'Clerical error' leads to projected DDA budget surplus

Board chair, Bippus debate unexpected halving of city’s contribution

THREE RIVERS — A clerical error in tax increment financing (TIF) captures has led to more money for the Three Rivers Downtown Development Authority.

DDA Board Chair Andrew George reported during the DDA’s meeting Thursday that he was notified recently by city Finance Director Cathy Lawson that the agency will receive approximately $32,000 more in TIF revenue than previously expected. The DDA is budgeted for approximately $95,364 this year in TIF revenue compared to the $62,769 originally budgeted by the city.

“When we originally did our budget for next year, the numbers weren’t fully in yet. There’s a lot of things that have to be calculated when we do that initial budget, and a lot of it is based on projections,” George said.

The additional money would boost the budget for the DDA and go toward its budget deficit, providing it a projected budget surplus for the year. During discussion, a motion was made to apply the estimated return, at the time being $12,600, to replenish the agency’s Retail and Restaurant (R2) grant, however the motion eventually failed by voice vote, sending the money to the general fund balance, noting they could do that with the money at a later time.

Last year, the DDA budgeted only $60,000 for TIF capture revenue, however the jump is attributed to new TIF captures in the DDA district from the new South Main Shell gas station and the new South Main Dollar General store. He added, in a way to “ease any concerns,” that he talked to St. Joseph County Clerk Lindsay Oswald about the situation, he said she assured him that a yearly audit would “always catch” if anything suspicious were to happen with the TIF captures in previous years.

“There’s no way this has happened in the past or can happen in the future, it’d always be caught,” George said. “With that being said, it’s a simple clerical error that was caught before we even approved the budget in the end, so everything’s clear.”

George said the DDA returning money to the fund balance would be the first time it would happen in the six years he’s been on the board, which he said “feels really good.”

Following discussion of the TIF revenue and the vote to send the revenue straight to fund balance, George noted the upcoming city budget, which had included a $25,000 contribution from the city to the DDA. However, City Manager and DDA board member Joe Bippus noted that the city amended the budget to reduce the contribution by half, to $12,500, something that George and former DDA Director Tricia Meyer, who joined the meeting by phone to assist in some discussions, appeared to be unaware of.

“I wish I would’ve known that,” George said. “So, we’ll put $100 back to fund balance, then.”

Discussion of the sudden change in the projected city contribution shifted over to board member comment, when George asked Bippus what the decision-making process was in reducing the $25,000 contribution. Bippus said the reasoning had to do with the TIF increase and its effect on the proposed budget.

“We looked at the budget and said, with the increase that you guys are getting, we’ve just made you whole. We made the budget that you wanted whole, and you didn’t need extra from the city,” Bippus said.

George appeared to be a bit upset at this explanation of the sudden decrease, asking if Bippus was aware of the “dynamics” between other cities and their DDAs compared to Three Rivers’, and that the city is a “large part” of the support DDAs get every year, claiming that Three Rivers’ DDA is the “odd man out” when it comes to contributions from their respective cities. He said he’s gotten “backlash” recently from both Bippus and Lawson when it comes to the DDA, and said it needs to “stop.”

“We need to work as a team, period. I’m done with it. Whatever the game is, it’s over. Let’s play nice, play as a team, support the downtown, support the community and the city as a whole,” George said.

“That’s what’s happening,” Bippus replied.

“Is that what’s happening?” George asked back. “Okay.”

Board Vice Chair Charlie Wolgamood said there would have to be meetings to discuss the issues going on between the DDA and the city.

“You can agree or disagree with their decisions, but I know DPS when we call them, they always answer the call for us. They go above and beyond. Budget stuff, that’s another issue in my mind, I don’t know a whole lot about the dynamics and stuff like that. This is something that we should sit down and talk about more,” Wolgamood said.

George then brought up the TIF capture issue, something he said wouldn’t have gotten brought up if the DDA hadn’t questioned it with Oswald. He said it “majorly” affected the budgeting process, and called it more than just a clerical error like he did earlier in the meeting, he called it a “major mistake” on Lawson’s part.

That, along with a spat between George and Lawson during the first round of DDA director interviews that led to Lawson walking out of the meeting, and Meyer not receiving a bonus from the city when they handed out bonuses last month – the DDA voted to give a similar stipend bonus to Meyer during Thursday’s meeting in lieu of the city’s – led George to say there were a “lot of things going against the DDA” with the city.

“There’s a lot of moves coming from the city right now that are not conducive to the city supporting the DDA,” George said. “Optics matter.”

Bippus then said the city would be “giving up” the extra revenue from the Shell station and the new Dollar General on South Main to the DDA, saying that the money “could have gone to the city as well,” but that it was TIF money and they “decided” to give it to the DDA.

Overall, George said he hopes the DDA and the city will work more “copaceticly” with each other in the near future.

“We’ve had four years of copacetic, that’s how I can tell the difference, and it hadn’t been until Tricia was leaving that all this stuff came up,” George said. “The only thing I can ask is that the city work with us. If there’s going to be complications, there’s going to be complications, I guess, but I would imagine the city would be wanting to help downtown, that the city would be passionate about the downtown, and not like the downtown was a thorn in the city’s side begging.”

In other business…

  • The board approved a $500 bonus to Meyer from the general fund balance as a COVID-19 stipend. The move was in response to the Three Rivers City Commission approving a one-time 5 percent bonus to full-time employees and a one-time $300 stipend to part-time employees that were employed during the pandemic to those that were still employed by the city on May 31. Meyer is currently a temporary employee of the DDA, helping with the directorial transition between herself and Cameron Mains.
  • The board approved an $1,800 increase in their line item for office space to move Mains into a new office space at 57 N. Main St. that, according to the background of the voting item, would be “more suitable to have meetings in private as well as better filing and storage space.”
  • The board approved a $210 sign rebate for new photography studio Studio 40 in downtown Three Rivers.

Robert Tomlinson can be reached at 279-7488 ext. 22 or robert@threeriversnews.com.

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