Source: Sherman Publications

DDA budget funds director job until Dec. 31

by CJ Carnacchio

June 05, 2013

One vote was all that separated Oxford Downtown Development Authority (DDA) Director Madonna Van Fossen from the unemployment line – at least for now.

At its May 28 meeting, the village council voted 3-2 to approve a significantly-reduced DDA budget for the 2013-14 fiscal year that includes keeping the director on a full-time basis until Dec. 31, at which point the authority’s financial situation would be reevaluated.

“Basically, what we’re asking is for six months to try to get our stuff together,” explained DDA Chairman Bill Dunn. “We are asking for a chance to see if we can right the ship.”

The DDA is hoping to supplement its depleted tax revenue stream with corporate sponsorships and advertising dollars.

Dunn told council members if they “don’t see any progress” at any point within that six-month trial period, they “could pull the proverbial plug.”

Included in council’s budget approval was a recommendation that officials meet to discuss the idea of reorganizing the DDA’s structure, so if the budget needs amending prior to the July 1 start of the new fiscal year, they can do so. A special council meeting to discuss the DDA will be held Wednesday, June 5 at 6:30 p.m.

The DDA budget calls for a projected $363,939 in revenue and $323,996 in expenditures, leaving $39,943 in reserves.

Many of the line items in the DDA budget were reduced to zero.

The major expenditures include $34,156 for six months worth of wages and benefits for the director; $146,700 for bond debt payments; $72,250 for DPW services; and $51,000 for police services. Council agreed to reduce the DPW and police fees by 15 percent, from $85,000 and $60,000, respectively.

The approved budget also includes four $500 sign grants ($2,000) and two $3,500 facade grants ($7,000).

Council was clearly divided on the DDA budget issue.

“I’m not in favor of this six-month trial because I don’t think it’s going to work,” said village President Tony Albensi.

Albensi believes the DDA should spend as little money as possible and just continue to collect tax revenue for a while.

“It may not be popular, but in order to right the ship, I really, firmly believe that we have to do that,” he said.

Albensi favored keeping spending for things that enhance the downtown, like facade and sign grants, but he was against continuing to fund the director’s position because under this significantly-reduced budget, there’s not much to oversee.

“We’re cutting this (budget) down to nothing. What’s really there to administer? There’s nothing to administer,” he said. “There’s really no need for an administrative expense when the only expenses you have are fixed expenses – other than possibly some facade grants and such.”

Chuck Schneider, who owns multiple properties within the DDA district and used to serve on the DDA board, agreed.

“There is no basis to pay somebody $34,000. There’s nothing to do,” he said. “In my book, there’s no justification for that whatsoever.”

Councilwoman Maureen Helmuth expressed her opposition to cutting the director’s position with the assumption that such a move will somehow solve the DDA’s financial difficulties.

“I think we’re trying to solve one problem by making another problem,” she said. “Let’s just get rid of the executive director – that will solve all our problems. That’s not going to solve a single problem.”

“Someone’s still going to have to do some of (the DDA director’s) work,” noted Helmuth. And it shouldn’t be village Manager Joe Young, in her opinion.

“I don’t think anyone on this board can expect him to take one additional item and put it on his plate,” Helmuth said. “He cannot do it. He’s going to have a stroke . . . We cannot make him take on more. He’s already doing triple duty. It’s not fair to him.”

Albensi reiterated his opinion that given the significant reductions in the DDA budget, the director’s position “is definitely not a necessary expense.”

“You have to ask yourself can we afford (to fund the director’s position)? And according to what I’m looking at right now, no, we can’t,” said Councilman Elgin Nichols, who noted the DDA might be able to after it’s reorganized, “but not right now.”

“Unless you see something I don’t see,” he added.

Helmuth admitted she doesn’t see “millions of dollars” in revenue coming in, “but I do think we can do better than this.” She said the DDA budget doesn’t leave a lot of room, “but it does leave something.”

“Do I think it’s a great budget? No. I think we can do better,” Helmuth said. “I don’t think (cutting the director) is the right step.”

A motion to completely eliminate the director’s position from the budget failed in a 3-2 vote.

Nichols was of a similar opinion as Albensi about the idea of giving the DDA a trial period.

“I can’t see anyway that the DDA’s going to get out of this – even in six months,” he said. “I still feel strongly that the DDA needs to be frozen – the assets need to be frozen.”

Money would only be expended on bills that must be paid. In Nichols’ view, the DDA should be kept “in place,” but its structure should be reorganized.

Councilman Dave Bailey explained he was “fine” with cutting the DDA budget “way back,” but not to the point where it can do nothing.

“I would probably be opposed to cutting it to zero – just allowing the monies to accumulate,” he said. “For one thing, it doesn’t look good . . . If they continue to function, no matter at what low level, I would regard that as a better solution than to have them function at level zero.”

Helmuth expressed her desire to see the DDA’s payments for police and DPW services reduced and eventually eliminated altogether.

“I have never been a proponent of the DDA paying the DPW and the police any money,” she said.

Helmuth suggested these payments be gradually reduced over a period of say five years until they’re zero.

“I think the village can’t just cut it out all at once, but I think we can take the step to reduce that amount,” she said.

In the future, whenever the DDA makes an improvement to the downtown – such as a parking lot that will need to be plowed, swept and eventually repaved – Helmuth suggested the authority makes a lump sum payment upfront to cover maintenance by the DPW and “that’s it,” no perpetual charges.

On this issue, Dunn agreed with Helmuth.

He doesn’t believe it’s “fair” for the DDA to pay the village $145,000 annually for these services and it’s “rubbing people wrong.” Dunn explained how the fire department doesn’t bill the DDA for its services and neither does the township parks and recreation department when it loans $500 tents, free of charge, for downtown events.

“Should they send the DDA a bill?” he said. “All I ask is fairness.”

Bailey noted he doesn’t believe a gradual reduction of the DPW and police fees is necessary. He said it could be done all at once in a single budget year.

“I see no need to scale back slowly on transfers from the DDA budget to the village budget,” he said.

Councilwoman Sue Bossardet agreed with Helmuth’s view that there has to be a better way to deal with the DDA’s financial crisis.

“Although I don’t have a better idea, I just feel like we’re going about this the wrong way,” she said. “I think we should have had some discussions about reorganization because that definitely needs to be done. I’m not sure that we’ve talked about it enough.”

“I hate to have the village council have to take over everything and that’s not my intent,” she added. “We’re putting the cart before the horse.”