BUCHANAN DDA AD HOC COMMITTEE PUSHING FOR ANSWERS FROM THE CITY OF BUCHANAN

By DEBRA HAIGHT
BCR Correspondent

BUCHANAN – Like many municipalities, Buchanan city officials are being creative in how they hold governmental meetings and invite the public to participate in light of the restrictions brought about by the COVID-19 pandemic.

The City Commission has held virtual meetings since March and last week the city’s Ad Hoc Committee on the Downtown Development Authority met virtually with attorney Thomas King. King is a former Kalamazoo city staff attorney and is well versed in municipal and governmental law. He has been in private practice for over 25 years.

The meeting appeared to bring some clarity to the ongoing dispute between the City of Buchanan and the Buchanan Downtown Development Authority. The two entities have been at odds for nearly a year over issues relating to the DDA’s mission, its relationship to the city and whether the DDA owes the city for administrative services.

This was the Ad Hoc Committee’s fourth meeting since last fall and the first held virtually with around 40 people tuning into the discussion. Committee members are City Commissioners Sean Denison and Mark Weedon and community members Fran Terry and Adam Burck.

Denison noted that the committee began meeting last November and has had meetings in December and February. He said he hopes to have another meeting still in April to wrap up the committee’s work but the committee’s work has been delayed due to the COVID-19 pandemic crisis.

“The goal of the ad hoc committee is to review the current DDA and its plan and make a recommendation to the City Commission on what changes we believe need to be made in order to make it a more effective organization and to improve its working relationship with city staff,” he said.

King spoke for nearly an hour on issues related to the DDA and its relationship with the city and then answered questions from meeting attendees. DDA members have clashed with city officials over the last year on a number of issues.

He first spoke about what a downtown development authority is in terms of its powers and responsibilities. “The first thing you need to understand is the nature of an authority, it is its own separate legal entity,” he said. “It has its own source of income and can adopt its own budget and spend its own money.”

King told those listening that the DDA’s existing by-laws are out of date in terms of complying with the recent 2018 state law regarding DDAs. “I found them (the Buchanan DDA by-laws) in some cases to be inconsistent with state law,” he said. “… I’d suggest amending the by-laws to be consistent with state statutes.”

He noted that the DDA can hire city staff to serve as their director, secretary and treasurer but that it has to be an “arm’s length transaction” with duties, hours and pay defined. If the DDA doesn’t feel the costs charged by the city are appropriate or if the city doesn’t want to fill those roles, the DDA can employ others, he said.

“The bottom line is that I view the city giving in-kind services as no different than giving general fund money,” he said. “It’s wrong for the city to provide services (without compensation) for a non-city entity. The city should be compensated for its costs but it can be flexible … Each has its own sphere.”

DDA members have disputed the amount of city charges for services provided in recent months. DDA members voted in February to spend 15 percent of its revenue on administration, 35 percent on annual programming and 50 percent grant/loans to building projects.

King’s legal interpretation differs with that provided by Eric Williams, an attorney hired last year by the DDA. Williams said no law requires the city to charge the DDA for anything but auditing costs.

King said he finds a “pretty significant conflict of interest” raised by having the city manager designated as the DDA director as the DDA by-laws call for. “I’d strongly recommend the director be somebody other than the city manager, that way he’s not trying to serve two masters who want to go different directions,” he said.

Questions raised by attendees included ones about the past history between the city and the DDA and whether it’s feasible for current DDA Chairman Joe Paolucci to resign from the DDA to become the DDA director. Paolucci has proposed doing that and volunteering his time to serve as director.

Comments from former DDA chairman Alice Kring shed light on the past history between the two entities. She has volunteered to come back onto the DDA board to help out. Kring noted that it worked well in the past when the DDA and the Chamber of Commerce shared a director.

She pointed out and King agreed that the city has to provide the same services to the DDA district as they do to the rest of the city. King put police, fire and public works services in that category.

Kring endorsed the idea of Paolucci resigning from the DDA and taking over as director with the goal of doing one grant/loan project a year. Paolucci said afterwards that his offer is still in place. He also took issue with many of King’s statements, saying that King was offering a “fantasy legal opinion” and echoing city hall talking points.

King was also asked about what small communities like Buchanan can do with DDA funding cuts caused by recent state tax changes. “It’s a double problem of being small and not having enough cash to generate the synergy you need to do,” he said.