DDA approves balanced 2010-2011 budget

By Mark Tower
Apr. 16, 2010    ·    10:38 a.m.

The Ypsilanti Downtown Development Authority has predicted total revenues and reimbursements of $570,592 for the 2010-2011 fiscal year in a balanced budget approved by board members Thursday morning at the authority's meeting.

“We would like to present a budget that does not dip into reserves,” Authority member Rene Greff said.

The largest portion of revenue, $409,405, will come from tax-increment financing (TIF) out of property taxes collected in each of Ypsilanti's three downtown districts. An additional $51,421 in funds is expected from the DDA's voter-approved operating millage of 1.982 mills.

One additional revenue source is expected for 2010-2011, DDA intern Tracy Lewis said, in the form a $93,317 grant from the Michigan Economic Development Corporation to improve building facades in the downtown and West Cross Street downtown districts. If this grant is not received, Lewis said those projects would not be done this year and the expenses taken out of the budget would cancel out the loss in revenue.

A one-time piece of revenue the DDA has received for this year alone is $16,449 in reimbursement funds from Michigan's Department of Transportation left over for 2005's Michigan Avenue streetscape project.

Total expenses for 2010-2011 are budgeted at $565,938, $424,016 of which will be spent from the TIF fund on projects and bond commitments and $48,605 of which will be spent from the operational fund. The facade grant project amounts to $93,317 of the year's total expense.

If this budget proves accurate for actual revenues and expenses in 2010-2011, the DDA will end the fiscal year with a total surplus of $4,681, $2,816 in the operating expense fund and $1,865 in the TIF fund.

Total fund balances for both operating and TIF funds in all three downtown districts (Downtown, Depot Town, and West Cross) were $589,995 as of June 30, 2009. If the budgeted surplus is realized in the upcoming year, it will be added to these fund balances.

Greff suggested the possibility of creating a contingency fund which would allow the DDA to cover unforeseen expenses without getting an amended budget approved by Ypsilanti City Council. No motion was made to create such a contingency fund, and the budget was passed Thursday without one. The DDA's budget will next face City Council consideration before it goes into effect later this spring.

The City of Ypsilanti has asked the DDA this year to pay for some of the accounting, human resources, and department of public works services it had provided previously for free. Lewis said the new budget puts aside $15,000 for this reimbursement in funds to the city, but said that amount could differ depending on what services for which the DDA determines it can legally pay the city.

Wages for DDA employees will, for the first time this year, be taken out of the TIF fund instead of the operating expenses fund, a change which was made to allow both funds to operate without drawing on their fund balances. Ypsilanti Mayor Paul Schreiber, who also sits on the authority, pointed out that recent changes in laws regulating DDA finances have made paying wages out of the TIF fund legal, where it was not before.

Wages make up $122,210 of the total TIF expenditures in the new budget, bond commitments make up $174,874, and projects account for the remaining $126,932 budgeted for the fund. This is a significant decrease to the $350,929 budgeted for TIF projects in the 2009-2010 DDA budget.

The TIF project budget is split between ongoing contractual agreements, such as the downtown streetscape maintenance contract and a trash hauling contract with Waste Management, which accounts for $67,432 of the total; and project costs, which account for $59,500.

Projects for the upcoming year include citywide way-finding, seasonal plantings, printing a partnership brochure, a parking study in all districts, Web site development, holiday lights and maintenance and $5,000 set aside for special event contributions.

Music festival gets financial help
Authority members approved $1,000 in funding Thursday for the weekly Crossroads Music Festival to help sustain the event, despite some dissension from authority members who voiced their concerns that there were better ways to spend the DDA's money.

The Downtown Association of Ypsilanti (DAY), which puts on the summer music festival as well as hosting a children's Halloween event and December's Starlight Spree shopping event, approached the DDA's promotion committee requesting $7,500 to support the 2010 summer music event. The DDA put $10,000 toward the music festival in 2009, which DAY said, alongside other fundraising, helped them break even for the year.

DDA member Linda French, who sits on the promotions committee, said she explained to DAY representatives that the committee's function would no longer be to annualy fund programs that could otherwise find ways to be self-sustainable.

Some DDA members agreed with this shift in philosophy, but questioned why the DDA would then commit $1,000 this year to the program.

French said she had told DAY the DDA could fund $1,000 before she knew that changes in the upcoming year's financial structure would no longer give each committee discretionary funds they had in the past. She said DAY would no longer expect DDA contributions in coming years, but that such a positive change in Ypsilanti's downtown atmosphere by the group should be encouraged.

Authority member Darryl Daniels and John Coleman agreed that though the music festival was a positive thing for the downtown area, the businesses organizing the festival and most benefiting from it should make it financially sustainable without contribution from the DDA. Coleman and Daniels both voted against the resolution to dole out $1,000 to DAY.

Lewis said there should be enough in the current TIF budget to cover the expense without dipping into reserves.

In other business, the DDA approved the early planting of hanging baskets, in preparation for placing the colorful floral displays along West Cross Street around May 25.

The authority also resolved to support the decision of Growing Hope and Ypsilanti's downtown farmer's market to move from the Key Bank parking lot to Ferris Street between North Hamilton and North Adams Streets, since increased usage of the parking lot have made it a less viable option.

French also brought a request before the board to provide $400 for the purchase of two wireless radio transmitters near Frog Island Park to expand Wireless Ypsi's free Internet access into the park. Schreiber requested an opinion from the city attorney on the legality of paying DDA money to the organization, since he said there have been some past complications in providing funding for Wireless Ypsi.

The funding issue will be considered by the city's attorney and that opinion will be cited when considering the $400 allocation at the next promotions committee meeting.

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