Ludington City Council Meeting January 23, 2017: Hams, Dozens of Hams

[XLFD]

The agenda and council packet effectively foreshadowed that this night at the city council would be brief and without any real meaningful action. 

The first of two items on the agenda was to officially decertify the 100 block of North James as a street, something that may have been contentious several years ago, when it was closed off for all intents and purposes.  Since then, the iconic brick pavers of the street have been uprooted to be replaced (after several costly experiments) with concrete and turf to make the area what our progressive leaders call a 'green space'.  It appears the State finally took notice and required the city to delete the street from the city's street system, thereby making less state funds available in the future, and the council did so without any ado.

The second item was to accept the resignation of Joan Walton from the Board of Review and replacing her with Kathleen Bromley.  I don't know the details of why the resignation took place, but Ms. Bromley otherwise should be a good addition to the board and she meets the qualifications of this important group.  The council agreed without saying so.

Into this humdrum agenda it's difficult for a member of the public to speak meaningful of anything.  Just last year, a citizen could get up at the front of a meeting and talk about whatever public policy was on their own agenda for up to five minutes.  Now they are reduced to two minutes after the council has conducted its business (where the only remaining vote is to adjourn the meeting)which allows little time to clearly develop an issue.  

The only way you can speak before the business begins is if your topic is about an agenda item.  Then you have three minutes.  This is the Krauch Rule instated last year in order to quell public involvement in the meetings.  It has worked; there is a lot less public comment since the rule was put in place, if you subtract my continued involvement. 

The City of Ludington discourages comments unlike other local governing boards.  Hamlin Twp allows 5 minutes before and after the business of a meeting on any subject.  The County of Mason allows 3 minutes before and after over any topic, it has also allowed citizens 10-15 minutes on the floor if they have been pre-approved to do so over a topic.  To my knowledge, both PM Twp and the City of Scottville have the same rules as the county.

But I did not once again belabor that point, or continue with the mysterious high lead content in our children's blood, my attention turned towards hams, and a mysteriously high amount paid for them as found in the city's payment of the bill's section:

January 23rd, 2017 Ludington City Council meeting from Mason County District Library on Vimeo.

XLFD (2:30 into the video) "On page 9 of the council packet an invoice is noted in the "General Fund" portion that states the City of Ludington spent $1272 on "Spiral Hams, Packing Tape, Gravy Mix and Veggies" for this latest billing period. 

If we consider that the city brought bulk purchases of packing tape, gravy mixes and veggies equaling $72, that would leave $1200 that they spent on spiral hams.  A packaged spiral-sliced half ham at Aldi's with an average weight of 8 pounds is $1.49 per pound, meaning the average half-ham is worth just under $12.  It looks as if the City's general fund has purchased up to 100 spiral sliced hams.

Now, citizens with a kosher diet should not be the only ones upset with a government taking money out of their city's general fund coming from our citizen's own pockets and spending it on a wholesale amount of ham.  That money should be used for only government services, the wages and incredibly high fringe benefits that city workers receive [often over 75% of their wages, 75%!], and the equipment they use.  Not for a hundred spiral hams. 

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. 

This purchase appears to be as illegal as it was when the general fund paid nearly $100 for appointed councilor's Krauch "Meet and Greet" door hangers back in 2014.  A principled public official uses private donations and their own money for political junkets, not money earmarked for public usage.  Yet the record shows collusion between our two 'threatened' officials to do just that, and you collectively said that "we don't care" then.

Why someone, somehow thought the purchase of over $1200 for ham was a legitimate purpose for our general fund monies is a mystery, but someone signed off on it after using the city's credit card, and the council is set to approve this questionable purchase when it comes time to paying the bills.  Please fully explain this purchase to the people before you do so."

As I expected, they did respond to this issue when it came time to 'paying the bills'.  I knew they wouldn't be able to resist trying to make themselves look good, while having done something that should make any reasonable public accountant cringe.  Let me preface their comments by admitting I remembered what Chief Barnett had said on December 5th concerning hams, and let me express that I am perhaps one of the biggest fans of watching local political drama, when the hams hit the stage.

(7:45 in) City Manager John Shay:  With respect to Mr. Rotta's comments, I'll let the chief go into the details, but this had to do with the 'Shop with a Cop' program, in which the city received money for these hams, if you will, so we were effectively the in-and-out agency here, so this wasn't some thing that we spent on our own. Chief, if you want to give even more detail on that.

LPD Chief Mark Barnett: This is in fact the case of 'pork' in the city budget, quite literally, and I wanted to make you aware, as I made you aware at the last council meeting that I attended in December [Ed. Note: 12-5-2016], that we intended to buy hams with money that was donated from both Meijer's and Wal-Mart. We did that, it was processed through the January paying of the bills. The hams were in fact brought and passed out by law enforcement agencies from the state police, the MCSO, the Ludington Police Department to some 60 families who frankly couldn't afford those hams. So it was not city money, though, as the city manager indicates, it was brought into and expended out of the city budget.

Shay: It didn't go to employees Christmas dinners?

Barnett: No, it went to kids and their families, because they couldn't afford to do the same for themselves.

Councilor Les Johnson: And was that done around Christmas time?

Barnett: Yes, it was done just before Christmastime and the bills had to be paid on January... January expenditures.

Johnson: That's what I thought. Thank you.

Councilor Gary Castonia: Your honor. Can I ask John a question, did anybody ever call you and ask what this money was used for?

Shay: No.

Castonia: Chief, did anybody ever call you?

Barnett: No, and I would happily have shared that information.

Castonia: So a phone call would have solved the whole problem, instead of bringing it up at a meeting like this.

Mayor Kaye Holman: That's correct [Shay nods, glowers at XLFD].

I recall most of what Chief Barnett said at the 46:15 minute mark of the 12-5-2016 meeting.  Summarizing he said:  "(Shop with a Cop) will be working with about 60 children... through a series of fundraising events.. to bring our total to about $13,000... that money is used to provide gift cards... we will have the opportunity to provide Christmas meals for each of the families... the officers will be delivering those meals the 21st or the 22nd..."

That doesn't explain, nor did any of the smug officials explain, the reason that a charge for the 'Shop with a Cop' (SWAC) came up on the general fund ledger, nor would a call by me to anyone at city hall have solved the problem it illustrates.  Look, I brought it up at their meeting, and all I get is elitist rhetoric showing that no official (including the treasurer who was present) understands proper public accounting and why this was wrong on their part, not mine. 

Let me explain, so it's clear, since they want to pettifog the issues, as I figured they would.  The first thing we do is make the definitions clear, including one you may be foggy on, General Fund. 

The general fund is for strictly public purposes, used for administration and operating expenses, that the city encounters that is not accounted for in other special use funds.  The money to pay for the hams found in this agenda packet, and the $9000 for Walmart gift cards for SWAC found in the December packet are not part of that.  In fact, the money received by donations and fundraisers for the SWAC program should have never been put or made available into the city's general fund in the first place.  It's not only an unethical and unlawful way to account the public's funds, it's potentially criminal, as noted.  Consider:

WMOM reported they were able to clear $5000 from the privately held pie auction, they and the COLDNews explained that LPD Officer Tony Kuster was the coordinator of the events that would reach the $13,000 mark according to Chief Barnett on December 5th.  A page of the City of Ludington's websitesays:  "One hundred per cent of the funds raised will go towards the program because there is no overhead. All participants are volunteers."

'Shop with a Cop' is not a public 'program' unto itself, it's a widespread 'event' that communities organize to present police in a more positive light.  It was widely broadcasted as a volunteer efforts with donations granted 100% to a singular cause:  Shopping with a cop. 

What happened here was that the donations were gathered and apparently the $13,000 or so was put into the general fund of the city's coffers.  The city spent $9500 in gift cards at Walmart in December, charged $1382 in hams and other food onto the city's credit card, and conceivably, has the remainder of the money still circulating in the city's general fund, because it is not otherwise accounted for by the records, and our 'helpful' officials did not tell us about any other SWAC program costs.

In my reckoning, The city has around $2100 (13,000 - 9500 - 1382) raised by volunteers for the SWAC still in the city's general fund!  That is totally unacceptable to me, and it should be totally unacceptable to anybody who is an accountant of any type managing a 'special purpose fund' of any type.  Chief Barnett and John Shay can call me on the phone if they want to tell me how they haven't robbed the people who donated to this cause, and them shamefully defending their unlawful acts as they have before by placing non-public funds into the general fund.

My latter two minutes involved talking over many of the points I brought to the fore in the article Sludgegate.  As this has been made public for a couple of weeks, they seemed to be better prepared for it, but their hammy performances once again took place at the end of the meeting.  Here was my comment made at the end of the meeting.  I asked John Shay to explain where his method of accounting is found in the city manager's handbook, before getting to my prepared comment (12:30 in)

"At the last meeting, I proffered to this council a statement made by John Shay in a memo delivered to you in December 2016 that where he said the lagoons of the wastewater treatment plant have not been de-sludged for the 40 plus years of its existence.  Contrary to his assertion, I have found out that the WWTP had been previously desludged in 1993, long before all of you entered Ludington politics. 

In April 1993, this council agreed to install brand new blowers and aeration equipment at the lagoon, remove accumulated sludge, and conduct other unspecified sewage disposal equipment improvements at the Wastewater Treatment Plant at a cost of $500,000.  This is effectively what we are trying to do 23 years later at a cost of $10,500,000 or 21 times what it took in 1993, the time the city did these maintenance tasks which John Shay fails to note in his memo.  The inflation rate applied to the $500,000 of work done in 1993 would still only make this come to $833, 000 today. 

It should be noted that the 1993 work did not specifically include replacing the liners of the lagoons, which would likely be around a million dollars to do today according to my research, nor does it specifically include the installation of a new headworks system which my research indicates would be around one million dollars. 

The question has to be asked.  Why is the price tag on wastewater treatment plant upgrades $10.5 million, when the actual cost looks to be under $3 million tops?  And why did John Shay, whom surely should know better, leave out the fact to you that Ludington did effectively the same thing in 1993 [my two minutes were up, if I could have finished...] for a half of a million dollars?  To me, it looks like somebody is getting rich at the taxpayer's expense and you folks are complicit."

Starting at 15:35 until the rest of the meeting was over, they went over a similar rope-a-dope like they used earlier. 

Castonia: John, isn't it true we are under state orders from the state to fix the sewage plant, not just because we want to spend ten million bucks?

Shay: We have the most recent NPDES discharge permit or permit to operate the wastewater plant contains limits in there that we cannot meet with our current wastewater treatment plant. So we need to upgrade our WWTP to meet the limits contained in that NPDES discharge permit. Otherwise we would be in violation of that.

Castonia: So we are not just spending $10 million just because we want to do it?

Shay: No, I mean there are some certain parts of the plant, for example the aeration equipment that needs to be replaced with or without the limits in that permit. But what we're looking at doing is things we need to do. This is a need list not a want list.

Castonia: And as long as we're doing what has to be done, we may as well clean up a few other things.

Shay: So if you look at when you're doing significant upgrades and are there anything else that needs to be upgraded as part of that project and that's what we're looking at doing.

Johnson: John, if someone wanted to do some serious research on what we're doing, would it be smart to maybe call the MDEQ, to get, I guess, more accurate answers than what Mr. Rotta researched already?

Shay: I don't know the sources of his research (shrugs)..

Johnson: I mean, if someone put a call into the MDEQ, they would explain to him what we have to do.

Shay: The DEQ will not mandate you to this specific type of repair or that specific type of repair, what the DEQ will say is "Here is your permit limitations, and you have got to meet them". So, for example, we're looking at relocating our outfall pipe. The pipe that takes the treated effluent from the WWTP and discharges it ultimately into the PM River.

Now if we keep our outfall pipe just where it's at, we will have a stricter set of limits in our permit. If we relocate the outfall pipe, there are less strict discharge limits that we have to meet. So the DEQ will say we are not making you relocate a new outfall pipe, but the way the permit is written it almost leaves you no choice but to relocate it.

So they won't say "you gotta do this specific type of repair" but they will have you meet these limits, and they do approve [engineering] plans and issue a permit for us to actually complete that. So they do look at it, but they don't put in their permit, "here are the specific types of repairs you have to do".

Moving the outfall pipe is not part of the budget for WWTP improvements, this has it's own costs according to the memo Shay wrote.  Shay effectively repeats meaningless information, but never touches the issue that the city is paying $10.5 million for what appears to be $3 million worth of improvements.  Tops. 

He does imply that he is the one calling the shots on the improvements of the WWTP, which should make us all expect that the budgeting that gave us excess SWAC donation money into the general fund, that had us overpaying the city attorney for over three years, that has allowed million dollar projects be contracted without competitive bids taking place when such projects were done four times less expensive in the past (Watertowergate), is going to be messed up.  

[AQUAMAN]

This crew certainly can banter with answers to questions at times, but their answers leave more unanswered questions that didn't get addressed. Well, for one, Shyster Shay, why is the outfall pipe at WWTP emptying into the PM River now? And where will it be moved to instead? And why would the cost for upgrades and repairs be 300-400% higher than expected when the COL population has decreased from 8.000 to about 6,000 residents? He also fails to mention the Michigan Power Corp's. new involvement in water and sewage usage? CC Castonia also refers to the James St. Plaza as being only 8 years old, when in fact it's over 20 years now. And did the COL also get MDOT funding for that block all these years in violation of not reporting it closed to traffic long ago? Also, the ham debacle and questions. Chief Barney says it went to 60 needy families. Is there a list available of their family names? How did those particular names get picked? And how does any normal sized family consume $200 worth of food in a day or two (60X20=$1200)? Instead of a 3-5 person family, you'd have to have a family of 25 or so to consume that much food. I'd be interested to also know the size of the 60 families that were on that list. And finally, since when did Shyster Shay or Barney ever give information by phone to XLFD, or for that matter, to most any citizen, when requested without a FOIA being filed? Like I said, convenient and no-excuse type answers for the public and LDN to consume, but, what about the rest of the information that isn't forthcoming? Plenty of secrets remain unanswered and held back for non-transparency type of governing.

[jfc123]

Guess they feel like wherever they get funds they are not held accountable, Fema and State of Mi for the 08 disaster, nothing????

[AQUAMAN]

One last observation, Shyster Shay still won't justly and legally explain why he continues to use the "general fund" for these type of activities. If it's illegal, per city charter, and Michigan law, why don't they use a "separate trust fund" at the bank with a "Charity Name" instead of using the general fund? Can't be that hard or any cost to do. But, he continues unabated in these pursuits, recklessly following what he has done illegally in the past, cause no one else calls him on this. The city council at least, along with the treasurer, should definitely discontinue this into the future. I would think that Krauch and Wilson would have more legal integrity and wisdom, but I don't hear anything from this in that regard.

[jfc123]

Straight up corrupt, just think if they could own the PM "Lagoon" for pennies on the dollar or less? Maybe their plan? Wish someone was on the side of us little people! The congress person that praised a concerned local, can you help us small business? Trump has great ideas, you????

[AQUAMAN]

There has been a long-standing idea to create a "local boardwalk" along the PM Lake so that ALL THE RESIDENTS have a 12'-16' walkway around the PM Lake for everyone. An old idea of Jack Harper in the 90's, that even CC Les Johnson wants today. It would create this walkway around the perimeters of ALL effected landowners from the LMC property to Copeyan Park. It would be the effect of taking other private property for the benefit of the public, with NO Money being paid to private property owners, i.e., eminent domain. No Liability to the city, just the landowners, and they never even presented a drawn plan for it to anyone, just a notion of city rights. This would eventually make those effected private properties devalue to the point of pennies on the dollar. Anyone else know this?

[Willy]

Why is it so difficult for the City to explain at each City Council meeting the why's and what for's regarding these huge expenditures. They should let the public know what they are doing, why they are doing it, how much tax money will be spent, how the bidding process will function, who will do the work and all of the other pertinent information regarding these projects. Instead X must ask what they are doing and why. They then either ignore him or he gets snide and sarcastic responses. These dummies should review the Council recordings so they can see just how ridiculous they appear to the public.

[jfc123]

Because NO ONE goes but X to speak out. Sad but they don't feel anyone else cares in my opinion? To add, there is no one in local media other then the Torch willing to stand up and challenge the city for fear of repercussion. Be nice if senate and congressional leaders cared for the locals here!

[stump]

XLFD brought up some real concerning questions and to be answered by council by sarcastic answers is really childish. But I guess it's expected from this group of dummy's . They can't see the writing on the wall or on the monthly register. I'm no bookkeeper but I can see the problem with this kind of bookkeeping. There must be a deposit and total withdraw of moneys donated earmarked in a special named fund, not the general budget. As stated ,is the city keeping donated money from citizens/business's for a special project not even city related in their coffers? How much? who's going to refund unused money's? to whom? not a good situation here. If it's against the city charter and the state has a law against doing such things, why isn't someone being held accountable? is it because it was a police benefit? Looks like another black eye for the police.

[XLFD]

And it is ignored by local media, to an extent.  The City of Ludington Daily News (COLDNews) ignored the WWTP issue of course; who wants to read about someone posing a question as to where $7.5 million is going, 'reporter' Kevin Brasiczeski?

But then it subtly mischaracterized the ham issue, here is there recap found at the end of their article on the meeting, only found in the print edition on Tuesday:  PAYING FOR HAMS 

"During Monday's public coment period, Tom Rotta said the payment of the bills the council was set to consider approving during the meeting included a $1200 bill for spiral cut hams to be paid by the general fund. 

He told the council that buying hams is not an appropriate way to spend city tax money.

City Manager John Shay and Ludington Police Chief Mark Barnett explained that the money was donated by Meijer and Walmart for the purchase of Christmas hams for 60 families through the local Shop with a Cop program.

Barnett said it was not city money, even though it was brought into the city's budget and was paid out through it.  He also noted the hams were purchased before 2017 began, but the bills came in for payment this month."

My point was summarized into a simpler form, other than lacking the nuances I introduced, it was basically correct.  But then Kevin did the same for the two officials, and had them erroneously saying

1) the two superstores donated the money for the hams:  they did not, the invoice for the hams (currently on request through FOIA) will most assuredly show the city credit card purchased those hams from Meijer (Walmart was similarly written a check for $9500 from the City of Ludington's treasury for gift cards).  How can these stores make a donation and then get paid in full for those donations?  That's not how donations work.  Also recall the SWAC pie auction and other fund raising activities raised the money, these stores sold their products, possibly making lesser donations.

2)  Barnett said it was not city money:  when it's put in the city's general fund, paid out through it, it can only be called city money.  The 'ham money' was part of the general fund in 2016 and 2017 due to it being put on the city's credit card.  Why would a city manager and a city treasurer create such accounting problems for themselves by doing this rather than put the privately raised money for a non-public activity (SWAC) into the fund and not having every cent accounted for?

The more the City of Ludington and their friends in the media try to support this type of activity, the dirtier it appears.

[Brad]

Yea, X, something stinks within the hall and LDN...  

And really... I'm not so worried 'bout the pork ...as far as hams are concerned, ...not as much as the difference of the $7.5 ...MILLION..!!!

Are the bids for the WWTP upgrades not available or not done..?

[XLFD]

As noted previously, the $10.5 million in improvements/maintenance was described in a memo from John Shay in general terms.  Several of those terms is exactly what they did in 1993, the remaining two tasks were researched as much as I could over a weekend, and I determined the materials for the lining and the headworks system was about $1.5 to $2 million.  I could not see installation labor exceeding more than a few hundred thousand. 

These are John Shay estimates, to my knowledge, the specs and the bids are still undone.  John Shay will at some point probably cut his $10.5 million figure down a million dollars or so, and have others trumpet that he saved the city a million.  As I see it, he's costing us many times more. 

He did a similar thing, albeit with smaller numbers, with the downtown wayfaring signs, if you recall, and lied that the contract with the water tower painters would cover two paintings of the water towers, one in 2010 and then in 2020.  The contract never says that or implies it, but costed us nearly a million more than it would have for a simple professional paint job as they got in Scottville back then.