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Council looks at reducing DDA director to part-time, cutting fees for services

by CJ Carnacchio

May 22, 2013

No final decisions were made, but it appears the Oxford Village Council is coming closer to finally deciding how to handle the troubled Downtown Development Authority (DDA) budget.

"There's some serious surgery to be done here," said Councilman Elgin Nichols.

Last week, council voted 4-1 to direct Manager Joe Young to run the numbers and bring them back for presentation at the village's May 28 meeting when the village must approve a budget for the DDA, which is currently facing projected budget deficits for both the current fiscal year ending June 30 and the 2013-14 fiscal year.

Specifically, council wants to see what the impact on the village budget would be should the DDA's required contribution for police and Departments of Public Works (DPW) services be reduced by 15 percent.

Basically, that means cutting the DDA's annual police contribution from $60,000 to $51,000 and its annual DPW fee from $85,000 to $72,250.

"I'm not necessarily against reducing the police and DPW amounts, but I need to see what that does to the entire budget, not just (the DDA's) portion of the budget and where (we're) going to make up that difference," said Councilwoman Maureen Helmuth.

In that motion, council indicated it also wanted Young to include the figures for cutting DDA Director Madonna Van Fossen's position from full-time to part-time.

And by part-time, village President Albensi specifically mentioned he wanted her wages cut in half (20 hours instead of 40 hours per week) and there would be no fringe benefits such as health insurance.

Currently, Van Fossen earns approximately $68,000 annually in wages and benefits.

Albensi has been a consistent advocate of either reducing or eliminating the director's position.

"I strongly believe that we need to make some administrative cuts," he said.

Former DDA board member Don Sherman told council members that should they decide to reduce or eliminate the director's position, "there will be no problem for (Van Fossen) to move on" given she's won all the awards she possibly can and the fact that she puts in "more hours than any of you on any given day."

"If you choose to make (the director's job) a part-time position, I can tell you it's not going to be her," he said.

Like many other local governmental entities, the DDA has seen its tax revenue shrink due to declining property values and property owners who have won tax appeals.

For instance, the budget originally approved for the 2012-13 fiscal year estimated the DDA would capture approximately $417,000 in property tax revenue. It's now estimated the DDA will finish the current fiscal year with about $377,000 in tax revenue a decrease of approximately $40,000.

DDA Chairman Bill Dunn noted how the taxable value of the properties within the DDA district that the authority is able to capture revenue from shrank by more than $3 million from $18.92 million in 2009 to $15.85 million in 2013. He told council the DDA is now capturing about $75,000 less in tax revenue than it was in 2009.

Nichols indicated the village needs to take a good look a what it charges the DDA for police and DPW services. He noted that if the authority didn't exist, the downtown area would still require these village services.

Given that, Nichols believes the DDA should only be charged for any additional services the downtown receives above the level of services it would normally require as part of the village, "not the whole thing."

"We need to investigate what they really should be charged for depending on the usage," he said.

It should be noted that if the DDA didn't exist, the $160,000 to $180,000 that it annually captures in village tax dollars would go straight to the municipality.

Sherman accused the village of using the DDA "like a credit card," taking money whenever it needs or wants to.

"When the village runs into a situation where they've got some bills they need to pay let's go to the DDA," he said.

"That's not a fair statement," Albensi responded.

"Well, it's my opinion," Sherman said. "It's not whether it's fair or not. It's my opinion."

DDA Chairman Bill Dunn, who also serves as the Oxford Township supervisor, noted how the fire department also provides services to the downtown area and "you know what they charge" the authority?

"Nothing," he said. "I think the village could maybe rethink the amount that they charge (for police and DPW services). It just doesn't seem to be equitable."

Helmuth noted she saw some "small areas" in the proposed DDA budget that could be eliminated for now, like funding for the community awards event and paying to string Christmas lights in Centennial Park.

"I just think there's ways here that we can make additional cuts," she said.

Albensi agreed.

"There's some little numbers throughout here that could add up to potentially a significant amount," he said.

Resident Laura Traylor objected to the idea of cutting the Christmas lights because they help attract visitors to the downtown area. She said downtown Rochester is "bustling" during the holiday season because of their lighting display.

Dunn asked council to consider giving the authority a six-month trial period to allow the DDA board and director "the chance to prove that they can get out of this mess."

Basically, the DDA would have six months to try to turn things around financially by soliciting sponsorships and internet advertising dollars to help bring in more revenue.

"(Council has) the ability to pull the plug at any time, but I do believe we deserve a change to try to get out of this," Dunn said. "I'm not going to stand here and blame anybody. There's enough blame to go around. We are where we are."

[At the Monday, May 20 DDA meeting, the board voted 6-1 to recommend a proposed budget to council that makes significant cuts in multiple areas, including 15 percent reductions in the police and DPW fees, but keeps the director's job as full-time until December. It's at that point the financial situation would be reevaluated.]

Dunn told council he doesn't want to lose the "momentum that the Village of Oxford has gained over the last few years" in terms of the downtown's growth and success.

"I believe we can maybe pull this out," he said. "The township needs a vibrant downtown. We just need it for the merchants here."

Dunn noted how "things are starting to happen" with regard to the local economy. As an example, he cited the fact that the township already has more than 30 new housing starts this year.

Councilwoman Sue Bossardet questioned the DDA's ability to oversee its own finances.

"The DDA is in need of an emergency financial manager," she said. "You're no different than the City of Detroit (or) any other community that's going through it."

Bossardet explained that she witnessed things in the "immediate past" that made her feel "like the DDA board is spending money that they don't have." She noted how people on that board voted to spend money on things "knowing that it's going to put (the DDA) further in debt than (it was) before."

Regarding Dunn's suggestion of a six-month probationary period, Bossardet said, "The fact is you have no money for like six months, so the village is going to be fronting every cent that you are spending up until then.

"That's where I'm struggling with allowing you to have freedom to do that."

Bossardet noted she agreed with Helmuth that there are more cuts that could be made to the DDA's proposed 2013-14 budget.

"When you have an organization that's bleeding, what do you do?" she asked.

Like Helmuth, she too cited funding for the community awards program as potential cut. "It's really nice, but when you're bleeding, is that important to do?" Bossardet said.

DDA Treasurer Ed Hunwick took exception to Bossardet's comments about the board's spending practices.

"We are actually spending less money in this current year's budget than what was originally approved," he said, noting when the DDA board saw that it would be receiving less revenue than originally anticipated, it backed down on its spending.

"We didn't spend more money that what was approved by this (council)," Hunwick added.