I guess it all depends if the “verbal assurances” are made by trustworthy officials.

As one commentator once said “A verbal agreement is worth the paper its printed on.”

This issue exactly captures the Michigan township viewpoint on taxes and expenditures. Township governments generally do not like to levy taxes and always put on the green eyeshades when looking at how benefits are apportioned between their own taxpayers and other municipalities or other entities. They try to pay for no more than what they estimate to be their precise value obtained. This effort to claim benefit (and therefore, an account payable) for others in this road project is a case in point.

It is reassuring to see that the AADL board is demanding documentation and precision on this matter. It is in stark contrast to the behavior of the AAATA board this week in approving an arrangement with Ypsilanti Township based on verbal assurances.

Tax Incremental Financing (TIF) has interested me for some time especially as it is used by the Downtown Development Authority (DDA). Therefore, I wish to offer my suggestions regarding the potential participation of the Ann Arbor District Library (AADL) with Pittsdfield Township’s State Street Corridor Improvement Authority (CIA).

As presented the CIA plans to improve the State Street roadway from Ellsworth Road south to US 12, about 2 1/2 miles. It proposes expanding the roadway to two lanes in either direction with a median strip separating the north from south roadways. The expected cost is $30 million which is to be spent over twenty years.

The representatives stated that the expanded roadway will reduce traffic congestion and encourage more patrons to travel along South State Street in order to visit the Malletts Creek Library. Having driven the involved route on different occasions I can attest to the variability of traffic volume depending on the time of day and day of the week. Most of the time I expect that traffic congestion will not be a discouragement for patron of the Ann Arbor library system. Even with the most crowded conditions travel to Malletts Creek Library should take only five to ten minutes longer than if there were no traffic on the route. The representatives for the CIA plan offered no other rewards for the library from joining the CIA.

On the other hand, the AADL will lose tax revenue if it joins the CIA and will receive no benefits in exchange as I mentioned above. TIF is only supposed to be collected when the property tax evaluation increases due to physical improvements. Thus, the AADL should not have to give up any of its tax (millage) revenue if it does not improve its property for tax purposes. Increases in property valuation due to inflation should not be subject to TIF, as is the case with properties subject to DDA TIF collections. HOWEVER, THE CIA REPRESENTATIVES TOLD ME LAST EVENING THAT THE AADL WOULD HAVE ITS INFLATED PROPERTY VALUE SUBJECTED TO TIF. The representative did say that the contract that will define the AADL’s participation in CIA could exclude from TIF consideration any increase in property valuation due to inflation but did not say that this arrangement is assured. I doubt that CIA officials will agree to the exclusion of inflation-increased property valuation from TIF treatment since the CIA will otherwise receive no revenue from the AADL.

In summary, I see no advantages for the AADL to join the CIA but I do recognize loss of funding. If you agree with me then please discuss with other personnel and with the library board a decision to “opt out” of the CIA.

Thank you,

Donald J. Salberg, MD