The Elgin City Council has approved a new three-year contract with the Downtown Neighborhood Association of Elgin, including provisions that they must hire a consultant to explore new revenue sources and conduct an audit within a year.
DNA had submitted a contract similar to the previous three-year deal that expired in June. The $180,300 deal — Elgin funds about 64% of the nonprofit’s overall budget — included 3% increases in the second and third years.
However, instead of simply approving it as had been the practice in years’ past, the city and council wanted changes made. Namely, that the agreement be reduced to two years, an audit be done, board members from the Elgin Area Convention and Visitors Bureau and Elgin Area Chamber of Commerce be appointed, and a consultant hired to explore the creation of a Special Service Area as a new revenue source.
The council ultimately backed off of most of the requests when discussing the issue Wednesday night. Only the audit and the exploration of a Special Service Area remained as part of the new deal.
While it was not clear why the city was pushing for new requirements, some council members said they believed them to be unnecessary.
“I feel the Downtown Neighborhood Association has not only met but exceeded the terms of our current agreement,” Councilwoman Tish Powell said. “I appreciate the work DNA does. I feel the contract being proposed right now for two years doesn’t recognize the value, the work and the success they have had. And I don’t feel it is setting them up for success.”
Powell said she remembers when the idea of creating an SSA was discussed years ago. “It is a very long and detailed process,” she said, agreeing with DNA that two years wasn’t enough time to develop one.
A special service area is a special tax on properties within a specific area to help pay for things like infrastructure. In this case, the tax would help fund DNA. The cost to hire a consultant is about $50,000.
Powell asked staff whether the consultant expense could be funded with TIF funds.
“I don’t immediately know,” City Manager Rick Kozal said.
Mayor Dave Kaptain said city staff sent council members a survey about the contract prior to discussing its adoption. He said there was a consensus to shorten the term but city officials did not explain why.
Councilman Dustin Good, who previously served on the DNA board, said just maintaining the status quo is not a good practice and the changes proposed in the contract were not unreasonable. The city provides a majority of DNA’s funding so it should be able to make change provisions within the contract, he said.
That said, the “frayed relationship” between the city and DNA was concerning, Good said. “I feel like we are talking past each other,” he said.
Councilman Corey Dixon said he had “not heard any good reason to change (the agreement).”
The process has become “personal and political, to be honest. Some people’s feelings got hurt. That’s how we got there,” Dixon said. “It has nothing to do with the actual work getting done. … Hopefully whatever is broken can be repaired.”
DNA Board President Brian Pinon said he was disappointed in how the negotiation process unfolded, calling it “messy.” The process distracted DNA from its mission and demoralized the volunteers, he said.
The real story of the DNA is not just about what it’s accomplished, Pinon said.
“The DNA is made up of people,” he said. “People who believe in this city. People who believe in downtown Elgin. People who are giving their time, their talents, and their hearts to make this place better, not because they have to but because they want to.”
DNA agreed to the audit if the contract was extended to three years but couldn’t agree to funding a consultant for an SSA, he said.
“This mandate does not make sense for an organization our size, and it diverts resources away from the very work you expect us to do,” he said.
Councilman John Steffen, a founding DNA member, added that only the city can create an SSA.
The final vote was 5-3, with council members Anthony Ortiz, Rose Martinez and Dustin Good voting no and Councilwoman Diana Alfaro abstaining.
On Thursday, Dixon was critical of those who voted against the deal.
“For those who voted against DNA’s contract last night, it was a vote against the development of our downtown, a vote against small businesses and a vote against our overall economic and vitality as a city,” he said.
But Pinon said Thursday he was happy with the ultimate outcome. DNA will find a way to hire a consultant and believes the cost may be eligible for TIF funds, he said.
Gloria Casas is a freelance reporter for The Courier-News.
