DDA faces budget woes
May 01, 2013
Madonna Van Fossen could be out of a job or find herself working only part-time as executive director of the Oxford Downtown Development Authority (DDA).
"I'm not taking it personally," she said. "I'm totally good with whatever decision (is made)."
Cutting Van Fossen is just one of the options on the table as the village council last week discussed ways to help the DDA deal with declining tax revenues and avoid running a deficit in the upcoming 2013-14 fiscal year, which commences July 1.
"You have a serious financial situation – there's no question about it," said Councilman Elgin Nichols. "They're in trouble."
Right now, there are a number of options being explored including reducing the amount the DDA pays the village for police and Department of Public Works (DPW) services for the downtown area, having the village loan the DDA some money and cutting the DDA director to a part-time gig or eliminating the position altogether.
The DDA was originally looking at proposing a $516,509 budget for 2013-14. The only problem was the authority's projected revenue was calculated to be $440,000, which would have resulted in a $76,509 deficit.
Like many other government entities, the DDA has been forced to deal with declining tax revenues due to decreasing property values over the last few years.
For instance, the total taxable value of properties within the DDA district declined by 3.9 percent for 2013. As a result, the total revenue to be captured by the authority is $383,166, which is $15,560 less than the current fiscal year.
Add to that a projected $14,560 in unpaid delinquent taxes for the upcoming fiscal – that's based on how much wasn't paid this year – and the DDA is looking at $30,120 less in revenue.
Based on current projections, it's estimated the DDA will end the current fiscal year with a deficit of $8,936.
To help ensure the DDA doesn't have a deficit for 2013-14 fiscal year and maintains about 10 percent in reserve monies, three budgets were proposed to council.
The first one cuts the DDA to "skin and bones," as Van Fossen stated in an e-mail, by making significant reductions to its four committees' budgets and requesting the police fee the DDA pays to the village be cut by $9,000 and the DPW fee be reduced by $12,000. It calls for $368,820 in spending and projects a more conservative revenue figure of $405,014, leaving a reserve of $36,194.
Currently, the DDA annually pays the village $60,000 for police services and $85,000 for DPW services.
The second proposed budget cuts $30,000 from the police fee and $54,000 from DPW fee. This proposal calls for $368,280 in spending and a projected $405,014 in revenue, leaving a fund balance of $36,734.
The third proposed budget cuts "a little here, a little there," as Van Fossen put it, from many areas of the DDA's operations and requests the police fee be reduced by $26,000 and the DPW fee by $30,000. It calls for $370,905 in spending and a projected revenue of $405,014, leaving a reserve of $34,109.
When examining these budget proposals, Van Fossen said council is going to have to decide what "value" it "places on what the DDA does and (its) accomplishments over the past four to five years," including "the recognition that Oxford has gotten solely based on the efforts of the DDA"
"What is the value there and do we want to keep that momentum going?" she said.
DDA Chairman Bill Dunn, who's also the township supervisor, told council he believes it's important to keep the authority going because it has helped improve the downtown.
"This community has gotten vibrant," he said. Dunn noted that when he first moved onto Dennison St. 14 years ago, he could have shot into the southwest parking lot from his front window "and maybe hit a car."
"Now, I've got cars on my lawn," he said.
"I think we've got to figure out a way to keep the DDA in place and get through this terrible time," Dunn continued. "If we don't do anything, I think we might start sliding back."
However, he noted, the DDA also has a responsibility to watch "every nickel they spend."
Council President Tony Albensi made it clear he's not in favor of any plan that cuts what the DDA pays for police and DPW services because that would affect the village's proposed budget, which is already very tight.
"Nothing against" Van Fossen, but Albensi suggested completely eliminating the director position or reducing it to a part-time job.
The director position costs the DDA $68,310 annually, which includes $48,900 in wages and $19,410 in benefits.
Van Fossen asked, "Who would oversee the DDA?"
"I think we could probably ask our village manager to take on some of those responsibilities," Albensi replied.
"Is it fair to ask the village manager to take on additional responsibilities . . . that you're today . . . compensating somebody approximately $68,000 (to do)?" Van Fossen asked. "Is it fair to ask (the village manager) to assume these responsibilities without any sort of compensation or any consideration to what his job already is and how full his day is?"
Van Fossen explained how her workload increased significantly after her administrative assistant left and the decision was made to not replace her.
"Since November 1, I have been doing the job of two people and, not that I'm complaining, but it is extremely difficult to keep up with what we have going on right now," she said. "To ask someone else to assume that (workload), I just think, personally, is unfair."
Councilwoman Sue Bossardet also didn't like the idea of village Manager Joe Young trying to do the DDA director's work on top of his own duties.
"I personally don't think that Joe has the time to do both jobs," she said. "He (already spends) practically 24-7 here."
Bossardet doesn't see how Young could possibly incorporate DDA duties into "the little time that he has left" after performing his functions as manager.
Bossardet indicated she preferred the DDA's third budget proposal, which she helped craft. She noted she told Van Fossen if council chose that option "there is no room for leeway (in the budget), period."
"You have no room in the budget to buy an extra pen or pencil, period," Bossardet said. "If we do go through with this, it means that somebody, myself probably, is going to be watching every cent that's spent."
Bossardet suggested that perhaps the village could loan the DDA some money, possibly from the sewer fund, in order to temporarily resolve the financial situation and keep the DDA going. She later told this reporter she was thinking the village could possibly loan the authority $56,000 to cover the police and DPW fee reductions proposed in the third budget option. She made it clear the DDA would be expected to repay this loan.
"There's funds available to do that," Young told council. The manager later proposed loaning the DDA $75,000 over three years at a 1 percent interest rate.
"I do feel that the DDA is a valuable asset to this community," said Bossardet, who noted she fought very hard to get Oxford established as a Main Street community because she "saw the value in it."
"I still see the value in it and I would hate to think that we're going to lose that momentum that we have."
Albensi didn't like the loan idea.
"I'm going to tell you right now, I would not approve any budget that would (include) a loan to the DDA," he said.
He was also critical of the fact that all three proposed DDA budgets listed as revenues $20,000 in corporate sponsorships and $8,000 from potential advertisers on DDA websites.
"You have no idea that those revenues are going to happen – none whatsoever," Albensi said. "If they don't come in, you're $28,000 short of revenues. I'm not sure it's a wise decision to budget in revenues other than tax revenues that you know are going to come in."
Van Fossen indicated she has the DDA board's support when it comes to obtaining corporate sponsorships.
As for the websites, Van Fossen explained that although many of the DDA's previous events, such as Celebrate Oxford, "are now community events," the authority would still collect advertising revenue from the various websites that promote them. "So, that would be purely revenue for us," she said.
Albensi said it "would be great" if the DDA earned all this projected sponsorship/advertising revenue, "but what if you don't?"
"Then (Van Fossen is) out a job," Bossardet said. "I don't like figuring those (projected revenue) totals in there because if you don't come up with it – I looked her right in the eye and told her that she's out a job, period. That's all there is to it."
Van Fossen noted that the DDA's budget problems should not be blamed on the present board. "This current board is the one that actually cleaned up the mess left by past boards," she said. "I'm not going to get into pointing fingers . . ."
At that point, Van Fossen was cut off.
"I wish you wouldn't, Madonna," Bossardet said. "You need to cut it right there. You need to cut your losses right now.
"Don't say anymore. I'm asking you to not say anything more, period, because other boards have done good, too. I think you need to keep your mouth shut. I'm telling you that."
"I agree," Albensi said. "You said you don't want to point fingers, but you just did."