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AI- 3414   12. B. 10.    
BOC Regular
Meeting Date: 12/17/2020  
Amendment to the Allocation of Funds Appropriated to the Land Bank Authority
FROM: Jim Dyer, Corporation Counsel, Corporation Counsel
Department: Corporation Counsel  

RESOLVED, the Calhoun County Board of Commissioners authorizes the County Treasurer and the Calhoun County Land Bank Authority to make changes to projects funded through a reserve account, within the Delinquent Tax Revolving Funds, approved in 2019 under Resolution No. 248-2019, and to increase the allocation to the Land Bank Authority by $130,000.00, as presented.
The Calhoun County Treasurer, the Calhoun County Land Bank Authority and County Administration recommends that the County Board adopt the resolution as presented. A full copy of the proposed resolution and a revised Exhibit A are attached.

Board Resolution No. 248-2019,appropriated $500,000.00 from the Land Reutilization Fund to the Calhoun County Land Bank Authority to complete specific planned projects (in Exhibit A).  The Calhoun County Land Bank Authority proposes to amend the allocation of these funds to cover the actual costs during 2020, all within the categories designated in the original authorization.

In addition, the Calhoun County Land Bank Authority experienced a loss in revenue due to a decrease in property sales, an increase in maintenance, and an inability to complete rehabilitation projects. To cover this revenue shortfall, the County Treasurer proposes that an additional $130,000 be allocated to the Calhoun County Land Bank Authority. These funds will only be released after the Treasurer has met his statutory obligations related to the Land Reutilization Fund, and determined that the funds are available for transfer.  Project related costs will be reimbursed only at the time the project has commenced with supporting documentation, but the $130,000 will be transferred immediately. This recommendation is based on the historical method of funding the Land Bank Authority through County Board authorizations issued to Treasurer to permit allocations from the Land Reutilization Fund.

In December, 2014, the County Board authorized the Treasurer to allocate an annual appropriation, up to $150,000, for post foreclosure holding costs incurred by the Land Bank; costs that would otherwise be incurred by the Treasurer's general fund budget. The County Board also approved a similar, project based, transfer of $640,000.00 on May 3, 2018, which permitted the Land Bank Authority to complete more than 20 blight eliminating demolitions of various properties throughout the County. As in this instance, a reallocation of those funds was authorized by the County Board, after it became clear that certain projects where funds had been allocated were delayed, modified, or could not be completed. Similarly, on December 5, 2019, through Board Resolution No. 248-2019, the County Board approved an additional $500,000, which is part of this request. As in the 2019 budget year, certain unanticipated event, in particular the COVID-19 pandemic, requires a re-allocation of the funds appropriated for the 2020 budget year. The current revised request and the additional funds to cover the loss in revenue would be in addition to the previous requests and represents funding for projects and activities that the Land Bank would otherwise be unable to complete.

It is important to note that the proposed surplus designation and the proposed appropriation to the Land Bank Authority would come from the Land Reutilization Fund, which is not part of the County's General Fund. This fund, by statute, may only be used for these types of activities. It may not be used for general fund, road construction or public safety purposes.
The Calhoun County Treasurer became the Foreclosing Governmental Unit (FGU) for Calhoun County by County Board action on December 16, 2004 as authorized under Section 78 (3) of Public Act 206 as amended, MCL 211.7. To assist with the post-acquisition costs of the tax foreclosed properties that came into the County Treasurer's ownership the County also created the Land Reutilization Fund (518) in 2006 to account for revenues collected by the Treasurer, including State mandated fees, to cover expenses associated with State mandated pre-foreclosure activities such as title work, property notification by in-person visits and certified mailings, parcel redemption expenses, and post-foreclosure holding costs and remediation expenses (including property demolition where necessary) related to the Treasurer's ownership of these foreclose properties.

On July 1, 2006, the Calhoun County Board of Commissioners authorized the creation of the Calhoun County Land Bank Authority (CCLBA) to more efficiently and effectively manage and dispose of foreclosed properties. Generally, the County Treasurer will transfer all foreclosed properties not sold at auction and refused by the local units to the CCLBA for holding and remediation until a final disposition of the property can be established and executed.
More recently, on December 7, 2017, a policy governing declaration and transfer of surplus funds from the DTRF to the Calhoun County General Fund for purposes authorized by Section 87(b) of Public Act 206 as amended, MCL 211.87b, was approved by the Michigan Legislature. To assist the CCLBA in its operations the County Treasurer proposes a modification of the 2019 request along with an additional transfer of $130,000 to cover a loss of revenue related to the pandemic.  This transfer from the Land Reutilization Fund of an amount enough to cover the cost of the activities described in Exhibit A along with funds to cover operating costs.
The 2019 allocation was different than the 2018 request because it sought to accomplish a range of activities including demolition, rehabilitation, and stabilization.  However, Exhibit A that was attached to the 2019 request also included a list of suggested projects as the Land Bank staff was still in the process of reviewing properties transferred from the County Treasurer as well as obtaining bids.  The original request suggested $303,182 for industrial properties, just over $80,000 for residential demolition, and $70,000 for residential rehabilitation.  This request seeks to modify these amounts to $397,948, $87,964, and $14,088 respectfully.   As with previous requests, Land Bank staff proposed completing these projects with a mix of matching funds, grant money, and Board authorized allocations from the Treasurer.
This Resolution acknowledges that, in undertaking demolitions, property management, etc., the Land Bank is acting in cooperation and collaboration with the Treasurer as the Foreclosing Governmental Unit and the County, to manage these properties. It also acknowledges that County's role as a partner with the Land Bank in stopping the spread of blight, addressing environmental concerns, and taking positive steps to creates better neighborhoods and increasing property values in Calhoun County.  

Pursuant to this Resolution, the Treasurer is authorized to make appropriations of enough funds to the Land Bank to be used to demolish, rehabilitate, or stabilize properties or activities described in Exhibit A. These appropriations would come from the Land Reutilization Fund, which is not part of the General Fund, and this fund, by statute, may only be used for these types of activities.

As suggested by the Commission. However, the projects listed in Exhibit A will not be able to proceed without this appropriation.
Staff recommends the adoption of the proposed Resolution to authorize the County Treasurer to allocate sufficient funds to the Land Bank to be used to demolish the properties in Exhibit A. The payments would come from the Land Reutilization Fund, which is not part of the County's General Fund. Additionally, this fund may only be used for these types of activities.

Fiscal Impact
There is no GF impact by this transfer.
Proposed Reallocations
Proposed Resolution

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