Crowdfunding: Tapping into Local Investment Power

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Pauline Rupp, Nate Scramlin, Summer Minnick, Nheena Weyer Ittner, and Ibrahim Varachia

League members filled the room, anxious to learn about how crowdfunding could benefit their communities. Summer Minnick, the League’s director of policy initiatives and federal affairs, engaged the audience with an interactive activity designed to gauge their current level of knowledge on crowdfunding. With clickers in hand that would record their votes, people answered a variety of questions on their familiarity with crowdfunding and its potential impact on their community. Understandably, the majority – 46% – rated their knowledge of crowdfunding as so-so. Stay tuned for the results at the end of the session. Minnick then enlightened the audience on the basics of crowdfunding – using a small amount of money to make a big impact in a new project of business venture. Michigan’s new crowdfunding law – Michigan Invest Locally Exemption – allows businesses to raise capital from accredited and non-accredited investors. “Non-accredited investors are about 93% of the population,” said Minnick. “That is what’s exciting about this for communities and entrepreneurs.” As evidence of crowdfunding’s economic value, she cited some impressive statistics. In 2014, crowdfunding added 270,000 jobs and pumped $65 billion into the U.S. economy. Michigan is at the forefront of the crowdfunding movement, which gives communities a powerful new economic development tool. This can lead to success for local entrepreneurs, local investors and the community as a whole. Minnick cited the example of Tecumseh Brewing Co., the first Michigan company to successfully raise capital under Michigan’s new crowdfunding law. They were able to raise $175,000, largely from local people who knew their business and wanted see it grow and develop.

Next, Nate Scramlin, MEDC, Community Assistance Specialist, filled in the audience on MEDC’s new crowdfunding initiative, Public Spaces, Community Places. In an effort to promote vibrant communities and attract talent, MEDC launched this matching dollar program to help communities with traditional downtowns create placemaking projects in public areas such as trails, alleys and public plazas. They have partnered with the League and Patronicity – a Detroit-based crowdfunding portal – to bring the value of crowdfunding to projects across the state.

Ibrahim Varachia, Patronicity co-founder, shared how his company works with Public Spaces, Community Places applicants to develop successful crowdfunding campaigns. Patronicity takes them through the important steps of identifying their project idea, establishing a funding goal, setting a timeline, and creating a unique pitch, video and reward. Varachia emphasized that setting a relatively short timeline – 30 days – creates a sense of urgency among potential donors and is generally results in more success. Marquette’s Skatepark was one of the first projects to take advantage of the MEDC crowdfunding program.

Nheena Weyer Ittner, director of the Upper Peninsula Children’s Museum, was active in helping the community raise about $200,000 to build the skatepark. When they needed $20,000 to add the finishing touches that would make the park an inviting gathering space for the entire community, she turned to Patronicity to help her create a successful fundraising campaign. With Patronicity’s expertise, Ittner’s enthusiasm, and a supportive community, the campaign did indeed reach its goal and gain the matching funds from MEDC. Now, remember how the audience rated their crowdfunding knowledge before this session began? By the end of the hour, 82 percent of the attendees rated their knowledge of crowdfunding as good or very good!

Changes to MDOT Annual Certification of Employee-Related Conditions Signed by the Governor

Senate Bill 882 has been signed by the Governor and is now Public Act 301 of 2014. This has been a long process and the Michigan Municipal League would like to thank all of those have helped with the passage of this bill. They include Senator Casperson and his staff, Representative Schmidt, Representative Kosowski, policy staff, MDOT, Munetrix, and most importantly our members for all of the outreach they did on this issue.

The final version of this bill eliminates the requirement for cities and villages to post their current fiscal budget, list the number of transportation employees, and create an additional dashboard. It pushes the implementation date back to September 30, 2015 and maintains the requirement to certify with the department that you are in compliance with PA 152. It also requires that communities inform MDOT if they have opted out of PA 152. If you fail to send in your certification form to the department they may withhold your Act 51 funding.

John LaMacchia is a Legislative Associate for the League handling transportation and infrastructure issues. He can be reached at jlamacchia@mml.org or 517-908-0303

Changes to MDOT Annual Certification of Employee-Related Conditions Sent to the Governor

Senate Bill 882 was sent to the Governor for signature after the Senate unanimously concurred in the House changes. The Michigan Municipal League supported these changes and is very thankful for the work put into this legislation by Senator Casperson and his staff.

The final version of this bill eliminates the requirement for cities and villages to post their current fiscal budget, list the number of transportation employees, and create an additional dashboard. It pushes the implementation date back to September 30, 2015 and maintains the requirement to certify with the department that you are in compliance with PA 152. It also requires that communities inform MDOT if they have opted out of PA 152. If you fail to send in your certification form to the department they may withhold your Act 51 funding.

John LaMacchia is a Legislative Associate for the League handling transportation and infrastructure issues. He can be reached at jlamacchia@mml.org or 517-908-0303

Senate Passes Firefighter Bargaining Preemption

This morning the Senate passed on House Bill 4624, a bill that would make a full-time firefighter’s ability to work as a firefighter in another community a prohibited subject of bargaining.The legislation is supported by the fire chiefs and the Michigan Townships Association.

The League is opposed to this legislation as it violates local control in the bargaining process. The bill now goes back to the House for concurrence.

Samantha Harkins is the Director of State Affairs for the Michigan Municipal League.  She can be reached at 517-908-0306 or email at sharkins@mml.org

Senate Unanimously Passes Bill Clarifying Reasonable Court Costs

Earlier this year the Michigan Supreme Court held in People v. Cunningham that a court may impose costs in a criminal case only if those costs are authorized by statute. This decision has a huge impact on courts across Michigan including our district courts.

This morning the Senate passed House Bill 5785, legislation that would allow a court to impose any reasonable cost on a defendant found guilty of a crime. Unfortunately on the House floor an amendment was added that would sunset the legislation in 27 months. The Senate increased the sunset to 36 months.

Reasonable costs include salaries and benefits of court personnel; goods and services necessary for operation of the court; and/or necessary expenses for the operation and maintenance of court buildings and facilities.

The bill requires the court to make available to the general public and the defendant information about any costs, fines or assessments imposed beginning June 18, 2014.

The legislation now goes back to the House for concurrence.

Samantha Harkins is the Director of State Affairs for the League handling municipal finance issues.  She can be reached at sharkins@mml.org or 517-908-0306.

Costly PA 54 Exemption on its Way to the Governor

We were told a costly PA 54 exemption, HB 5097, was a priority for the Governor. Now it is on its way to his desk for his signature.

House Bill 5097 exempts police and fire from Public Act 54 so that they can have retroactive pay increases after a contract expires. In the House-passed version they included retroactive health care language that references PA 152 of 2011 (the 80/20, hard cap, opt out legislation). The language is confusing and unnecessary, and we suspect it will result in major issues during negotiations.

The Michigan Municipal League has strongly opposed this bill due to the detrimental financial implications for our communities.

In 2011 the legislature passed a number of reforms to help employers control costs and be better stewards of taxpayer resources. One of the, if not the, most significant reform was to prohibit retroactive pay increases after a contract has expired. This game changing statute, PA 54 of 2011, has helped communities settle contracts more quickly and provides more certainty in municipal budgets.

HOWEVER, according to the Michigan Employment Relations Commission there were only 43 PA 312 filings in 2013 as opposed to 69 in 2011. PA 312 filings are significantly lower than they were before enactment of PA 54. In addition, even if the legislature only intended this for teachers, it has been a game changer for municipal budgets, and it’s critical that we keep this tool to allow local units the opportunity to settle contracts expeditiously and save taxpayers money.

Unfortunately these arguments fell on deaf ears in the legislature, and HB 5097 passed both chambers overwhelmingly.

Samantha Harkins is the Director of State Affairs for the League.  She can be reached at sharkins@mml.org or 517-908-0306.

Fire Escrow Withholding Legislation Receives Committee Hearing

HB 5862, a bill to amend the insurance code of 1956 to increase the maximum fire insurance escrow withholding for demolition of fire damaged property, received a committee hearing today in the House Local Government Committee.  Currently, the maximum amount allowed is $6,000 with inflationary adjustments.  This is about half of what the cost is for average demolition costs of fire damaged property.  HB 5862 will increase that amount to $12,000 with inflationary adjustments.  This will be a great help to local communities in combating blighted property and creating a safe environment for local residents.

Thank you to Rep. Amanda Price for introducing this legislation and bringing it before the committee for testimony.  Also, thank you to officials from the city of Detroit and city of Jackson for coming to testify in support of the legislation and how this would assist them in their daily efforts in battling blight.

Nikki Brown is a legislative associate for the League handling economic development and land use issues.  She can be reached at nbrown@mml.org or 517-908-0305.

Full Senate Passes Michigan Investment Market Legislation

HB 5273, a bill dealing with Michigan investment markets, unanimously passed out of the full Senate today!  HB 5273 would give businesses and residents in Michigan the ability to become broker-dealers to create a market (online or in person) through which intrastate stocks can be listed, bought, sold and resold. Those interested in purchasing stock from local companies would have easy access to the listings of all the companies on the exchange and show these potential investors that there is indeed a market for what they may be purchasing.  Exchanges must apply and be registered with the state as well as follow rules of operation laid out in the legislation which will provide security for all those participating, both the businesses and the investors.

This is the next progression from the MILE/crowdfunding legislation that was passed earlier this year and we are thankful to Rep. Jenkins for working so diligently to help small businesses in our local communities grow and prosper.

Nikki Brown is a legislative associate for the League handling economic development and land use issues.  She can be reached at nbrown@mml.org or 517-908-0305. 

House Passes Changes to MDOT Annual Certification of Employee-Related Conditions

The House passed SB 882 yesterday by a vote of 107-2. A floor amendment was adopted creating an additional change to the bill. The amendment states that when cities and villages certify to MDOT their compliance with PA 152 they will also have to inform MDOT if they opted out. Concurrence in the House changes should happen in the Senate this morning, followed by the Governor’s signature before the end of the day.

The final version of this bill eliminates the requirement for cities and villages to post their current fiscal budget, list the number of transportation employees, and create an additional dashboard. It pushes the implementation date back to September 30, 2015 and maintains the requirement to certify with the department that you are in compliance with PA 152 along with the additional information of whether or not you opted out. If you fail to send in your certification form to the department by September 30, 2015 they may withhold your Act 51 funding.

John LaMacchia is a Legislative Associate for the League handling transportation and infrastructure issues. He can be reached at jlamacchia@mml.org or 517-908-0303

Mobile Home Park Legislation Passes Out of Committee

The House Regulatory Reform committee passed out HB 5513 this week, a bill that makes changes to the Mobile Home Commission Act.  HB 5513 was introduced by Rep. Andy Schor in an effort to address a situation that occurred in his district with the Life O’Riley Mobile Home Park. This legislation requires the DEQ to outline clear roles for local units of government and enforcement (a problem that occurred with the Life O’Riley mobile home park that ended being condemned and residents forced to seek housing elsewhere). In addition, there are more reporting requirements of the DEQ to local units of government of rules promulgated or when a mobile home is found to be in violation.

The League is supportive of this legislation.

Nikki Brown is a legislative associate for the League handling economic development and land use issues.  She can be reached at nbrown@mml.org or 517-908-0305.