The Development of Authority, part 7: The Fine Line Between Public and Private, Employee and Contractor

On the same day that part four of this series came out exposing the lack of competitive bids for the first part of the signage project and the appearance of bid rigging in granting the rest of the $150,000 signage project to the DDA director's fiance, the Downtown Ludington Board (DDA) convened, and here is the salient part of their meeting:


Mayor John Henderson called the meeting to order at 11:00 a.m. in the City Municipal Building
Community Room. 
Members present: Gail Lyons, Julie Payment, Wayne Brown, Kathy Maclean, Carrie

Financial Report

Kathy reported that there were additional monies in the fund balance but some of that was money

from the New Years Eve Funds. The Budget for 2011 is $15500

Committee Reports

A. Business Recruiting/Retention/Marketing/Communications

Kathy started the discussion of the shared position with the Downtown Board and the
Chamber of Commerce. Cost to the board would be approximately $1000 per month for the
remainder of the year. Gail Lyons, Wayne Brown and Julie Payment spoke in support of the
position and that Heathers job has changed and grown in the last few years. With John
Henderson abstaining from the vote, the shared position was passed.

Analyze this small part of the meeting.   DDA 2-14-2011  is the entire meeting.  Kathy (MacLean), the DDA Treasurer proposes a shared position costing the board about $1000 a month.  From the minutes we cannot determine what the position is about or why Mayor John Henderson abstained from the vote.

Next month's meeting had the follow-up: 

Shay and Venzke explained that the previous months vote needs to be retaken on the

shared position. The city attorney advised to re-vote with two thirds majority.

Brown made a motion to approve the marketing and communications agreement

between the chamber and downtown board, seconded by Neal. Motion carried. 9 voting

members voted in favor of the contract.


What's going on?


Quite a bit that isn't being explained. 

1) The Revote: The DDA has eleven voting members total  DDA 2011 Voting Members , six were present on Valentines Day.  With the Mayor abstaining, there was only five members voting, which does not constitute a quorum for making decisions, this was caught and corrected the next month.  Experienced parliamentarians like the Mayor and Kathy MacLean, were blind to this?  There may have been a reason.


2) The Abstention:   Why did Mayor Henderson abstain the first time?  City law states: 

"2-72:  Prohibited Conduct:  1)  No officer or employee shall make or participate in a decision in his or her capacity as an officer or employee knowing that the decision will provide such officer or employee, a member of the officer's or employee's immediate family or a business with which the officer or employee is associated, a financial benefit of more than a de minimis nature which is distinguishable from the benefits to the person as a member of the public.  If a member shall abstain from voting, he or she must enumerate reasons for such abstention which reasons shall be enumerated in the minutes of the governmental body." 


The appointee was in the Mayor's immediate family, so he correctly abstained.  Unfortunately, all members who approved the minutes failed to note that he did not enumerate the reason, nor were those reasons put in the minutes, as the underlined protocol says.  In fact, they seemed to want to keep what the vote was about obscured in both meetings, just something about a shared position.


3)  The Contract:  From a FOIA request, the contract was received and is here:


This is a contract between the DDA and the Ludington/Scottville Chamber of Commerce (LSCC) wherein the LSCC's Administrative and Communications Assistant ('assistant') is to do contract work for the DDA.  The LSCC is a private organization, and is receiving $1000 in public dollars from the DDA each month for the services of the Assistant until the contract is dissolved.  As such, members of the LSCC who also serve on the DDA should not be able to vote on this position (see the provisions in Section 2-72 in 2) above) because of the conflict of interest inherent.

A look through the LSCC directory of businesses, and their LSCC representative is quite revealing.  All but one member of the DDA is a direct representative of their business with the LSCC as a hard copy of that directory shows.  Here is a quick E-list:

Aleksy Urick- 108 Threads

Gail Lyons- Mariellen's Hallmark

Les Johnson- AJ's Party Port

Julie Payment- Sportsman's Bar

Nick Tykoski- Tye's Inc.

Sara Jeruzal- West Shore Bank

Wayne Brown- Wayne Brown's Ins. Agcy. LLC

Carrie Kosla- Lenz Insurance

Barry Neal- House of Flavors, Inc.

Furthermore, Aleksy is also on the Board of Directors, and as noted at the bottom of the agreement

Kathy MacLean is the President of the LSCC:  LSCC Board of Directors.  So, with possibly only one person on the DDA able to vote on this contract (agreement) to filter public money to a private business organization everyone belongs to (other than the abstaining Mayor), this decision should not have even been considered.  No quorum could ever be reached and the exchange of public to private money is highly unethical.  This duplication of DDA/LSCC members begs the question:  Why have a DDA when the Chamber of Commerce has the same function and members?  The answer that makes most sense is that the Ludington DDA, as is, is meant for corporate welfare of favored businesses in favored areas. 


4)  The Assistant:  The Assistant who isn't named in the meetings or in the Agreement by name is Brandy Henderson, the daughter of the Mayor, who we encountered in the thread Marina and the Henderson's and the SOS Lifeguard thread.  Between 2005 and 2010, she worked full time at the marina in season.  But during that time she was going to school, then college, where she majored in Public Relations.  In spring and summer2009, she was given an internship position under Heather Venzke  BH- 2009 Internship under HV   with the following duties  Intern Duties

That may have been innocent enough in itself, as no money was spent, and so it worked well for everyone.  In Sept. 2010, E-mails passed between DDA president Venzke and City Manager John Shay about a position she proposed to create for a certain person named Brandy followed by an E-mail to Ms. Henderson, who was thrilled by the offered opportunity  9-23-2010 Contract position E-mails   9-24-2010 Contract Position E-mails  The Contracted Jobs

City Marina business was winding down for Brandy and she managed to do 37 hours of billable work  Work Times   and then she was paid through payroll the $370 she earned, as these two documents tell  Payroll 1  Payroll 2.  This 'who cares?' attitude between the difference of a contractor with an established contract and an employee is one of the reasons we have City Attorneys who argue that they are contractors, while having all the powers and more of City Officials.

Right after she completed both jobs in November, she was hired on by the LSCC in a new job as the 'Assistant' to Kathy MacLean  BH in Linked 1.  Her string of luck continued in February 2011 with the extra $1000 per month voted to her illegally by the DDA, including a vote by her boss at the LSCC and her fellow LSCC members.


5)  The Discussion Starter:  Kathy MacLean was the one at the beginning of this thread who shared the DDA's financial report, as she has been the DDA's Treasurer since at least 2005, and then lead the discussion into adopting the shared position.  You also see her name at the bottom of that contract as the President of the LSCC.  As Treasurer of the DDA she proposes to give public money to her assistant at the private organization she heads, the LSCC.  Is that ethical?


SUMMARY:    The DDA is almost totally funded through the DDA's 2 mils, and the TIF, both public funding, given to the local  government to be applied judiciously to concerns of the local community:  public safety, improving the infrastructure, providing necessary services and utilities, etc. 

The DDA has massive and unexplained administrative fees, questionable public expenditures, unfair distribution of their funds, and contracts like the above that unethically give the taxpayer's money over to a private business group.  The Ludington DDA has devolved into a place where our 'connected' local downtown businesses can go for over $100,000 of unearned money.  If the LSCC likes what the DDA is doing, let them fund the programs, or get together with the Convention and Visitor's Bureau (whose revenues went up over $200,000 per year due to the 'room tax') to pay for what each Ludington property owner pays for now

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Totally shocking, and additionally, disgusting, to the MaX!! Or is Max a factor anymore/ not our Max, just the Maximum allowable by LAW? And any ethics these days? Quite the investigative forum, imho.

All of this stuff took a long time to compile, and much of it ties into research done on an as yet unpublished part of the sordid activities of public and quasi-public officials.  The minutes of the DDA are always vague and compiled in a way that defies the Open Meetings Act-- I used to think it was just because of an incompetent Secretary (who has been Les Johnson for awhile) or apathy by the submitter of the minutes, Ms. Venzky-- but it seems more likely it is written to be purposefully vague.

Being vague is good for the DDA, it keeps you guessing as to what their true motives and spending favorites are. After all, what good is transparency in even the local government, when the State and Feds are setting prime examples for them to follow.
Amazing job X. I wonder if the LDN would hire you as a reporter since they do not seem to have any on the payroll.
Whereas I wouldn't mind the job, I would mind the limitations they would put on me.  From what I read in the LDN on local government issues, I think I would need a full-frontal lobotomy and re-programming to achieve their standards of reportage

Nepotism, money laundering, Open Meeting Act violations, and conflict of interest all around. 

Most of these people know better.

Thanks for the dirt on the dirt in Ludington.  You are truly the Eye on Ludington. 


Pure dynamite!!! 


Heather and her buddies at the City Hall may be getting favorable assessments on their houses, but the rest of us are seeing the values of our houses go south and their assessment holding steady or going upward.  That tax money gets redistributed by the City to just the downtown businesses to use.


Here's an idea for all of you in the DDA and the L/S Chamber of Commerce and all other downtown businesses:  get money by earning it. 

I can feed the family some fast food out in PM Township for a less price than I can feed one at most downtown restaurants.  And, at least during the summer, get better service.

I have to go out of town to get hardware, sporting goods, and any cheap groceries.  Downtown is turning into fudge.   

C'mon Edie, when Fudgies are attracted via a Fudgie World downtown, whom would you most expect to visit it, surely not the locals, as the CC and LCC has it planned out for. Us locals come last as you well know, we are at the bottom of the rung of priorities of money spent here, as we surely deserve by our apathy towards any positive change.

Downtown has changed quite a bit since just a few years back.  From what I see and hear it looks like a bit of social engineering is going on to make it into an area that is vibrant only between Memorial Day and Labor Day, and far from viable the rest of the year. 

But damn those tupperware benches and trash cans look so cool, and those new gold and black signs are so trendy.  I finally read the DDA 5:  Signs of Love thread.  That's pretty sick stuff those guys are getting away with.  Not as bad as the Daleys in Chicago, but on its way.


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