Ludington City Council Meeting, November 13, 2017: Financial Secrets of the House

End of the year Ludington City Council meetings typically have an ambitious docket, especially when there has been a three week gap between meetings rather than two, but the November 13, 2017 meeting wasn't very packed in content or controversy.  This led to a forty minute meeting that featured just as much content and controversy off the agenda.

They approved the CVB's 4th Annual Brrrewfest, a midwinter afternoon bacchanal taking place at the east end of City (Rotary) Park on January 27th without problem.  They passed a non-conforming use agreement with Carr Manor, visible outside the north windows of city hall across Foster Street.  Carr Manor's management and the City had a difference of opinion in the manor's possible expansion of living units (read the council packet p. 54+ for more on the issue), no problems arose in its passage.

The first presentation of an ordinance changing the future fire station's lot on Tinkham from being zoned limited commercial to government service was read, and another first reading for an ordinance adding industrial surcharges on to future discharges of harder-to-process wastewater, like Biological Oxygen Demand (BOD) waste from the House of Flavors (HOF).

The latter figured into the last item of interest at the meeting, a request by the HOF to keep some sensitive financial figures of theirs secret from the public.  Reportedly, the updates needed at the Wastewater Treatment Plant to handle their BOD waste amounted to $1.5 million above and beyond.  

The HOF want to pay this incrementally over five years, the City doesn't want to extend this kind of credit without looking into their financial records in order to see whether that HOF favor might be too risky.

While I give credit (no pun intended) to the City for trying to establish a way to potentially save the citizens money if the HOF defaulted, I believe the City can accomplish this without getting some unidentified financial records that go beyond the HOF's usual disclosures of their finances to the IRS and other government agencies which are a matter of public record.  Likewise, they should be able to receive a copy of the company's credit report, with minimal effort and cooperation.  

But apparently they want enough to make HOF management want to classify the information as secret.  To do this, they need the city council's and the city manager's approval, for then they believe they could make this material exempt to public records requests through FOIA.  This is what I took issue with after reviewing the law and some relevant court precedent.  I also am at issue in that they do not seem willing to publish their criteria for accepting or rejecting the bid; what they want to do is look at the relevant records, whatever they are, make their decision, whatever it is, then forever dispose of the data they based that decision on.  The absence of criteria and the records is a very non-transparent process that is abhorrent to open government in Michigan.  

I was the only one to comment at the head of the meeting, and this was what I focused on after berating the latest Safety Decals invoice by the DDA: 

November 13th, 2017 Ludington City Council meeting from Mason County District Library on Vimeo.

XLFD (2:50 into the video):  "  (Government Heather)... In contrast, the City is looking to formulate a payment plan with House of Flavors to pay for the needed upgrades at the wastewater treatment plant to deal with their BOD waste.  In order to agree to terms, the city has asked for financial records to review of which the House feels should be left confidential,

I feel it’s an abuse of the city’s power to even ask for such records.  A reading of relevant laws and court precedents indicate to me that once the city decides whether to accept or reject the deal, the financial records they base that decision on should be made available.  If the city does not voluntarily release them, I will seek them through FOIA and expect no trouble.  Thank you."

During the meeting (12:00 in), the city attorney assured the council that his analysis of the situation was correct, and that all aspects of the deal could be kept secret from the unwashed public.  Their relief was noticeable before they passed the secrecy covenant and... I do expect trouble when I seek the records.  I will assure the public that the attorney's arguments are rather weak with the facts presented in this case.

At 26:30 in, during the post-agenda comments, I decided to get in front of the City's push for their own unaccountable charity:

XLFD: "As we get closer to the holiday season, local charities will be asking for help in their missions to make everyone's Christmas a little nicer.  If you can, think of donating to the red kettles of the Salvation Army, the various Toys for Tots programs, or other charity you feel comfortable with.  I would, however, advise everyone that the Ludington Shop with a Cop program needs to answer questions concerning their accounting irregularities of the previous year, and respond as to why they disingenuously advertise that all proceeds of their fundraising events provide the opportunity for needy children to shop with a local officer.  

Last year, it was shown that nearly $1000 was unaccounted for on a Meijer gift certificate, that $500 was unaccounted for in Walmart gift certificates, and that over $2300 was never used and supposedly deferred to the next year's program and has been kept within the city's coffers for nearly a year.  These are significant numbers given that just a little over $10,000 was used last year for the shopping.

At the beginning of this year, I had brought the disconcerting figures up as the city's general fund was used last November and December to pay for the expenses of the program.  "Shop with a Cop" is not part of Ludington government, public accounting principles suggest that this money should not go into a general fund of a city.  The records suggest much time and some resources were spent during the city's business hours doing work on the SWAC charity.  This further suggests that many of our highest paid public officials, with extravagant fringe benefits packages, don't have enough work to do otherwise.  Charity begins at home on your own time, not at city hall on the public's dime.  Thank you."

Had no other citizen rose, I probably would have gotten an earful from LPD Chief Mark Barnett after I took my seat, but two other Diannes had their say in two emotional topics to them involving the Fourth Ward.  Dianne Chippi brought the PM Bayou's city-caused pollution to the council's attention once again.  Dianne Seelhoff made a point about the Splash Pad Committee (SPC) and the proposed Fourth-Ward-placed splash pad, and the Open Meetings Act.  

Unfortunately, Seelhoff was on the impression that the SPC was a public body rather than a private body, which was meticulously picked apart by various officials at the end after Chief Barnett got his chance to plug his department and slug the citizen wanting answers to the department's accounting problems.

Chief Barnett started off with his plug for the SWAC program's pie auction, at around 32:00 in then segued into the meaningless monologue he has used other times to totally avoid talking about where the nearly $1500 in unaccounted-for gift certificate money.  It took over four minutes to say what he said below, which trumpets the character of his police that can't account for the missing money and questions the common sense of any detractor who asks questions about missing money in another episode of gaslighting.  

 

"Also I'd like to talk a little, if you bear with me, a few minutes on (deep sigh) some perceptions as to what a police officer (I won't speak for any other city employees) but what a police officer's job is.  I've been in this line of work for 41 years, 24 years of which, including 7 years in Pontiac, I've been involved with community policing.  Community policing is not just a program that you sign up to serve and do, it's a strategy.  Figuring out ways to solve problems that maybe can't be solved in other traditional ways. 
In holiday time we are confronted with, confronted really the year round with problems in the citizens both of the city and county face about things relative to the economic concerns of an actual family. So in the spirit of trying to solve some of those problems for many in a short period of time, the police department, along with other businesses and the citizens of the city of Ludington and Mason County, marshall our forces or combine our forces in order to solve a few of those problems. 
What we do is try to raise money so the kids of economically challenged families can go out and buy presents for their family members and for themselves so that they can have a little bit of Christmas.  Last year we fortunate enough to have some money left over, because people were generous with their donations, to be able to go and buy Christmas meals.  And the officers again took some of their on-duty time to deliver those Christmas meals. They do that because number one, it's the right thing to do, they don't do it to take anything for themselves, (unintelligible) police officers.  They do it to help people, they do it to solve these problems. It's got gonna make their life, but it's certain that they can raise some of the concerns, some of the problems that exist around the holidays.
I think that's the right thing to do.  I'm proud to be part of an organization, the city government, the city police department, that sees this as a priority, sees this as a function in terms of community policing.  In terms of problem solving, in terms of helping people.  Too many times, police officers have the unfortunate task of taking away somebody's freedoms.  Too many times we have the unfortunate task of taking away some of that hard-earned money people make to pay a ticket.  It's a great time of year that we have when we help spread a little bit of Christmas cheer.
I think the people, right-thinking people, that are using common sense, understand that concept.  I think they understand that there are people less fortunate than they are, that need a little help around Christmas time.  For as long as I'm going to be here, we will continue to do that; and we will continue to brush off comments that find fault with people's good intentions.  That find fault with people volunteering, and that find fault... you know you've heard the saying that no good deed goes unpunished.  This is certainly the situation.
Over the last couple of years, where disparaging comments have been made about the intentions and the motives of those dastardly police officers, shopping with a young boy or a young girl, helping them find Christmas and reaching into their pockets.  I've heard stories of officers spending up to $200 of their own money to help round out and pay for the gifts the excited young person is putting in his basket. 
So you know what?  I think we may need to look at that and we can certainly hear a variety of opinions, but I think we need to employ a little bit of common sense here.  So we will continue to do that."

My lack of common sense is still caught up in the ethics behind Chief Barnett not even being curious about why $1400+ is not accounted for after his peers negligently lost track of it.  John Shay followed with more of the same, saying that I had accused them last year of using some of the money for hams, which was untrue, just like Chief Barnett's aspersions.  When you use money from the general fund to buy Christmas dinners, what is one supposed to think?  But what I said was:

 

"Why was over $1200 of our city's general fund used for a purchase of spiral sliced hams in January, when our city manager and his mockingbirds in the city council tell us of how the city is so starved of money to do their normal functions?  They surely have put enough money aside to pay up to 78% of the city employee's wages in fringe benefits, are they now furnishing them with post-Christmas hams, packing tape, gravy mix, and veggies also?

Your honor, state law says that it is a misdemeanor for an officer of a city to purchase any goods in the name of the city for any other purpose than for use in the regular course of the official business of the city.  That wasn't done here.  Ham won't fix our streets, ham won't solve our ongoing water and sewer issues, and ham can't respond to a police call no matter what we refer to our local cops as."

It turns out the bill for the hams was paid for with the City's credit card, in the name of the city, all but about $90 of it which was paid with the only accounted for use of the $1000 in Meijer credit.  Chief Barnett assuredly wants you to move along, because there's nothing to see.  But there is.  In case you missed it earlier this year, here is a full accounting:  Shoplift with a Cop.

In general refutation to the words of Chief Barnett, the $2330 overage of the SWAC program from last year has lingered in the city's financial institutions for a year, unused by the needy families over that period, during a time period when the Dow Jones grew over 20% in value.  Will that overage have any interest tacked on?  Nope.  Is retaining that money many had donated to make last year's Christmas tolerable for needy families "the right thing to do"?  Is that "helping people" or "solving problems"?

And the chief admits that his officers delivered these Christmas meals when they were officially on duty.  I would love to ignore the fact that if it took an officer a conservative 15 minutes to deliver a meal to one household, then you can tack on an additional $20+ to each meals cost.  But I can't ignore that if an officer delivered this to a household while on duty, he would be duty-bound to notice violations of the law that may be occurring at these households.  "Merry Christmas, here's a full dinner for your family, Miss Smith.  Is that marijuana smoke I smell...?"

As noted before, Fourth Ward Councilor Mike Krauch, Shay and Attorney Wilson berated the admittedly grieving citizen for calling the SPC a public body just before the meeting's end, but then they made their own legal mistake which wasn't corrected.  They said that their committee meetings were "public meetings" in the legal sense, but they aren't classified as such by the OMA (sec MCL 16.262), since a "meeting" involves a quorum of a public body deliberating and deciding issues.  These committees are strictly supposed to be advisory with no ability to make decisions or have a quorum, for then they would be "meetings".  

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Thank you X and Diane for all your fight to make things right in this good town.  Please don't give up.

I agree Brad. Good points Diane and X.

Thanks for supporting the new girl (and myself), trying to reform bad actors in government.  It can often be a thankless business with little if any positive results when the deck is stacked as bad as it seems here in the city.

And another meeting of the deceptive minds of Krauch, Barnett, and Shay in excellent form too. Barnett: you also need to focus on the accounting matters of the SWAC program, not just take extra credit for the program's purpose, but also for the funding issues. Is there only 60 families in need of Xmas dinners? Of course there isn't. There are also numerous homeless in need, and many others that the remaining monies should have been spent on right away, so there wouldn't be any leftover monies to start with. That isn't rocket science sir, and your officers should again, as volunteers, do this stuff on their own private time, not while on duty, if you were sincere to begin with. Then Krauch needs to learn the dif. between private and public usage and mtgs. on the splash pad. It IS afterall, going to be placed in a public park, using public water and drainage, with public sidewalks and handicap access, all to be paid by the city, not the splash pad committee as far as I know. So again, Diane Chippi brings up the PM Bayou disaster and contamination, and Shyster Shay ignores her, and that ongoing problem since 2008, now over 9 years. The LDN's "Readers Forum" is where citizens can write letters and opinions. And you can bet Patti, as her past big boss Begnoche taught her well, will edit your original version very carefully, and redact anything and everything they see as truths that need to continue to be covered-up. The LDN slanted reporting of the CC mtgs. is also right on track, to keep deception and misinformation at the top of their game.

Does anyone know what the current Biological Oxygen Demand (BOD) is in pounds from the House of Flavors(HOF)? And what it was over the last 15 years?

Also the same data for new surcharges for the Total Suspended Solids, Phosphorous, Ammonia Nitrogen and Total Nitrogen? Is that data available from the HOF? And if that data was never recorded can it be estimated from the previous BOD tally?

And one more, whom is going to be responsible for determining what and in what amounts are being sent by the HOF to the  Waste Water Treatment Plant (WWTP)?

Will the new WWTP have the lab and resources to ascertain this? Will they be sending samples to the State for testing? Will HOF be relied on to provide the data? Will this information be disclosed to the public?
It seems like it would be nice to know the protocol and procedure for determining this.  It would also be nice to have some others in the manufacturing of ice cream to compare it with.

And why are the taxpayers being asked to play the HOF's Bank accepting payments over 4 years. Wouldn't the other area Banks be more suitable? And if they don't find HOF suitable for a loan why should the City be giving them time to pay?

I asked for some of these records back when my neighborhood was stinking back in early 2016, the following Excel document has the billings for HOF waste over the period 2014-early 2016.  Your other questions are good, but it seems like HOF and the COL both want it to remain their little secrets, as they are going out of their way to make their structured settlement out of the public ken.

Attachments:

From the HOF billing summary I wonder what the reason was that the load from the BOD increased dramatically in the first quarter of the year in 2016?

In the first quarters of 2014 the BOD load was 8,400. 2015 it was 9,200. Then in 2016 it suddenly rose to 23,500.

Why the big increase in 2016?

The stench was noticeable that year, why did the HOF increase their BOD load  and overload the Waste Water Treatment Plant (WWTP)? The volume of water increase but even looking at the months in previous years when they used a similar amount of water, the amount the BOD load still increase 2-3 times.

Did HOF suddenly change their manufacturing process increasing their BOD?

And if they did was the City of Ludington aware of the upcoming change and hence decide to upgrade the WWTP prematurely?

If this is so was the HOF culpablility regarding of the cost of the WWTP adequately assessed? 

 

How many years ago did the House OF Flavors / Bob Neal declare Bankruptcy? I was at a council meeting years ago where the subject came up . I think Bob Neal wanted the city to give him some more money for something. I questioned it and Bob Neal got up and said it wasn't our money that he went bankrupted on , it was the State Of Michigans. DUH!!!!  Same shit different day coming up.

Right stump, Bob Neal declared (Chapter 11) bankruptcy for several reasons I remember. The first was so he could undersell his competition in pricing, and finally put them into insolvency, so he alone would monopolize the market. The second was because he overpaid himself and other big wigs in the firm. And the third was because his bookkeeper embezelled monies from his firm, and I heard, it was because of his unwanted assaults on her repeatedly. Like the kind we have been hearing about by Senators and Executives not in the bedroom recently.

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