Ludington City Manager and City Attorney Partners in Crime Again

[XLFD]

More unlawful activity from the two best paid positions in our city?  Why certainly; who would expect any different when their past indiscretions have gone uninvestigated and unprosecuted by either an oblivious or complicit city council, local media and police department.    

The March 21, 2016 meeting shall be remembered for the city leaders totally ignoring a petition signed by over a hundred people and vocal opposition at their hearings in order to send an application to the DNR to get $300,000 to do cosmetic changes to the West End of Ludington Avenue that nobody outside city hall seems to want.  It shall also be remembered for the Agreement between the City and LC Companies to develop the bowling alley block, enticing these developers with local PILOTs to more than offset the demolition and construction thereof.  Of course they will get even more subsidization from state agencies to make it a very lucrative proposition for the Jacobson family that will be effectively paid for by the taxpayers.

That will be covered in due time, the fallout from it will come out much later, but let's look for now at the City of Ludington legal issue I mentioned earlier, and spoke of at the meeting at the 8:10 mark of the meeting:

March 21, 2016 Ludington City Council from Mason County District Library on Vimeo.

"Among other issues, the law firm that is contracted by the city as its city attorney , Mika Myers PLC, has received another nice gift from the citizens, once again courtesy of John Shay, with the money of our tax payers.  If you recall, John Shay knowingly overpaid these attorneys for three straight years, this they finally admitted after they were called on it repeatedly.  Now he will give them one more gift by choosing them as contractor for legal services for the water and sewer upgrades, making them $50,000 richer in the process without any competitive bidding. 

You may think our city's rules say that such a high cost contract must be decided by a competitive bidding process, and you would be right.  We have plenty of reputable lawyers in our area that would welcome $50,000 for doing mostly routine legal work, or whatever they could have offered in a lower bid, had they been given the chance.  Instead, we let our city manager and city attorney set the rates and allowed you (councilors) to be accomplices in this violation of city contract law.

As if to highlight their intention to violate competitive bidding in the future, they have submitted an ordinance that only invites cronyism, not competitive bidding.  Ordinance 332-16 section 4 totally absolves our officials of conducting competitive bidding. 

     Having the option to reject a low bid of qualifying bidders is NOT competitive bidding, the ordinance contradicts itself

This is a violation of the public trust, our city's laws, and opens everyone on the panel before me to justified charges of cronyism when they avoid using the competitive bidding process.  This is also your legacy.  Thank you."

Sample City Attorney Billing Records from 2013 charged to the City taxpayers.  The hourly rate for attorney work on special projects was $185 per hour

In most other cities, what I presented would be a serious charge and, if verified, could end the careers of both officials involved when reviewed by an uncorrupted and law-abiding council.  But this is Ludington, and our city attorney and city manager are actively protected from the public by our corrupted city council whether they are right or wrong.  This has been on display for years, particularly during the months they were being called on their overbilling.

In the 3-7-2016 council packet (p.146) , they were provided with the following memo outlining the entering in of a Legal Services Agreement between the COL and the City Attorney law firm of Mika, Myers:

After this in the packet is four separate agreements for each section-- a practice I have never seen before in the other agreements I have reviewed for other cities and towns with more complex projects.   Section 2.4 of our city code says (see also sec. 13.2 of the City Charter) :  "Sealed bids shall be asked for in all transactions involving the expenditure of $10,000.00 or more and the transaction evidenced by written contract submitted to and approved by the city council."   

Being that the work was divided into four 'legal projects' of $10,000 or more, our city manager had a duty to either conduct four sealed competitive bidding or explain clearly why it is "clearly to the city's advantage to contract without competitive bidding."  He didn't even try to do so, nor did the packet indicate anyone other than the COL's Grand Rapids law firm had the opportunity to bid.

But packets sometime leave information out, so about two weeks ago I sent a FOIA request to the City asking for "Records detailing the competitive bidding process the city used in selecting Mika Meyers for legal work involving the water-sewer upgrades work, which was presented for first reading at the March 7, 2016 meeting as ordinance 326-16."  I was rewarded by the FOIA Coordinator's response:  "Your request for disclosure has been denied: "A public record does not exist under the name given or by another name reasonably known by the FOIA Coordinator"

So there were four legal services projects of $10,000 or greater value that were not bid out.  The obvious first defense is to claim that the hiring of our city attorney is convenient and in the city's best interest.  Another defense would be to claim that $50,000 is likely to be the best buy for the city.  They might even propose as defense that the Rural Development (RD) Agency allows such agreements.

But, RD has to follow their own rules, which does require the City to get into a Legal Service Agreement.  This is further explained in rule 7 CFR 1780.39 - Application processing:  "Applicants should negotiate for procurement of professional services, whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiations of fair and reasonable compensation."   The RD agency effectively requires a degree of negotiation and competitive bidding for any of the services used by the City, and RD must concur on such agreements. 

There is nothing precluded from having this agreement be between a governing body and its official counsel.  But there are plenty of such recent contracts available to the public that shows that $50,000 for such work is way overvalued, and not a good deal for the city's taxpayers.

Carroll County RD Attorney Services Agreement in 2013 for both water and wastewater projects similar to Ludington's had a LSA for a price not to exceed $8000.   Oakfield New York's LS agreement was made not to exceed $7500.  Yates, New York had a LS agreement not to exceed $9750 for their substantial Rural Development projects.  The highest I found was for Bozeman, Montana who was up at $15,600 for a multifaceted project. 

Closer to home, Union City Michigan contracted their village attorney to do the RD legal work in 2013 for no extra compensation other than his Village Attorney retainer.  The town of Alexander NY did the same.  There is good reason for that; this is typically work that is subsumed in a normal legal service agreement between a public attorney and the local unit they work for.   

On p. 9-10 of this 2013 packet, we see the latest form of Ludington's agreement with their law firm, and this could easily be classified as regular project work.  Even working at the rate of $205 per hour, our attorneys would have to work around 250 hours exclusively on the legal aspects of these constructions and improvements of our water and sewer system. 

And yet, I made the FOIA request suggesting such bidding was necessary, made it the main topic of my speech at this meeting, and our city council agrees to give up to $50,000 of our money to our contracted law firm from Grand Rapids knowing there was not any competitive bids used as required by city charter (or compelling reason not to do so).  This is how you squander the wealth and resources of Ludington, our fair city. 

[shinblind]

The corruption of City Manager John Shay and the incompetence of this City Council knows no bounds.  

[Willy]

Your in depth articles are a must read for all concerned with Ludington's future. This is the only place that can be found which provides the particulars regarding the City's actions. I do have one question, where can I find Ordinance 332-16 sect.4? I looked at the Code of Ordinances but could not find it.

[XLFD]

Thanks for the glowing compliment, and in reply to your question, the ordinance is not currently within the city code being that it was adopted just five days ago, however you can find it in its proposed entirety here:  see page 147.

You will notice the ordinance is effective (as are most non-emergency ordinances) twenty days after publication.  It looks to me as if Attorney Wilson wanted to split the full contract into four pieces in order to avert some non-existing rule that says no competitive bids are needed for contracts under $15,000-- which you won't find in the code.  The code specifically states however that contracts cannot be subdivided in such manner to avoid the legal requirement that all contracts above $10,000 require such bidding. 

[Willy]

Where can I find this code section

It seems to me that the City Attorney has no business drawing up and reviewing his own contracts with the City. Any City Attorney contracts should be created by an independent  third party attorney to prevent any hanky panky from going on or at least eliminate the appearance of said hanky panky.

[XLFD]

That section was snipped from the first presentation of Ordinance 332-16 whose material begins on p. 285 of the March 21 packet.  This ordinance only affects construction contracts made for the water and sewer projects funded by Rural Development. 

Having two presentations of accepting such contracts is one of the city charter's safeguards against spending too much money for projects due to cronyism or other considerations not in the public's interest.  In this one ordinance, they not only take this protection out, but makes it clear that the city has no obligation whatsoever to fairly bid these contracts out.  There is ample record of the COL violating their competitive bidding process (most wastefully perhaps being the water tower painting (where no bids were sought for a $1.2 million plus unnecessary project) and the Washington Bridge reconstruction engineering contract (where a bid of under $70,000 on a request for proposals by local engineers were ignored to spend nearly $200,000 more on GR engineers) ). 

This is purely a matter of legislated cronyism funded by your tax dollars.