VBT LDFA meets in special session to consider 2019 budget

In order to get ready for the daylong, Van Buren Township workshop discussions on the budgets for 2019, the Local Development Finance Authority met in special session on July 24.
The LDFA accepted the 2017 audit and approved the proposed 2019 budget.
Ron Akers, the VBT director of planning and economic development, said most of the LDFA budget has to do with the Visteon bond payments. The VBT board will meet Aug. 13 and 14 to discuss budgets.
In the 2017 audit, Plante Moran explained:
“The township has pledged a portion of future property tax revenue to repay $18,779,656 in LDFA bonds issued in 2003 and a portion refunded in 2006, and then refunded in 2015 to finance various capital improvements.
“The bonds are payable solely from the incremental property taxes captured by the LDFA and were originally projected to produce 100% of debt service requirements over the lives of the bonds. Current economic conditions are resulting in annual captures being less than annual debt service payments.
“Total principal and interest remaining in bonds are $39,157,400, payable through 2032. For the current year (2017), principal and interest paid and total property tax captures were $1,126,265 and $514,807, respectively.”
Plante Moran also stated in the audit report: “All required payments on the bonds are guaranteed by the township in the event that the LDFA is unable to make required payments. Because it has been determined that the township will more likely than not be required to make a payment under this obligation, in accordance with GASB Statement No 70, the township has recorded a liability on its financial statements for the guarantee. However, the LDFA has not been released from its obligation on this debt.”
Beginning in 2019, the LDFA will be paying on the principal, as well as the interest, so its total payment in 2019 will be $2,073,206, up from the total of $521,081 in interest only in 2018.
Akers also presented a timeline for LDFA compliance with Public Act 57 of 2018 which is the Recodified Tax Increment Finance Act. There are requirements for posting of information on the web and much of this already is posted on the township website. This part of the new requirements will be completed by September, Akers said.
A Synopsis of Activities will have to be prepared and placed on the website and estimated completion date for this is January 2019. The Financial Reporting Requirements will be completed by May/June 2019.
The new law also requires two informational meetings a year and the LDFA is planning to hold those meetings during the regular LDFA meetings. Estimated completion date of this requirement is November 2018, Akers said.