Only three members of Van Buren Township’s nine-member Local Development Finance Authority attended the scheduled Aug. 11 meeting to consider the 2012 budget that would deal with declining revenue.
Present were Michael Dotson, J. Doug Peters, and Leonard Armstrong. Absent were David Tyler, Pam Smart, Charles Covington, Craig Medlen, James Ayer, and Chris Hayes.
Also present were VBT Planning and Economic Development Director Terry Carroll, Township Supervisor Paul White, recording secretary Pat Queener, and five members of the audience.
The board members present agreed to ask for responses from board members in the future to see if they will attend the meeting so a quorum can be determined in advance.
Resident John Delaney asked where the LDFA money was kept and Supervisor White said it is aggregated with township funds in investments, but is in a segregated account.
White said Visteon signed an agreement for payment in lieu of taxes when the revenue doesn’t cover the bond payment.
LDFA members informally agreed that 2016 is the year they expect to have problems covering the bond payments.
The meeting broke up at about 2:10.
(The next regular meeting was scheduled for Sept. 8 at 5 p.m., but the LDFA has been meeting at 2 p.m. for the last few meetings because the township hall now closes at 4 p.m. Later the 5 p.m., Sept. 8 meeting was cancelled “for lack of agenda” and another LDFA meeting set for 2 p.m. Sept. 15, but no agenda immediately posted.)
The main item of new business for the Aug. 11 meeting was the proposed 2012 budget. Under general discussion was to be an update on Visteon/Hoosier Co-Generation Facility.
Carroll said that the budget could wait until the September or October meeting.
He had given a memo to the LDFA concerning a budget challenge.
He gave an overview on the main focus of the LDFA, which is to collect the tax capture of the tax increment finance district (Visteon Village) and use the proceeds to fund the debt that was incurred to make the public improvements to the district.
“In addition to the debt service there are minimal charges to the capture for the administrative cost that the township incurs to administer the affairs of the board.
“The current year of 2011 is the first year that the LDFA experienced a steep decrease in tax increment capture due to the revaluing of Visteon as a result of their bankruptcy,” he wrote.
“Collected amounts that had totaled $1.3 million in the past are now anticipated to be no more than $400,000.
“The largest expenditure anticipated for 2012 will be for the bond principal ($120,000) and interest expenses ($833,753). The entire budget will require the use of $499,228 of unrestricted fund balance in order to balance the budget,” Carroll wrote.
Carroll said it is the recommendation of the Administration that the LDFA Board approve the 2012 budget as prepared by Deputy Treasurer Sean Bellingham.
“This will allow for the debt to be serviced and the business of the LDFA to be conducted for another year. There will still be approximately $5 million of the settlement left to cover future budget deficits,” Carroll wrote.
The settlement referred to was the $5,706,463 lump sum payment from Visteon in 2010 after the township agreed to reducing the state equalized value of Visteon Village by $100 million during Visteon’s bankruptcy proceedings.
Visteon Village (now called Grace Lake Corporate Center) stretched from Tyler to Ecorse roads between I-275 and Hannan Road and encompassed nine buildings.
The parcels are subject to property tax valuation and assessment within the township. In 2002 VBT, under the administration of Supervisor Cindy King, assisted Visteon in financing the construction of Visteon Village by issuing about $28 million in bonds supported by the full faith and credit of the township.
The township primarily relies on the property taxes it collects from Visteon to service the debt on the township bonds.
Resident Charles Tackett has questioned the legality of about $4.7 million worth of on-site improvements for Visteon paid for by the township. He said LDFA board members have agreed to look into this issue.