July 03, 2013 - Madonna Van Fossen won't receive any severance pay, but the Oxford Downtown Development Authority (DDA) will get a temporary cash infusion to cover its deficit.
Last week, the village council voted 4-1 to deny the DDA board's request that Van Fossen, who's last day on the job was June 26, be given a $3,015 severance package and be allowed to keep her municipal-owned laptop computer.
Council previously eliminated the DDA director position from the 2013-14 budget, which took effect July 1, in an effort to help the financially-struggling entity save money.
Village President Tony Albensi, who also serves on the DDA board, said he voted against the severance package because the DDA was already facing an estimated $15,000 deficit for the 2012-13 fiscal year, which ended June 30.
The only other DDA member who voted against the severance recommendation was Chairman Bill Dunn.
Had council approved the recommended severance payout, the DDA's deficit would have increased to $18,000.
Albensi explained that just prior to the DDA's severance recommendation, the board told a business owner it didn't have $1,500 to fulfill a request for a facade grant.
"I understand why the DDA board said that because they really didn't have the $1,500 that (the business owner was) requesting," Albensi said.
However, he couldn't understand how the board could then turn around in the same meeting and recommend a $3,015 payout to Van Fossen "knowing full well that they didn't have any money to pay for that severance package."
Councilman Elgin Nichols agreed.
"One thing that really disturbs me is the fact this (DDA) board that I saw some real promise in, (took) it upon themselves to spend even more money that isn't theirs to spend," he said. "They're asking the village to provide funds for the severance pay."
Given "the DDA is in shambles financially," Nichols said he couldn't support paying a severance to Van Fossen, whom he called "the leader of this catastrophe."
It was noted there's no provision requiring any severance pay in Van Fossen's employment contract.
Council was also unwilling to give away a village-owned computer with an estimated replacement cost of $1,500.
"There's no way that I would let a computer leave the municipality," said Nichols, who was concerned about it containing proprietary information.
"It's a computer that this office could use for whatever it may need it for," Albensi said.
Following the severance discussion, council voted 5-0 to transfer $15,000 from its general fund reserves to cover the DDA's deficit. The expectation is the DDA will repay the village with revenue from the 2013-14 fiscal year.
"The DDA is not going to be broke next year," Dunn said. "You (council) have taken steps to make (the DDA) solvent. This $15,000 would basically be a loan that would be paid (back) as soon as we get our first (property tax revenue) check."
"What are the repercussions if we don't do this and it shows up on the (annual) audit?" asked Councilwoman Sue Bossardet.
Manager Joe Young said in that case, the village would be obligated by law to file a deficit elimination plan with the state to "explain how we're going to get rid of the deficit."
"It's better to have a cleaner audit," noted Councilwoman Maureen Helmuth.
"It just seems like we're cleaning up this mess," Bossardet said.
Instead of being unaware of the deficit or ignoring it like "many other communities," Young said village officials "know there's a problem and it needs to be fixed," so they're doing what's "right" to rectify the situation.
"I see no reason why we shouldn't do the right thing and make good this discrepancy," said Councilman Dave Bailey.
Dunn pointed out the DDA's financial situation is not just the board's fault. He was referring to the oversight role both council and the village administration play in the DDA's budget process and finances.
"There's enough blame to go around for the mess we're in," he said. "To say it's the DDA's problem . . . it's all of our problem."
A combination of declining property values, property owners winning their appeals at the state Tax Tribunal and delinquent/unpaid personal property taxes, gave the DDA $48,000 less in revenue than originally anticipated for the 2012-13 fiscal year, according to figures provided by Young.
Included in that revenue loss was $11,113 in tax monies from 2010 and 2011 that the DDA had to refund to property owners who won appeals. Delinquent/unpaid personal property taxes amounted to $14,985.
The DDA began the 2012-13 fiscal year with a relatively small fund balance (i.e. reserves) of $38,189.
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.