Make the DDA Pay Its Fair Share for Public Safety!

What with the hubris and conflict of interest involving DTN and the Park District, all the other conflicts of interest, the diverted library millage, and giving away taxes for redevelopment of not-blighted sites for which there is no urgency that end up as high-cost student rentals and bars and frivolous public works, I believe it would be easy to win a ballot initiative to pull the plug on both the Downtown Development and Brownfield Redevelopment Authorities. If the developtocracy-industrial complex does not put an end to cronyism and use tax diversion in the limited way for which it was intended, with adequate review, objective assessment, and checks and balances, pulling the plug will be the only choice.

There are alternatives, if Council, staff, and the DDA and BRA themselves are willing to fit development priorities within the larger needs of the community. One such is having the DDA pay its fair share of public safety costs and more of its fair share of administrative costs, as well as 100% of existing obligations, before embarking on more projects and programs.

Currently, the DDA is hamstrung by debt obligations and is effectively running a deficit, despite the added 2 mils for the library and the 2011 expansion of the DDA tax increment financing district to Hagadorn, including all of East Village (between Grand River and the river east of Bogue) -- capping taxes for public safety at 2011 levels for the notorious area best known for DTN's Cedar Village is especially concerning. In the FY 2014 budget, we are picking up the tab for the DDA's inability to cover its downtown maintenance obligation to the tune of about $60,000, and the DDA is about $200,000 short of what it should be paying for debt service on University Place/Division St. Garage.

But, eventually, property taxes will rise, and in October 2016 that particular debt will be paid off, so (depending on how much of a loss is absorbed on Evergreen properties debt) the DDA someday should have positive cash flow.

Even the out-of-control Eastwood (Lansing Township) DDA is contributing to public safety. So, what I want to see, as a minimum condition for not pulling the plug on the East Lansing DDA, is for its number one strategic priority to be paying its fair share of public safety costs, after meeting in full all its current obligations (debt, downtown maintenance, administrative and operating costs, etc.).

The simplest way of calculating "fair share" is based on the percentage of city tax revenue that goes toward net police, parking enforcement, and fire expenses (see pp. 5-6 of the FY 2014 budget). Tax revenue is about $15.7 million, and these public safety expenses total about $14 million, or almost 90%. Throw in revenue sharing of $6.3 million, and the percentage is 64%. Add in net court revenue of $1.3 million, and the percentage is 60%. Therefore, the fair share of city revenue diverted to the DDA that should be going to public safety is between 60% and 90%, remembering that the downtown party scene, especially now with DTN's Cedar Village included, is especially costly, and parking enforcement, which is mostly downtown, in itself costs $684,590 in the budget (I believe net ticket revenue is under the court budget).

Diverted DDA tax revenue for FY 2014 comes to about $865,000, a small portion of which comes from the state and about half of the rest from Ingham County, CATA, and LCC. So, diverted city taxes are about $400,000. A fair share of public safety costs would be about $250,000-$300,000.

Obviously, since the DDA is already about $300,000 short of meeting its obligations (probably more, if it really paid proportionally for personnel and operating costs), and whatever happens, there will be a significant shortfall on Evergreen debt after refinancing, the DDA will not be able to pay its fair share of public safety costs any time soon. But what Council needs to do is insist that fair share of public safety costs is at the top of the DDA's strategic priorities, before it is allowed to undertake any new programs and projects.

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