Chapter 7 of the city code. Chapter 7 limits the amount of taxes the DDA could capture in its TIF district. Excess TIF capture is to be divided among the taxing authorities in the district.

At its May 20, 2011 meeting, the DDA board voted to accept a method of excess TIF calculation that amounted to roughly $473,000 of excess TIF capture since 2004 to be divided among the following taxing authorities, which have a portion of their tax revenues captured in the DDA TIF district: Washtenaw County, Washtenaw Community College, and the Ann Arbor District Library.

At its May 30 session, the Ann Arbor city council voted to waive the $711,767 in excess TIF capture that was owed to the city of Ann Arbor based on that method of calculation.

The Chronicle has published two op-ed pieces on the subject, arguing that the method the DDA used to calculate the excess TIF was not accurate: “Taxing Math Needs Another Look” and “TIF Capture is a Varsity Sport.”

This brief was filed from the DDA offices at 150 S. Fifth Ave. A more detailed report will follow: [link]