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CRA says its numbers warrant continuation

By Staff | Oct 13, 2012

The downtown Community Redevelopment Agency met for an emergency meeting Friday to discuss its future following a recommendation that the city council to take over the duties of the CRA.

And while City Manager John Szerlag says the CRA only has enough money to surviving through 2013, CRA officials painted a different picture and will try to prove it in a future meeting.

The board voted unanimously to have its executive director request a joint workshop with the city to discuss CRA governance and related issues

Szerlag told the CRA on Tuesday he was recommending that the city absorb the agency and that he would serve as its director. He said the CRA’s own budget shows the agency will become insolvent in a year.

The CRA not only tried to show it was solvent for another five years, it also maintained its budgeting was the envy of the city financial manager.

CRA Chairman Rich Greer started Friday’s session by saying he was surprised by Tuesday’s meeting. He said he “looked at numbers and said ‘it isn’t right.'”

The CRA claims the figures presented by Szerlag are flawed, based upon an analysis that runs counter to the way the CRA had budgeted.

CRA Executive Director John Jacobsen said three years ago the budget was $3 million and the agency spent $1.5 million.

“It shows what you budget and that’s what we went by. You have to budget all the money and show all expenditures. We had no intention of spending it, projected higher than we would spend. We knew four years ago, when John was chair, that this was a fiscally sound budget that would increase funds.”

John Hertz showed revenues expected by the city were projected to increase 3 percent until 2017. After 2016, the agency would still be solvent, according to its numbers.

Debt service related to LCEC underground lines remain the same at $416,854 from 2014 on.

“Why is there disparity between the numbers? Is there something at play. When you start asking questions and you get this response, you wonder,” CRA chairman Rich Greer said. “There’s concern the CRA can’t handle financial responsibility. Our liaison told us we’re doing a great job, told us everything is fine, the budget is OK, and then the city tells us it’s shutting us down, it’s troubling.”

Proof of the CRA’s fiscal responsibility came from a tape of a 2011 meeting, showing city Financial Director Victoria Bateman saying their budget was “bare-boned, without much wiggle room. Half of the budget is set aside for future use; I wish we had a budget like that.”

“The budget process hasn’t changed in years, never come close to spending its budget, Bateman applauded the CRA’s budgets until now and the budget is sound,” Jacobsen said. “It’s all documented, we did what we said we would do, and we remain sound until 2017. The velocity of the plan is troublesome. What is the financial emergency that’s causing this train to move so fast?”

Greer asked how the city was going to work with the downtown area from City Hall, and most of the board member expressed their dismay.

“To break up a team like this and hand it to the city so it can get bogged down in politics is wrong,” CRA Vice Chair Lou Simmons said. “Who authorized the city manager to say he’s taking over without talking to us? I’m learning more from the paper than from the city or CRA.”

“I can’t imagine how the city manager can be a three-day-a-week director with a 60-hour a week workload,” said CRA member Don Heisler. “He came to town and said he wants an assistant city manager, but took it back. If CRA goes to council, he’s going to see how much work it is and hire someone to run it.”

Others had a less emotional approach. Dan Creighton said it’s about the low-lying fruit, that cities and counties have taken over CRAs for the additional revenue they get from the state.

“We serve at the pleasure of the council. What they dictate we need to work within as best we can,” said board member Jim Evans. “Could budgets be better structured? Yes. They look at what we spend on staffing and budget and see they can do it cheaper. They can. Can they do it better? I don’t think so.”

Among the attendees were Mayor John Sullivan and Councilmember Chris Chulakes-Leetz, who in March made a similar ordinance to move the CRA to city authority. This ordinance is being sponsored by CRA liaison Marty McClain, who was not present.

Sullivan said he hasn’t made up his mind what to do.

“Can we do the job? I don’t know. I want to see everything before I make a decision,” Sullivan said. “I can’t research all this myself. We need the numbers to know what’s going on. The city manager can’t decide himself. The CRA was created with an ordinance and has to be dissolved with one.”