Unresolved issues with DDA could make it hard to finish work on Ann Arbor city budget, mayor says
The city of Ann Arbor's budget situation grew more complicated Monday night, with Mayor John Hieftje saying it's going to be difficult to finalize it this month.
It's been expected the Ann Arbor City Council would adopt the budget for the next two fiscal years next Monday, but Hieftje told council members they should keep the Friday before Memorial Day weekend open in case a late special meeting is needed.
"This is a situation I think we may be in," he said, adding there remain "some unknowns" regarding the financial picture for the fiscal year starting July 1, including the lack of an approved parking agreement with the Downtown Development Authority.
Ryan J. Stanton | AnnArbor.com
Tom Crawford, Ann Arbor's chief financial officer, provided an update Monday night in which he said about $750,000 to $800,000 in tax revenues expected to be collected by the DDA next fiscal year may need to be refunded to the taxing bodies from which they came.
"Of that, about $450,000 or so would be toward the city itself," Crawford told council members.
Crawford said that's on top of $2.5 million the DDA potentially owes entities like the city of Ann Arbor, Washtenaw County, the Ann Arbor Transportation Authority, the Ann Arbor District Library and Washtenaw Community College going back to 2004.
The DDA is partially funded through tax-increment financing revenue, meaning it captures the increase in taxes that result from new construction and improvements downtown.
DDA officials learned last week the authority may have collected more TIF revenue than it should have been allowed to keep in recent years.
DDA and city officials still are working on interpreting a forgotten section of the city code from 1982. But basically it states that if TIF revenue grows faster than expected and hits certain targets, the DDA is supposed to kick back excess money to taxing jurisdictions.
The DDA's TIF income has grown substantially since 2002 due to new developments downtown. It's nearly $4 million annually, up from less than $2.9 million in 2002.
Hieftje said it's possible the DDA could call a special meeting before the City Council votes on its budget next Monday, but it's unlikely everything is going to be resolved by then.
Under the city charter, the City Council is supposed to adopt the city budget no later than its second meeting in May.
Hieftje acknowledged having to call a special meeting at the end of this month to tie up loose ends with the budget could disrupt some people's vacation plans.
"And who knows, maybe we'll get to the end of the month and we won't be able to finish it, but we'll do our best," he said.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at email@example.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.