To create a DDA the governing body of a municipality must first find that a DDA is necessary to “halt property value deterioration and increase property tax valuation where possible in its business district, to eliminate the causes of that deterioration, and to promote economic growth . . . .” See MCL 125.1653. Once a municipality makes this determination it needs to pass a resolution to declare its intention to create a DDA. After a resolution is passed a public hearing should be scheduled regarding the adoption of the proposed DDA ordinance and designating its boundaries. This public hearing is subject to strict notice requirements and it is recommended that a would-be DDA board consult the statute (MCL 125.1653).
The notice requirements are as follows:
• Post Notice in newspaper on two occasions at least twenty days before the hearing but no sooner than 40 days. In other words, posting an advertisement in a newspaper 41 days before the scheduled hearing is improper under the Act.
• At least twenty days before the hearing, the municipality must mail notices to all property taxpayers in the proposed district.
• At least twenty days before the hearing, the municipality must mail notices by certified mail to the governing body of each taxing jurisdiction levying taxes that would be subject to capture if the authority is established and a tax increment financing plan is approved.
• Post notices of the public hearing in at least twenty “conspicuous and public places” at least twenty days before the hearing.
• Make sure the notice states: the date, time, and place of the hearing and that it sets out the boundaries of the proposed downtown district.
• Once the notice requirements are met the public hearing can take place.
Please note that the governing body must undergo the same process noted above to alter or amend the ordinance and authority. MCL 125.1653(5).
Checklist - Did your municipality:
1. Determine a DDA is necessary?
2. Pass Resolution to create a DDA?
3. Schedule a public hearing on DDA creation?
4. Post Notice twice in a newspaper at least 20 days in advance of public hearing?
5. Mail notice of hearing to property tax payers in the district at least 20 days ahead of time?
6. Mail notice of hearing to the governing body of each taxing jurisdiction levying taxes in the district?
7. Post notice in 20 public places?
8. Have any taxing jurisdictions opted-out of the tax capture plan after the public hearing?
9. Did the municipality vote, by a majority, to adopt the ordinance establishing the DDA 60 or more days after the public hearing?
Governing Board
Once a DDA is formed a governing board must be selected. The Board must be composed of a chief executive officer and between eight to twelve members, a majority of whom must have a property interest in the downtown district and at least one member must reside in the district. If a municipality’s population is fewer than 5,000 the Planning Commission can double as the DDA Board. In the case of a Township, members are appointed by the supervisor and approved by the township board. Once the board is up and running it may hire a director, treasurer, secretary, and legal counsel. The director must swear a constitutional oath and furnish a bond. The director cannot be a member of the board and serves at the pleasure of the board. See generally MCL 125.1655.