Borrowing

Funding Capital Improvements (.pdf)

June 2005 Michigan Township News Feature Article 

The authority for townships to borrow money and incur debt must be provided by a specific law.

Charter townships are limited to the amount of net indebtedness incurred to 10 percent of the total township assessed valuation (MCL 42.14a).

General law townships are not statutorily constrained as to the overall amount of bonded indebtedness allowed. However, separate limitations are set for certain types of financing. For example, a maximum limit of 5 percent of assessed value applies to certain general obligation bonds.

The Revised Municipal Finance Act directs the Michigan Department of Treasury to regulate township and other municipal borrowing. Before borrowing, a township must, as a general rule, be pre-qualified on an annual basis to issue municipal securities. See the Municipal Finance Web page and Qualifying Statement below for more information:

Michigan Department of Treasury Municipal Finance Web page

Muncipal Finance Online Qualifying Statement

Revised Municipal Finance Act, Public Act 34 of 2001, MCL 141.2101, et seq.

One exception to the requirement to pre-qualify is the installment purchase agreeement: 

Financing Through Installment Agreements (.pdf) Includes sample forms

Installment Purchase Agreement Statute (Public Act 99 of 1933, MCL 123.721)