LDFA will owe Van Buren Township more than $4 million by end of year

Van Buren Township loaned the township’s Local Development Finance Authority $1 million in March and another $775,000 on Sept. 1.
Both “advances” were necessary to supplement existing LDFA funds in order to meet the bond obligations due on April 1 and Oct. 1, said VBT Deputy Treasurer Sean Bellingham in a memo to LDFA chairman Michael Dotson.
As detailed in the loan agreement, the LDFA has agreed to pay interest on the township’s shortfall payment until they are reimbursed at an annual interest rate equal to the average interest rate that the township is earning on the investment of its general fund monies, Bellingham explained.
He provided a spreadsheet detailing the running total of the loan and a projection through the end of 2021, when the total with interest will be $4,189,873.33.
Bellingham said the interest rate being charged on the “advances” has decreased significantly due to the historically low interest rates being earned on the township’s money market and pooled savings accounts. The interest rate shown on the spread sheet is 0.100%.
He said the annual budget continues to focus on debt service and legal fees related to the ongoing litigation with Visteon Corporation. The updated budget for 2022 has minimal other expenses.
LDFA second vice-chairman John Delaney asked if they had heard anything from Kaveh Kashef, the township’s attorney on the Visteon law suit, and Supervisor Kevin McNamara said they had a meeting with him and LDFA vice chairman Doug Peters, a retired attorney, was invited.
Chairman Dotson said he will talk to those who met with Kashef and they’ll decide if there is a need for a legal update.
Also, at the 21-minute, zoom meeting on Sept. 14, the LDFA board:
• Held its informational meeting as required by Public Act 57. Two sessions outlining the 2020 LDFA Synopsis of Activities are required each year, said Deputy Supervisor Dan Selman. He noted in his synopsis that due to economic conditions, the LDFA is not capturing sufficient tax revenue to cover the bond payments and due to the shortfall, which occurred on Oct. 1, 2019, the LDFA was loaned $700,000 on Sept. 4, 2019 to assist with the payment. And then, in 2020, the loans were $900,000 in March and $800,000 in September. The advances will continue going forward until the bond obligation is fulfilled;
• Studied the proposed 2022 LDFA budget prepared by Bellingham, which is almost the same as 2021. There is $695,000 tax capture expected in 2022. The township budgets will be approved by the township board in October and then the LDFA budget will come back to the LDFA for approval after that; and
• Heard Delaney thank the VBT staff for help and cooperation in setting up the 911 memorial event at Grace Lake. Dotson especially thanked Delaney for all his work in putting the event together. Dotson said some people who attended said they never knew Grace Lake Corporate Center was there. Supervisor McNamara also thanked Delaney, saying, “You were amazing.” Delaney said he would like the event to continue every five years. He said the Boy Scouts and Girl Scouts will now use the area to earn merit badges and they will be building benches. Dotson said he would like to present an official thank you to the scouts for helping at the 911 memorial and would like to do it at a township board meeting.
All the members of the LDFA board were present at the zoom meeting until Leonard Armstrong was called away because he was told his wife was taken to the hospital. There are currently two vacant seats on the LDFA.