Lakeview Downtown Development Authority

LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY AGENDA Regularly Scheduled Meeting April 25, 2023 4:30 pm Conference Room 302A – City Hall 10 N. Division Street 1. Welcome and introductions (as needed) Chair a. New board member Mark Steinbrunner 2. Approval of minutes October 25, 2022 (action required) Chair 3. Annual Audit (action required) Staff a. Approval of the FY 2022 Annual Audit b. Approval of the FY 2022 Annual Report 4. Financials Staff a. Interim financials through March 31, 2023 b. Fiscal Year 2024 Budget 5. Project updates Staff a. Capital Ave. Bridge Replacement b. Horrocks opening c. Mall Development 6. Public comments 7. Board member comment 8. Adjourn Attachments - Agenda - Minutes from October 25, 2022 - FY 2022 Annual Audit - FY 2022 Annual Report - Interim financials - FY 24 budget - Bridge replacement presentation NEXT MEETING SCHEDULED FOR October 24, 2023, City Hall, Room 302A  Lakeview Downtown Development Authority Minutes of the Meeting of October 25, 2022 Commission Chambers, City Hall 4:00pm. MEMBERS PRESENT: David Rost, Anmar Atchu and T.R. Shaw, MEMBERS ABSENT: Dave Schweitzer, Rebecca Fleury OTHERS: Assistant City Manager Ted Dearing, Finance Services Manager Kourtney Matuschka, communication Specialist Eric McClure (online support). CALL TO ORDER: The meeting was called to order at 4:03 p.m. APPROVAL OF MINUTES: Motion by Atchu, supported by Shaw, to approve the minutes of the regular meeting of May 4, 2022 as submitted. MOTION CARRIED RES. NO. 2022-05 FY 202 Preliminary year end financials: Mr. Dearing briefly reviewed the FY 2022 preliminary year end financials noting revenues over expense of $16,715. Interim Financials: Mr. Dearing briefly presented the interim financials for the period of July 1, 2022 through September 30, 2022. PROJECT UPDATES: Mr Dearing provided updates on the follow projects. A. Site improvements: Recommendation to consider weed control along the corridor. Consider renaming Whitmark Drive back to Kim Sigler Drive. B. Capital Ave Bridge replacement: Considering complete closure of the bridge versus keeping lanes open which will extend the project time. C. I-194 PEL WSP kick-off meeting: Public engagement process to consider the future development/redevelopment of the I-194 corridor between I-94 and Hamblin Ave. PUBLIC COMMENT: None BOARD COMMENT: Board members discuss bridge signage, the status of development at the mall and the status of retail in the market. ADJOURNMENT: The Board adjourned the meeting at 4:33 pm. 1 LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY (A Component Unit of the City of Battle Creek, Michigan) Year Ended Financial June 30, 2022 Statements This page intentionally left blank. LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY Table of Contents Page Independent Auditors’ Report 1 Management’s Discussion and Analysis 5 Basic Financial Statements Statement of Net Position and Governmental Funds 10 Balance Sheet Statement of Activities and Governmental Fund Revenues, Expenditures and Changes in Fund Balances 11 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund 12 Notes to Financial Statements 13 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 19  This page intentionally left blank.  INDEPENDENT AUDITORS’ REPORT December 22, 2022 To the Board of Directors of the Lakeview Downtown Development Authority City of Battle Creek, Michigan Report on the Audit of the Financial Statements Opinions We have audited the financial statements of the governmental activities and each major fund of the Lakeview Downtown Development Authority, a component unit of the City of Battle Creek, Michigan (the "Authority") as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the Authority, as of June 30, 2022, and the respective changes in financial position and the budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Independent Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 1 In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Independent Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: ∙ exercise professional judgment and maintain professional skepticism throughout the audit. ∙ identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. ∙ obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, no such opinion is expressed. ∙ evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. ∙ conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit. 2 Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2022, on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control over financial reporting and compliance. 3 This page intentionally left blank. 4 MANAGEMENT'S DISCUSSION AND ANALYSIS 5 LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY Management's Discussion and Analysis The Lakeview Downtown Development Authority (the “Authority”) was established October 27, 1981, pursuant to Public Act 197 of 1975. The Authority is a component unit of the City of Battle Creek, Michigan and presents this management discussion and analysis of its financial performance as an overview of financial activities for the fiscal year ended June 30, 2022. Using this Annual Report This discussion and analysis is intended to serve as an introduction to the Authority’s basic financial statements. The basic financial statements are comprised of the following: • The statement of net position and governmental funds balance sheet presents information on all of the Authority’s assets, liabilities, and deferred inflows of resources, with the difference reported as net position/fund balance. Over time, increases or decreases in net position/fund balance may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating. • The statement of activities and governmental fund revenues, expenditures and changes in fund balances presents information showing how the Authority’s net position/fund balance changed during the most recent fiscal year. • The statement of revenues, expenditures and changes in fund balance – budget and actual – general fund presents information showing the comparison of the Authority’s actual revenues and expenditures to what was budgeted. • The notes to the basic financial statements provide additional information that is essential to a full understanding of the data provided in the basic financial statements. Financial Analysis The net position of the Authority is summarized for the purpose of determining the overall fiscal position. As shown below, the Authority’s assets exceeded liabilities and deferred inflows of resources by $137,149 at the end of the fiscal year. 6 LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY Management's Discussion and Analysis A comparative analysis of the data is presented below: Net Position as of June 30, 2022 2021 Assets Current and other assets $ 1,054,502 $ 314,784 Liabilities Other liabilities 741,483 ‐ Deferred inflows of resources 175,870 194,350 Net position Unrestricted $ 137,149 $ 120,434 When comparing the current fiscal year to the previous fiscal year, net position increased by $16,715. This increase is a result of the electronic billboard lease revenue offset by decreases in the value of investments held at year end. Assets and deferred inflows of resources increased $175,870 due to the implementation of GASB 87 ‐ Leases. The remaining increases in assets and liabilities is the result of tax distributions to other municipalities outstanding at June 30, 2022. These distributions were made before year end in the prior fiscal year. Changes in Net Position for the Year Ending June 30, 2022 2021 Total revenues $ 2,045,858 $ 2,076,593 Total expenses 2,029,143 2,056,438 Change in net position 16,715 20,155 Net position, beginning of year 120,434 100,279 Net position, end of year $ 137,149 $ 120,434 General Fund Budgetary Highlights The general fund original adopted and final budget reflected expenditures in excess of revenues and a net fund balance decrease of $5,500. The increase of fund balance for the fiscal year of $16,715 is a positive variance from the budget primarily due to the lease revenue that was unbudgeted for the fiscal year. 7 LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY Management's Discussion and Analysis Economic Factors The Lakeview Downtown Development Authority's expenses are governed by the laws of the State of Michigan. During 2022, total expenses were $2,029,143. Contacting the Authority This financial report is designed to provide a general overview of the Lakeview Downtown Development Authority's finances and to show accountability for the money it receives and expends. The financial statements can be found on the City’s website: www.battlecreekmi.gov. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City Revenue Services Director, P.O. Box 1717, Battle Creek, MI 49016‐1717. 8 BASIC FINANCIAL STATEMENTS 9 LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY Statement of Net Position and Governmental Funds Balance Sheet June 30, 2022 Total Capital Governmental Statement of General Projects Funds Adjustments Net Position Assets Pooled cash and investments $ 829,238 $ 46,648 $ 875,886 $ ‐ $ 875,886 Interest receivable 2,746 ‐ 2,746 ‐ 2,746 Leases receivable 175,870 ‐ 175,870 ‐ 175,870 Total assets $ 1,007,854 $ 46,648 $ 1,054,502 ‐ 1,054,502 Liabilities Accounts payable $ 741,483 $ ‐ $ 741,483 ‐ 741,483 Deferred inflows of resources Deferred lease amounts 175,870 ‐ 175,870 ‐ 175,870 Fund balances Committed for capital projects ‐ 46,648 46,648 (46,648) ‐ Unassigned 90,501 ‐ 90,501 (90,501) ‐ Total fund balances 90,501 46,648 137,149 (137,149) ‐ Total liabilities, deferred inflows of resources, and fund balances $ 1,007,854 $ 46,648 $ 1,054,502 (137,149) ‐ Net position Unrestricted $ 137,149 $ 137,149 The accompanying notes are an integral part of these financial statements. 10 LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY Statement of Activities and Governmental Fund Revenues, Expenditures and Changes in Fund Balances For the Year Ended June 30, 2022 Total Capital Governmental Statement General Projects Funds Adjustments of Activities Revenues Property taxes $ 2,016,772 $ ‐ $ 2,016,772 $ ‐ $ 2,016,772 Rents and leases 25,000 ‐ 25,000 ‐ 25,000 Unrestricted investment earnings 4,086 ‐ 4,086 ‐ 4,086 Total revenues 2,045,858 ‐ 2,045,858 ‐ 2,045,858 Expenditures/expenses Community development 2,029,143 ‐ 2,029,143 ‐ 2,029,143 Change in fund balance/ net position 16,715 ‐ 16,715 ‐ 16,715 Fund balances/net position Beginning of year 73,786 46,648 120,434 ‐ 120,434 End of year $ 90,501 $ 46,648 $ 137,149 $ ‐ $ 137,149 The accompanying notes are an integral part of these financial statements. 11 LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual ‐ General Fund For the Year Ended June 30, 2022 Budget Actual (Original Over (Under) and Final) Actual Final Budget Revenues Property taxes $ 2,011,277 $ 2,016,772 $ 5,495 Rents and leases ‐ 25,000 25,000 Unrestricted investment earnings 4,000 4,086 86 Total revenues 2,015,277 2,045,858 30,581 Expenditures Community development 2,020,777 2,029,143 8,366 Net change in fund balance (5,500) 16,715 22,215 Fund balance, beginning of year 73,786 73,786 ‐ Fund balance, end of year $ 68,286 $ 90,501 $ 22,215 The accompanying notes are an integral part of these financial statements. 12 NOTES TO FINANCIAL STATEMENTS 13 LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY Notes to Financial Statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity These financial statements present the activities of the Lakeview Downtown Development Authority (the “Authority”). The Authority was established October 27, 1981, pursuant to Public Act 197 of 1975. The primary purpose of the Authority is to revitalize and encourage economic activity in the Lakeview business district. The Authority’s activities are primarily funded through tax increment financing. The Authority is a component unit of the City of Battle Creek, Michigan (the “City”) because the City appoints the Authority’s Board of Directors, it has the ability to significantly influence the Authority’s operations, and it is financially accountable for the Authority. Accordingly, the Authority is presented as a discrete component unit in the City’s financial statements and is an integral part of that reporting entity. Government‐wide and Fund Financial Statements As permitted by generally accepted accounting principles, the Authority uses an alternative approach reserved for single program governments to present combined government‐wide and fund financial statements by using a columnar format that reconciles individual line items of fund financial data to government‐wide data in a separate column. Accordingly, this is presented in the statement of net position and governmental funds balance sheet and the statement of activities and governmental fund revenues, expenditures and changes in fund balances. Major individual governmental funds are reported as separate columns in the aforementioned basic financial statements. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government‐wide financial information is reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Governmental fund financial information is reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Authority considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. 14 LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY Notes to Financial Statements The Authority reports the following major governmental funds: The general fund is the Authority’s primary operating fund. It accounts for all financial resources of the Authority, except those accounted for and reported in another fund. The capital projects fund accounts for all financial resources restricted, committed or assigned to expenditures for the acquisition or construction of capital assets. The effect of interfund activity has been eliminated from the government‐wide financial statements. Leases Receivable and Deferred Inflows of Resources The Authority is a lessor for a noncancellable lease related to a billboard. The Authority recognizes a lease receivable and a deferred inflow of resources in the statement of net position and governmental funds financial statements. At the commencement of a lease, the Authority initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for prepaid lease payments received at lease inception. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term. Key estimates and judgments include how the Authority determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts. The Authority uses its estimated incremental borrowing rate as the discount rate for leases. The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee. The Authority monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable if certain changes occur that are expected to significantly affect the amount of the lease receivable. Fund Balances Governmental funds report nonspendable fund balance for amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted fund balance is reported when externally imposed constraints are placed on the use of resources by grantors, contributors, or laws or regulations of other governments. Committed fund balance is reported for amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision‐making authority, the Board. A formal resolution of the Board is required to establish, modify, or rescind a fund balance commitment. The Authority currently has no nonspendable or restricted fund balances. The Authority also has no assigned fund balance as the Board has not yet given authority for the making of such assignments; assigned fund balances are neither restricted nor committed. Unassigned fund balance is the residual classification for the general fund. 15 LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY Notes to Financial Statements When the government incurs expenditures for purposes for which various fund balance classifications can be used, it is the government’s policy to use restricted fund balance first, then committed, assigned, and finally unassigned fund balance. Budgetary Information The general fund is under formal budgetary control and its budget is prepared on the same modified accrual basis used to reflect actual results. The Authority follows the City budget process in establishing the budgetary data reflected in the financial statements: • The Authority submits a proposed budget to the City Manager. After review and approval, the City Manager submits a recommended operating budget to the City Commission. Public hearings are held to obtain taxpayer comments. The budget is legally adopted through a City Commission resolution prior to the beginning of the budgetary year for the Authority’s funds. • The budget is adopted on a basis consistent with generally accepted accounting principles. Budgeted amounts are as originally adopted and amended by the City Commission during the year. No budget amendments were made during the year. For the year ended June 30, 2022, the Authority incurred general fund expenditures in excess of the amounts appropriated for community development of $8,366. 2. POOLED CASH AND INVESTMENTS At year‐end, the carrying amount of the Authority’s pooled cash and investments, which were deposited entirely in the City’s internal cash management pool, was $875,886. Because it is infeasible to allocate risk to individual component units or pool participants, aggregate cash and investment categorizations are presented in the City’s basic financial statements. 3. LEASES The Authority is involved in an agreement as a lessor that qualifies as a long‐term lease agreement. Below is a summary of the agreement. The agreement qualifies as long‐term lease agreement as the Authority will not surrender control of the asset at the end of the term and the noncancelable term of the agreement surpasses one year. Total lease revenue for the year ended June 30, 2022 was $25,000. Remaining Term of Agreement Asset Type Billboard 7 years 16 LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY Notes to Financial Statements Lease receivable activity for the year ended June 30, 2022, was as follows: Beginning Ending Balance Additions Deductions Balance Leases receivable $ 194,350 $ ‐ $ (18,480) $ 175,870 4. PROPERTY TAXES Property tax revenue is derived pursuant to a tax increment financing agreement between the Authority and various applicable taxing districts. Real and personal property taxes are levied and attach as an enforceable lien on properties located within the boundaries of the tax increment financing district. The City bills and collects the taxes on behalf of the Authority. Delinquent taxes on ad valorem real property are purchased by the County of Calhoun. Property tax revenue is recognized when levied in the government‐wide financial statements and in the fund financial statements to the extent that it is available to pay current obligations. Except for property taxes captured from local schools that exceed contractual obligations, the Authority is entitled to all taxes levied on property within the Lakeview Downtown Development Authority district to the extent that the current taxable value exceeds the base year taxable value. The Lakeview Downtown Development Authority district was established in 1981 and then expanded in 1991. Taxable values of ad valorem property for the 2021 levy are summarized below: Total taxable value $ 88,007,609 Less: base year value 8,693,117 Capture increment $ 79,314,492 5. DEVELOPMENT PROJECTS AND COMMITMENTS The Authority has entered into a development agreement with the City whereby the Authority reimburses the City for costs to construct certain public improvements. At June 30, 2022, the Authority has committed $46,648 to existing projects. The capital projects funds not committed to existing projects would be available for new projects approved by the Authority. 6. CONTINGENCIES The Authority is currently involved in various tax appeals pending before the Michigan Tax Tribunal. The appeals cover various commercial and industrial properties for 2022. Due to the large number of appeals currently before the Tribunal, the time frame for resolution of these matters is unknown at this time. An estimate of the Authority's maximum exposure is approximately $5,453,000 in taxable value. The City is vigorously defending all litigation. 17 LAKEVIEW DOWNTOWN DEVELOPMENT AUTHORITY Notes to Financial Statements 7. CORONAVIRUS (COVID‐19) In March 2020, the World Health Organization declared the novel coronavirus outbreak (COVID‐19) to be a global pandemic. The pandemic has resulted in operational challenges for the Authority as it determines the impact on employees, vendors, and taxpayers, and the appropriate method for providing services. At this time, management does not believe that any ongoing negative financial impact related to the pandemic, if any, would be material to the Authority.  18  INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS December 22, 2022 To the Board of Directors of the Lakeview Downtown Development Authority City of Battle Creek, Michigan We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of the Lakeview Downtown Development Authority, a component unit of the City of Battle Creek, Michigan (the "Authority") as of and for the year ended June 30, 2022, and the related notes to the financial statements, , which collectively comprise the Authority's basic financial statements, and have issued our report thereon dated December 22, 2022. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Authority’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 19 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. 20  Annual Report on Status of Tax Increment Financing Plan Send completed form to: For Fiscal Years Treas-StateSharePropTaxes@michigan.gov Enter Municipality Name in this cell TIF Plan Name ending in Issued pursuant to 2018 PA 57, MCL 125.4911 Filing is required within 180 days of end of authority's fiscal year ending in 2022. MCL 125.4911(2) Downtown Development Authority LDDA #1 2022 Year AUTHORITY (not TIF plan) was created: 1981 Year TIF plan was created or last amended to extend 2004 its duration: Current TIF plan scheduled expiration date: 2034 Did TIF plan expire in FY22? No Year of first tax increment revenue capture: Does the authority capture taxes from local or intermediate school districts, or capture the state No education tax? Yes or no? If yes, authorization for capturing school tax: Year school tax capture is scheduled to expire: 2034 Revenue: Tax Increment Revenue $ 2,016,772 Property taxes - from DDA millage only $ - Interest $ 4,086 State reimbursement for PPT loss (Forms 5176 and 4650) $ - Other income (grants, fees, donations, etc.) $ 25,000 Total $ 2,045,858 Tax Increment Revenues Received Revenue Captured Millage Rate Captured From counties $ 467,844 5.9261 From cities $ 1,263,647 15.7650 From townships $ - 0.0000 From villages $ - 0.0000 From libraries (if levied separately) $ - 0.0000 From community colleges $ 285,281 3.6136 From regional authorities (type name in next cell) $ - 0.0000 From regional authorities (type name in next cell) $ - 0.0000 From regional authorities (type name in next cell) $ - 0.0000 From local school districts-operating $ - 0.0000 From local school districts-debt $ - 0.0000 From intermediate school districts $ - 0.0000 From State Education Tax (SET) $ - 0.0000 From state share of IFT and other specific taxes (school taxes) $ - 0.0000 Total $ 2,016,772 Expenditures Professional Services $ 5,500 Attorney Fees $ - Contribution-Other Govt Entities $ 741,483 Transfer to Primary Government $ 1,282,160 $ - $ - $ - $ - $ - $ - $ - Transfers to other municipal fund (list fund name) $ - Transfers to other municipal fund (list fund name) $ - Transfers to General Fund $ - Total $ 2,029,143 Total outstanding non-bonded Indebtedness Principal $ - Interest $ - Total outstanding bonded Indebtedness Principal $ - Interest $ - Total $ - Bond Reserve Fund Balance $ - Unencumbered Fund Balance $ 90,501 Encumbered Fund Balance $ 46,648 CAPTURED VALUES Overall Tax rates captured by TIF plan PROPERTY CATEGORY Current Taxable Value Initial (base year) Assessed Value Captured Value TIF Revenue Ad valorem PRE Real $ 3,379,004 $ 298,691 $ 3,080,313 25.3047000 $77,946.40 Ad valorem non-PRE Real $ 75,172,029 $ 6,857,334 $ 68,314,695 25.3047000 $1,728,682.86 Ad valorem industrial personal $ - $ - $ - 0.0000000 $0.00 Ad valorem commercial personal $ 8,738,269 $ 196,161 $ 8,542,108 25.3047000 $216,155.48 Ad valorem utility personal $ 351,232 $ - $ 351,232 25.3047000 $8,887.82 Ad valorem other personal $ - $ 1,340,931 $ (1,340,931) 25.3047000 ($33,931.86) IFT New Facility real property, 0% SET exemption $ - $ - $ - 0.0000000 $0.00 IFT New Facility real property, 50% SET exemption $ - $ - $ - 0.0000000 $0.00 IFT New Facility real property, 100% SET exemption $ - $ - $ - 0.0000000 $0.00 IFT New Facility personal property on industrial class land $ - $ - $ - 0.0000000 $0.00 IFT New Facility personal property on commercial class land $ - $ - $ - 0.0000000 $0.00 IFT New Facility personal property, all other $ - $ - $ - 0.0000000 $0.00 Commercial Facility Tax New Facility $ - $ - $ - 0.0000000 $0.00 IFT Replacement Facility (frozen values) $ 24,493 $ - $ 24,493 25.3047000 $619.79 Commercial Facility Tax Restored Facility (frozen values) $ - $ - $ - 0.0000000 $0.00 Commercial Rehabilitation Act $ 342,582 $ - $ 342,582 0.0000000 $0.00 Neighborhood Enterprise Zone Act $ - $ - $ - 0.0000000 $0.00 Obsolete Property Rehabilitation Act $ - $ - $ - 0.0000000 $0.00 Eligible Tax Reverted Property (Land Bank Sale) $ - $ - $ - 0.0000000 $0.00 Exempt (from all property tax) Real Property $ - $ - $ - 0.0000000 $0.00 Total Captured Value $ 8,693,117 $ 79,314,492 Total TIF Revenue $1,998,360.49  Budget Performance Report Date Range 07/01/22 - 03/31/23 Include Rollup Account and Rollup to Object Act Adopted Budget Amended Current Month YTD YTD Budget - YTD % Used/ Account Account Description Budget Amendments Budget Transactions Encumbrances Transactions Transactions Rec'd Fund 251 - LDDA General Fund REVENUE Department 62 - LDDA Business Unit 2311 - LDDA General Fund 402 Current Real Property Taxes 402.100 Current Real Property Taxes Tax Incremental Revenue 2,052,254.00 .00 2,052,254.00 .00 .00 2,048,576.98 3,677.02 100 402.110 Current Real Property Taxes Tax Incremental Rev-Prior .00 .00 .00 .00 .00 (77,558.89) 77,558.89 +++ 402 - Current Real Property Taxes Totals $2,052,254.00 $0.00 $2,052,254.00 $0.00 $0.00 $1,971,018.09 $81,235.91 96% 573 State Aid Revenue 573.001 State Aid Revenue State Reimbursement for PPT loss .00 .00 .00 .00 .00 .00 .00 +++ 573 - State Aid Revenue Totals $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 +++ 664 Investment Income 664.010 Investment Income Appreciation - invest value .00 .00 .00 .00 .00 3,769.50 (3,769.50) +++ 664.020 Investment Income Interest-Investments .00 4,000.00 4,000.00 .00 .00 9,515.45 (5,515.45) 238 664 - Investment Income Totals $0.00 $4,000.00 $4,000.00 $0.00 $0.00 $13,284.95 ($9,284.95) 332% 667 Rents 667.020 Rents Rents & Other .00 .00 .00 .00 .00 25,000.00 (25,000.00) +++ 667 - Rents Totals $0.00 $0.00 $0.00 $0.00 $0.00 $25,000.00 ($25,000.00) +++ Business Unit 2311 - LDDA General Fund Totals $2,052,254.00 $4,000.00 $2,056,254.00 $0.00 $0.00 $2,009,303.04 $46,950.96 98% Department 62 - LDDA Totals $2,052,254.00 $4,000.00 $2,056,254.00 $0.00 $0.00 $2,009,303.04 $46,950.96 98% REVENUE TOTALS $2,052,254.00 $4,000.00 $2,056,254.00 $0.00 $0.00 $2,009,303.04 $46,950.96 98% EXPENSE Department 62 - LDDA Business Unit 2311 - LDDA General Fund 801 Prof & Oth Svcs 801.010 Prof & Oth Svcs Professional Services .00 5,500.00 5,500.00 .00 .00 4,036.99 1,463.01 73 801.030 Prof & Oth Svcs Attorney Fees .00 .00 .00 .00 .00 .00 .00 +++ 801 - Prof & Oth Svcs Totals $0.00 $5,500.00 $5,500.00 $0.00 $0.00 $4,036.99 $1,463.01 73% 900 Printing & Publishing 900.010 Printing & Publishing Print-Publish-Broadcast .00 .00 .00 .00 .00 .00 .00 +++ 900 - Printing & Publishing Totals $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 +++ 959 Contribution-Other Govt Entities 959.030 Contribution-Other Govt Entities Surplus Tax 781,777.00 (1,500.00) 780,277.00 .00 .00 .00 780,277.00 0 Distribution 959 - Contribution-Other Govt Entities Totals $781,777.00 ($1,500.00) $780,277.00 $0.00 $0.00 $0.00 $780,277.00 0% 960 Transfer to Primary Government 960.101 Transfer to Primary Government Transfer to General 1,270,477.00 .00 1,270,477.00 105,873.08 .00 952,857.72 317,619.28 75 Fund 960 - Transfer to Primary Government Totals $1,270,477.00 $0.00 $1,270,477.00 $105,873.08 $0.00 $952,857.72 $317,619.28 75% Business Unit 2311 - LDDA General Fund Totals $2,052,254.00 $4,000.00 $2,056,254.00 $105,873.08 $0.00 $956,894.71 $1,099,359.29 47% Department 62 - LDDA Totals $2,052,254.00 $4,000.00 $2,056,254.00 $105,873.08 $0.00 $956,894.71 $1,099,359.29 47% EXPENSE TOTALS $2,052,254.00 $4,000.00 $2,056,254.00 $105,873.08 $0.00 $956,894.71 $1,099,359.29 47% Run by Ted E Dearing on 04/18/2023 01:56:24 PM Page 1 of 2  Budget Performance Report Date Range 07/01/22 - 03/31/23 Include Rollup Account and Rollup to Object Act Adopted Budget Amended Current Month YTD YTD Budget - YTD % Used/ Account Account Description Budget Amendments Budget Transactions Encumbrances Transactions Transactions Rec'd Fund 251 - LDDA General Fund Totals REVENUE TOTALS 2,052,254.00 4,000.00 2,056,254.00 .00 .00 2,009,303.04 46,950.96 98% EXPENSE TOTALS 2,052,254.00 4,000.00 2,056,254.00 105,873.08 .00 956,894.71 1,099,359.29 47% Fund 251 - LDDA General Fund Totals $0.00 $0.00 $0.00 ($105,873.08) $0.00 $1,052,408.33 ($1,052,408.33) Grand Totals REVENUE TOTALS 2,052,254.00 4,000.00 2,056,254.00 .00 .00 2,009,303.04 46,950.96 98% EXPENSE TOTALS 2,052,254.00 4,000.00 2,056,254.00 105,873.08 .00 956,894.71 1,099,359.29 47% Grand Totals $0.00 $0.00 $0.00 ($105,873.08) $0.00 $1,052,408.33 ($1,052,408.33) Run by Ted E Dearing on 04/18/2023 01:56:24 PM Page 2 of 2 Lakeview Downtown Development Authority 2023-2024 Fiscal Year Budget Revenue Item Tax Incremental Revenue $2,306,732.00 (1) Investment Income $22,900.00 Rental Income $25,000.00 TOTAL $2,354,632.00 (1) Assumes captured taxable value of $91,126,406 and capture of City, KCC and County Millage in FY 2023/2024 Expense Item Professional/administrative fees $2,500.00 (2) Audit fees $3,000.00 (2) Contingency $0.00 Unexpended funds $2,349,132.00 (3) TOTAL $2,354,632.00 (2) To City Finance Department (3) Expected to be returned proportionately to City, KCC, and Calhoun County  I-94 in Calhoun County Project – Capital Avenue Bridge Replacement December 8, 2022 MDOT - Marshall TSC  SEVEN MILES OF ROAD PAVING M-311 17 MILE F DRIVE FOUR MILES OF ENHANCED ROAD RESURFACING 9 MILE RIVERSIDE BEADLE LAKE 6 ½ MILE BRIDGE REPLACEMENT CAPITAL AVE OVER I-94 BRIDGE REPLACEMENT BRIDGE REHABILITATION • Design-Build Delivery Method. 2023, 2024 and 2025 Construction • Nine Bridge Replacements, Eight Bridge Rehabilitations • Four Miles of Enhanced Road Resurfacing • Seven Miles of Road Paving • Capital Ave Bridge and Road Reconstruction Capital Avenue CAPITAL AVENUE Interchange BRIDGE & APPROACH RECONSTRUCTION MODERNIZE TRAFFIC SIGNALS AT RAMP TERMINALS ALL RAMP RESURFACING RECONSTRUCTION OF I-94 UNDER CAPITAL AVENUE BECKLEY ROAD WESTBOUND MODERNIZE TRAFFIC RIGHT TURN LANE SIGNALS AT BECKLEY AT BECKLEY ROAD ROAD & CAPITAL AVENUE INTERSECTION Proposed Capital Avenue Bridge EASTBOUND I-94 WESTBOUND I-94 Capital Avenue Bridge Cross-Section SHOULDER SHOULDER  Capital Avenue Bridge Construction • Full closure with no access thru Capital Avenue over I-94. • 75 days construction duration. • Proposed construction start after July 4, 2023. • All ramps open during bridge reconstruction. • Access to Capital Avenue and Beckley Road during bridge work using ramps. • Bridge will be opened prior to ramp reconstruction: • Eastbound Ramps Closure: 2 weeks. • Westbound Ramps Closure: 3-4 weeks.  Capital Avenue Bridge Construction • Improved safety for motorist, pedestrians, and workers during bridge demolition. • Contractor funded shuttle service to be provided on Capital Avenue for pedestrians to get across I-94 during Battle Creek Transit service hours. • Contractor funded traffic calming measures and extra law enforcement on local roads to reduce cut-through traffic in neighborhoods. • $1.5 million savings in project costs.  Capital Avenue Bridge Construction Schedule • Early July: Detour Capital Avenue after the Independence Day Holiday. Full closure and detour of I-94 for bridge demolition will be at night for 12 hours. • Mid July – Early August: Construct cast-in-place concrete substructure & utility construction. • Early August: Intermittent 15-minute night-time full closure of I-94 for prestressed concrete beam erection. • Early August – Early September: Construct cast-in-place concrete superstructure and continue utility & earthwork construction. • Early September – Mid/Late September: Complete bridge approach work, signals, lighting, and slope restoration. • Mid/Late September – October: Open Capital Avenue to traffic and begin ramp closures for ramp pavement reconstruction. Northbound Capital Avenue Vehicle Detour WESTBOUND I-94 ENTRANCE DETOUR ROUTE RAMP AT M-66 CAPITAL AVENUE EASTBOUND I-94 EXIT RAMP AT M-66 BECKLEY ROAD  TEMPORARY TRAFFIC DETOUR ROUTE SIGNALS AT HELMER RAMP TERMINALS CAPITAL AVENUE HELMER ROAD BECKLEY ROAD  Greg Finnila MDOT – Marshall TSC MDOT-MarshallTSC@michigan.gov 269.789.0592