The Commerce Township Board of Trustees this month approved the Downtown Development Authority’s (DDA) 2013 budget in the amount of $4.6 million.
The budget — which was passed unanimously with the exception of Township Supervisor Tom Zoner, who didn’t attend the meeting — includes about $1.74 million in advances from the township for the year.
Kathleen Jackson, director of the DDA, said the budget doesn’t assume any DDA property sales, and projects taxable property values decreasing by 2 percent from this year’s figures, as well as a refund of 10 percent of the total taxable value of he DDA from the Michigan Tax Tribunal.
Tax revenue collected from property in the DDA district is the primary source of DDA revenue, while delinquent taxes, interest income, and three rental buildings also contribute to the DDA’s total annual revenue of about $1.56 million. The DDA is projected to have a starting fund balance of about $1.27 million for 2013, bringing the total available for appropriations to about $4.6 million, including advances from the township.
The majority of the DDA’s budget is used to pay down the DDA’s debt, which includes about $2.5 million in interest and bond administrative costs and $1.5 million in principal during 2013.
About $80 million in bonds were issued to help cover the cost of constructing the Martin Parkway project, which included purchasing property and constructing roundabouts along the roadway, which is an extension of Martin Road south to Pontiac Trail. About $1.09 million is budgeted toward paying down that project’s debt in 2013.
The project, which was initiated by the DDA to alleviate area road congestion and help the DDA market and develop hundreds of acres of property between M-5 and Pontiac Trail and Martin and Oakley Park roads, includes a four-lane boulevard extending Martin Road south from PGA Drive to meet M-5 at Pontiac Trail; building five lanes from PGA Drive north to a roundabout at Oakley Park Road; and building a large roundabout where M-5 meets Pontiac Trail and the new Martin Parkway.
However, economic conditions and the inability to sell the DDA property has left the DDA unable to begin paying of its bond debt. Since the bonds were backed by the limited general obligation and full faith and credit of the township, the township must advance money from its general fund to cover the initial DDA bond payments.
In February, the DDA and township Board of Trustees entered into a formal agreement assuring that the DDA will pay the township back for funds allocated for the repayment of bonds.