Mayor probes funding arrangement with Heart of Danville

Published 7:15 pm Thursday, July 25, 2019

After being interim director since March, Dustin Duvall recently accepted the position of permanent executive director for Heart of Danville. Board Chair Valery McMann shared the news Monday with the Danville City Commission, adding she hoped they “welcome him with open arms.”

However, the tone quickly changed to financial concerns since the city was just about to approve its bills, which included the first round of agency appropriation payments for the new fiscal year. And the Heart was questioned about “accreditation issues,” as well as how it uses its allocated funds.

McMann said the board’s executive director search committee did its work and made the recommendation to hire Duvall due to “the great success” he’s had. Duvall joined the Heart in 2017 as its project manager, then accepted the interim position after the former director, Nick Wade, relocated to Covington.

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McMann said since that time, Duvall “has single-handedly — because he’s now an office of just one — put together a series of profitable Main Street Live, our concert series at Weisiger Park every other Thursday this summer. And profitable Lawn Chair Theaters once a month at Constitution Square Park.”

McMann said the way those have become profitable “is not only do we have concession and drink sales, but more importantly, we’ve had sponsors for each and every event.”

Duvall thanked the city commission for its appropriated funds, and said the Heart is “going to do our due diligence to keep going, and make you all proud, hopefully.”

Mayor questions funding

As McMann and Duvall returned to their seats, Perros said, “I do want to address Heart of Danville. Because that is part of our pay-the-bills discussion. And it’s a large line item.”

The line item Perros was referring to is $13,750 — Danville’s first-quarter allocation to the Heart; it was funded a total of $30,000 this fiscal year. Last year, the Heart received $72,500 in city funding; the year before, it received $110,000 when the funding was routed from Danville through the Economic Development Partnership. 

During the March agency funding requests, City Manager Ron Scott questioned the Heart about its request for the county, which was only $15,000. He said it should be recognized that “downtown benefits the city and the county,” but the funding requests “seemed a little lopsided.”

Board Chair Logan Germann said the $15,000 was “an infinitely large request increase for the county, because they haven’t been funding us to near the level the city has.”

Boyle County Fiscal Court did not approve any funding for the Heart. It does provide funding for Main Street Perryville, the other main street organization in Boyle County.

During Monday’s meeting, Perros announced he and McMann had a “frank, open conversation” that morning. “I’m going to request publicly that the Heart go back and revisit this annual letter of commitment, and perhaps all of us together need to sit down and go over that. Because I think we’ve gotten away from that, quite a bit.”

As he held the letter up, Perros said, “Part of this says we want a written plan of action. I mentioned that to you this morning.”

McMann said the Heart’s work plan was submitted with its budget request. “Even though we haven’t talked about that, you all should have access to it. We’d welcome the opportunity to get together and talk that through.”

Perros said he “also mentioned” in his talk with McMann “that it’d be my desire for the Heart of Danville to rebuild their finances. As I’ve said in this room many times, our capacity and capability to continue to fund our nonprofits is going to continue to diminish as we labor to increase our pension contribution.”

New director doesn’t have CLG accreditation

The mayor said the “issue of accreditation” also needs to be discussed. “May not want to do that right here, but that is definitely something that needs to be addressed.”

Commissioner Denise Terry said she agreed with the mayor. “As I’m reading this accredited program annual commitment letter that the city and the Heart of Danville agrees to … I believe I asked this same question the last time they hired a new director … the director’s accreditation. I don’t know what that is, but I think the city needs to know. You don’t have to answer it right now, unless you just want to.”

McMann said the confusion over accreditation is one the Heart addressed a few years ago. She said when Bethany Rogers was here, the executive director before Nick Wade, “she had the proper background to allow the city to have CLG status,” referring to being a Certified Local Government. When Rogers left, McMann said Wade did not have that accreditation.

“Ideally for CLG, it would be somebody with a historic background that can serve the whole city. Because, obviously, there’s preservation issues across Danville, not just downtown …” She said that is when the city hired Joni House, who is now part-time preservation coordinator.

“And that’s the ideal situation,” McMann said, noting that the city will not lose its CLG status due to Duvall not having that background. “So, the accreditation is not really an issue. Those are the conversations we’ve had before.”

City Manager Scott said Danville is required by the Kentucky Heritage Council to have the credentialed individual. “It’s not the Heart, it’s the city itself, in order to qualify for a certified Main Street Program.”

What should the Heart’s focus be?

Perros said he feels that the Heart should “focus back onto hard economic development and preservation. Those are the things … in my estimation that are going to bolster our downtown and help keep our historic identity. Have I said anything that we didn’t talk about, Valery?”

“No,” McMann said.

Terry added that “preservation is and should be one of the Heart of Danville’s main goals and objectives. And I don’t think that’s been a high priority for the last few years.”

McMann said if the city wants the Heart to focus more on preservation, they can certainly have those discussions. However, she argued that getting more people downtown does aid preservation, due to businesses making more money “to be able to preserve or remodel their buildings.”

McMann said the more people we have downtown, the more people will want to relocate here.

“It’s kind of the chicken-and-the-egg thing. Everything we do does have to do with preservation, even if we don’t call it preservation. … Main Street Live is not ‘Preservation Main Street Live,’ but it’s helping because it’s getting people downtown.”

Perros then said his concern is “yes, we’re getting people downtown. But most everything’s closed at that time. They don’t disperse and walk through town to shop, so how do we take that concept and tweak it, rework it?”

McMann said she sees that point, but part of the hope is that when people “come down, they see something that’s closed and they’ll come back later. Some of our businesses stay open later because of Main Street Live, but we can’t force them to do that. You’re right; it’s a challenge.”

She said most purchases nationwide are made after 6 p.m.

Policy could change soon

Terry said the city’s overall policy for nonprofit allocations needs to be changed. She said the city’s money should not be used to fund an operational budget.

“Our money should be allocated to capital expenditures and seed money for new endeavors, for two to three years of that new endeavor,” Terry said. “We are going to get a new city manager, and that person may or may not recommend that we make any allocations to nonprofits.”

Later in the meeting, Terry said if nonprofit allocations “are going to continue,” she would like to have a policy change “before our new city manager comes on board.”

“I want to clarify that the public spending test, legally, is that when you expend tax dollars, does it meet the public purpose test,” City Attorney Stephen Dexter said. “The interest that you said about no funds go to operational costs — that can be a policy decision of this commission. But it’s not quite the legal test, which is funds can certainly go to operational costs, so long as those costs promote a public interest.”

Dexter said if the commission wants to make a policy decision about where it wants “your dollars to be spent … you could decide to do that. I wanted to clarify that for anyone who may think that the city may not have allocated funds appropriately.”

Commissioner Kevin Caudill said it seems the issue is communication, and it’s a good idea to get the city and the Heart together “to talk about where we want to go, instead of trying to read each others’ minds.”

Scott sees this as “a good opportunity for the Heart, commission and community to have that discussion about the importance of preservation, and the four-point approach of the main street program, which is grounded in historical preservation efforts.”

He said due to “lots of tools that have come out more recently,” such as Opportunity Zones, “we could have a situation develop in the near future where there’s a lot of additional investment coming into downtown, in terms of renovations of upstairs lofts, have more people living downtown … So it’s a pretty exciting time to begin having that meaningful conversation.”

The city and the Heart plan on some type of workshop just after Labor Day.