The Saline Reporter
A Heritage Newspaper
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ACH, city reach agreement on tax appeal
City to refund manufacturer more than $200,000 in taxes
By Sue G. Collins, Staff Writer
PUBLISHED: May 29, 2008
The city of Saline is poised to refund more than $200,000 in taxes after the City Council approved an agreement May 19 to present to Automotive Components Holdings LLC in a tax assessment dispute.
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Representatives from ACH appealed the personal property assessments for 2006 through 2008, claiming the city over-estimated the value of equipment, computers and furniture at the Michigan Avenue plant by 76 percent.
"After much negotiation and review, it was determined that some obsolescence did exist; however, much less than the 76 percent originally claimed," wrote City Assessor Catherine Scull in a memorandum May 12 to the council.
The 2006 and 2007 personal property tax bill for ACH will be decreased by approximately $8,800 each year and this year's taxes will decrease by about $8,100.
"We talked to many other communities and state and nationwide agencies that provided input," Scull said. "We feel this is a fair agreement that will allow us to put the past behind us and move ahead."
City Finance Director Lee Bourgoin said the funds have been in an escrow account and will be released once the city receives notification from the Michigan Tax Tribunal.
The settlement should prove helpful as ACH moves forward in a purchase agreement with Johnson Controls, which announced in November its intentions to buy the automotive interiors business based in Saline.
In 2006, the city granted ACH a two-year tax abatement in light of the company's plans to invest more than $19 million in the plant on Michigan Avenue to make it as attractive as possible to potential buyers.
The Saline plant covers 1.6 million square feet on 189 acres. In 2005, the plant won international supplier acclaim for two injection-molding processes and other plastics innovations. Its product mix includes instrument panels, fully contented cockpits, door panels, door trim and consoles for a variety of Ford vehicles.
The plant has been in Saline for more than 40 years. The facility opened in Saline in 1966 as a Ford Motor Co. plant before it was spun off in 2000 to become Visteon. At its peak, the plant employed almost 2,500 workers. It now employs closer to 1,100.
ACH was formed in 2005 after Ford Motor Co. took back 23 facilities from Visteon Corp., a supplier of instrumentation panels and consoles that was on the verge of bankruptcy. The holdings company was charged with selling or closing the properties by the end of 2008.
The confirmed sale should provide some relief for city staff and council members drafting Saline's fiscal budget, as ACH provides about 9 percent of the City's tax income.
Budget Woes
Bourgoin cited the plant's sale as one of four factors that will affect the city's general fund balance. He said, as the city expands its boundaries, annexing new residential developments, as the housing market improves and as city-owned industrial park property is sold, the balance should improve.
"Still, we must change the way we do business," said Mayor Gretchen Driskell. "We need to continue to cut costs everywhere we can."
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