Committee advances resolution to borrow against 2024 delinquent taxes, authorizes notes up to $210 million

The Ways and Means Committee advanced a resolution authorizing the issuance of notes in an amount not to exceed $210,000,000 secured by a pledge of limited tax full faith and credit and by a statutory lien on 2024 delinquent taxes that are transferred to the Wayne County Treasurer and remain uncollected, Craig Hammond, legal counsel to the treasurer, told the committee.

Hammond, outside counsel with Dickinson Wright, said the borrowing is structured as in prior years. The proceeds will be transferred to local taxing jurisdictions in Wayne County in June, the treasurer's office said. The notes will carry a term of up to 30 months; the treasurer historically repays the notes earlier (Hammond said recent average payoff has been about 23 months).

To limit the county's exposure under the full-faith-and-credit pledge, the treasurer excludes parcels subject to bankruptcy or likely foreclosure from the pledged pool. Hammond also described a note reserve fund equal to 10% of the issue as additional collateral support.

Why it matters: the borrowing is a cash-flow tool used to provide taxing jurisdictions timely funds while the treasurer collects delinquent taxes. Committee members did not alter the resolution and moved it forward for full commission consideration.

Ending: staff said they are available to answer additional technical questions from commissioners and that the treasurer's office manages inclusion/exclusion of parcels to lower county exposure under the pledge.