Source: Sherman Publications

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Attorneys agree using DDA funds for police, DPW services is legal

by CJ Carnacchio

March 02, 2011

Much to the chagrin of the Oxford Downtown Development Authority, it appears the village is within its rights to make the entity pay for police and maintenance services provided to its district.

"I cannot conclude the village's decision to retain a portion of DDA revenues to pay for DPW and police services is clearly unlawful or unauthorized," wrote John D. Staran, the Bloomfield Hills attorney who represents the DDA, in a Feb. 16 e-mail.

Staran's e-mail was a response to a Feb. 4 legal opinion by village Attorney Robert Davis, which basically stated the municipality is currently doing nothing illegal or improper by charging the DDA $85,000 annually for DPW services and $60,000 each year for police services.

DDA Board Member Tony Lasher called it a "depressing document" in his motion to receive and file it.

Over the years, these payments have been a bone of contention between the government bodies because the DDA hasn't had any control over how much the village charges it for these services and in light of shrinking revenues, the DDA would like to see more of these funds go toward its various projects related to economic development and promotions.

The DDA has questioned the legality of the village's automatic retention of a portion of its revenues for these basic municipal services.

Based on Davis' review of the DDA's own Development and Tax Increment Financing Plans the entity's governing legal documents the use of DDA revenues for DPW maintenance services is expressly referenced and authorized.

As for police services, the development plan includes as one of its goals the creation of "a positive image of the business district to attract customers and investors and rekindle community pride."

"Obviously, this goal is furthered through the providing of police services a safe downtown attracts customers and investors," Davis wrote.

Staran seemed to largely agree with Davis' assessment of situation.

"I'm not sure I find it as clear as the "I'm not sure I find it as clear as the village attorney suggests particularly regarding police services but I do concur that the plans do include general statements that could be argued or construed to imply or authorize use of DDA revenues for those purposes. (Again, I think it's a little clearer for DPW than it is for police)," Staran wrote.

"Reasonable people can debate whether the intent was to authorize recovery of extra or special DPW or police services beyond the basic level, or whether it covers all basic level services as well. The adopted plans don't make a distinction," Staran continued.

Davis' opinion could lead some to the conclusion that the DDA has no choice but to pay whatever the village sees fit to charge for police and DPW services.

Given the DDA is an "instrument" of the village, not an autonomous entity, under state law, its budget must be approved by the municipality or it can't spend any funds.

"In other words, the Oxford Village Council has the final say on the Oxford DDA budget," Davis wrote.

"The bottom-line is folks, we ain't got much to say about nothing," said DDA Board Member Chuck Schneider.

However, Staran noted that "whatever the village is retaining for such services should correlate to the services actually provided."

"In other words, it's not a money-grab, and the money withheld should correspond to the services provided," Staran wrote.

While the "level of service and the amount that may be recovered is debatable," Staran indicated the reality is it's all up to the village council in the end.

"Their interpretation and determination will prevail unless/until convinced otherwise," he wrote.

Schneider took this to mean the DDA must be more well-prepared when it comes to formulating its annual budget and making its case as to why it needs the money normally taken by the village for police and DPW services. The need for this money must be justified by specific projects, in his opinion.

"We need to change the way we do things in view of this document," Schneider said. "And when we present a budget to the village and we want to reduce the police or the (DPW) contribution, we better have a real good reason why. That means we need to spend a lot more time and effort in developing our budget."