Ypsilanti DDA: Declining revenue may lead to property owners paying 50 percent of waste services
Ypsilanti business and building owners in the downtown districts may soon begin paying 50 percent of their waste management services, according to Downtown Development Authority officials.
Executive Director Tim Colbeck told DDA the board over the summer that he recommended requiring private financial participation in the management of the public dumpster enclosures.
The DDA covers all of the costs for waste management services and the goal is to have property owners pay at least 50 percent of the costs. In 2011, the DDA paid nearly $24,000 for waste services, including bulk removal, for the downtown districts.
Colbeck attributed declining revenues as to why the DDA is seeking contribution from owners. For the last three years, the DDA has seen a decrease in property tax revenue.
In 2007-08, the DDA received $316,559 in Tax Increment Financing. TIF allows all taxable value within the DDA boundaries to generate tax revenue for the DDA instead of the city of Ypsilanti. That number has declined over the years and in 2013-14, the DDA expects it to further decline to $239,138.
Courtesy of the DDA
"We've seen revenue drop since it's directly tied to property taxes and value," I'm optimistic that we're going to see a leveling off on it in 2013 but we'll still be off the curb," he said. "Over the last few years we've squeezed out some concessions."
In 2008, the DDA began to pay for waste services in an effort to beautify and clean up the surrounding areas. Prior to 2008, there were no collective dumpsters in the downtown districts.
"We were investing heavily, doing some improvements and said 'Why not put the enclosures in there?'" he said. "At the time it was wonderful, but waste removal represents a higher value of our expenditures."
The current contact the DDA has with Waste Management expires in March 2013 and officials expect next year's contract will include extra pick-ups and administrative costs.
Colbeck provided four possible scenarios:
Courtesy of the DDA
Colbeck said the scenario most likely to come into fruition is option 3 and it would split the yearly costs, which right now are about $24,143.99, equally between the DDA and property owners.
If the costs are split, both the DDA and business owners would pay $15,798.26 per year.
That $15K amount would be further split among all of the business owners and each would pay an amount based on a sliding scale that would amount to anywhere from $93.21 to $218.02 per year.
The scale is based on the intensity of their needs for the service. Buildings used for offices would be at the lower end and restaurants on the higher spectrum because they produce more waste.
The DDA said 44 offices, 33 residential properties, 21 personal service businesses, 16 retail and 6 restaurants would be affected by the change. The cost for residential properties would apply to landlords and not individual tenants.
Colbeck said most likely, owners would receive one bill a year.
“I know not everyone is going to like it, but in general, once we split these estimates, most people will find them favorable compared to operating dumpsters at their own expense,” said DDA Community Development Coordinator Jake Albers. "Of course if you're asking someone to pay $124 when it was once zero, no one is going to be (happy), but it's reasonable."
If implemented, Colbeck said it would be an "honor system" where they trust business owners to pay their portion of the costs. The DDA has no immediate plans to create a special assessment district to help with a fee collection process.
"It's not going to be an assessment or any automatic billing," he said.
Colbeck said its important to note that plans are still in the discussion stage and have yet to be "set in stone." However, down the line, owners may incur the full costs of waste management.
If that were to happen, Colbeck said the amount owners pay would double. Restaurant owners would pay about $436 per year.
"We're not saying that's an absolute but it's certainly in discussion," Colbeck said. "The end goal is to eventually pass off those costs to the consumers, but we haven't set an end date.
Shortly, the DDA will begin reaching out to business owners to receive feedback regarding the possible changes.
"We're going to be approaching our business owners and building owners with the option to help cover the costs but we haven't gone out and done any of that yet."
David Heikkinen, owner of Heikk's Decorated Apparel Studio, said it's important for the dumpster enclosures to be maintained.
Heikkinen, who also serves as the Downtown Association of Ypsilanti president, previously said, the owners lined their individual dumpsters in the back of their buildings.
"It was very unsightly," Heikkinen said. "Initially we weren’t happy about them (dumpsters) because we weren’t sure how they were going to work, but now that we’ve had them for four years they work well."
Heikkinen said the "devil is in the details" and will reserve judgment on the costs until business owners receive more information from the DDA.
"... I know the DDA budget is going down a little bit this year," he said. "We're still waiting to see the details and we'll just have to wait to see what the final presentation will be."
DDA officials said the possible changes will be discussed in a planned public forum.