How can Redevelopment Agency (RDA) funds be used to pay for a project like the proposed indoor sports complex currently being suggested as an economic impact tool for Mesquite? Aren't the funds supposed to be used to improve blighted areas in the City? Who approves RDA projects? And, who gets the money?

Those are just a few of many questions the Mesquite Citizen Journal recently asked City Staff members and Councilman Kraig Hafen about the RDA fund program.

We admit this subject is enough to make your head swim but the answers we received from Interim City Manager Kurt Sawyer, Economic Development Officer Bryan Dangerfield, and others, were quite enlightening.

This is the first of a two part series that explains how RDA money is administered. The first part examines how the funds are used in 'blighted areas' and which Mesquite businesses have received money under the program.

Tomorrow we'll look at where RDA money comes from and who approves payouts from the funds. The latter may surprise you.

The RDA Board, essentially the Mesquite City Council, meets Tuesday, Oct. 11, at 4:00 pm in the City Council Chambers. It's the first time the Board will meet under the new administration that took office July 1.

"The RDA is designed to bolster the whole economy of Mesquite. That may be because the area is blighted. But, there might be other things we can use the money for because everybody needs it. Right now, the whole City of Mesquite needs something for businesses. Every business is hurting. It's to bolster the entire city economy," is how Sawyer justified using RDA funds on a project like the proposed indoor sports complex.

Aaron Baker, an Economic and Redevelopment Associate in City Hall, said "there is one portion of the RDA fund that is bond proceeds. That has to be used for capital projects. Right now it's about $2.5 million. The other part is property tax increments and that's used for remodeling and renovations."

"There are certain criteria we have to follow when giving out RDA funds and they are set by state law. The projects have to meet certain tests and findings. In this one instance of the sports complex, the property tax that can be derived from the hotels and casinos doing better is significant. If we can help them improve, everyone improves. They are the largest taxpayers in the RDA. That's your nexus," Baker explained.

RDA Funds for Blighted Areas

There is a pot of money budgeted each year for District Support Services used primarily to renovate and remodel buildings in certain areas of the city. It's the fund dedicated to what most people think of as 'blighted area.'

The FY 2011/12 budget shows that $635,000 is dedicated to four incentive areas in this category: Building/renovations, façade rehabilitations, sign replacements, and fees. Fee incentives are paid in conjunction with one of the first three and are used for building permit fees or similar fees charged by the City. Baker explained the process used to award those funds.

"When someone applies for an RDA grant with us, (the Economic Development Office) we discuss permanent improvements that are eligible and non-permanent improvements that are not eligible."

Baker remarked that non-permanent improvements like televisions or refrigerator coolers are not eligible for RDA funds.

"Things that will stay with the property and increase the property value are eligible. The plans are submitted to the tax assessor's office so that the property taxes due can be re-evaluated," he explained.

The application is reviewed by a committee consisting of Bryan Dangerfield, the Economic Development Officer, Richard Secrist, Planning and Environmental Resources, and Baker. The City Manager also reviews the application.

After that, "we draft an agreement to pay the business person either the amount applied for or the actual construction costs, whichever is less. If someone applies for $5,000 for their project and they actually complete it for $4,000, we pay them the specified percentage of the $4,000."

The RDA program administration used to be in the City's Planning Department. It was moved into the Economic Development Office in 2010.

Applicants must submit three competitive bids from contractors for the projects and the Economic Development office takes the lowest competitive bid. "We don't dictate that they have to use that person, but we take the lowest price bid and pay according to that. They are free to use whichever contractor they want."

"The parties involved sign the agreement, we sign it, and the Mayor signs it," Baker added.

"They get all the necessary permits, do all their work, and then provide us with canceled checks or lien releases from all the contractors showing they've been paid. Then we issue a check for the appropriate amount of money.

"We have a lot of checks and balances in place to make sure everything is done properly." he commented.

If the applicant is a tenant, the landlord is also involved in the process.

Baker explained that his office doesn't monitor an entire project, but only "those expenses eligible for RDA Grant money."

If the project exceeds expected costs, Baker says they only get paid for the original estimate. "For example, if we expected the project to cost $5,000 and it ends up costing $6,000, we only pay according to the original $5,000 estimate."

When asked about the $18,589 RDA grant money awarded to the now-closed Home Plate Diner in May, and whether that money would in effect, be lost, Baker said, "the nice thing about these RDA grants is that we only give money for improvements that remain with the property. So, we're collecting property tax off those permanent improvements regardless of whether a business is operating there or not. It helps the next business that comes in because they don't have to make those improvements."

The increase in that property value is attached to the tax base of that property. "Anything that increases the property value within the RDA district, we want to invest in because that means more taxes paid into the RDA.

Who gets the money?

A Mesquite Citizen Journal review of City financial documents, including check registers, show some of the following expenditures from RDA District Support Services funds since 2009.

Business Name	Purpose	Amount	Date
View on Mesquite Magazine	Corridor advertising	10,800	7/20/09 thru 10/25/10
View on Mesquite Magazine	Heritage Museum advertising	3,260	7/20/09 to present
CityWide Golf, LLC	Promotional video	7,500	12/29/10 thru 4/5/11
Chamber of Commerce	Mesquite Days	2,500	4/28/11
Various Mesquite businesses	So Long Summer event	2,938	Summer 2009
Mitchell Insurance Agency	Business Expansion	1,000	3/27/2009
Maverik Stores	Business Expansion	1,000	3/27/2009
General Store	Remodel/Rehab	25,206	12/18/2009
Mitchell Insurance Agency	Business Expansion	1,000	3/15/2010
Maverik Stores	Business Expansion	1,000	3/15/2010
The Portrait Company	Remodel/Rehab	29,288	6/22/2010
Arnez LLC	Remodel/Rehab	1,122	11/4/2010
Stephen's Hair, Etc	Remodel/Rehab	10,204	1/18/2011
Desert Winds Plaza	Remodel/Rehab	1,750	2/7/2011
Stephen's Hair, Etc	Sign Replacement	352	4/4/2011
Home Plate Diner	Remodel/Rehab	18,589	5/9/2011
VV Family Services	Remodel/Rehab	7,460	5/16/2011

According to Dangerfield, "the $10,800 paid to View on Mesquite magazine for corridor advertising was suggested by the old Downtown Business Advisory Committee. They proposed that the businesses in this corridor go in as a collective and benefit from the magazine that's put into all the hotels. We stopped it last November and kind of parted our ways. We still pay for advertising the Heritage Museum ad in the magazine. The Museum Director says he gets a lot of visitors who've see the ad."

Dangerfield also explained that payments for business expansions, such as those paid to Mitchell Insurance Agency and the Maverick store, were discontinued by the RDA Board on Apr. 19, 2009.

Also, in the FY 2011/12 budget, corridor marketing was moved out of District Support Services and placed under Contracted Services, still RDA funds, to clean up the budget categories and to isolate district support service payments better.

"CityWide Golf, LLC, which is the formal name for Golf Mesquite, was a partner in updating our promotional video and help contribute to the video," Dangerfield explained.

While the promotional video was a one-time payment from RDA funds, Golf Mesquite is scheduled to receive $20,000 separately from Economic Development funds.

"Our largest contributors to the RDA tax revenue are the casinos. If we can prop them up that helps the whole corridor. When they swing either way, we feel it. If we can help them get their rooms filled by bringing in golfers, that's good for all of us. If you can prop up any of the RDA properties, and they are contributing to the tax base, that helps everyone," Baker commented.

Coming up Friday, Oct. 7: Where RDA money comes from and who approves payouts from the funds.