[HISTORY: Adopted by the City Commission of the City of Kalamazoo as indicated in article and section histories. Amendments noted where applicable.]
Appointment of City Assessor — See § 11.
City Assessor generally — See § 51.
Taxation generally — See § 77 et seq.
Board of Review — See § 81 et seq.
Special assessments for public improvements — See Ch. 32.
Downtown Development Authority — See App. F.
General Property Tax Act — See MCLA § 211.1 et seq.
Assessment role — See MSA § 7.24; MCLA § 211.24.
Completion of review of assessments — See MSA § 7.30(1); MCLA § 211.30a.
State Housing Development Authority Act of 1966 — See MCLA § 125.1401 et seq.
Tax exemption for housing project — See MSA § 16.114(15a); MCLA § 125.1415a(5).
Downtown Development Authority — See MCLA § 125.1651 et seq.
[Adm. Code § A207.34]
The "tax day," for the purpose of assessing the value and determining the taxable situs of persons and property, both real and personal, in the City shall be the same as the "tax day" for such purposes as set forth in the General Property Tax Act of the State of Michigan (MSA § 7.1 et seq.; MCLA § 211.1 et seq.).
[Adm. Code § A207.35]
Each year, unless in conflict with law, the City Assessor shall, on or before the first Monday in March, make and complete the assessment roll.
[Adm. Code §§ A207.36, A207.38]
Each year the Board of Review shall meet, for the purpose of reviewing and correcting the assessment roll, at the office of the City Assessor, on the first Tuesday following the first Monday in March, between the hours of 9:00 a.m. and 5:00 p.m., and shall continue in session until the assessment roll shall have been revised, corrected and approved. The review of assessments shall be completed on or before the first Monday in April.
All notices required to be given to the public of the time and place of meeting of the Board of Review shall reflect the dates provided for in this section.
[Adm. Code §§ A502.1A, A502.1B; amended 2-24-1975 by Ord. No. 1045; 12-22-1980 by Ord. No. 1215; 6-3-1985 by Ord. No. 1352; 7-6-1987 by Ord. No. 1418; 2-8-1988 by Ord. No. 1431; 5-31-1988 by Ord. No. 1442; 11-6-1989 by Ord. No. 1477; 10-4-1993 by Ord. No. 1559; 11-6-2001 by Ord. No. 1726; 6-20-2008 by Ord. No. 1842; 7-20-2009 by Ord. No. 1857; 7-21-2014 by Ord. No. 1923]
Preamble. It is acknowledged that it is a proper public purpose of the State of Michigan and its political subdivisions to provide housing for low- and moderate-income persons and families and to encourage the development of such housing by providing for a service charge payment in lieu of property taxes in accordance with the State Housing Development Authority Act. The City is authorized by this Act to establish or change the service charge to be paid in lieu of taxes by any or all classes of housing exempt from taxation under the Act at any amount as agreed upon by the City and the sponsor, as allowed by the Act, not to exceed the taxes that would be paid but for the Act. It is further acknowledged that housing for low- and moderate-income persons and families is a public necessity, and as the City will be benefited and improved by such housing, the encouragement of the same by providing a real estate tax exemption for such housing is a valid public purpose. It is further acknowledged that the continuance of the provisions of this section for tax exemption and the service charge payment in lieu of ad valorem property taxes during the periods contemplated by this section are essential to the determination of economic feasibility of housing developments that are constructed or rehabilitated with financing extended in reliance on such tax exemption.
Definitions. As used in this section, the following terms shall have the meanings indicated:
- The State Housing Development Authority Act, being Public Act 346 of 1966 of the State of Michigan, as amended, MCLA § 125.1401 et seq.
- ANNUAL SHELTER RENTS
- The total collections during a calendar year or other agreed-upon annual period from or paid on behalf of all occupants of the housing development representing rent or occupancy charges, exclusive of charges for utilities furnished to the occupants. (This definition is not applicable to a housing development project which receives project-based Section 8 rental subsidy.)
- The Michigan State Housing Development Authority.
- CONTRACT RENTS
- The total contract rents (as defined by HUD in regulations promulgated pursuant to Section 8 of the U.S. Housing Act of 1937, as amended) received in connection with the operation of a housing development during a calendar year or other agreed-upon annual period, exclusive of utilities. (This definition is not applicable to a housing development project that does not receive project-based Section 8 rental subsidy.)
- HOUSING DEVELOPMENT PROJECT
- A development or project which meets the qualifications of and is eligible for a service charge payment in lieu of taxes under the Act and this section.
- The Department of Housing and Urban Development of the United States government.
- LOW- OR MODERATE-INCOME PERSONS AND FAMILIES
- Persons and families qualified pursuant to applicable HUD or Authority regulations as being eligible to move into a housing development project governed by this section.
- MORTGAGE LOAN
- A loan that is federally aided (as defined in Section 11 of the Act), or a loan or grant made or to be made by the Authority, for the construction, rehabilitation, acquisition and/or permanent financing of a housing development project, that qualifies for a payment in lieu of taxes pursuant to the Act and this section and is secured by a mortgage on the housing project.
- Any persons or entities that receive or assume a mortgage loan.
- Charges for gas, electric, water, sanitary sewer and other utilities furnished to the occupants of a housing development governed by this section and which are paid by a housing development project sponsor.
Class of eligible housing development projects. It is determined that the class of housing development projects to which the tax exemption shall apply and for which a service charge shall be paid in lieu of such taxes shall be those housing development projects that are for persons and families of low or moderate income and which are financed with a mortgage loan. Prior to being eligible for tax exemption under this section, each housing development project shall be presented to the City Commission, which shall make a determination by resolution as to whether the proposed project qualifies for exemption and, if so, shall set forth the service charge payment in lieu of taxes to be made for that project. Documentary evidence must be presented to the City Commission to establish that the project so qualifies for exemption, whether by making available to tenants a program of rent supplements or housing assistance payments, as established and allocated under the rules and regulations of either HUD or the Authority, or both, or the project is being operated in accordance with the requirements of the Housing Development Grant Program, or otherwise qualifies by law.
Establishment of annual service charges. The housing development projects and the property on which they are or will be located that are within the class of housing development projects for tax exemption pursuant to this section shall be eligible for exemption from all ad valorem property taxes. The City acknowledges that the sponsor, and the Authority, in the case of a sponsor receiving an Authority-financed mortgage loan, or the sponsor and the mortgage lender, in the case of a Sponsor receiving a federally aided mortgage loan, have conditioned the economic feasibility of the housing development project in reliance upon the enactment and continuing effect of this section, as from time to time amended, and the qualification of the housing development project for exemption from all ad valorem property taxes and a service charge payment in lieu of taxes as established in this ordinance section. Therefore, the City, in consideration of the sponsor's offer, subject to receipt of a mortgage loan to construct or rehabilitate, own and operate said housing development project, agrees to accept payment of an annual service charge for public services in lieu of all ad valorem property taxes. The annual service charge payment shall be in an amount equal to a percentage of the annual shelter rents or contract rents actually collected by the housing development project sponsor during each calendar year or other agreed-upon annual period as determined by the City Commission in a resolution to be adopted pursuant to this section for each project.
Limitation on the payment of annual service charge. The service charge to be paid each year in lieu of taxes for the part of an otherwise tax exempt housing development which is occupied by other than low- and moderate-income persons or families shall be equal to the full amount of the taxes which would be paid on that portion of the housing development if the project were not tax exempt.
[Amended 9-21-2015 by Ord. No. 1935]
Manner of payment in lieu of taxes. Except as otherwise provided in this section, the annual service charge payment in lieu of taxes shall be based on the annual shelter rents or contract rents for the preceding calendar year or other agreed-upon annual period based on the audited financial report for that year as provided by the sponsor to the City. The annual service charge payment in lieu of taxes shall be paid to the City on or before 120 days after the close of the owner’s fiscal year. Any annual service charge payment in lieu of taxes or any portion of the annual service charge payment remaining unpaid after 120 days after the close of the owner’s fiscal year shall have interest of 1% per month, together with a penalty fee of 4%, added to it, provided that the total penalty fee shall not exceed 4% of the total service charge payment in lieu of taxes due and payable. The annual service charge payment in lieu of taxes shall be accompanied by an estimate of the shelter rents or contract rents for the current calendar year and a certified annual audit of the gross rentals and utility costs of the project for the preceding calendar year along with documentation regarding how the sponsor has calculated the amount of the annual service charge payment it is submitting to the City. The sponsor shall also provide the City with any other audited financial statements or other documentation as may be necessary to establish compliance with this section.
[Amended 9-21-2015 by Ord. No. 1935]
Contractual effect of section. Notwithstanding the provisions of Section 15(a)(5) of the Act to the contrary, a contract shall be deemed effected between the City of Kalamazoo and the sponsor, with the Authority as third-party beneficiary, to provide a tax exemption and accept service charge payments in lieu of taxes as previously described by this section upon the adoption of a project-specific resolution as provided by this section.
[Amended 9-21-2015 by Ord. No. 1935]
Duration. Unless indicated otherwise in the resolution adopted by the City Commission, the property tax exemption provided under this section shall commence at the beginning of the tax year immediately after the property has satisfied all the requirements under the Act. If, at the inception of the exemption provided by this section, the property does not generate any annual shelter rents during one or more calendar years or other agreed-upon annual period, the service charge payment shall equal the amount of regular ad valorem taxes that would have been paid for the property until the property begins to generate annual shelter rents or contract rents. Unless indicated otherwise in the resolution adopted by the City Commission, the duration of the property tax exemption provided under this section shall continue so long as the Authority-aided or federally aided mortgage loan remains outstanding and unpaid, provided that construction or rehabilitation of the housing development commences within one year from the effective date of the resolution. In the event that the housing development project sponsor fails to timely pay the annual service charge in lieu of taxes, the City Commission, by resolution, may, in addition to any other means available under law, elect to: 1) employ collection procedures that are in accordance with the provisions of the General Property Tax Act (1893 Public Act 206, as amended, MCL 211.1 et seq.); or 2) direct the City Attorney to commence an action in a Kalamazoo County court of competent jurisdiction to collect any outstanding past-due service charge payments and/or seek an order terminating the contract and revoking the tax-exempt status of the project due to the breach of the acknowledged contract between the City and sponsor created pursuant to the provisions of this section. If the tax-exempt status of the housing project is revoked, the housing development project shall then be placed on the tax rolls on the next December 31 following the revocation of the tax-exempt status of the project. If a housing development project is added to the tax rolls and any service charge payment remains unpaid at the time the housing development project is added to the tax rolls, the City officials in charge of the collection thereof shall certify to the tax assessing officer of the City the fact of such delinquency, whereupon such charge, together with any accumulated interest and penalty fees, shall be entered upon the tax rolls as a charge against such premises and shall be collected and the lien thereof enforced in the same manner as general City taxes against such premises.
[Amended 9-21-2015 by Ord. No. 1935]
Severability. Should any section, clause or provision of this section be declared by any court to be invalid, the same shall not affect the validity of this section as a whole or any part thereof other than the part so declared to be invalid.
Inconsistent ordinances. All ordinances or parts of ordinances inconsistent or in conflict with the provisions of this section are repealed to the extent of such inconsistency or conflict.
Savings clause. The adoption of amendments to this section shall not repeal or revoke the tax-exempt status and payment in lieu of taxes previously established for any other housing development by the City Commission.
[Added 12-26-1979 by Ord. No. 1182; amended 4-7-1980 by Ord. No. 1194]
Pursuant to § 87 of the City Charter, all taxes due and remaining unpaid after the last of the month in which such installment shall be payable shall have a penalty of 1% per month, together with a collection fee of 4% added to them; provided that the total collection fee shall not exceed 4% of the total tax due and payable on the first day of July next preceding.
[Adopted 12-5-1988 by Ord. No. 1450]
Editor's Note: Sections 1 through 13 of nonamendatory Ord. No. 1450, adopted 12-5-1988, were modified herein as §§ 35-21 through 35-33 of Art. II at the editor's discretion. The plan and any amendments thereto are on file and available for inspection in the office of the City Clerk.
Since the adoption of Ord. No. 1450, the Downtown Authority Tax Increment Financing Plan and Development Plan has been amended by subsequent ordinances including the following: Ord. Nos. 1457, 1468, 1492, 1523, 1643, 1679 and 1817. These ordinances have not been set out herein but are available in the office of the City Clerk.
The development plan included in the plan meets the requirements set forth in § 17(2) of the act, and the tax increment financing plan meets the requirements set forth in § 14(2) of the act [(Act 197, Public Acts of Michigan, 1975, as amended (the "act")].
The proposed method of financing the development, as set forth in the plan, is feasible, and the authority has the ability to arrange the financing.
The development is reasonable and necessary to carry out the purposes of the act.
The land included within the development area to be acquired is reasonably necessary to carry out the purposes of the act.
The development plan is in reasonable accord with the master plan of the City.
Public services, such as fire and police protection and utilities, are or will be adequate to service the development area.
Changes in zoning, streets, street levels, intersections and utilities, to the extent required by the plan, are reasonably necessary for the development project and for the City.
The City Commission hereby determines that the plan constitutes a public purpose.
The City Commission hereby determines that it is in the best interests of the public to proceed with the plan in order to halt property value deterioration in the downtown district, to increase property tax valuation, to eliminate the causes of the deterioration in property values, and to promote growth in the downtown district.
[Amended 8-28-1989 by Ord. No. 1468]
The plan is hereby approved and adopted as modified by the amendments specified in Exhibit A attached thereto. The duration of the plan shall be 30 years from December 5, 1988, or the date of issuance of the last series of bonds issued pursuant to the plan, whichever is later, except as it may be extended by subsequent amendment of the plan pursuant to the act.
Editor's Note: Ord. No. 1817, adopted 1-2-2007, amended the plan to provide for a termination date of 10-1-2029.
A copy of the plan and all amendments thereto shall be maintained on file in the City Clerk's office.
Within 60 days of the publication of this article, the City Assessor shall prepare the initial base year assessment roll. The base year assessment roll shall list each taxing jurisdiction in the downtown district on the effective date of this article, the initial assessed value of each parcel of property within the downtown district and the amount of tax revenue derived by each taxing jurisdiction from ad valorem taxes on the property in the authority jurisdiction.
The City Assessor shall transmit copies of the base year assessment roll to the City Treasurer, County Treasurer, the authority and each taxing jurisdiction, together with a notice that the base year assessment roll has been prepared in accordance with this article and the tax increment financing plan contained in the plan approved by this article.
Each year within 15 days following the final equalization of property in the downtown district, the City Assessor shall prepare the tax increment assessment roll. The tax increment assessment roll shall show the information required in the base year assessment roll and, in addition, the amount by which the current assessed value as finally equalized for all taxable property in the downtown district exceeds the assessed value of the property as shown on the base year assessment roll (the "captured assessed value"). Copies of the annual tax increment assessment roll shall be transmitted by the City Assessor to the same persons as the base year assessment roll, together with a notice that it has been prepared in accordance with this article and the plan.
The treasurer of the authority shall establish a separate fund which shall be kept in a depositary bank account or accounts in a bank or banks approved by the Treasurer of the City, to be designated "downtown development authority project fund." All moneys received by the authority pursuant to the plan shall be deposited in the project fund. All moneys in the project fund and earnings thereon shall be used only in accordance with the plan.
The City Treasurer and the County Treasurer shall, as ad valorem taxes are collected on the property in the downtown district, pay that proportion of the taxes, except for penalties and collection fees, that the captured assessed value bears to the initial assessed value to the treasurer of the authority for deposit in the project fund. The payments shall be made on the date or dates on which the City Treasurer and the County Treasurer are required to remit taxes to each of the taxing jurisdictions.
The moneys credited to the project fund and on hand therein from time to time shall be used annually in the following manner and following order of priority:
First, to pay into the debt retirement fund, or funds, for all outstanding series of bonds issued pursuant to the plan an amount equal to the interest and principal coming due (in the case of principal whether by maturity or mandatory redemption) prior to the next collection of taxes, less any credit for sums on hand in the debt retirement fund.
Second, to pay to the taxing units their portion of the tax increment revenues as provided in the plan.
Third, to establish a reserve account for payment of principal of and interest on bonds issued pursuant to the plan to the extent required by any resolution authorizing bonds.
Fourth, to repay amounts advanced by the City for project costs, including costs for preliminary plans, and fees for other professional services.
Fifth, to pay or set aside in a reserve account for the purpose of paying when feasible the cost of completing the remaining public improvements as set forth in the development plan to the extent those costs are not financed from other sources.
[Amended 8-28-1989 by Ord. No. 1468]
In the event that the City issues obligations on behalf of the authority, and the City is required in any fiscal year to pay out of its general fund any portion of the debt service on such an obligation, the authority shall be required to fully reimburse the City from its available funds (but only after the set-aside for debt service for any fiscal year has been met), including, but not limited to, tax revenues derived from assessed value captured under tax increment financing (but only after the taxing units have been fully reimbursed as required under the agreement dated December 5, 1988, among all taxing units, attached to the plan as Exhibit 8), the authority millage levy or other sources of the authority.
Within 90 days after the end of each fiscal year, the authority shall submit to the City Commission, with copies to each taxing jurisdiction, a report on the status of the project fund. The report shall include the amount and source of revenue in the account, the amount and purpose of expenditures from the account, the amount of principal and interest on any outstanding indebtedness, the amount in any bond reserve account, the initial assessed value of the downtown district, the captured assessed value of the downtown district and the amount of captured assessed value retained by the authority, the tax increments received and the amount of any surplus from the prior year, and any additional information requested by the City Commission or deemed appropriate by the authority. The secretary of the authority shall cause a copy of the report to be published once, in full, in a newspaper of general circulation in the City.
Any surplus money in the project fund at the end of a year, as shown by the annual report of the authority, shall be paid by the authority to the City Treasurer or the County Treasurer, as the case may be, and rebated by each to the appropriate taxing jurisdiction.
[Amended 8-28-1989 by Ord. No. 1468]
Should any project dealing with the Arcadia Creek storm system, the Arcadia Creek open space and land improvements, and any appurtenances related to Arcadia Creek, as described in § 11.D.3. and 4. of the development plan, be undertaken by the authority, the authority shall be responsible for the repair and maintenance of or construction of later improvements to such projects throughout the duration of the tax increment financing plan. No general fund money of the City shall be expended for this purpose during this period.