City asks for 2 mills from DDA
By Jenny Johnson –
City administrators have asked the DDA to levy two mills to help support the deficit in the city’s general fund. In a joint DDA and DACC meeting they explained the need for the funds.
If city council and the DDA adopt the proposed millage it will increase property taxes for parcels in the DDA by 2 mills. The money will go to the city’s general fund. This would generate about $350,000. About $190,000 would be paid by Ford Motor Company with the balance paid by other businesses in the DDA area.
“The 2 mill levy is the main reason we are having this meeting tonight,” said Community Development Director Peter McInerney.
David Steinhauer, owner of Wayne Professional Insurance asked, “Is this legal? My concern that the 2-mill levy is for special projects. Is it even legal to do something like this?”
“Legally, any city expenditure in the DDA can be charged to the DDA,” said Finance Director James Ghedotte. The DDA is one-third of the city.
Cindy Schofield, DDA member said, “I am concerned too because the DDA Authority 197 says you should have a development plan for some sort of a project. You have to have a reason to be asking for the two mills.”
McInerney said that the law reads the DDA can levy the tax as they choose to do so.
“The purpose of the authority is pretty broad,” he said.
The 2-mill tax has never been used in the 30 years of the DDA.
Ghedotte said if the city kept things the same, with no cuts or changes, there would be a $3.6 million deficit this year.
The proposed budget still has almost a $1 million deficit.
“We are at our taxable limit-20 mills for operating,” he said.
“At the current time we are struggling with balancing our general fund budget.”
Currently the city levies 15 mills for operating purposes, .9620 mills for retirement, .9999 mills for recreation, 1 mill for public safety, 1 mill for police, 1 mill for the road program, .9999 mills for library purposes, and 2.9073 mills for Solid Waste.
Some of the proposed changes in the 2014-15 budget include assessing the full cost of street lighting to residents this year. Currently the assessment is for 60% of the street lighting cost.
It is also proposed that 14 full time positions be cut from police, fire and public works departments.
The 2-mill levy would go on summer taxes and would be about an eight percent tax increase for business owners. It will be assessed for one year.
“City council has to approve it year by year,” said McInerney.
The proposed plan is to transfer $933,000 into the general fund from the DDA and $394,000 be used for debt owed on the fire station.
The DDA will no longer provide funds for the State Wayne Theater, Wayne Public Library or Wayne Farmers Market.
There had been a request from the Main Street Program for $50,000 from the DDA. The recommended DDA budget included $10,000 for Main Street.
Schofield asked, “ By transferring $933,000 into the general fund, does this solve the general fund problem or is this just a piece?”
Ghedottee said, ”It is just a piece.”
“We have a $3 million problem. Even if the $350,000 were to happen it is only about 10% of the solution. There are still some very difficult decisions for the elected officials,” McInerney said.
Wayne resident Ron Roberts said, ”How does this spur and create economic development in downtown? It seems to shore up the budget. When you look at the TIFA plan it talks about doing something about the deterioration of downtown.”
Mayor Al Haidous said in the past when we have a project for downtown revitalization like streetscape, lights, banners and flower planters. They were paid for by DDA.
“And anytime if there is a project to enhance the downtown area physically. If something is on the table it is a priority to spend money. If you don’t have a project then use the money to balance the budget,” he said.
Councilman John Rhaesa said, “We have a $50,000 project presented to us. Are we going to look at that? That should be on the agenda next time. “
Haidous said, “There are too many questions about how balancing the budget will help the downtown. It will help.”
If the city is broke and has to invite the state to intervene the state only cares about two line-expenditures and revenues. They don’t care how it happens, he said.
“It should not scare us how painful it is,” Haidous said.
There will be a public hearing at 8 p.m. on May 20 at the Wayne Community Center, 4635 Howe Road, Wayne to discuss increasing taxes by 2 mills in the Downtown Development area.
Council will also discuss the 2014-15 budget.