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Commission approves consolidation of DAGA and DDA interfund loans to stabilize downtown finances
Summary
The commission approved consolidation of outstanding interfund loans with the Downtown Economic Growth Authority ($1,060,000) and Downtown Development Authority ($1,070,680) into 10‑year schedules with a 3.75% interest rate to move short‑term liabilities to long‑term repayment and avoid state deficit plans.
The Kalamazoo City Commission on Dec. 16 approved agreements to consolidate outstanding interfund loans with two downtown authorities to improve their balance sheets and preserve downtown operations.
Staff said the DAGA consolidation covers $1,060,000 and the DDA consolidation covers $1,070,680. CFO Steve Vicencio said the agreements convert short‑term liabilities to long‑term payback over 10 years and carry an interest rate set at 3.75 percent, a figure staff said was based on the 10‑year Treasury at the time of negotiation.
Vicencio told the commission the consolidation “moves some of their short term liabilities to long term, which will get rid of that deficit elimination plan” required by the state if deficits persist. Commissioners discussed the timing of loan commencement and repayment; the motion included clarifying language that the loans would commence Dec. 31, 2024 with repayments beginning in 2026.
Both actions passed on roll call votes. Members of the commission said the steps preserve downtown programs and allow the authorities time to stabilize capture and repay the city over the multi‑year schedules.
