The Development of Authority, Part Two: Funding and Function

[XLFD]

MONEY FROM THE PEOPLE:

The Ludington DDA sometime along the way did what was in their power to do; levy 2 mills in taxes. From a 2008 article about Ada, Michigan creating a DDA: "The ability to levy a tax of up to 2 mills is possible, but seldom used, said Township Planner Jim Ferro. "It is common for there to be some concern about a new tax," he said, "but in all of Kent County - and there are more than a dozen of them (DDAs) - none have used the authority to levy property tax."

And when Grosse Pointe considered one: "Residents voiced concerns that one funding option for a DDA was the levy of a millage within the district. The levy could not exceed 2 mills and only could be approved by a DDA board and city council. "There is definitely a concern about a 2 mill tax increase, but since the DDA board will be (mostly, if not all) comprised of merchants, that's not going to happen," John Denomme said.

In 1984, this may have been what our DDA planners thought. What they say is true, a DDA can raise your taxes by 2 mills without any form of public vote. In the last two years, the DDA and its ex-officio members have fought against tax rollbacks successfully with the city council, and kept this rate, even while our cities property values head south. No private individual or business came forward to support keeping that rate in the truth-in-taxation hearings.

 

Vocal disagreement in the city council meeting in 2009 by business-owner David Stratton, Best Choice Market, 222 W. Ludington Ave., stated that other than snow removal on the sidewalks he did not believe he gets anything for the taxes that he is paying and he did not believe he was getting anything for his DDA tax money. Councilor Engblade was the only vote against raising the millage this year, while Councilor Holman was the lone dissenter in 2009.

Nearly $50,000 of tax money each year is used from this source for the DDA.

MONEY FROM OTHER LOCAL PUBLIC BODIES:

Tax Increment Financing (TIF) is a financing tool that uses future growth in property values in the district to finance downtown improvements. For instance, if the taxable value of a commercial building goes up because of improvements made to it, the taxes resulting from that increased value would be applied to DDA programs and operations.

A TIF is a re-allocation of new tax revenues, not a tax increase. It takes a percentage of money the city and county collects from millage. For example here is the City's TIF projections: 

Schools typically opt out of this capture of their millage to preserve their funding, as can other taxing authorities when the DDA is created. Most don't. Using the above chart, we can find out how much they were projected to get this year. You need only multiply the annual totals by 12% (.12) to see how much TIF the DDA gets. As you can see they received $75,032 this year ($625,268 X .12), and they got $32,135 of that from the city operating millage. You can say they took $2820 from the police pension, $2680 from Senior Citizens, $833 from the County Fire District, $1371 from the District Library, $8586 from WSCC, $2500 from LMTA, and even $8 from Soldier's Relief. Though it isn't a tax increase, it may steal funds from what one may consider more valuable public functions.

DDAs in Michigan can also obtain funds through loans, fundraising, and donations. 

 

WHERE THAT MONEY GOES:

What is done with the $120,000? It varies but here is the itemized city budget prepared for the DDA last year and projected into 2012

Without going into specific detail of each of these breakdowns in the DDA budget just yet, this opens up a couple questions:

 

1)  Administrative Costs are defined as "Expense incurred in controlling and directing an organization, but not directly identifiable with financing, marketing, or production operations. Salaries of senior executives and costs of general services (such as accounting, contracting, and industrial relations) fall under this heading. Administrative costs are related to the organization as a whole as opposed to expenses related to individual departments.  Between 2009 and 2010 there were no obvious change in the administrative aspects of the DDA.

The current budget records indicate that the Administrative Costs of the Ludington DDA jumped from $10,000 last year (and previous) to $30,000 this year and years henceforth.  The financial records show an outlay of $2500 at the end of each month for this expense, this year, with no explanation other than for 'administrative costs'  (that's a difference of $20,000-- where have we heard that number before-- eliminating lifeguards, raising City Attorneys salary, tax increase levied on Longfellow Towers all happened this year.  Any relation?)

 

What is the meaning of this dramatic raise (tripling) of administrative fees?  This question was asked and has been ignored by DDA executive Heather Venzke, and is now the subject of a FOIA Request.

 

2)   There appears to be no capital outlay from DDA's budget for DDA sponsored events like Friday Night Live, Octoberfest, the New Year's Eve Ball Drop, et. al., from this budgets disclosures.  State law requires that monthly DDA expense records need to be made available to the public.  I FOIA'ed those records, and even though the Ludington DDA had no monthly expense records per se, they did have their annual financial reports available which revealed some interesting data about how the money is being used.   And what are some of these expenses in the budget actually refer to? 

(stay tuned for The Development of Authority, Part 3:  Under the Microscope)

[Susan Rose]

Thank you for a very interesting post. I am looking forward to Part 3. I will have to go back and read part 1&2 again and look closer at the budget. Thank you again for sharing your knowledge, and insight of the DDA.

 

[AQUAMAN]

On the TIF side, it's hard to imagine stealing funds from Senior Citizens, LMTA, Library, Police Pensions, and WSCC, that are always in dire need of more funding. On the expense side, yes, the Administrative fees and Contractual services are the bulk of the total. How come $900 in cell phone service went back to $0 now too? As well as professional services going from $150 to now $6,000? Many of the DDA's own figures would be in strong suspicion from an auditors point of view if this was a private corporation. Disguised terminology needs scrutiny and itemization to get the total story of expenses. Very clever accounting, but legal and ethical? I just wonder.

[Lisa O'Brien]

I'm just wondering if you don't like the postings why bother to come on the site.

[Willy]

Cyndi

I'm sure you understand that what folks say on a forum is a form of venting. It's a good thing. Some of the observation may be correct or may be in error but that's what a forum is all about. Aquaman gave his opinion and you in turn gave yours. Who know's if he is correct in his assumptions. He may have astutely just described what is going on in local government. What we don't need is  censorship and it seems that is what you desire.

[outforjustice]

What is sad about this entire situation is that the person who created this website is out for nothing more than to get even with the city of ludington for receiving a ticket that he deserved.  He ran a stoplight and was arrested even after he was given a warning.  It was then proven in court that he was still in the wrong.  Maybe people should be asking how much money he is actually costing the city of ludington with all of his nonsense FOIA request. I mean come on.  Downtown is leaps on bounds better than it has been for years and we are doing way better than manistee is during these economic times. and whoever said that downtown is half empty obviously hasn't been downtown in a long time. Maybe he should take some time and find some real problems in the city and bring them to light.   Maybe we as "bloggers" need to be asking Tom Rotta what his real problem is?  why did he quit the fire department, because trust me if you ask some of the people that knew him he was in a lot more trouble than just what he playing up about his bike ticket.  There were a lot of other issues he had besides getting in trouble with a police officer after the officer begged him just to comply and not make a big deal out of running the stop sign.  I really think he just has an issue with someone telling him what to do.  I think it is awesome that people come here and try to bring issues in the city and county to light but there has to be a point where we step back and look at some of these conversations and wonder how many of them are really multiple people or who is the same person just using different names.  and seriously I highly doubt with the clerk we have and the other people and the gossip that comes from city hall that anything illegal with funding is going on.  If we want to look at money and the issues we should look at tom rotta and ask why he still collects a disability check from the government and works only one day a week so he doesnt lose his disability. Speaking of which we as taxpayers pay for him to ride around town on his bike looking at peoples yards and taking pictures of their houses.  Maybe we should ask why he cannot look people in the eye and bring issues up to city officials or other important people.  why does tom rotta hide behind a website. If he really wanted to fix things he would get involved. We as taxpayers know that we are paying for his life vacation so he does have time to really make a difference and does have time to get involved instead of hiding behind his computer screen. Tom Rotta, man up bring your issues before city council. bring them to people who can make a difference.  IF NOT SHUT UP and quit pretending to be all these people on this website.

[AQUAMAN]

Hmmm, I was tweaking my response to Cyndi, then took too long and it got lost in cyberspace. Meanwhile, some drive-by decided it was time to bash the creator again. Sad, no life for these ninkumpoops. Someone isn't outforjustice, you're out to be judge, jury, and executioner all in one. Obviously, a God Ego, anyhew, nice screenshots for later.

[AQUAMAN]

Cyndi, the fact that $75K in city funds already appropriated for necessary, not optional, programs in need, like police pensions, senior citizens, library, LMTA, WSCC, fireman, these are all legitimate programs that should not be robbed from, even if the TIF and DDA makes it legal under their policies, imho. If you and your cohorts, like Musicman, outforjustice, and many other alias's took any time to investigate like X does, you might find the local taxpayers are being bilked like so many sheeple into unending taxes for the far future ahead. X just posted actual city paperwork, actual and projected budgets, some with disguised expenses, not itemized as to where the funds actually go, or to whom. When the spotlite of justice and truth is shined on the city fathers and their so-called legitimate programs, and it's all bs, why the urgency to defame and libel? Did he strike a vital nerve? Seems so, or this wouldn't be anything of substance to worry you at this time, or would it? Hmmm.

[XLFD]

Aquaman well understands the point.  TIF money comes from the people, not only the city's taxpayers, but the county's taxpayers too.  DDA's terminology calls this a 'capture' of taxes, but you are actually taking public money from WSCC students, firefighters, police pensioners, librarians, and soldiers, among others. 

Is this money well spent by the DDA?  We will see, as we delve into the public records.

 

[Willy]

XLFD hit a nerve with some of the more sensitive bystanders of the community. I suspect Cyndi and outforjustice are, in some way, close to people in Ludingtons city hall. They both want people who they disagree with to shut up. I guess we have some socialist liberals who like to keep track of conversations on this forum. I support XLFD in his endeavor to dig into what local government is doing. He's doing what everyone should do. I for one could care less what XLFD's personal life is all about. All I know is that it takes a lot of guts to come on here and inform citizens about local politicians actions. 

[XLFD]

Our two responses to OFJ both crossed each other through the ether, RJE.  These are just peripheral nerves at this point that I've touched, but this is just the beginning of the root canal process and the 'patient' is trying to close his mouth and bite the dentist's (Dr. XLFD's) fingers. 

 

Let us not forget that most of our members want what's best for Ludington, the area, and its people.  When our government is not serving either of those well, it deserves discussion.  If you wish to trash the messenger(s) of such news with fantastic tales with little or no basis in fact, think about what your own motivations are.

[Guidothesemipsuedocaptitalistpig]

ya ruined all my fun XL.. I had plans for our buddy this time!!! I wanted to engage him a little before he poofed!! Of coarse I am sure I'll get another opportunity.

[XLFD]

Outforjustice has been suspended from this website, but his material has been left behind, as it is meant to slander me and those who wish to contribute to a website that is out to make a difference, and I wish for everyone to wonder about his/her motivations. 

I invite anyone to do research to check up on any allegation that OFJ has just made on me as to its veracity.  If I am collecting some form of disability from the government, you should be able to find that out with a FOIA Request.  I don't; I don't even have health insurance. 

 

Beyond my name, the use of aliases on Ludington Talks to convey my messages, and the fact that I took pictures of four city council members front yards to show that a majority of our council do not believe in the city's sidewalk policies, OFJ has made up a story.  A sad story which speaks volumes about him or her.