Scio Township’s DDA is No More

The Scio Township Board approved an ordinance at its August 12 meeting to dissolve the Downtown Development Authority (DDA). The reason being is that it has fulfilled its purpose and is no longer needed. However, there are some in the township who believe the DDA is still needed.

At the township board meeting, the board approved by a 4 to 2 vote of the board with supervisor Jillian Kerry and treasurer Ryan Yaple voting no saw the board adopting Ordinance 2025-06 to Repeal Township Code of Ordinances Chapter 14, Article 14-II Downtown Development Authority.

Township clerk Jessica Flintoft prepared a report to the board recommending the dissolution of the DDA.

It said:

“37 years ago, the Township Board adopted an ordinance to establish a Downtown Development Authority because at that time the Board found that it was necessary and in the best interests of the public to eliminate the causes of property value deterioration. Back in 1988, those causes were found to be a lack of water supply and Jackson Road which was too narrow. The DDA was tremendously successful: extending the water and sewer system, and creating the Jackson Road Boulevard. The purpose of the DDA has been fulfilled.

“Today, having this DDA is not necessary and is no longer in the best interests of the public. Arguably, based on the cash position of the DDA, the Township Board should have dissolved the DDA earlier. Currently, the Township via its DDA is idly sitting on public monies captured from millages that voters enacted for the provision of public services, e.g., mental health and public safety, parks, open space, public transit, community college, library, and other public services. The DDA cash position far exceeds its outstanding liabilities or capital plans. The purpose of the DDA has been fulfilled, and it is no longer responsible for the Township to capture a portion of these millages.

“Today, this Township Board can serve the best interests of the public by adopting Ordinance 2025-06. By doing so, the Township Board can allow the operating and specially voted millages to go to the respective public services for which the voters passed them. The Board may consider other Tax Increment Financing or similar tools for economic development. But, the Board must use this extraordinary power to capture and divert voter approved monies sparingly, to meet the conditions of current times, not 1988.

“Recent federal policies are expected to increase poverty and hardships for working families, exacerbating the need for affordable housing, nutrition assistance, and basic healthcare. Now more than before, the Township must be responsible, ethical, and efficient in managing public funds. Adoption of Ordinance 2025-06 allows the county, school district, library, and township public servants to be responsible for the administration of these limited taxpayer monies. The purpose of the DDA has been fulfilled, and it is time for the Board of Trustees to end this capture of voter approved millages.”

What is the DDA

The township webpage explains the DDA this way:

“Michigan Public Act 57 of 2018  (MCL 125.4201 et seq.) enables all Michigan municipal entities to constitute development authorities with fundraising capabilities for major projects.  Via this Act, funds can be raised through a mechanism called Tax Increment Funding (TIF), and those funds can be used to make improvements to downtown districts in order to enhance economic viability, stimulate private investment, and increase property values.  

Scio’s DDA first defined its downtown district as properties along Jackson Road, parts of Wagner Road, and a short section of North Zeeb Road. Then the DDA engaged in two major improvements for the Township: construction of sewer and water capabilities along Jackson Road and in nearby areas of the Township, most of which were included in the DDA district; and construction of the Jackson Road boulevard.

Recent DDA-supported projects include adding bus shelters to bus stops in the DDA area, paving select feeder roads off of Jackson Road, providing support for a sidewalk along Parkland Plaza, and assisting with brownfield cleanup sites.  The DDA is actively investigating traffic- and pedestrian-safety issues on North Zeeb Road and updating the DDA Master Plan.” 

The DDA funding mechanism does not involve new taxes, but rather redirects a portion of the increased tax revenue generated from rising property values due to development.

Why Dissolution

The Sun Times News followed up with Flintoft, who provided a statement:

“37 years ago, the Scio Township Board of Trustees exercised its authority to capture voted millage monies to be administered by a Downtown Development Authority, a dedicated committee of appointed community members. The sole purpose of capturing these taxpayer monies was to widen what was then a two-lane Jackson Road into a boulevard, and to extend the water and sewer system along Jackson Road boulevard. This purpose has long since been achieved, and Scio Township’s property values have been increasing for decades. 

“Meanwhile, the Township has continued to capture voted millage monies that cannot lawfully and appropriately be used for any other purpose. More than $3 million sits idly, and it is irresponsible for the Board of Trustees to allow this to continue.  The Township Board should wisely apply Tax Increment Financing captures. Being able to capture and divert millages enacted by votes of the people is an extraordinary power for a Board of Trustees to have. Captures such as a DDA should start when a public purpose is identified, and as importantly, end when that public purpose is met.

“Most voters expect that when they vote on a millage it is going to the stated purpose on the proposal, e.g., for mental health and public safety, special education, library services, land preservation. The adopted Ordinance to dissolve the DDA and abolish the capture of millages allows more of Township taxpayers’ monies to go directly to deliver the public services that they have voted to fund. 

“As set forth by law, the balance of remaining funds will be dispersed back to the County, the Intermediate School District, the Libraries, and other taxing entities to provide the public services that the millages were expressly intended to deliver.”

DDA Support

During the first public comment at the Aug. 12 township board meeting there was support voiced for the DDA and its mission, which included DDA Board members speaking against dissolution.

A resident and a DDA Board member both said the township board should pump the brakes on dissolving the DDA. One DDA member said the DDA has and is accomplishing a lot of important things, from addressing blight in the past and in the very recent past including helping fund such projects as dealing with sidewalks, bus shelters, paved roads, Brownfield cleanup and sewer improvements. A business owner in Scio also spoke and said the DDA is a resource for local businesses/

During the public comment portion, DDA Board Chairperson Gus Boutsikakis said from his point of view the DDA’s purpose was far from being over.

One detail brought up during public comment included funding the construction of the second fire station. As an important note, in leading up to the Aug. 12 meeting, over the past month or so, members of the township board had gone to the DDA and put forth a proposed agreement that would have had the DDA returning to the Township captured assessed values of taxes for four special millages for the term of each of these millages: Parks and Pathways, Fire Protection, Transportation, Farmland, and Open Space Land Preservation.

Prior to the board’s vote, township supervisor Kerry said dissolving the DDA was premature and shortsighted. Kerry said the DDA, whose board has newer members on it and needs the chance to update it plans, goals and in general to revamp itself, is still relevant and working on things and would be that still pertain to its original goals, including potential development, sewer and water work and what is included in the Jackson Road Corridor study. She said the township should be working together rather than eliminating the DDA.

“I would love to see this township work together,” Kerry said.

She said the DDA still has a purpose.

As some background, the township describes the Jackson Road corridor study this way: “Jackson Road is Scio Township’s main commercial corridor, and continues to grow and evolve, incorporating a mix of commercial uses and, recently, multi-family housing developments. However, the corridor’s automobile focus has resulted in a lack of connectivity, safety, walkability, and integration into the surrounding community.  The Township is developing a plan that will consolidate the previous planning work, identify opportunities for non-motorized connectivity improvements, and serve as a guiding framework for investment along Jackson Road.”

DDA’s Dissolution

With the dissolution of the DDA, the township attorney said the Township Board has the authority to dissolve the DDA by ordinance upon finding that the DDA has completed the purposes for which it was organized. However, as part of the dissolution, the Township must either pay the DDA bonds, or segregate the funds required to pay the bonds specifically for that purpose.

According to the township attorney, some of the original reasons behind the creation of the Scio DDA included:

a. The water available to several of the properties located in the downtown district has been discovered to be contaminated.

 b. The properties in the downtown district are serviced by roads which are too narrow to accept increased traffic associated with any potential development in the downtown district.

c. Lack of proper water and roads has prevented development in the downtown district.

d. The property values of several properties located within the downtown district have declined over the past several years, for reasons which include water problems.

e. Resolution of the water supply problem and the traffic congestion will permit property development in the downtown district, which is expected to bring about an increase in property tax valuation in the downtown district.

According to state law, an authority that has completed the purposes for which it was organized shall be dissolved by ordinance of the governing body. The property and assets of the authority remaining after the satisfaction of the obligations of the authority belong to the municipality.

With the dissolution decision now done, the township will follow some steps to complete it. Here are four of them:

The Township Clerk shall notify all of the taxing jurisdictions subject to tax increment financing capture by the DDA that the Township has dissolved the DDA and abolished the Development/TIF Plan.

After the three months set forth in paragraph 5 above, or other time period recommended by the Township Treasurer to ensure that all DDA liabilities have been paid, or when any investments mature, the Township shall revert the remaining surplus funds proportionately to the respective taxing bodies that were subject to tax increment financing capture by the DDA under MCL 125.4215 (2).

The cash currently held by the DDA, which shall include any cash invested as allowed by law, shall be transferred to the Township Treasurer, who shall deposit the cash into a segregated account in a financial institution approved by the Township Investment and Depository Policy, as recommended by the Township Treasurer for payment of any DDA liabilities that may be invoiced within the next three (3) months, and any long term liabilities. The Treasurer shall not be obligated to cancel or withdraw any investment that has not matured or would be subject to any penalty for early withdrawal or cancelation.

The Township accounts for the DDA’s assets, liabilities, revenues, expenditures, and fund balance in a dedicated Fund 494 the Downtown Development Authority fund; and the Township Clerk shall continue to keep these accounts in such a dedicated fund(s).

As part of the approval to dissolve, the recommendation said:

“The Interim Finance Director projects that the DDA Estimated Tax Capture for FYE26 alone for Ann Arbor District Library is $229,388; Dexter District Library is $23,187; WCC is $494,341; County Operating is $471,280; County Supplemental (special millages for parks, natural areas, roads, EECS, veterans, older persons, mental health and public safety, conservation district) is $625,526; Township Operating is $134,150; Township Open Space is $71,880; Township Public Transit is $51,102; Township Parks is $94,277; and Township Fire is $428,517.”

“The Interim Finance Director prepared projection of how the current liabilities of the DDA would be covered with existing cash, and how the remaining cash in the DDA fund would be used to pay outstanding liabilities and then returned to the voted millage funds from which they were captured, if the Board adopted ordinance to dissolve the DDA.”