The Art of the Sleight of Hand

[XLFD]

Here is a recent excerpt copied verbatim from a Ludington City Council Meeting, with the more salient points boldened for emphasis.  It involves applying and financially committing for a special one time grant with certain restrictions fairly well explained in the application, most of which are brought up in the discussion.  The LAAC is a private non-profit organization.  It ends with a course of action that the City Government took.  Many people would like more grant money in our area for the arts, but was what they did legal?  Ethical?  Perfectly fine?  What's your opinion?

 

Regular meeting of the Ludington City Council held in the Council Chambers of the Municipal Building on Monday, August 23, 2010, at 6:30 o’clock p.m.

 

Present: His Honor Mayor John Henderson and Councilors Kaye Holman, Paul Peterson, Wally Taranko, Brent Scott, Pete Engblade, and Gary Castonia.

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…Terry Murphy, Executive Director of the Ludington Area Arts Council, explained that the Michigan Economic Development Corporation has a new one time grant for rural arts project funding with funding levels between $5,000 and $10,000. The grant requires a 50% cash match and a financial commitment letter from the City of Ludington to provide support before the grant is awarded.

LAAC is not asking for the financial commitment from the City but rather a letter of support in which the Arts Council will guarantee its financial commitment. The project must be completed by April 30, 2011. Moved by Councilor Holman, seconded by Councilor Peterson, to approve the writing of the letter of support to the LAAC with the condition that LAAC will provide all of the financial commitment to support the grant match.

Councilor Engblade questioned if the City Attorney had researched this grant to see if that was something that we could have done. City Manager Shay explained that the documentation which came with the grant indicated that the letter from the City stating its financial commitment to the project is required. The grant language also states that the local match cannot be from other state or local grant dollars including private, public, or nonprofit dollars.

The City does not have the answer as to whether the Arts Council could provide the local match and still be in compliance with the grant document. City Attorney Wilson suggested that the City provide the letter and apply for the grant but not actually accept the grant until the City can get clarification of this question.

Councilor Engblade asked if we should amend the motion to show that the City would apply for the grant and then would not accept the grant until we have that answer. His Honor Mayor Henderson stated that the motion could amended if Council chose to, but the grant agreement would have to come to Council anyway for approval. At that time Council would then have the ability not to approve the grant.

It was agreed that as long as the grant agreement came back to Council for approval the amended motion was not needed. Councilor Engblade asked if there was anything to stop LAAC from making a donation to the City of Ludington equal to what would be construed as the amount of match for the grant and nothing to stop the City from accepting this donation. City Attorney Wilson confirmed this. Motion Carried.

[Sweater Cows!]

Well, it appears a legit way of going about it to me. Considering that a grant is a very specific thing, donations and fund-raisers are not considered a 'grant' when we speak of a grant in the Noun form

. From your dictionary .com I found a def. for grant that best describes a grant as it is spoken of here.

"# Law
a. A transfer of property by deed.
b. The property so transferred.
c. The deed by which the property is so transferred."

The grant application requires that the city match the funds 50%. It only makes one stipulation as to how the city gets the money.

The stipulation that the money used has not been received in the form of a grant(noun) from [a state, local, public, private or non-profit (grant)].

As long as the money the LAAC gives the city did not come from previous grant funds that they received and it came from any other source but a grant(noun) that money can be used.

Since they are giving the city the money it isn't a grant(noun) to the city because they are not offering a grant where people apply to receive it.

The only issue I see is that the LAAC must know where the specific money they are using came from, fundraisers, donations etc..

[AQUAMAN]

This thread kinda reminds me of a two-edged sword, so to speak. I mean, why would the City of Ludville say they will match the grant funds, then seek those promised funds from a non-profit LAAC? Doesn't the LAAC by itself have grant options without the City backing them? It seems devious and untruthful, on too many avenues. Cause in all reality, the City doesn't have any intention at all of matching the grant with any city monies, but promises the Feds. in writing that they will, at least from what I can see. They do say though, that they will reject the grant, if the LAAC can't come up with the matching funds, their option, I guess. But why the charade and sleight of hand? Example: if you did this in a poker game, you would probably be called out on it, and kicked out of the game, for sure! It would amount to passing cards under the table on the dealer, and the rest of the players. Such a waste of taxpayers time for the grant agencies if this doesn't come to fruition too, imho. Like I said elsewhere, some real serious trick shot artists are in our midst.

[XLFD]

I will put up the actual grant application later this weekend, it was a strictly on-line affair which had its rules stated. I have also got the City's exact application coming through an FOIA request.

Aquaman and Sheila both run businesses, but have different views. Sheila, like many small business owners keys in on the loopholes so that the LAAC can get money. Aquaman brings up some excellent points with the poker analogy, and realizes the chicanery and perhaps what would happen to someone if they were caught doing such a maneuver with another business entity by the same government that condones this.

[Edie Lindsey]

I thought you might be using this as a parallel with what happened with the Dog Park, but I don't see the connection. So here are my thoughts, following the money.

The LAAC is a non-profit private group supported by donations. They are wanting to use the money, donated by people who are supporting the arts, to donate to the Ludington Gov't. to serve as a commitment from the city. But this money doesn't stay with them, they make an agreement to donate it back to the LAAC after a state agency decides to match the amount and give it back to the LAAC. If this doesn't happen the LAAC gets the money donated back anyway. I don't know but it doesn't sound like this is the way the grantors wanted this to happen. It seems dirty, I would never expect back anything I freely donated.

If you go down to the DHS and apply for public assistance but have thousands in saving, just remember this lesson. Donate all your money to the City of Ludington, get your state money for as long as you need to, then have the City give you your money back when you go off assistance.

Pretty much sounds like fraud to me, X. But this is today's Government.

[XLFD]

I like your DHS analogy. But fraud is an impossibility-- John Shay is Chairperson of the the Michigan Local Government Management Association (MLGMA)' Ethics Committee, LOL.

[Sweater Cows!]

Who is the granting agency(fed, state private) dont' matter really.

I didn't think of that part of it "the LAAC gets the money donated back anyway."

It never occurred to me that the LAAC would get there own money back whether or not the grant was awarded. I didn't consider anything as far along in the grant app as to whether or not the grant was or was not received.

I guess if we were to compare it to a poker game here is my analogy.

Me, edie , X and AQ, are sitting at a table, one of us on each side playing poker(five card draw), max bet 50 cents. The rules on the game are that you can not borrow money from the person to your immediate left or right, There is a fifth person there who who made the rule that all aggreed to who is going to match anyone who makes a profit on the game an amount equal to their profit.

(I am one edies left, X on her right) edie has enough money to match the bet and stay in, BUT she wants to raise the bet. Since she can't borrow money from me or X per the rules she asks AQ to borrow her the money. Because he is directly across from her, not on her left or right that is within the rules.
AQ agrees to borrow her 50 cents. Whether or not edie wins the hand AQ gets his 50 cents back from edie. Now if edie wins and makes a profit then the fifth person pays her an amount equal to her profit. She still has to pay AQ back. and if she loses and doesn't get the matching money AQ still gets his money back.

Now that would all be the same as what is happening with the city and LAAC. Like AQ, whether or not edie wins, AQ still gets his 50 cents back. Nowhere does it say how AQ had to get the money to borrow edie, it only says he cannot get it from his immediate left or right.

So, is it fraud that edie borrowed the money to continue the game, as long as it didn't come from her left or right?

As far as the LAAC grant The rules only state where the money CAN'T come from, and as long as the money isn't from any sort of grant funds it is legit.

It is a bit of sleight of hand so to speak, but per the rules it seems legit.

As far as the DHS comparison I have to say that is a good one. But, a different way to look at it is about old people. If a person goes into a nursing home the state can take pretty much all there assets to cover the nursing home fees. and a person can't just give away the money to not have to use it to pay. Well actually they can, but it has to have been done something like five years before the person goes into the nursing home.

This is getting off topic but does DHS have a similar rule like the old persons assets rule regarding nursing homes?

If they(DHS) don't then it would be legal to do as edie suggested in her example.

Whether any of us agrees with the tactic used isn't really relevant as long as it is within the rules and laws.

I would rather see the rules followed, whether I agree with them or not doesn't matter, as long as they are clear about what can and can't be done.

Now here is where we get to our dog park comparison. In the current topic the rules seem (to me at least) to be clear about what is and isn't allowed(whether they are written in an exclusionary way or an exclusionary way doen't matter, they are what they are). In the dog park/charter dealio the rules are unclear and leave it open to each persons interpretation of them.

[AQUAMAN]

Methinks the important point here is again, what X has pointed out on all too many occasions around the small berg of Ludington, the laws and rules seem to be a timeless pretzel to be twisted and bent by the privileged few, into what appears on the surface to be legal and ethical, when in fact, it really smells like spoiled dead fish. Expert trick shot artists in our midst make that possible, along with the ambiguous wordings and apathy by the public to question such actions.

[charlemagnetism]

youthinks what methinks too. this little sordid exchange happened in the light of day with little or no battings of eyes or blushes. for the record not off the record as much seems to be done in the pleasureburg of ludington nowadays. you think this bad just consider what is considred in those formerly smokefilled rooms at the city building. verily.

[Mary A.]

This is off track, but you're a smart man, X. You know the only thing that's going to change the situation is a good housecleaning. I don't know how the council is appointed or elected, or how long the terms are, but new blood is the only way. If it's any consolation, I've lived in several different towns, and I have found in each place that the councils have behaved similarly and can easily be influenced by special interests just like the big government players. If you pursued this, you might discover that there is a silent majority in Ludington that agree with you but who are shy about speaking up because they don't want to be labeled as the town troublemakers. I admit I'm like that, but I duly exercise my right to vote people I don't like out of office. Why don't you run, or find some folks who will and manage their campaigns the next time council seats are up for grabs? I expect my elected and appointed officials to be above reproach, but sadly they usually aren't. Things may never change, but I think forum discussions fall short as change engines.

[XLFD]

Housecleaning in Ludington can only happen on the odd years, which is coming up. The Bell, California CM and council look like they may get some real punishment for their crimes against the public trust

http://www.wibw.com/nationalnews/headlines/103499699.html

Our problems are not likely near that bad, but in 2011 four City Council positions and the treasurer spot is on the line in Ludington (none this year). I hope we can get at least a couple of pro-citizen, anti-corruption people into these spots and I will work for anyone who runs on such a platform with ardent zeal.

Being that Councilor Engblade is term-limited out then, we need at least one person to take his place. He may not always do what I think is right, but he is not a rubber stamp, and will ask questions, and is not afraid to make a vote 6-1 instead of unanimous.

[AQUAMAN]

It'll be a sad day indeed when we lose Pete down there. He's the one voice of reason and integrity that the people can count on. Mary A., only "in the city limits proper residents" can run for these offices, at least as far back as I can remember. Too bad, many too many good citizens live outside those boundaries. I think they should change that rule, as well, let any business owners that own property in the city limits that pay taxes to the city, also participate. I think this forum, and many others, could start a good thing by asking any City of Ludington citizens to let us know if they are interested in such civic duties, and get their views on matters to see if we can garner a grass roots support group. What's keeping you in Franklin Mary? I know X and I are both out of city limits, in the suburbs, and I think way too many other fine candidate types may also be in the woods, for calm and the beauty.

[Mary A.]

I'm still working. I've had to put off my retirement until we recoup some of our losses from 2008 and so I can keep my health insurance. I wouldn't be a good candidate for public office, anyway, but I'd sure be willing to work for someone I judge worthy.