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Gladstone DDA legal after all, study finds

City estimates final cost at $500,000

GLADSTONE — The Gladstone Downtown Development Authority’s (DDA) capture of assessed value of the properties within the DDA district have been determined to be legal.

After thousands of dollars were spent on lawsuits and a settlement agreement with former City Commissioner Mike O’Connor, the results of one of the settlement terms was reviewed during Monday’s regular city commission meeting.

The commission approved a contract with Joseph Turner of Michigan Property Consultants, LLC., of Saginaw, Mich., for $9,000 in January 2019.

There were two issues that were to be resolved by Turner looking into the DDA. One was determining what the captured assessed values were for the DDA for the fiscal years ending in 2009 through 2018. The second was determining if the DDA should revise how it calculates and/or establishes captured assessed value going forward.

According to what has been called the “Turner Report,” it was concluded for the years 2009 through 2018 inclusive, the amount of the captured assessed value computed by the city was reasonable, and the geographic areas used and the value of properties lying within them are reasonable for the years 2009 through 2018 inclusive.

Within the report, Turner also suggested some changes for the future but said, “changes are necessary, but all-in-all, it appears that city leaders over the past quarter century have planned diligently to improve their community with taxes that have been captured.”

After hearing the summary of the Turner Report from Interim City Manager Eric Buckman, commissioners had feedback on the findings.

Mayor Joe Thompson expressed frustration with spending $9,000 plus city staff time and legal opinion to find out the city was running the DDA legally.

Buckman said other terms of the settlement, which was a Utility Rate Study, and the cost of the Turner Report, it equals about $75,000, along with attorney fees.

In December 2018, the city of Gladstone finally ended a series of lawsuits with O’Connor by approving a settlement agreement. The legal battles spanned over more than two years and cost the city more than $200,000 in legal fees.

Buckman said if how much city staff time was spent on all of the reports and other items in regards to the lawsuit and settlement are taken into account, O’Connor cost the city around $400,000 to $500,000 total.

When Commissioner Brad Mantela heard the estimated total cost on the city, he noted the money was spent just to come to the conclusion the city is acting well within the law.

“You know, we sit up here, we talk, we kind of wring our hands over a couple thousand dollars here and there, and now we’re talking about a deep, deep six figure half-million dollar bill that was unnecessary that we’ve all been saying from the beginning,” Mantela said.

Commissioner Darin Hunter said the money spent unnecessarily could have gone to other projects going on in the city like the 9th Street Project.

“I guess when people see Mr. O’Connor they should thank him for wasting the money,” Hunter said.

No motions were made regarding the Turner Report findings.

Both the Utility Rate Study and the Turner Report are available on the Gladstone City website.

In other business, the commission:

– swore in reelected Mantela and Dave Phalen as city commissioners.

– swore in Thompson to continue on as mayor of Gladstone.

– swore in Mantela to continue on as mayor pro tem.

– tabled the item relating to the city manager, as Buckman met with Thompson and Commissioner Greg Styczynski about staying on as city manager but had not written up a contract yet.

– approved the Gladstone Parks and Recreation policies.

– approved the enrollment of the State Fire Insurance Withholding Program and the resolution to accompany it. The program is designed to provide municipalities with some financial protection against the cost of cleaning up a damaged structure following a fire loss.

– approved the street closures of North 11th Street from city hall to the American Legion and Delta Avenue from 11th Street to 8th Street leaving the intersection open from 4 p.m. to 8:30 p.m. on Friday, Nov. 29, for the Old Fashion Christmas event.

– set the special meeting date for the Wastewater Treatment Plant State Revolving Loan Fund discussion for Dec. 5 at 5 p.m.

– heard an announcement an Buckman that TJ Thomas, the director of the Delta County Economic Development Alliance, has resigned after being offered a job in the private sector.

– went into closed session to speak with City Attorney Don Bacon.

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