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Council approves $500,000 line of credit to let DDA spend previously approved projects; opponents call for tighter oversight
Summary
The Loveland City Council approved on second reading a $500,000 line-of-credit arrangement to let the Downtown Development Authority (DDA) access funds to implement already-approved projects; the item drew criticism from some business owners and public commenters who objected to downtown spending and asked for more transparency.
Councilors on May 6 approved a second-reading ordinance authorizing a $500,000 temporary line-of-credit to support the downtown development authority’s (DDA) already-approved project budget. The financing mechanism will let the DDA manage the timing of its cash flow while spending proceeds are repaid to the city’s utility fund as planned.
City staff said the line-of-credit does not provide additional money to the DDA beyond its previously approved budget; rather, it temporarily facilitates cash flow for projects the DDA has already authorized. City staff reduced the requested maximum from $1,000,000 (used in a prior year) to $500,000 based on the DDA’s projected schedule and prior draws.
Brian Walies, the city’s chief financial officer, told council the loan-and-repay arrangement has precedent and was reviewed by the Loveland Utility Commission; staff said the mechanism will be temporary and that Wells Fargo (the city’s new banking partner) is working with the city on a longer-term approach.
The item drew spirited public comment. Downtown business advocate Darren Barrett and several business owners criticized the DDA’s spending priorities and questioned why the city would facilitate what they described as nonessential expenditures downtown. Barrett specifically called DDA discretionary items “waste” and said business owners felt intimidated from raising concerns. Other speakers, including Kathy Bullard and business supporters, said downtown improvements and events have revitalized the area and supported small businesses.
Council debate touched on transparency and stewardship of public funds. Councilor Foley said he initially voted no at first reading because he wanted more clarity on why the amount was set where it was; staff explained they cut the cap in half after reviewing draws from the prior year. Councilor Black cast the lone substantive “no” vote on the second-reading ordinance; the final tally was 7 in favor and 1 opposed.
By approving the ordinance, the council allowed the DDA to use the line-of-credit to cover timing gaps for projects already in the DDA-approved budget. Council asked staff to keep transparency high by publishing project lists and drawing justifications and to return to council if the DDA requires changes beyond the items already approved.
