No action taken to dissolve LDFA, DDA
Community discussion a positive step, says mayor
OSCEOLA COUNTY — After more than a month, the Evart Downtown Development Authority and Local Development Finance Authority still have hope of continuing onward with their plans to help the city grow and thrive.
No action was taken by the Evart City Council to dissolve the two entities during a special meeting which took place on Jan. 8.
The gathering stemmed from a Dec. 2 city council meeting where Evart City Manager Zack Szakacs said he wanted to dissolve the DDA and LDFA in order to capture about $138,000 of revenue for the city. In addition to the funds, the city would inherit the debt and assets both already have. Szakacs said he believes the two organizations were successful in their early years, but a legacy cost has been created without financial assistance from either to offset the city’s burden. Economics will play a major role in how the two entities will be funded in the future, he added.
More than 50 people filled the community room within the Evart Depot to take part in the discussion, ask questions about the two groups, the city's involvement with the entities and what would happen if they were both dissolved. A number of citizens offered their opinions on the DDA and LDFA, most in support of what both provide for the city and the community. Others said the work of the groups make them proud to be a resident of Evart.
Szakacs again discussed his opinion about his recommendation, renewing facts and figures he collected before making his suggestion to dissolve the authorities.
"They keep grabbing dollars out of their fund balances to pay their bills and it's starting to shrink," he said. "That's the dilemma and currently neither units are generating any revenue to help bring the balances back up."
Legacy costs from the DDA and LDFA projects have been placed on the city's shoulders as well, Szakacs stated, which is another issue. Roads by the industrial park built by the LDFA are in need of repair, but aren't being maintained by the LDFA and the city is not receiving money from the LDFA for repairs.
"They put in all of the infrastructure, the sewer, the water, the streets in the industrial park," he said. "Now all of those roads are cracked and who has to pay to fix them? They created it and that's where it goes — to the legacy cost. We're going to have to use our budget to repair them. We aren't generating enough revenue to pay for the legacy costs and we're taxed to the max."
About $539,000 coming in from taxes pays for police, fire, department of public works, water and sewer. Adding additional infrastructure is another strain on the city's budget.
Evart Mayor Eric Schmidt challenged Szakacs on his stance about legacy costs regarding the DDA and LDFA, saying it is a necessary hit if the city hopes to grow.
"The only way we can stop legacy costs is to stop searching for new business," he said. "Black and white. So what you're saying is, if we stop the legacy costs, we stop the search."
Schmidt also took note of a positive result of having a DDA, discussing the fact that Evart ranked higher and progressed to stage two of receiving a $700,000 Downtown Infrastructure Grant (DIG). The city could not have qualified for stage two without the DDA.
"Having the DDA gave us that extra boost," he said. "The DDA is thriving more than the LDFA is."
If the entities are dissolved, the funds could help other areas in the city, Szakacs added.
"Whatever money is available we'd have to pay off any debt and then the next tax year our revenues will go up," he said. "We would get the money the LDFA and DDA already receive and help the city provide services that our residents are used to. What happens is that we would give the county Emergency Medical Service the library, the school district and Mecosta-Osceola Intermediate School District more money."
LDFA Director Melora Theunick defended the LFDA and DDA to the city council.
"We have enough money, we have a balanced budget, we have been fiscally responsible for many years," Theunick said. "We've always stayed within our guidelines. We are a nonprofit so we're not supposed to be holding onto a lot of money. What we have goes back to the citizens.
"The projects we have done are innumerable. I started the Easter Egg Drop. They directly impact every business and citizen we have without affecting the bottom line. The city would not be what it is without the LDFA and DDA. All of the sewer and water projects were joint projects. We developed one of only four certified air industrial parks in the state, and that's very desirable. In the future we are ready to bring business in and we are having people call us looking for industrial spots."
She also mentioned the Evart fireworks, farmer's market, Dulcimer Funfest, Woodcarver's Round Up and more community events that bring people into the city from miles around. All have been assisted by the DDA and LDFA, she said.
"The LDFA has provided for almost everything in this town, but the second we are on hard times everybody has turned on us," Theunick added. "We have done nothing in the town but move things forward. This decision will doom this town to be nothing more than a bedroom community and we will not be able to bring business in. Businesses will probably leave Main Street if the DDA and LDFA is eliminated."
DDA Director Al Weinberg also spoke about positive and unique aspects of having a DDA in Evart.
"While I also share the budgetary concerns of our city, I feel like we're a team and I look to do my part to make Evart a better place," he said, arguing the DDA's original plan has not yet been completed. "The DDA exists to strengthen Evart through public improvements, creating a vibrant community that supports and attracts businesses in the downtown area. The board approved an amended long-range plan on May 23, 2012, that was supported by the city manager. Is there still work to be done? Yes."
He said the DDA does have the fund balance to exist and no one knows what the future will bring. The DDA collected more than $23,000 above its tax capture last year and is expected to capture more this year. The entity also has improved facades of downtown buildings, with no more than a 50-50 match, which not only makes the city look better, but can attract additional businesses. Weinberg also reiterated the DIG, which could not have happened without the DDA, and is funding half of the city's required 10 percent match of the DIG. The DDA also helps organize annual events including the Wildcat Block Party, the Christmas Carnival and Christmas in a Small Town, Musicale, Halloween Monster Mash and more.
Other benefits also stem from having a DDA, he said.
"Every dollar that we spend is on the Evart community," Weinberg added. "Last year the DDA spent about $13,000 on city improvements. That's everything from the painting of the train, the painting of this depot, the flowers up and down Main Street. We're giving back to the community. I just really feel the DDA is mission-effective. With only a part-time director, in 2013 the DDA was able to achieve many of its yearly goals."
Following his speech, he asked the council to reject the proposal for dissolution, and instead give them a minimum of two years to operate in confidence. If council cannot fulfill that request, he asked to know its decision as soon as possible so he knows how to move forward with a number of grant opportunities that have deadlines in the near future.
"We can't operate with 'we haven't made a decision yet,'" he said. "I don't want you to make a hasty decision, but I need you to make a decision. At the end of the day, I really just want us to know what we're doing."
Following the meeting, Schmidt expressed enthusiasm about seeing so many people from the community attend and become educated on the issue.
"I think the information was very good information to add to their knowledge," he said.
Though other council members may be unsure about whether to keep the DDA and LDFA, Schmidt has his mind made up.
"I think it would be disastrous to get rid of them," he said.
Schmidt also believes the two authorities should not have been grouped together, as they serve different functions.
Weinberg also felt positive about the way the meeting transpired.
"I was really pleased with tonight," he said. "It was good discussion. I felt there were good questions and comments, there was a chance to get things clarified. I felt today was a great turnout and I felt very supported by the community."
Although the issue is complex, the real question is how the entities can come up with a solution to be the healthiest city it can be, he added.
"We will continue to work together. I don't want Evart to fail," he said. "From here, we have to move forward. With attracting new businesses, you might have to knock on 100 doors so you can get your sale. It takes some time."
Theunick also thought the meeting had a positive tone.
"I think the citizens were well informed, had good concerns and good ideas," she said. "I'm pleased everyone has been paying attention and showing concern."
Both Theunick and Weinberg said they need to know the council's next course of action as soon as possible, as both the LDFA and DDA have grant applications and business opportunities in the works that need to be completed or withdrawn within a certain time frame.
"Until the LDFA board knows the outcome, my hands are tied," Theunick added.