By Meg Peters
Review Co-Editor
If no amendments are made, by 2020 Lake Orion could lose its Downtown Development Authority (DDA), which has been revitalizing the downtown since 1985.
Its survival depends on the extension of their Tax Increment Financing plan, which pulls a certain percentage of tax dollars from surrounding jurisdictions. The last amendment to the plan was in 2001, and calls for a sunset in 2020. The original plan was adopted in 1985, and financed the M24 water line, the streetscape, parking improvements, the fa’ade improvement program, among other projects. Each project is predetermined in the TIF plan, and the money raised finances only those projects.
DDA Director Suzanne Perrault and the board are recommending extending the plan for ten years, contingent upon the approval of village council.
First they must find a committee, and that’s where the community comes in. Perrault is calling for at least nine village residents, preferably from the DDA district, to join the Development Area Citizen’s Council, required for TIF plans.
The advisory council will help identify and prioritize projects, amend the TIF plan, and help tweak the DDA’s vision for the future. Committee members will meet about once a month for six months. Applications are due’September 23’and can be downloaded from the Village of Lake Orion’s website’www.lakeorion.org.
‘If you want a voice in what the future of the downtown is, this is one of the first steps of getting involved,? Perrault said. And the more the merrier’nine members is the requirement, but the way she sees it is the more people putting their heads together, the better the product.
How TIFs work
The capturing concept is slightly compli-cated.
The way a TIF plan works is this: every tax dollar generated by a new private property development within the district, and/or other improvements, can be captured by the DDA to use for public improvements. The idea is to make the district more inviting for future private investments.
The DDA can only capture the increase in property values from the base year, 1984, to the current year, which is then multiplied by the millage rates of each jurisdiction. Jurisdictions include Orion Township, the Village of Lake Orion, Oakland Community College, Oakland County, and village properties that received a pilot at some point.
The Numbers
The original value of the DDA district at the end of 1984 was about $7.2 million, known as the base year. Over the year, the projected captured value increased to about $7.6 million, leaving about $382,500 available for tax capture that year.
For 1985, the current millage rate for the DDA was 66.95 mills, and after multiplying the millage rates by the $7.6 million, the DDA received $25,608 at the end of the year.
In 1987 the DDA made the first amendment to the TIF plan, simply extending the range of the DDA district to include properties west of M-24.
Jumping forward to the second amendment in 1995, the DDA board extended the TIF development plan another ten years.
By 1996 the TIF captured an estimated $222,674 of about $8.7 million, the projected captured value.
The third amendment came in 2001 to extend the life of the DDA another 15 years until 2020. The projected capture value of 2001 was about $14.5 million, and TIF revenues were estimated at about $317,600.
Today the entire DDA District is valued at about $31 million, thus tax captures, or in other words the DDA’s budget, for 2015 are estimated at $544,126.
About 25 percent of the budget is paying off the streetscape loan, 23 percent is spent on projects, and 16 percent goes to pay staff. Other slices of the budget fund promotions, office and operations, design committees, economic restructuring, contract services and organization.
The TIF plan collects tax dollars only from property within the DDA District.
For the current year, the program is expected to collect approximately $224,811 from the Village of Lake Orion, $188,189 from Orion Township, $35,366 from Oakland Community College, $103,707 from Oakland County, and $10,287 from the VLO Pilot, properties that received a pilot at some point.
A pilot stands for payment in lieu of taxes, and is associated with properties who don’t pay the full millage rates to the government, for example, an association that offers affordable housing.
If the village chose not to approve an extension to the current TIF plan, all captured revenue would be returned to the original taxing units.?