Hats given out at the Cruisin’ 53 event June 8 have prompted the Warren City Council to scrutinize the city’s Tax Increment Finance Authority.
The hats appeared to be paid for by the city’s TIFA, which Council Secretary Mindy Moore questions as a proper use of the body’s funds.
“I went on the city web site and looked at TIFA and I did not see anything in their stated mission or purpose that indicated buying a hat with the mayor’s name on it fit within,” said Moore.
At its regular June 28 meeting, council discussed its concerns and tabled a motion to freeze TIFA spending until questions about the authority’s budget can be answered. The council has scheduled a special meeting to discuss TIFA issues on July 1, 6 p.m. at the Warren Community Center in conference room B, which is located on the second level.
Moore also said it appears, based on information from the city web site, there are people still serving on the TIFA board whose reappointments were rejected by city council and, that in at least one instance, the Open Meetings Act may have been violated.
Jeffrey Schroder of Plunkett Cooney Law, special attorney for the city council, said he has had two conversations with the Michigan Department of Treasury recently and referred to Warren’s TIFA as a “ship off course.”
“The representative of the state who I was talking to said that it does not appear that the City of Warren’s TIFA has filed financial reports for the past three or four years,” said Schroder during Tuesday’s meeting. “In fact, none have ever been filed, so they are out of compliance.”
TIFA requirements that changed in 2018 became effective in January 2019. They require cities and municipalities to file a TIF plan and an annual financial report with the state. Warren’s TIF area encompasses the Van Dyke Avenue corridor between Eight Mile and Stephens roads. Tax monies captured by the TIFA are supposed to be used to make improvements to a specific designated area.
The City of Warren website states the mission of the TIFA as preventing urban deterioration and encouraging economic development, neighborhood revitalization and historic preservation.
Michigan Department of Treasury representative Travis Bukovik confirmed that on Thursday, June 30 he received the reports from the City of Warren for the past three years. He said the state never asked Warren to submit the information previously because it believed Warren’s TIF expired in 2010. It was not until he received the first call from Schroder that he was aware TIF funds were being collected.
According to information the city council said it received from the city treasurer, more than $320,000 was captured by the Warren TIFA in 2021.
Bukovcik said the state will not impose a fine on the City of Warren for its late filing of the TIFA reports. Warren Mayor James Fouts said he was scheduled to meet with city controller Richard Fox and members of the TIFA to determine why the city’s reports were not filed with the state before Thursday and to develop a set procedure to ensure such filings are not overlooked in the future.
“The way the statute is written, we send a certified letter if the report is not filed and the city then has 60 days to file the paperwork,” said Bukovik. “We actually try to make informal reminders – a phone call or email – first. We have actually never had any city not submit the paperwork after an informal reminder.”
Still, the city council and its attorney have concerns about the TIFA and its budget.
“There is no budget approved by council, no financial statement and no plan beyond 2010,” said Schroder. “The best I can figure is maybe the plan has been updated but they just have not published it. But it is required by the state to be on the web site.”
Fouts said the TIFA budget is included in the budget of the Downtown Development Authority and that the city received permission from the state “several years ago” to include the TIF in the DDA.
It is not known if any members of the TIFA board will attend Friday’s special city council meeting.
