CITY OF BUCHANAN DDA LEADERS TAKE A LOOK AT SPENDING OVER THE LAST DECADE

By DEBRA HAIGHT
BCR Correspondent

BUCHANAN – Buchanan Downtown Development Authority members have reached a consensus on how they want to allocate budget revenue for different projects in coming months and years, but questions remain as to whether their proposal is something city officials will accept.

DDA members met last week to talk about budget concerns and to take a closer look at the DDA’s finances over the last decade. Members have been pushing in recent months to get a clearer idea of the resources they have to help push downtown redevelopment efforts.

One of the DDA’s main concerns has been the amount of money spent over the years on administrative expenses-whether it has been paying a DDA director as it did for several years or paying city staff for their services.

DDA Chairman Joe Paolucci has fought to get an accurate picture of the DDA’s finances since joining the board as the chairman last June. He said last week that he had finally been given the correct information about how much revenue the authority has brought in as well as what they’ve spent the money on.

Paolucci told board members that the DDA had brought in just over $800,000 in tax revenue from 2009 to 2019 and spent out $1.44 million over the same time period. Out of the $1.44 million in expenditures, the DDA spent $469,530 on city administration charges and $232,497 on building improvements.

As he noted, city administration charges accounted for almost 60 percent of tax revenue received by the DDA and the money spent on those charges is more than twice the amount invested in building improvements.

“Each year, money has been taken from DDA savings to cover expenses,” Paolucci said. “It’s important to realize what we’re talking about. It’s okay to run deficits but the budget should show that. The reality is that we’ve paid 58 percent of our tax revenue back to the city.”

He told fellow DDA board members that he discovered that the city has been keeping two sets of books, one shown to auditors and one set shown to the City Commission and DDA. He said the set shown to the city and the DDA “dramatically fake” yearly revenue by adding in reserves and as a result hide “huge fiscal deficits.”

DDA board members then spent time debating how the DDA’s annual revenue should be sent in terms of percentages to be spent on certain categories. While some felt that the city should be paid something for doing DDA business, they rejected a city proposal that the DDA pay $22,000 a year for administration.

“If they’re doing DDA business, we should be charged,” Ralph MacDonald said. “I do agree though that we should keep the administration charges to a minimum and do the most we can for the downtown.”

“My view is that we shouldn’t pay city staff who are already being paid unless they have to stay over,” Paolucci said. “We shouldn’t waste our money on staff who are already being paid. Administration charges shouldn’t be more than 10 to 15 percent.”

Board members ended up recommending a budget spending 15 percent of the revenue on administration, 35 percent on annual programs such as the Farmers Market, Pears Mill, concerts and other events and 50 percent on some type of loan/grant building improvement program. The recommendation was passed with only Mayor Pat Moore voting no.

Moore again pointed out that the DDA is its own taxing entity and can levy up to two mills on downtown property owners to raise more revenue. “If city staff is working on your behalf, I don’t understand why you shouldn’t be paying for services,” she said.

DDA member Penny Slocum disagreed. “Yes, we could raise two mills in taxes but taxes are already ridiculously high,” she said.

DDA members also had a short debate about capital improvements versus repairs. While city officials have said that investing in window replacements or façade restorations amount to repairs and don’t increase the value of buildings, Paolucci and others disagreed.

Moore and City Assessor Mindy Cole-Crocker said that such improvements don’t raise the value of properties and represent “basic maintenance”. Paolucci pointed to IRS rules on what constitutes capital improvements. “It’s like Alice in Wonderland when you’re dealing with City Hall,” he said.

Issues raised but not answered at last week’s DDA meeting included what the ad hoc committee established last fall in the wake of city-DDA disputes will recommend and whether there will be a resolution to the questions raised in a DDA attorney letter last summer. City Attorney Randy Hyrns drafted a response letter which has never been released.