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Council cuts DDA director, looks to reorganize entity

June 12, 2013 - One vote can make a difference – just ask Madonna Van Fossen.

Last week, funding for Van Fossen's position as executive director of the Oxford Downtown Development Authority (DDA) was completely eliminated from the 2013-14 budget in a 3-2 decision by the village council.

Two weeks ago, one vote was all that separated Van Fossen from the unemployment line as the village council voted 3-2 to adopt a DDA budget that funded the position through Dec. 31.

Van Fossen's last day will be June 30 when the current fiscal year ends.

"I am totally good with that," she told council. "I understand. I've come to terms with it. I have no problem. If you eliminate the director's position, that's fine."

In the absence of a director, Van Fossen encouraged council to "empower" the existing DDA board to do things such as pay fixed expenses, "take a look at projects coming up" and present them to council, and follow procedures that are already in place.

"You've got the people on the board now that know what they're doing," she said.

As a result of council's decision, the DDA will begin its new fiscal year July 1 with a $309,840 operating budget.

The DDA is projected to collect $367,335 in revenue, so it's estimated the authority will accrue $57,495 in reserves (i.e. fund balance) by the end of the 2013-14 fiscal year.

As village President Tony Albensi put it, the 2013-14 DDA budget has been "pretty much stripped down to nothing."

Many line items were reduced to zero.

The major expenditures include $146,700 for bond debt payments, $72,250 for services provided by the Department of Public Works (DPW) and $51,000 for police services – all of which are fixed expenses that require no discretionary oversight.

The budget also includes four $500 sign grants ($2,000) and two $3,500 facade grants ($7,000) for downtown businesses that wish to improve their exteriors.

Given the significantly-reduced nature of the DDA's operations, Albensi once again expressed his belief that there's no need for a director under this budget. "There's really nothing to administer," he said.

Councilman Elgin Nichols agreed.

"There's a lot of things cut out of the budget – who's going to administer things that aren't there? There's no need for it," he said.

Under the DDA budget approved May 28, Van Fossen would have been paid $34,156 in wages and benefits for six months. Normally, the director position was costing the DDA about $68,000 for a full year.

Although the DDA budget adopted June 5 eliminates Van Fossen's position, it must still allocate money for her. It allots $20,000 to cover unemployment benefits should she avail herself of them.

DDA Chairman Bill Dunn requested council consider giving Van Fossen some type of severance package and allowing her to keep her village-owned laptop computer.

"I'm not sure I'd be willing to consider that," Albensi said.

Once again, there was some discussion about the annual fees the DDA pays the village for police and DPW services.

For the upcoming budget year, those fees were reduced by 15 percent. The DDA was paying $85,000 for DPW services and $60,000 for police. At the previous meeting, Councilwoman Maureen Helmuth brought up the idea of gradually reducing those payments to zero over a period of five years. However, that suggestion was not adopted by council.

According to figures supplied by village Manager Joe Young, the DDA has paid the village $1.069 million for these services between 2004 and 2012. That breaks down to $714,045 for the DPW and $355,000 for police.

Councilman Dave Bailey suggested that if the village really wants to help the DDA, it could immediately reduce its DPW and police payments to zero.

He likened the situation to a patient coming into an emergency room with five different injuries that are all bleeding. He said ER personnel wouldn't decide to fix one injury per day for five days; they'd fix them all at once.

"If we want to save the DDA, we want to reduce those (payments) down to zero this year, not over five years," Bailey said. "We've got a problem this year. Let's reduce the bleeding (from) all of the wounds now. Then we don't have a problem, do we? I don't think we do."

Van Fossen recommended the DDA save as much money as it can over the next couple years, so when the DDA board is able to function in "full swing again," it has "a balance left to start with."

"There are things that the (DDA's four) committees and the DDA board can do in the meantime, so when we do get back in full swing, we're ready to go with shovel-ready projects," she said.

There was a lot of discussion about how to reorganize the DDA itself.

Helmuth suggested that the village planning commission take the DDA board's place for one year, while it and its four committees examine what has worked and what has not, then restructure themselves accordingly.

Councilwoman Sue Bossardet proposed that a temporary DDA board be created to oversee things for six months to a year.

She suggested this temporary board consist of all the heads of the various local government entities that are legally required to contribute tax dollars to the DDA.

Right now, the township supervisor and village president currently serve on the board. To them, Bossardet proposed adding the library director, fire chief and director of the township parks and recreation department.

"There are other parties out there that have an interest in the DDA district," she said.

Bossardet suggested these officials because they understand budgets and finances.

"I think that's the biggest thing right now – to get that straightened out," she said.

She proposed having a bank employee with financial knowledge serve on the board, adding a citizen representative and keeping current DDA board members Ed Hunwick and Jim Bielak because of their knowledge and previous contributions.

Bossardet explained she believes there are people on the DDA board right now who harbor "strong feelings" that "are getting in the way of making some sound decisions."

She believes her temporary board is made up of "impartial people" who can better help reorganize the DDA.

Bossardet made it clear she's not saying the current DDA board members aren't "good people," who've worked hard and done their best. "It's just that . . . we've reached that point where it needs to be just different people," Bossardet said.

In order for Oxford to keep its Main Street accreditation, Bossardet proposed having the village manager take on the duties of a part-time DDA director. But she was quick to note that she "would not ever consider that be a permanent appointment."

Albensi didn't like Bossardet's proposal because he doesn't believe "it allows for enough property owner representation."

"I think it's important to have representatives of the various (government) entities that provide monies to the DDA," he said. "But it's also important to have those that are actually paying the taxes. The business owners or property owners really need to be involved."

Currently, the DDA board consists of three downtown property/business owners, two business owners who lease property, the township supervisor, the village president and a township resident. A ninth seat on the board remains vacant. It's supposed to be occupied by someone living in the DDA district.

Both the DDA bylaws and state law require that a majority of the board seats be occupied by "persons having an interest in property located in the downtown district."

Bossardet noted she defines "interest" in the broadest possible sense.

"I think everybody in town has an interest in the DDA district," she said.

Bossardet stressed her proposed DDA board would only be "a temporary thing."

She noted how she would like to see property/business owner representation on the DDA board more equally distributed between the north, south and central areas. Bossardet noted how the current board only has property and business owners from the central area.

Van Fossen pointed out that Mickey Tankersly, owner of PKSA Karate, only recently moved to the central area. Before that, his business was located in the southern end of the DDA district inside the Oxford Marketplace shopping center. She also named three other past board members – Chuck Schneider, Chris Bishop and Kevin Wisely – who represented either properties or businesses in the DDA's south end.

Although he didn't have a proposal, Bailey made it known that he favors changing the DDA's structure as little as possible.

"I'm not sure that we need to kill the patient in order to save it," he said.

Bailey believes the DDA is "doing great in all ways except ... the bottom-line – if you consider the fund balance to be the bottom-line."

According to figures supplied by Young, the DDA's undesignated fund balance was $597,975 in 2001, increased to a high of $820,863 in 2006 and has declined since then. The 2012-13 fiscal year began with a fund balance of $38,189, however, the DDA is now projected to end the year with a deficit of approximately $14,000.

A combination of declining property values, property owners winning their appeals at the state Tax Tribunal and delinquent/unpaid personal property taxes (which amounted to $14,985), gave the DDA $48,000 less in revenue than originally anticipated for the 2012-13 fiscal year. Included in that revenue loss was $11,113 in tax payments from 2010 and 2011 that the DDA had to refund to property owners who won tax appeals.

"I can't deny that the fund balance has been going down," Bailey said. "That's the nature of fund balances – sometimes they go up, sometimes they go down. Sometimes they go down a number of years in a row.

"I don't consider it a disaster if the fund balance goes down a number of years in a row provided there's some (money) there and/or there's some larger organization that's ready to (come to the) rescue if that disaster occurs. Some would argue that a disaster is occurring now and the council is rescuing (the DDA) now."

Based on his many years in private business, Nichols said, "If I see my fund balance dropping as quickly as what happened here, I would take drastic measures and that's what we're all about today."

Van Fossen encouraged council to keep the existing DDA board in place should its membership choose to continue serving. She said this board "does get it" when it comes to finances and has worked diligently to get the DDA's financial house in order.

Van Fossen blamed much the DDA's financial situation, which she described as "a shambles," on the village administration.

"DDA boards of the past have worked very hard, given their time and energy to try and straighten out the financial situation and they have been met consistently . . . with misinformation, with inaccurate information and this is why we're here today," she told council.

Nichols said ultimately, Van Fossen is responsible for what's happened with the DDA. "If there is one person responsible – and I like this person immensely – it would be the person in charge of the ship – the director," he said.

Nichols said Van Fossen should have seen that "things weren't going right" and attempted to "fix" the financial situation.

"If I were the leader, I would take full responsibility for the situation," he said.

Former DDA Chairman Mark Young disagreed. He reminded council members that every time he went before them, he was reminded that "you folks hold the key to (the DDA's) future." He was referring to the fact that all DDA budgets and budget amendments require final approval from council. "To lay it all on one person is inaccurate," he said.

Council was expected to continue discussing the possible reorganization of the DDA's structure at its June 11 meeting.

CJ Carnacchio is editor for The Oxford Leader. He lives in the Village of Oxford with his wife Connie and daughter Larissa. When he's not busy working on the newspaper, he enjoys cigars/pipes, Martinis/Scotch, hunting and fishing.
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