After three FOIA attempts to get potentially exculpatory material for what seemed like an obvious conflict of interest involving members of the DDA, we were finally successful with the following FOIA request:

“In Ludington DDA's 2008 TIF Plan, page 22, Section 22.6, there is detailed a projected cost of "Signage" of $150,000 for the period of 2009-2012. Section 2-4 of the City Code says "Competitive bids for all purchases and public improvements shall be obtained where practicable and contracts awarded to the lowest responsible bidders." and "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.". The recent budgets show that a significant portion of that money has already been spent, thus at least some of the bidding has been completed.

Under provisions of the Michigan Freedom of Information Act (MCLA 15.231 et seq; MSA 4.1801 (1) et seq) I am requesting, preferably in electronic records sent to this E-Mail address, I wish to inspect :
1) any documents that contains all the "contractors invited to bid" on the signage project. If this is contained on only one document, that is sufficient.
2) the letter(s), or general template, the City had sent out to each Signage contractor invited to bid.
3) any replies from those Signage contractors to the City's bid requests from those invited to bid.”

The conflict arose from the public records suggesting the signage program had been funded in 2008 for $15,000 in 2009 DDA Sept 29,2008 minutes, had begun in 2009 DDA Sept 14 2009 minutes, and yet the bids for sign contractors was done in the spring of 2010 DDA May 2010 minutes .  These latter two will be discussed.

 

The Available Public Record

MCL 15.342 is a state law that describes seven forms of prohibited conduct by a public officer or employee.  The city has much the same in the "Conflict of Interest" Division of the City Code.  A ‘public officer’ by definition is any elected or appointed official whether full-time part-time, paid, or unpaid and shall include members of the various boards appointed by the city. Section 5 states that:

A public officer or employee shall not engage in a business transaction in which the public officer or employee may profit from his or her official position or authority or benefit financially from confidential information which the public officer or employee has obtained or may obtain by reason of that position or authority…”


Nick Tykoski, who recently ran unsuccessfully for County Commissioner, has been a member of the Downtown Ludington Board of Directors (aka Downtown Development Authority or DDA) for several years. This public officer also runs his own sign business called “Tye’s Signs”, recently renamed “Tye’s Inc.”. He has had prior experience in law enforcement, and currently serves on the Ludington Fire Department. Indications are that he is an excellent firefighter and entrepreneur.

The DDA has had several occasions lately when they have needed services involving the skills of a sign-maker. The city utilized Tye’s Signs for working on store window decals for the successful Halloween event downtown (DDA minutes, 10-12-09). The city also purchased the 6000 lights for the New Year’s Ball from Tye’s Signs (LDN, 12-30-09).  All signs for the dog park were to be made by Tye Sign's.   In neither case were there any mention of any competitive bidding by other companies who may have wanted the public money utilized.

On May 10, 2010, the DDA met at its monthly meeting, Nick was absent from the meeting. From the minutes:

St Hillare handed out the estimate for continuation of the signage project for Downtown Wayfinding signs. 4 additional requests were faxed to other companies in addition to the one received from Tye’s Inc. Tye’s Inc was the only estimate received. The project is being done in phases.
A Motion was made by Brown and seconded by Johnson to approve the estimate from Tye’s Inc for the current phase.
A motion was made by Brown and seconded by Neal to approve Tye’s Inc as the vendor for the remainder of the signage project for Downtown signage.”

DDA Venzke was the secretary of that meeting, and as usual in her minutes, she left out what the decisions on the motions were, contrary to what the Open Meetings Acts demands (MCL 15.269). But presuming these motions were passed, it sounds from the minutes that Tye’s Inc. did not get faxed a request—that somehow the company gained inside knowledge from some source.  Likewise the word 'continuation' suggests it had already been started-- which it had-- by Nick Tykoski's company.   It is curious also that in these rough times, you’d think at least one of the other four companies would try to get this lucrative deal.

The second motion also seems to go against the city charter (Art. 1, sec. 2-4 Purchases and Contracts) which says: “Competitive bids for all purchases and public improvements shall be obtained where practicable and contracts awarded to the lowest responsible bidders…” To be precise, if Tye’s Inc. effectively gets the remainder of the signage project without the DDA even seeking competitive bids, isn’t it reasonable to assume Tye’s Inc. could charge a non-competitive rate for the work?

The Acquired Public Record

 

On the fourth attempt to get the competitive bids for the $150,000 signage contract through FOIA, we did not receive any competitive bids before April 2010.  This is strange, because the financial records of the DDA show that on 10-12-2009, $15,000.75 was paid out for downtown signs under contractual services  DDA Financial records 2008-10 p. 9 (zoom in).  So who got the money?  Tye's Signs or Tye's Inc. ? 

Now a contract for over $10,000 was awarded to a member of the DDA, a city employee, via his company without a competitive bid, let alone a sealed bid.  But what about the bids in April 2010?

On Tuesday, April 27 the following was faxed to three sign companies, a 4th did not receive theirs.  4-27-10 Fax p 1  4-27-10 Fax p 2  4-27-10 Fax 3

The terms seem very rigid, and the time frame allows only 3 business days to respond with an estimate.  But each received it on the same day.  Sounds fair for this phase-- until you see this:  4-20-10 Tye's Estimation for project  

A week before these faxes were sent out to receive sealed bids, a particular company was able to get their bid in without even being faxed.  Being that Nick was part of the wayfaring sign committee in the DDA, the inflexible demands and the small time frame for bidding seems to work well in his favor. 

But how was Nick able to get all this past the wary eyes of the DDA Director Heather Venzke?  Let's just say that today is Valentine's Day, and love just might be the answer. 

They also got a sweet deal on a Freddy Mac foreclosed home this last summer at 201 N Washington St.  A house that recently sold for twice what they brought it for.  Assessor Info 201 N Washington

How did they do this?  Love found a way.

 

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Verrrry interrresting!   In your picture, I recognize Heather in the middle, is that not-such-a-saint Nicholas with the red eyes to the right?

I hope the couple has a Happy Valentine's Day.  And that they then both promptly resign from the Downtown Ludington Board tomorrow.  Why do we have to put up with this stuff?  The money wasted on the water tower painting and the transient docks could at least be assigned to misguided good intentions, this sounds like pure greed

BTW, are you referring to the gold and black signs that they installed in several downtown areas?  Pretty, but useless, IMO.

Nice work X. I wonder what the water tower situation is going to reveal when you get all  that information together. I sure am curious as to why LDN or the council lady who has posted here are not investigating all of this.
I am also wondering how they got this sweet deal on this foreclosure?  Was it knowledge they (Heather) obtained from being a city employee?  I would like to know how long this place was in foreclosure before they bought it AND was it ever listed in the LDN for a foreclosure sale? How do I find out? Also, if u look on the assessment page - you can see images/sketches of the property in question (top of the page Note like to clink on) there are 2 PDF documents that I cannot open - one is from after they bought the property, I wonder what that document is?

Angie, The one document dated 9-15-10 should give some extra clues as to some of those unanswered questions about a 'sweetheart' deal.  I haven't been able to open it on two different systems either. 

One could check the library for all issues of the LDN between the date it was foreclosed and the day it was brought.  I can also review the property files at City Hall.  One more FOIA request...

One of Heather's duties is to apply for federal and state grants, manage the Residential Rehab Program for the DDA, and oversee other Community Development programs.  This property was picked up very quickly after it went into arrears. 

It's purchase could be legit; but then when one considers the ethics in the bidding processes for the sign contract these two appear to have had, I would like to see proof of fair acquisition.

ya I doubt it was a legit sale. Can't someone go down to the courthouse and view these PDF documents that we cannot see? I wonder if there is an easier way to see if this info was in LDN instead of looking thru every single issue from one date to the date of sale? shouldn't the courthouse keep a record of that also?

They should be available at the courthouse and in the city's 'address folders', records they keep about each city address.  I don't know what sort of notice protocol they need to publish to sell Freddie Mac foreclosed homes, but maybe someone else more involved in real estate can.

And if part of that protocol is the need to advertise that fact in the local paper, the only way to confirm whether that was done is to check those papers exhaustively, or get that fact from the LDN staff that processes such notices.  Or have someone who saw it notify the rest of us that it was published in the LDN, and point us to the edition(s) such notice was published.  Heather or Nick could do this, if they want to clear this aspect up.

Being that the City Manager and the City Mayor were present at the DDA meetings, one has to question why they didn't see that the City and State laws were not followed, and that the appearance of ethical impropriety didn't occur to them. 

City Manager Shay is a member of the Michigan Local Government Management Association (MLGMA).  He currently serves as Chairperson of the MLGMA's Ethics Committee.  Why is he blind to this?  Why had he stonewalled my original request by violating FOIA law for this information three times?   

Three days is a very short amount of time I would think.

 

But as far as being very specific I think that is a good thing. Considering there are so many products to use and ways to due things(at least in auto body) it is  best if the bid requests are very specific as to how they want it done, what they want it done with and any other detail that could vary from one estimators opinion to anothers.

 

That is why I dislike sealed bids. There are so many variations on things that one person may think it best to do it one way but yet another could want to do the job differently or use a different product . At least if they tell you exactly what to do, how to do it and what materials to use a estimator can then have a level playing field to enter a bid.

 

For example. if a Rt front Fender needs repairs one estimator may choose to replace that part with (OEM-orginal rquipment say GMC parts), another estimator may use aftermarket parts(parts not made by the vehicle manufacturer, usually imported) and another may choose to repair the current part using metal work and body filler and yet another may choose to find a used part at a salvage yard. So if the person requesting the bid specifies that they want it repaired with body filler(and not to replace the part) then each estimator isn't guessing as to what the other guy is doing. And in many situations any of the above ways of repairing that fender will end with the same result and any one result being equally valid as another.

Nothing wrong with being specific, Sheila, but the fax is prepared without showing what the finished product is desired to look like, where the signs need to go, what the signs are to say, etc.  All these and more could factor in on the bid, and they could have included this in the fax.

Being that Tye's company had already done over $15,000 of signwork up to this point without a contract in the public record, you can imagine they might have an upper hand on being the low bidder by having all the templates and materials at hand.  I have called a couple of the sign companies contacted and had some interesting conversation with one, which I unfortunately can't divulge here. 

Did you happen to notice the signs golden lettering is actually made of high-carated gold?  So even though you can't see the signs, you still know they're golden!

The city's scope of work was certainly lacking - and giving only 3 days to prepare a quote is absurd when you expect the vendor  to drive to see an actual sign. They did not provide the verbage, size of lettering or style. Black poles - matte or gloss? It is clear they did not want other vendors to bid on this job, but with that said.... Tyes quote was dirt cheap on labor, cement and misc materials.

It is odd that they don't state what the sign must say...or could it be common to request that the bidder in the world of signs go look at similar signs and then bid based on what those are like? I really don't know but it did say that the signs are to be similar to the ones already in place, I don't know if that means anything or not.

 

What is up with the gold(carated) lettering. I would think they would use something with more reflectivity or 'brightness'. Real gold is not very bright is it? idk...just thinking out loud...

 

hmm... Love or lust of money position etc... 3 days esp if someone else was somehow (allowed) to place a bid out side of the bid criteria.

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