The Development of Authority, part 6: More Hats for Les

[XLFD]

A Question of Legitimacy

 

When City Councilor Scott retired to Grand Rapids after an illustrious career on the city council for nearly twelve years, a vacancy of office was created for a 3rd Ward Councilor.  At that time, the City's decision was to have the existing city council choose someone from the third ward to take CC Scott's place for the half year remaining on his term.  The process they considered was to advertise the position, interview candidates by the CC Personnel Committee, and then decide who would be the replacement by CC vote.  Les Johnson won, and I was one of the losing candidates.  My candidacy was a bit tongue in cheek.

At the time, I had read the City Charter and found the following ordinance (i.e. city-created law) that should have obviated the need for that procedure:

 

While it says "Any vacancy of an elective office, except the Mayor, shall be filled within thirty (30) days by appointment by majority vote of the Council with the Mayor voting in case of a tie.", it then says "Multiple vacancies (of elective offices) shall be filled by a special election."

Why does this matter?  Consider the City Treasurer, Linda Rogers, who is an interim treasurer because she achieved her office by the resignation of Mary Reeds-Mortensen just after the last city election in 2009.  She was appointed, through the same process Les was-- but there was only one vacant office at that time.  At the time CC Scott resigned, there were multiple vacancies (i.e two) of elective offices, and a special election was required by City law.

 

This point was made by me in a comment on the E-edition of the LDN, but it was never published.  Unfortunately, such a special election would have been done mere months before the general election, and both positions would again require a vote.  That is still no reason for disobeying the law.  This is why CC Scott should have served out his term even if it was in absentia-- for the good of the City.  As it was, six people who don't live in the Third Ward decided who was best to serve the Third Ward, and that's ridiculous.

 

A Further Question of Legitimacy

 

In a previous discussion, I exposed a pattern of city appointments that definitely violated the City Code, if not State law:  Commissions of Sins .  At that point, Les Johnson was only serving on the Downtown Labor Board (DDA) and not appointed to anything else.  His appointment was extended to 2014:

 

But Mayor John Henderson then appointed him to the Board of Review for this year:

 

 

in clear violation of this ordinance:

 

As noted in the Sins link, above, which says that any appointee to the Board shall not already be an elected or appointed official of the city.  So the Mayor and the Ludington City Council overlooked this restriction and let Les get on this Board while already being appointed to the DDA.  They must both really like Les to break the law for this appointment and then appoint him once again contrary to statute to the City Council.

 

Mr. Three Hats

 

OK.  We have established that he was appointed to the Board of Review in January, contrary to the City Code, then appointed to the City Council by the City Council, in contradiction to the City Code's policy for multiple vacancies for elective offices-- so what's the harm?  Why can't he be on all three?

 

Well, the Board of Review is supposed to be above the politics of the rest of the Boards and officials by the way they are constructed, but usually they do not interact with the other two public bodies.  He really should resign from this (he hasn't) or resign from the other two, if he wants to remain on this and be within the law.

 

The other two hats have a bit of interaction between them.  And even though there is no direct statutory provision that prohibits someone from being on the DDA and the City Council, most cities disqualify such combinations because of the inherent conflicts of interest.   Good government should not have a person with two offices when one office is subordinate to another, or when one is supervised by the other.

 

But that's what occurs here.  The Board is the governing body of the Ludington DDA, while the City Council is the governing body of Ludington  MCL 125.1651 .  The DDA Act has several interactions between the two where the CC has control over the DDA's activities-- here's a short list and the corresponding laws (emphasis added by italics):

 

1)  125.1653:  (5) The governing body (City Council) of the municipality may alter or amend the boundaries of the downtown district to include or exclude lands from the downtown district pursuant to the same requirements for adopting the ordinance creating the authority.

2)  125.1654:  Members shall be appointed by the chief executive officer of the municipality, subject to approval by the governing body of the municipality.  (4) Pursuant to notice and after having been given an opportunity to be heard, a member of the board may be removed for cause by the governing body.

3)  125.1655:  (1) The board may employ and fix the compensation of a director, subject to the approval of the governing body of the municipality.

4)  125.1661:  (1) The activities of the authority shall be financed from 1 or more of the following sources:  (g) Money obtained from other sources approved by the governing body of the municipality 
5)  125.1662:  (1) An authority with the approval of the municipal governing body may levy an ad valorem tax on the real and tangible personal property not exempt by law and as finally equalized in the downtown district. 

6)  125.1663:  The municipality by majority vote of the members of its governing body may pledge its full faith and credit to support the authority's revenue bonds.
7)  125.1663a:  1) The authority may with approval of the local governing body borrow money and issue its revenue bonds or notes to finance all or part of the costs of acquiring or constructing property in connection with the implementation of a development plan in the downtown district or to refund or refund in advance bonds or notes issued pursuant to this section.

8)  125.1664:  (1) When the authority determines that it is necessary for the achievement of the purposes of this act, the authority shall prepare and submit a tax increment financing plan to the governing body of the municipality.  The authority may enter into agreements with the taxing jurisdictions and the governing body of the municipality in which the development area is located to share a portion of the captured assessed value of the district.   5) A tax increment financing plan may be modified if the modification is approved by the governing body

 

9)  125.1665:  The governing body of the municipality may abolish the tax increment financing plan when it finds that the purposes for which it was established are accomplished.  Annually the authority shall submit to the governing body of the municipality and the state tax commission a report on the status of the tax increment financing account.

10)  125.1666:  1) The municipality may by resolution of its governing body authorize, issue, and sell general obligation bonds subject to the limitations set forth in this subsection to finance the development program of the tax increment financing plan and shall pledge its full faith and credit for the payment of the bonds.  (2) By resolution of its governing body, the authority may authorize, issue, and sell tax increment bonds subject to the limitations set forth in this subsection to finance the development program of the tax increment financing plan. 

11)  125.1669:  1) The governing body after a public hearing on the development plan or the tax increment financing plan, or both, with notice thereof given in accordance with section 18, shall determine whether the development plan or tax increment financing plan constitutes a public purpose. If it determines that the development plan or tax increment financing plan constitutes a public purpose, it shall then approve or reject the plan, or approve it with modification, by ordinance  2)  Amendments to an approved development plan or tax increment plan must be submitted by the authority to the governing body for approval or rejection.

12)  125.1678 Before the budget may be adopted by the board, it shall be approved by the governing body of the municipality. Funds of the municipality shall not be included in the budget of the authority except those funds authorized in this act or by the governing body of the municipality.

 

As you can see, the City Council may have a lot to say about the direction of the DDA, and it falls within the public's best interest that the membership of the two groups should not occur.  According to current records, Les Johnson is on these two public bodies as well as the Board of Review.  For the community, Mr. Johnson, lose two of those hats.

[Marty Redman]

Local governments without respect for their own laws should be altered or abolished. 

I went ahead and read the Commissions of Sins thread and some of the prior DDA threads.  If nobody in the City of Lud has responded or took action, you really need to get some outside help.  Maybe you have.

As a point of admission, I once went up against a corrupt local government and lost.  I finally gave up.  Now others in that area are getting screwed over as well.

I wish you success and perseverance.  

[XLFD]

Thank you, Marty.  Perhaps you can relate what happened with your situation some day here, or send it to me via a message.  Some things are in play, but I am still getting blocked by incredible FOIA replies to requests by the City Manager and his obstructionist lawyers from Manistee.

Les Johnson, in the meantime will serve as an interim City Councilor, a Downtown Ludington Board Secretary, and a Board of Review official, all appointed by John Henderson with approval from the City Council, this year.   

[Edie Lindsey]

The very topic of DDA and City Council dual membership is/was a big one over at Ann Arbor.  A couple of CC members are also on the DDA there.  The DDA gets quite a lot of money through parking fees and sometimes allegedly there are money transfers that happen that don't appear to be legit.  Here's what I could find from their local newspaper:

"We also think the current discussions underscore the different missions of the City Council and DDA, and we reiterate our concern about City Council members serving on the DDA board. We understand that the mayor — or alternately, the city administrator —has a place on the board under DDA bylaws. But City Council Member Sandi Smith, D-1st Ward, also serves on the DDA board, and should she step down at some point, we do not think another council member should be appointed in her place." -- http://www.annarbor.com/news/opinion/dda-and-city-council-need-to-b...

 

"But we’re troubled by the dual role Smith plays by sitting on both City Council and the DDA. The DDA needs to be more independent of council, and to keep its first priority as maintaining a vibrant downtown." -- http://www.annarbor.com/news/opinion/annarborcoms-endorsements-for-...

 

Then there are the local blogs say on it, and these are perhaps the meatiest on the subject.  A2 Politico goes after these guys like X goes after the Ludington DDA.  And that's good! 

"DDA board members and Ann Arbor City Council members who worked out the framework for the $2 million transfer behind closed doors during the last year. Hall said the meetings of the working group should have been open to the public, but even some DDA board members were kept away from sitting in on the discussions. ”I don’t support this type of conduct,” Hall said. “I find it sneaky, and underhanded, and corrupt, and possibly illegal, and in violation of the public trust in our government. Obviously not everyone is in agreement with me on this or things would have happened in a different way. But at the very least you should be able to understand why I’m so angry today.”

It was revealed in FOIAed emails that Smith had invited everyone on Council over to the DDA office to discuss what should be built atop the underground parking garage planned for the Library lot. This was, of course, seven months before July 2009, when City Council actually issued the RFP to solicit proposals from developers interested in building atop the Fifth Avenue parcel. There was no public notice of the January 20, 2009 meeting, nor were minutes kept. Just City Council and DDA Board members alone in a room deciding what should be built on land owned by the public. If Jennifer Hall was at that meeting, her outrage at the behavior of her colleagues and City Council members over being excluded from meetings concerning the ultimate disposition of the $2 million dollars requested by the city from the DDA, seems somewhat staged" -- http://www.a2politico.com/?p=3516

 

Is the system sick, or what?

[XLFD]

I came across the Ann Arbor situation in my research on this.  A lot of the problems they are having is because of the conflicts of interest between the City Council and the DDA, cronyism, and violations of the Open Meetings Act.  When the line between two public entities disappear, corruption is the likely result.

[Willy]

Good job XLFD. It seems that, according the City ordinance, Les is only able to serve on either the Board of review or the Downtown Ludington Board. He was appointed illegaly to the office of City Council and all of his votes, decisions and dealings as such should be void. I again ask the question, "why isn't the LDN on top of this situation"? What purpose is LDN serving if it doesn't inform the citizens of illegal activity by City officials. More important is the sit back and scratch your crotch attitude of the Mayor while this illegal appointment took place. Ludington citizens have serious problems in how thier elected officials are carrying out the City's businesss.

[XLFD]

Ludington City Manager John Shay, City Attorney Richard Wilson, and Mayor John Henderson continue to expand the reach of the Ludington Government by creating ordinances and policies that give City Hall far-reaching power, and yet fail to follow, enforce, and respect the pre-existing laws and policies that go against their actions. 

It is obvious in this case and others that they go against the law, but who are the people who enforce the local ordinances?  Just them and those who are under them in the chain of command on the code enforcement team and LPD.  The County Prosecutor and the Attorney General of Michigan do not enforce local municipal laws.

[Marty Redman]

And they're loth to enforce their own state's laws without someone pushing them and pushing them to do so!  If you can be as annoying to them than you have been to the City Hall, you may just get some results.

I just wanted to point out an error in your article.  Les Johnson wears FOUR hats-- the three public ones on the Board of Review, the City Council, and as secretary of the  Downtown Development Authority, plus the Ludington Chamber of Commerce representative for AJs Party Port which gets taxpayer dollars via the DDA, as per the latest in your series.  He must have an awfully big head.

[XLFD]

Thanks for the correction and for the encouragement.