Estimated $8,000 fee increase to the village
By Joseph Goral
Staff Writer
jgoral@mihomepaper.com
LAKE ORION — The Lake Orion Village Council approved an agreement with Orion Township for the township to provide tax collection services beginning July 1 through June 30, 2028 at a fee equal to 1% of scheduled collections on April 28.
The village currently pays $16,000 annually for tax collection but the township is proposing charging 1% of total tax collections annually. This would amount to an estimated $24,000 for 2025, according to village documents.
When Council Member George Dandalides asked for an explanation for the cost increase, Village Manager Darwin McClary told him township Treasurer Matt Pfeiffer said in a meeting with McClary that a township study on the cost of providing tax collection services for all taxing units completed in 2022 found an “equitable” amount to charge by applying the total costs against the pro rata share of taxes collected for each taxing unit.
When Dandalides asked which was more equitable – charging based on the number of properties serviced, or using a percentage no matter what the property’s value is – McClary said he found while reviewing the General Property Tax Act that “it appears” state statute allows a tax collecting unit, the township in this case, to charge a 1% property tax administration fee. He added there were some disagreements on how to charge the fee.
“I think that the village needs to look at additional options going forward after the upcoming year as to how we handle this,” McClary said. “I’ve already mentioned to the council in the previous manager’s report that we need to look at the possibility of maybe taking tax collection activities in-house and performing those activities ourselves rather than contracting out for those.”
McClary said he thinks the village and township should come to an agreement for the upcoming year because the end of the current fiscal year, June 30, is drawing close. He then added he has “no argument whatsoever with the 1% fee.”
Council Member Michael Lamb said the village should continue paying the fee out of pocket so it does not get construed as a tax increase to residents.
According to the agreement, the village will not be required to pay any bank-earned interest on scheduled remittances. Instead, it will remain the municipality’s property, and be used toward coverage of reasonable expenses incurred by the municipality associated with collecting and administration of property taxes.
The agreement also states “if the municipality determines that actual reasonable expenses exceed the anticipated costs, the township may increase the collection charge by up to 10% to cover the additional expenses.” Reasonable expenses are defined as fees proportional to the costs incurred by the municipality for assessing property values, collecting property tax levies and administering the review and appeal processes.
The village can terminate the agreement any time upon six months of prior written notice. Both parties may also terminate the agreement upon providing 30 days advance notice to the other party if the applicable law is materially changed by future legislation.
The agreement may also be amended by mutual agreement between the village and township.
The motion was made by President Pro-Tem Stan Ford and approved 6-0. Village Council President Teresa Rutt was absent from the meeting.