At its Oct. 11 meeting, Van Buren Township Supervisor Paul White asked the VBT Downtown Development Authority for about $576,000 to switch all the police and fire radios to a new 800 MHz system.
At that meeting, the DDA members questioned whether it was a legal way to spend DDA funds, since some of the portable radios would be carried out of the DDA district. They asked for a legal opinion.
At the Nov. 22 meeting, the DDA reviewed the attorney’s opinion, discussed the matter some more, and then voted 6-1 to approve just $207,501.19 to cover the radio equipment that would be installed in the district, such as consoles, and other radios that would remain within the district.
Public Safety Director Carl McClanahan asked that the allocation be made available in the 2011 budget, which runs through the end of this year. He said the plan was to ask for the rest of the money from the township’s general fund.
Before the discussion on the allocation began, DDA Executive Director Susan Ireland had provided a memo describing how she had contacted DDA attorney Robert Schwartz and asked for a written opinion.
She said the opinion from Schwartz strongly cautions the DDA. She said the DDA Act requires that the expenditure of funds must be within the general powers of the DDA and it must be within the scope of the DDA’s tax increment financing plan.
She said the purpose of the Act is to “eliminate property value deterioration and promote economic growth.”
Ireland said Schwartz pointed out the acquisition of personal property would require an extremely broad reading of the Act in order to support the request.
Ireland said her interpretation was that the project can be considered if it falls within the scope of the DDA’s Plan. She said there is wording that says “Assist with Public Facilities Development and Improvements” and specifically mentions public safety facility assistance. But, it must remain in the DDA district.
DDA chairman Jere Dolph disagreed with Ireland’s interpretation of Schwartz’s opinion, and asked McClanahan if there were any other options to pay for the radio system.
McClanahan said the balance needed would be presented to the township board.
In Schwartz’s opinion: “… the argument has been made that expenditures on behalf of a municipality (i.e., Township) that would normally be made from general funds or an operating levy cannot be made with DDA funds because the Act prohibits the use of DDA funds ‘to circumvent existing property tax limitations.’
“The argument is that, by shifting normal operating expenses of the municipality to the DDA, the DDA is funding expenditures that should be funded out of general fund millage, so the Township and the DDA are therefore circumventing the tax limits on the Township’s operating millage,” Schwartz wrote.
“Finally, as to whether property acquired or constructed by the DDA must be within or remain in the DDA district is addressed in a State Tax Commission rule which appears in the Michigan Department of Treasury’s website. In effect, the rule provides that all property acquired or constructed by the DDA must be described in the Plan and must be spent for the benefit of the DDA’s development area and be located within that area,” he concluded.
Dolph said he heard that $40,000 in portable radios were purchased last year without approval. He asked McClanahan how he could justify that.
White said the radios were approved by the board of trustees, as any purchase over $19,999 has to be.
Dolph said he has been talking to members of the police department and fire fighters and they said the radios weren’t worth the money put into the purchase.
McClanahan said after the purchase of the radios for the fire department, he became aware that the FCC was requiring narrowing the band and it seemed like a viable option to adjust those radios.
But, he said, his department is having problems with its radio system. He said it’s the infrastructure that is deteriorating and if they used narrow band radios they would have to put up more repeaters, and that’s on a system that’s seriously deteriorating.
DDA member Ron Blank said the DDA already discussed the need for the radios. What they are discussing now is if the DDA can in good conscience buy any radios that go out of the district, he said.
“The township needs the radios, period,” stated DDA member Pastor Jim Richter. “But, we asked an attorney and he says no. We’d be better off if we hadn’t asked.”
Blank asked if the radios would help promote economic growth, one of the purposes of the Act, and White said people tell him they feel safe in VBT because they see so many police cars around and that’s why they moved here.
Ireland said she was surprised to learn how many officers the township has on every shift.
“That’s commendable,” Blank said. “But does it meet the test? The SEC is actually taking on DDAs.” He referred to the investigation in Ecorse where funds reportedly were not appropriately used for bond issues that have failed. The fund proceeds were not used for what they should be used for, Blank said.
“I want this to be done,” Pastor Richter said of radios for public safety. “The challenge is with Schwartz.” Richter asked if they could do an amendment to the DDA plan to meet the law.
“We all want to help them,” Pastor Richter said.
“But, is it legal?” Dolph asked.
Since Ireland had said Schwartz had given his cautious opinion before she had come up with the DDA Plan that references public safety, Blank asked if they should ask the attorney also to review the Plan before they decide.
“In the last election, we renewed police and fire funds,” Dolph said. “Why don’t we use some of the present money on hand?”
White said the DDA captures $314,000 of the public safety millage and $74,000 of the township’s one mill. He suggested the DDA consider entering into an Intergovernmental Authority, as other communities do.
Dolph insisted that with Schwartz’s opinion, the purchase was not proper.
DDA member Ron Laginess pointed out that the DDA built Fire Station 2 in the DDA district.
Blank recalled after all that was approved, Cindy King or Bryce Kelley said the DDA needed to buy emergency radio equipment.
Ireland said the DDA made the fire hall ready for equipment, with wiring, etc.
Blank said the DDA spelled out a worse-case scenario to the attorney and he did not have a copy of the DDA Plan. He said the DDA has a couple of choices: a motion to see where it goes or reverting it back to the DDA attorney with the Plan.
“He is being cautious,” Blank said of attorney Schwartz, who also will be handling the bonds for the Ecorse Road upgrades. “Bonds are different than they used to be.”
DDA members discussed funding just the part of the request that stayed in the DDA district.
“We’re going basically against what our attorney asked us to do,” Dolph warned.
Ireland said there are 70 radios between police and fire and McClanahan said there will be nine police employees and four fire fighters in the district per shift, cars in the district and, “I’m OK with that.”
Laginess made the motion to approve purchase of the first seven items on the list at a cost of $207,501.19 from the Public Safety line item for 2011. This was seconded by Blank and approved 6-1, with Dolph voting no.
Dolph explained: “With the information we have received from our counsel … I’m not thoroughly in favor of it … I think it is not correct.”
After the meeting, Dolph explained further: “He gave us a memo that cautions us not to do that, with valid reasons why. Bond issues will be affected by our decision. We are looking forward to other projects, such as recreational facilities on the Ford land. We definitely will have to revise the budget… We are not following the guidelines of our attorney.”
In other business at the Nov. 22 meeting, the DDA:
• Agreed to keep Robert Schwartz as bond attorney and for occasional legal opinions. His pay comes out of the bond issue and he does not charge extra for the opinions, except in unusual circumstances;
• Heard an update on engineering for the Ecorse/Belleville roads intersection. Matt Stacey of Wade Trim explained technical changes in the 2012 MDOT specifications are delaying Wayne County completion of its augmented specifications, thus delaying the township’s project and requiring some engineering work to be done over. Stacey said he can’t even do a price estimate at this point, so the bond can proceed. He said he had hoped for a May contract award of the project for work next summer, but that may not be possible. Breaking it into two construction seasons is not a good idea, he said. He has another meeting with the county soon and will keep the DDA informed of the situation;
• Set a 5:30 p.m., Dec. 5 special meeting
to discuss the DDA 2011 amended and 2012 proposed budgets. The budget was on the Nov. 22 agenda, but was postponed because they wanted a full board present and four members were absent: Atchinson, Zoller, Bechtel and DeLibera; and
• Heard a presentation from recommended financial consultant Tom Traciak of Umbaugh, based in Lansing. His services will be necessary for the upcoming bond issue for Ecorse Road. He will prepare an engagement letter for consideration at the Dec. 5 meeting. Traciak would be paid out of the bond money. Schwartz had said to sell at a good rate the bonds may require the full faith and credit of the township behind them and financial counseling is vital.