March 05, 2014 - Attorneys are like opinions, everybody's got one and that could prove to be a good thing for the North Oakland Transportation Authority (NOTA).
Orion Township's attorney, Dan Kelly, is in the process of crafting a written opinion as to whether a NOTA property tax could be exempted from having a portion of it captured by a Downtown Development Authority (DDA).
"We think it's possible. It's not definite," said Orion Supervisor Chris Barnett, who also serves on the NOTA board.
NOTA previously received a Feb. 4 opinion letter from attorney Bob Davis, who represents Oxford Village and Addison Township, stating there can be no exemption for it because the state's DDA Act does not expressly allow for it.
"Both our attorney and Bob Donohue (program coordinator for Main Street Oakland County) didn't agree with his opinion," Barnett said.
NOTA is looking to place a five-year, 0.25-mill property tax on the August ballot to help support its operations. The proposed millage would allow NOTA to replace the $425,000 in federal and state grant funding it will lose after this year, implement an ongoing vehicle replacement program and keep 13 vehicles on the road Monday through Friday.
NOTA provides low-cost, publicly-subsidized transportation to senior citizens, disabled individuals and low-income folks living in Oxford, Addison and Orion townships along with the villages of Oxford, Leonard and Lake Orion.
If approved by voters in the three townships, the NOTA millage is expected to generate $578,785 in its first year.
Of that, it's estimated that $8,402 would be captured by the Lake Orion DDA and $4,306 by the Oxford DDA.
During the life of the five-year NOTA millage, it's estimated the two DDAs could capture a combined $66,134 by 2019. That works out to $43,725 for Lake Orion and $22,409 for Oxford.
Neither DDA has its own dedicated millage, so they rely on capturing portions of other millages as their primary funding mechanism. Basically, they get a piece of the property tax revenue that's meant to fund services provided by fire departments, public libraries, townships, villages and park/rec. departments.
Lynn Gustafson, director of NOTA, wrote a Feb. 24 letter to both DDAs requesting they "seriously consider" exempting the transportation agency from capture.
"If that is not possible, please consider a second option of the DDA returning the captured money back to NOTA to fund downtown area transportation to residents," she wrote. "This enhances the downtown area by making the area accessible to residents (who) otherwise would not have transportation."
In his opinion, Davis explained that Michigan's Downtown Development Authority (DDA) Act only permits the governing body of a taxing jurisdiction to have its millages exempted if it passes a resolution to that effect within 60 days after a public hearing either creating a new DDA or changing the district boundaries of an existing DDA.
"If the DDA Act does not expressly provide another opportunity to 'opt out' – then it does not exist," Davis wrote. "This applies here. Here, the DDA Act does not state that the millage for a transportation authority can 'opt out' from capture after the DDA has been established."
But, according to Barnett, Donohue, who didn't return phone calls seeking comment, disagrees.
"This is what he does for a living, he works with DDAs and he said yes, it can be done," he said. "That's pretty definitive, I think."
However, Donohue "didn't get into specifics," Barnett noted. That's where Orion's attorney comes in. "Our attorney, Dan Kelly, is of the same belief – yes, it is possible to do," Barnett said.
Barnett, who serves on the Lake Orion DDA, noted the board was agreeable to idea of exempting the NOTA millage if possible.
"It's not revenue that the DDA currently has, so it's not like we're going to lose money that's budgeted," he said. "My take is it sounds like our DDA is open to the concept."
Oxford Township Supervisor Bill Dunn, who chairs the Oxford DDA and serves on the NOTA board, said the DDA board will discuss the NOTA issue at its 6 p.m. Monday, March 17 meeting.
"We haven't talked about it because we didn't have anything in writing from NOTA until now," he said.
Dunn favors granting the exemption if it's legal to do so.
"I can't see why we wouldn't do it," he said. "Things are still tight for the DDA (in terms of finances), but giving up the chance to collect an extra $4,000 a year isn't going to break us. If that $4,000 is going to help give one of our seniors a ride to the grocery store or the doctor's office, I say we give it to NOTA and be thankful we've got this service in our community."
Barnett would like to see the Lake Orion DDA exempt from capture both the NOTA millage and a new fire millage that Orion Township will be seeking this year.
"I know my township board is extremely interested in looking at it," he said.
Barnett believes both millages will have a much easier time gaining voter approval if there's nothing in the ballot language about a DDA capture.
"These are both extremely important millages that need to pass," he said. "And if this will help ensure their passage and at the same time, not hurt the DDA because it's not revenue they currently have, to me, I think it's pretty straight forward."
Whenever a millage is subject to DDA capture, state law requires it must be specifically mentioned in the ballot language.
"I know some of our residents will absolutely vote 'no' on any ballot proposal that has that language," Barnett said. "There's a lot of people that don't like that language."
He said these people don't like the idea of voting for a millage for a specific reason, then having some of the money get diverted to fund an unrelated purpose.
"If removing this tax capture clause will help people understand (these millages) better and support (them), that's what we need to do," Barnett said. "We want to see if (the millages) can be exempted because (that means) a lot less explaining (to the public) . . . It's just going to save a lot of headaches and frustration if the DDAs are willing to do that."
Exempting NOTA could also generate some positive publicity for DDAs in general, which could help them survive and improve their overall image, in Barnett's opinion.
There's currently legislation in the works to eliminate the tax capture funding mechanism DDAs rely on. Barnett said this would "essentially kill DDAs."
"It's kind of a political issue," he said.
Barnett explained some people view the DDAs as "trying to nickel and dime everybody" by capturing portions of other government entities' millages.
"That's not the case," he said. "That's just the way DDAs are set up. That's how they get their funding."
By exempting millages like NOTA, the Oxford and Lake Orion DDAs could show the public they're not after every penny, according to Barnett.
"We could look like we're doing the right thing and maybe it helps our DDA in the long run," he said.
CJ Carnacchio is editor for The Oxford Leader. He lives in the Village of Oxford with his wife Connie and daughter Larissa. When he's not busy working on the newspaper, he enjoys cigars/pipes, Martinis/Scotch, hunting and fishing.