BRAND NEW BUCHANAN DDA PLANS “WORK AROUNDS” FOR LEGAL REQUIREMENTS

By Kate Gassman
BCR Editor

BUCHANAN, MI – Last week the freshly formed DDA for the City of Buchanan held its third meeting since its inception in early June. A full agenda from the meeting can be viewed here. The discussion opened with a review of bylaw changes and then public comment from Former LIVE Buchanan Chair, Randy Hendrixson, who  urged the DDA to absorb LIVE Buchanan. This was followed by a report from City Manager Tony McGhee after a meeting with the city’s attorney. The attorney recommended the DDA not assume control of LIVE Buchanan. The DDA chose to follow the attorney’s recommendation, and there was no further action. This means the DDA will not have a 501c3 arm, which limits their ability to accept funds through a nonprofit.
Next the DDA provided an overview of their financial position. The DDA currently has $201,979 liquid cash assets with ~$193,170 encumbered in capital improvement investments. At the city manager‘s recommendation, the DDA voted unanimously to keep only $50,000 liquid and purposely encumber the remainder in investments.
This decision comes with the reasoning that there is no need to use any of it on downtown improvements and they would prefer to encumber the funds. Members of the audience commented “How about you invest in your downtown that’s about to die?”
The majority of the rest of the meeting was spent listening to a presentation from Dan Fette, Director of Community Development for Berrien County. The presentation included the responsibilities of a DDA according to the state of Michigan, an overview of TIF funds and what they can be used for, and some cautionary advice for the new DDA.
Fette noted that the DDA must provide direct support to businesses that are in the downtown. One way they can do this is specifically through loans.
He cautioned them that there are reporting requirements for DDAs, which the BCR reported on in June. Fette said most DDAs get in trouble in that area. He noted specifically that “Reporting is burdensome.”
They must publish an annual synopsis on their website. They must demonstrate consistency with their TIF plan. If they fail to comply, they risk review from the Michigan Department of Treasury. Further reporting requirements include an annual report to Treasury specifically, which is different from the one that must be filed on the DDA’s website. This report is more technical.
Fette noted that TIF funds may only be spent on physical structures and buildings. He also noted that they must all be spent in their entirety. There can be no surplus funds. But he did provide them a “way around it” saying that money can be encumbered into projects or show that it is being saved for specific projects. In comparison, the former DDA that dissolved in 2020 operated at a loss each budget year so that they complied with this requirement and intentionally spent down surplus funds.
Fette encouraged the DDA, saying that their new TIF plan would be written by him, making their work requirements minimal. All they had to do was decide what they wanted to put in it. However, members of the DDA weren’t sure what they wanted to do to improve the downtown.
       DDA Chair Richard Paniagua asked Fette how they are supposed to figure out what they want to do to help the downtown? He asked if they should form a subcommittee. Fette answered in the negative, and suggested they coordinate with their planning commission. He also urged them to invite public opinion to find out what the citizens of the downtown would like to see, and suggested they talk to friends and neighbors.
After the presentation DDA chair, Paniagua asked about the timeline to get the TIF plan finalized. Fette said by the end of the year is possible, but if that deadline can’t be met, there isn’t a big problem because the TIF plan from 2007 is still in effect. The DDA can operate using the existing plan.
If it takes until February or March that would be acceptable. This deadline comes after City Manager Tony McGhee assured the city at a commission meeting earlier in the year that the DDA would be up and running and ready to work hard by November.
The final item the DDA addressed was a marketing plan. There were two committees formed at previous meetings, one of which was for immediate relief efforts and marketing of the downtown during the construction and one was a general marketing committee.
The DDA general marketing committee has only four members, which does not constitute a quorum. This means they are able to meet informally without public audience. However, City Clerk Langston cautioned the committee, saying “there better be no decisions made” at that meeting. Despite objections from Vice Chair Joseph Williams, who was purposely excluded from the general marketing committee, the four members will meet informally without public scrutiny at Thistledown and Row on Thursday, August 21 at 5 PM.
When DDA member Sydney Finan reminded the members that the immediate relief committee had agreed to do something to support a local business by this meeting’s date, Paniagua suggested they all attend a fundraiser on September 6, and “tip back a few drinks.” He felt this was enough of a support for the downtown businesses, despite pleas to the contrary from local business owners, stating they are in peril.
Finan also commented, “Do we even have a list of businesses in the downtown?”
After their public fumbling, and lack of action, McGhee still encouraged the DDA at the end of the meeting, saying they are doing a lot for only being three meetings in. He acknowledged some pain points, but wanted them to think they are doing well, despite forming zero plans for relief for businesses in the downtown.