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Act 188 of 1954 (“Act 188”) is a statute that many townships use to finance many improvements using special assessments ranging from lake improvements to rubbish collection. See MCL 41.722. Although Act 188 requires townships to approve project costs, there are times when a township may collect more in special assessments from property owners than it expends on a project. See generally, MCL 41.725.

If a township collects surplus assessments under Act 188, it has a couple of options. If the surplus assessments collected account for greater than 5% of project costs, then a township must prorate refunds of the surplus to properties (not property owners) within the special assessment district. MCL 41.732. A township must do this by applying the refunds on the next township property tax roll or by resolution if there will be no taxes levied on a property. Id. When collected surplus assessments are less than 5% of project costs, it is our opinion from the language of Act 188, that a township may either move the funds into a township’s general fund or prorate refunds to properties (not property owners) in any manner. For reoccurring assessments (e.g. rubbish collection), a township may want to apply any surplus funds to future assessments for the same purpose.