The Truth About The DDA

There is an unknown government in Blissfield.

This unknown government currently consumes 10% of all property taxes – it can be created without the vote of the citizens affected. Unlike other governments, it can incur bonded indebtedness without voter approval. Unlike other governments, it may use the power of eminent domain to benefit private interests. This unknown government provides no public services. It does not educate our children, maintain our streets, protect us from crime, nor stock our libraries. It claims to eliminate blight and promote economic development, yet there is no evidence it has done so in the half century since it was created. Indeed, it has become a rapidly growing drain on public resources, amassing enormous power with little public awareness or oversight.


The above graph shows the concept of how Tax Increment Financing is a creative way to pay for something without letting the taxpayer know they are actually paying for it. Tax Increment Financing (TIF) was developed in California and is used by our Downtown Development Authority. Our DDA’s capturing taxes (diverting, or dare I say “stealing”) from all the basic services taxpayers voted to be paying for. Since revenue increases every year and the cost of basic services increase yearly, the DDA captures a larger and larger portion with no maturation date…basically, forever…in perpetuity. Instead of the district tax base revenue paying for the basic services, the DDA uses it to pay for whatever they want. Click on the images to view larger.
Note:

The graph is an honest representation of most uses of TIF. It has been fully vetted by lawyers and TIF experts. It is precisely accurate to refer to the missing revenue as red ink – that is the funding hole left behind by diverting the increment property taxes.


The Downtown Development District consists of the entire commercial district, from the Dollar Store on the west side of the Village to Schmidt & Son’s Pharmacy on the east. Almost one-third of our Village is paying 1992 tax rates for basic services while the rest of us pay 2011 tax rates, plus we have to make up for the district’s shortfall (this map was on the previous DDA website – Michael, since you are the DDA/MMS director, I suggest putting this map up somewhere).Since 2001, the DDA has spent a great deal of money giving select businesses matching grants for exterior upgrades on commercial buildings. Not on the list is another $23,650.00 that’s been slated to go out the door for grant funds promised but not issued at the time this document was printed. The lowest amount awarded to one business in one year was $374.00 and $33,375.00 was the highest amount awarded in one year from the DDA not including the state contribution of $31.625.00 for the Packrat’s third grant). Many recipients use the grants as a building maintenance fund. The Hathaway House has used their last grant to paint Art Weeber’s residential properties. Click on the document to view it at a readable size or follow this link to the source.

Below, Village officials pretty much claimed failure that they couldn’t halt the economic deterioration of the Downtown core (the reason the DDA was formed in the first place) so they signed up with another government agency to do the same thing. They sold it to us as free in the Blissfield Advance and the Village Newsletter.

I would have assumed they really meant “free for them” but they actually said for “us” (business or property owner). Diverting taxes is not free.

As per the contract signed with Michigan Main Street, they were required to hire a Main Street Manager or Executive Director. The next document below is the FY 2009/2010 DDA budget before they hired a director. The document states they had $20,000.00 dollars in the budget to hire for this position. They hired Michael Sessions at $28,000.00. Not only did they magically find an extra $8,00.00 in the budget but, they also gave him a raise a couple of months into his position, which raised his salary to $30,00.00 plus $15,000.00 in benefits. He had done nothing at this point to earn or deserve a raise, it wasn’t even as a result of a favorable six month or yearly performance review.


To review the entire document above at the source follow this link.

After being hired, Michael Session wrote the DDA budget draft for FY 2010/2011 and wrote his salary into the budget at $50, 750.00 and the DDA board approved it.
The far right 2 columns were added by me. Michael Sessions did not add correctly…and the DDA neglected to review the numbers, they just approved the budget. To view a similar document as the one below, click here (somehow, I couldn’t find the original).

Below, James Wonacott’s FY 2010/2011 DDA Budget was included in the Village Council”s agenda packet before the recommended budget was adopted by Council.
The budget shows $184,000.00 as “captured” Tax Increment Financing in this fiscal year term. The document also shows that this steal-and-spend program’s administrative costs…excuse me, only wages, are a whopping 30% of the program. This is unacceptable. Click here to view this document from the Village website.

We, the voters of Blissfield, have the power to redirect redevelopment funds back into serving the public, either through legislation or ballot initiative. We should do so. The alternative is allowing the current direction to benefit select people (corporate welfare) and higher property taxes. You are involved whether you like it or not, not making a stand is making a stand.

Understanding Tax Increment Financing better: Municipal Officials for Redevelopment Reform

Recommended reading from our DDA– proposing a Commercial Rehabilitation Zone

TIF is Not Free Money

Impact of Tax Increment Financing and Tax Abatements on Michigan Community Collegesa report by the Auditor General
The report states:

“Statutes authorize TIFAs to “capture” the property tax revenue associated with the increases of the State equalized valuation within a TIFA’ boundary. Captured revenue is to be used to promote economic development. In its report dated February 17, 2000, ORTA estimated that TIFAs captured community college tax revenue totaling approximately $3.9 million, $4.7 million, $5.6 million, $6.4 million, $7.8 million, $8.2 million, and $8.7 million for calendar years 1994 through 2000, respectively (Exhibit 1).

Tax abatements are used as an incentive to owners of both real and personal property to promote economic development. Pursuant to Act 198, P.A. 1974; Act 255, P.A. 1978; and Act 385, P.A. 1984, a local governmental unit may grant property tax abatements that reduce the taxes levied on certain property for up to 12 years. The recipient of a tax abatement pays specific taxes in lieu of property taxes. In its report dated February 17, 2000, ORTA estimated that tax abatements reduced community college tax revenue by approximately $6.6 million, $6.7 million, $6.3 million, $7.0 million, $7.4 million, $7.9 million, and $8.4 million for calendar years 1994 through 2000, respectively (Exhibit 2).”

Recommended reading of related posts: Blissfield

Here is the link to access all the Downtown Development Authority/Michigan Main Street documents, http://bit.ly/blissmain

Advertisements
This entry was posted in DDA, The Community, TIF and tagged , , , , , , , , . Bookmark the permalink.

19 Responses to The Truth About The DDA

  1. Tom says:

    Excellent bit of research Robin; a culmination of corrupt practices incurred by the agencies that are part-public, part-private, and all-suspicious, the DDA and MMSP. I come from Ludington and we have our own problems inherent in our DDA. Our City levied 2 Mils for our DDA a long time ago, and it keeps getting raised back each year after it gets pushed back by Headlee rollbacks (due to our property values heading south) by truth in taxation hearings.
    Much like yourself, I developed a watchblog back in 2009, and the activities of our DDA has been suspicious and decidely illegal-looking. I have done a bit of probing and have done eight threads on our DDA and its shortcomings. The first couple look into our DDA and its funding. The next 5 look into specific events and people of interest and their unethical acquisition of Joe Taxpayers money. The eighth one looks at the Blissfield situation, borrowing from your site, which I think you have documented as admirably as I’ve seen. I think you may find it instructive to take a look at our situation here, I am providing a link to the first, and you can use the ‘search option to find the rest among the other threads we offer: http://ludingtoncitizen.ning.com/forum/topics/the-development-of-authority

    • Robin says:

      Thanks Ludington Citizen, I appreciate your complements but, appreciate much more the fact that there are people like you out there willing to take time for a serious look into the processes that are robbing us blind (among other unpleasant things). Most people have no idea what Tax Increment Financing is and like you, I’ve undertaken the task of educating myself then the general public. I proudly commend you for taking an interest, because that interest positively affects the masses and quite honestly…could save a State and perhaps a Republic in the process.

      I’ll certainly take time to read through your posts, thanks for providing the link, I’m quite sure it will be instructive.

      We may think we are only reaching a small choir by writing on a local blog; however, I’ve been reaching many more communities than anticipated…the word is spreading. I’ve also come up with some excellent solutions, if you want to take action in your community, please contact me by email: robin@mipii.com to hear what else I’ve been doing. The good news is – there’s more power to control the situation in our hands than one might have been lead to think.

  2. A Resident of Blissfield says:

    Mount Pleasant looks to pull out of Main Street program
    THIS IS AN INTERESTING ARTICLE I FOUND ABOUT THE MAIN STREET PROGRAM. I THOUGHT YOU MIGHT ENJOY READING IT.

    By David Veselenak || January 11, 2010 .

    After joining the state-sponsored program in April, the Downtown Development Authority has recommended the city withdraw from the program.

    The Downtown Development Board requested in December a meeting with the City Commission to discuss the city’s withdrawal. The Commission will meet with the DDB before the next Commission meeting at 6:30 p.m. Jan. 25 at City Hall, 320 W. Broadway St.

    The DDB recommended that Mount Pleasant withdraw from the program after its members went through the program’s training in October. The Board felt the program required too much of them and that the program’s requirements should have been communicated while Mount Pleasant was an associate member from 2008 to 2009.

    “If you go to their Web site, none of (the requirements are) there,” said Michelle Sponseller, downtown development director.

    Other cities that have pulled out of the Michigan Main Street Program
    Ishpeming – The city applied for several grants that only members on the program could, but had little success, said Mayor Gary Nelson. The city withdrew from the program in 2009.
    Midland – Midland withdrew from the program after city officials determined the city’s downtown was more mature than most, and that the program create an inconvenience to business owners, with some workshops only being held in Lansing, said Keith Baker, director of Planning and Community Development. The city withdrew in 2008.
    Sponseller said the city should have looked more closely at the requirements before becoming a select member.

    The Michigan Main Street Program is designed to keep historic downtowns around the state intact, and to attract younger residents and high-tech companies to Michigan. There are 15 cities in the program, including Mount Pleasant, Clare, Owosso and Boyne City.

    “Honestly, we’re disappointed,” said Joe Borgstrom, director of the Specialized Technical Assistance and Revitalization Strategy Division for the Michigan State Housing Development Authority, who oversees the Main Street program. “We’ve never had anyone leave this quickly.”

    Borgstrom said the only other communities that left the program were Midland and Ishpeming, both for separate reasons. Ishpeming wanted to develop an emerging street as opposed to their downtown, and Midland wanted a more staff-driven downtown as opposed to a volunteer-driven program.

    Gary Nelson, mayor of Ishpeming and a Downtown Development Authority Board member, said the program came with the promise that they would be eligible for grants. After Ishpeming was rejected from several grants, Nelson said the city got frustrated and decided to save on costs by withdrawing from the program.

    “In the end, it’s like, ‘Show me the money,” he said. “We’re spending $70,000 a year and not getting any results.”

    At the Jan. 4 City Commission meeting, Commissioner Jon Joslin, a member of the Downtown Development Board, made a motion to withdraw from the program, only to be halted by several Commission members who wanted to discuss the issue with the DDB.

    “Perhaps it’s true there is no advantage, but we spent two years trying to get into this,” said City Commissioner Kathy Ling.

  3. A Resident of Blissfield says:

    Here is another interesting article I found: I think the last paragraph is very interesting.
    Marshall’s Main Street status could change after restructuring.

    Marshall resident Jack Reed introduced himself to the council at Monday’s meeting and said he was interested in filling the vacant Ward 4 seat.

    By CORINNE KELLOGG
    Staff Writer

    The Marshall City Council by a 4-0 vote, decided to restructure the chain of command for Marshall Main Street Manger Diane Larkin. (Council members Wayne Booton and Jody Mankerian were absent).
    Mayor Jim Dyer recommended that Larkin now report to City Manager Tom Tarkiewicz.
    Larkin previously reported to the chairman of the Downtown Development Authority Board, but conflicting views about the Main Street program’s direction led to the change.
    “I’m comfortable reporting to Tom,” Larkin said. “Reporting to the city manager facilitates the feeling of being part of a team. I think it will be a good relationship. Tom will be a good mentor. It’s a logical chain of command and I think, from a logistics standpoint, it will be much easier.”
    In doing this, the city could possibly lose its Michigan Main Street status, which they’ve had since 2003, when the program began at the state level.
    “We’ve been informed informally by the state Main Street board that it is not appropriate for a Main Street manager to report to anyone but a board; that they not report to a city employee,” Dyer said. “So this action may have an impact on our membership in our Main Street Program.”
    Dyer and Larkin will be meeting with the state in October to resolve the issue.
    “We will be actively requesting that they clarify in writing and indicate to us that our reporting relationships are appropriate and not an impediment to continue participation in the main street program, be that our intent in the future,” Dyer said.
    The DDA, which acts as an advisory board to the council, was the leader of the campaign when they brought the idea to the city in 2003, saying that they want to be part of the program.
    On Jan. 13, the DDA voted for Marshall remain a Main Street community by a vote of 5-4. After submitting some needed documentation to satisfy deficiencies, Marshall was again named a Michigan Main Street community through 2012.
    The DDA board then added a motion to their May 26 agenda to “graduate” or terminate the relationship with the Main Street Program, which passed with a 5-4 vote. The DDA’s main concern was that the program had the volunteers and staff focusing too much time on documentation.
    “Questions that were posed were, “Can volunteer time be spent better with hands program instead of administrative paperwork?” and “Do we like the idea that the state will be running our main street program?” Larkin said.
    Larkin said the positives to the program is that “it provides a balanced approach for creating a healthy downtown” and allows for promotions and marketing; an organizational structure; designs for facades, streets, etc; historic preservation; and business development.
    “Being a Main Street community is a competitive process,” Larkin said. “Being one of 16 communities in Michigan with this certification, it makes us an elite group.”
    Because of the conflicting votes with the DDA, Dyer’s first recommendation to the council was that they take no action on either of the DDA’s rulings.
    “There are strong feelings on both sides of the issue with DDA,” Dyer said. “There are no questions about that.”
    Dyer asked those with strong opinions to contact him and share their thoughts.
    His second recommendation was that the general day-to-day supervision of Larkin be transferred to the city manager.
    “I’m making that recommendation for a couple of reasons,” he said. “The current situation where Diane reports to Main Street board, generally or to the Chair specifically, doesn’t work. I think she ends up with multiple bosses and there is no centralized direction for the marketing of the downtown, commercial and service entities.”
    Councilwoman Kathy Miller agreed saying that in the scheme of things it doesn’t make sense to have Larkin reporting to multiple people.
    “Reporting to many chiefs gives you a different perspective of what they want to see done, which I think is not good for anybody that is trying to promote anything,” she said. “I’m very much in favor of the manager reporting to Tom. I think that both Diane and Mike (Hindenach, Marshall Economic Development Manager), or those positions, should have some accountability to Tom and the council, especially when it deals with economic development. This such a touchy issue right now.”
    Dyer has had conversations with Tarkiewicz about supervising both Larkin and Hindenach to create a focused approach for Marshall’s economic development.
    “We have had Tom even informally supervising Mike Hindenach, who does the industrial economic development,” Dyer said, “The hitch with Mike, of course, is that he is actually an employee of BCU (Battle Creek Unlimited) and they provide him to us with our contract with them. We will be talking to them about how that circumstance shakes out, but the notion will be, regardless of whether Mike is or is not an employee of BCU, that the person that has that position will ultimately report for his day-to-day activities to the city manager so we’ll have a focused economic development approach.”
    Dyer said he’s also been working on the possibility of creating economic development cooperation, but that the city is nowhere near finalizing that.
    “The bottom line is we have to have some centralized focus for our economic development, whether it’s commercial or industrial,” Dyer said. “And I believe this step will result in at least that focused approach.”
    Larkin said whether or not they stay in the Main Street program, the important thing is getting the city’s economic development plan on track.
    “At this point, I feel we need to do what’s best for Marshall,” she said. “Economic development should be a high priority for us. We need to adjust our economic development model and staffing to be most beneficial for Marshall. It’s not enough to have a healthy downtown or a healthy industrial park. They both must be healthy to have a healthy Marshall. We need a holistic approach to allow the city to have economic development be a priority.”
    Councilman Brent Williams said with the Marshall Main Street Program being at Master status, the city must be doing something right as far as economic development.
    “I would just comment that main street and many of these types of programs are just a means to an end, the ultimate end is economic development, and in this case specifically in our downtown,” Williams said. “We’ve been recognized time and again as one of the leading communities in the Main Street Program so it’s a little bit frustrating, to put it nicely, that some bureaucrat from Lansing would come here and tell us that a community that’s been at the top of their list is now all of a sudden not quite not up to their standards,” he said. “That makes me think that maybe we know what we are doing here when it comes to economic development. We don’t need some bureaucrat from Lansing with their program to tell us how to do it. I’m probably being a little more blunt than I should be here, but we can get to those ends whether we are a member in good standing with Michigan Main Street or not. Its not a tag that we have to have.”

    • Robin says:

      I absolutely enjoyed reading your articles…interesting indeed! Thanks Blissfield Resident! This ties in nicely with my next post regarding economic development, I hope people can see past the sales pitch (this includes opinions from the non-politico’s that have bought in and evangelize spend programs that don’t deliver). It all boils down to what economic philosophy you revere to be accurate…stay tuned.

  4. Dennis says:

    Here in Honor Mi the progressives want a DDA that literally encompasses the entire village. This is part of “Grand Vision” which follows the Agenda 21 from the United Nations.

    I need help to combat this movement as they have in their plans to execute “eminent domain” on several properties. If anyone can provide any links to offset their propaganda I would appreciate it. Please email me at wakeuphonor@gmail.com

    BTW: these articles are awesome and have been extremely helpful!!!!

    • Robin says:

      Hi Dennis,

      I’m really sorry to hear what has been transpiring in Honor, I can’t say I’m surprised. It seemed a logical next step to me. Unfortunately eminent domain is extremely easy with a clear path to power given to DDA’s. What I’ve been working on in my community is going door to door with the information on this post to educate the electorate. I’ve also had petition in hand to present to Council and request dissolving the DDA by elector initiative – if that fails, to put it on the ballot in November.

      I’ve noticed all across the internet that Agenda 21 is still alive and well, hopefully some of our readers will contact you with some helpful info. Keep up the good fight, your liberty is worth the effort.

      • Dennis says:

        Tom; please send me any or all articles that you would find that could be useful for me, it would be greatly appreciated. I am also developing a website called wakeuphonor.org any suggestions you have would also be appreciated and from anybody else, thanks again

    • Tom says:

      Dennis,
      Robin has done a great job here crystalizing the debate that runs contrary to the DDAs and Main Street Program. In Honor, you will run counter to the powerful members of your community, the well-connected businesses, any local paper, the local chamber of commerce and Honor City Hallers, so be prepared for some stiff opposition from those who want more of your tax money to spend on their own businesses, pet projects, and/or re-elections.

      I have a series of ten articles I have done on my local DDA in Ludington, and the unethical and sometimes unlawful actions of that body. I will send them to that E-mail address you published. Good luck, and fight with Honor in mind.

      • Dennis says:

        please do send these articles onto me as I’m accumulating as much information and knowledge as possible. We will prevail in honor

        • Robin says:

          Tom, please send those articles to me as well, like Dennis, I’m accumulating as much information and..

          Dennis, I’ve also included many resource links in my articles, there’s lots of good information there. Also, if you have any questions not answered in the posts, you can contact me directly through the “Contact Us” page.

          Tom has done some excellent work in his community, and as you can see by his comments, he is an intellectual force to be reckoned with. He is absolutely right about “be prepared for some stiff opposition.” Look at the opposition as a challenge to overcome and enjoy the process, you have “what’s right” on your side. You will prevail.

          • Tom says:

            It’s in the mail. I must add that the aftermath of part five, where I compiled and pointed out public records that showed the DDA Chairwoman had illegally allowed her fiance-fellow DDA member’s private sign company to do $15,000 of sign work without any competitive bidding, and then get the full $150,000 ten-year signage contract with a rigged bid process.

            Within two weeks, I was banned from Ludington City Hall and the Police Station with a newly created policy that is currently being challenged in a federal court. The ban, I believe was an over-reaction instated to prevent me from making FOIA requests. It hasn’t worked!

            • Robin says:

              Wow Tom, good for you! You know you’re doing something right when the claws come out, as they hopelessly flounder trying to justify their actions. I got the information you sent and will go through it, hoping I haven’t already read it. Keep us posted regarding that federal court case.

    • Tom says:

      Dennis,
      I just saw a notice of your fledgling wakeuphonor.org on Channel 29/8’s website at the following link: http://www.upnorthlive.com/community/press_release.aspx?id=719772
      Congratulations, I hope you are successful in reining in the monster before it grows .

      • Robin says:

        Thanks for the info Tom! I was so impressed with Dennis’s passion and speed to do something, I posted his press release too!

        Dennis, I hope you don’t mind, just thought I’d help (figured there’s no such thing as too much help). I mirror Tom’s well wishes and want to throw in some good luck getting your message heard.

  5. Dennis says:

    Well, the shit has hit the fan here in Honor! I am now being harassed and sworn at by village council members! It appears I have hit a nerve in their plans!

    Damn the torpedo’s, full steam ahead!

    • Robin says:

      It certainly means you’re throwing a wrench into someone’s capitalization attempts. I’m certain there are those that have been told the DDA is good and therefore blindly believe. I’m certain there are those that know it’s a scam but, it gives the appearance of doing good if no one bothers to look beneath the esoteric level.

      Document the harassment and garner constituent support. The motivation to use DDA’s was to capitalize on a funding source…no matter how unconstitutional, and never mind circumventing the voters (this was the easy way out). Instead of fooling the people they should have been fighting the conglomerate that’s been stiffing them (state and federal government). How hard do we expect them to fight for a part-time job with part-time salaries and a grand benefits package?

      We expect them to fight hard and right.

      You’re a soldier Dennis, and a patriot…full steam ahead indeed!

    • Tom says:

      Like I told you, Dennis, you will get hit back by most City Hallers and the influential businesspeople that will benefit from all the extra taxpayer money given to them. It’s like taking a favored toy away from a baby, or withholding a monthly check from a welfare beneficiary. You will get the same reaction, but from people who can make life miserable for you. But by all means get the word out so that the truth about DDAs and economic development can get out to the folks, so that there will be “No thieves among Honor”

Tell us what you think!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s