Township subsidizing developers? Board identifies accounting error – reduces retainer fees for legal services in Oakland Township – still many unanswered questions

At the July 28, 2015 Oakland Township Board meeting, the Board revised the contract with the Township’s legal firm, Giarmarco, Mullins and Horton P. C.  The monthly retainer fee was reduced by $750.  Treasurer Langlois stated the reduction was done for a ‘more proper’ allocation of expenses regarding legal services.  Trustee Bailey indicated that there were some legal service fees that were put ‘erroneously’ into the General fund that should have been billed to ‘other people’. 

The change to the contract is welcomed. As previously reported on this website, the legal service fees for our Township have almost doubled since the new Board was elected in 2012.  This recently discovered error explains a portion of the reason for the higher expenditure, but does raise several questions regarding whether the Township has been subsidizing developers, and whether we can retroactively recover those costs.

The Board also missed an opportunity to clarify an issue that had been repeated raised by former Trustee Thalmann regarding ‘double coverage’ for legal services for the Parks and Recreation Commission.

Treasurer Langlois proposed the change in the contract to:

“facilitate a more proper allocation of the expenses regarding the legal services to the accounts and funds that make use of those.”

Trustee Bailey stated:

“One of the advantages of what you are proposing is that we’ll be billing appropriately the people that should be billed for these legal services. Whereas before, they were kind of all,  much of them, or some of them at least were put into the General Fund erroneously or not correctly, and were funded by our General Fund.”

The author of this post raised several questions at the meeting.  They are restated here:

  • Have all the charges that should have been charged to the developer’s escrow funds been identified?
  • If they have been identified, have they been correctly charged to those accounts?
  • If they have not been identified, will they be identified?
  • If not, have the Township citizens essentially been subsidizing the developers?
  • Are there other consultant fees, beyond the legal fees, that have improperly been charged to the Township?

The Board did not respond to any of the questions raised.

The author also pointed out a missed opportunity to clarify an issue regarding the legal fees for the Parks and Recreation Commission.

Former Trustee Thalmann repeatedly complained that the legal retainer fee includes legal support for the Park’s Commission, but that the Parks Commission continues to use Joppich’s firm resulting in double payment for services.  The Board members never corrected her repeated claims. As a result, the citizens were left to believe that the monthly retainer fee WAS intended to cover the Parks Commission.

Based on that assumption, an analysis was undertaken to look at the historical expense for legal fees for the Parks and Recreation Commission prior to the Board changing law firms.

The six year average for Parks and Recreation legal services, prior to this Board taking office, was approximately $5,000 per year. As a result, the monthly retainer fee with Giarmarco, Mullens & Horton, P.C. should be further reduced by $416 per month, or $5,000 for the year, to reflect that they are not providing Park’s Commission legal support.

Once again, the Board refused to respond to the question and suggestion.

Here is a video of Treasurer Langlois and Trustee Bailey’s comments at the meeting.

 

Why is this important to the citizens of Oakland Township?  As previously reported, the legal expense for our Township has almost doubled since the current Board took office.  The following graph shows this historical and projected trend.

Oakland Township Legal expense

(click on graph to enlarge)

The recent discovery, that we have not been charging developer’s escrow funds for legal services, is a direct result of the inquiries raised on this website.  The Board needs to address the questions raised in THIS posting, so the citizens understand how much we may have subsidized developers and if the fees can retroactively be recovered. They also need to clarify whether the retainer fee is intended to cover Parks and Recreation legal support, as had previously been claimed by former Trustee Thalmann, and not challenged by the Board.

There are a number of other financial ‘transparency’ issues that will be brought up in later posts.  The Board still needs to make a case for why legal service fees have almost doubled during their tenure.

Here are some previous posts on this subject:

Attorney bills out of control in Oakland Township?

July 14th UPDATE: Attorney bills out of control in Oakland Township? Accounting error found!

 

Richard Michalski

2 thoughts on “Township subsidizing developers? Board identifies accounting error – reduces retainer fees for legal services in Oakland Township – still many unanswered questions

  1. Dominic J Moceri

    Mr Michalski,

    The Township Subsidizing Developers? That’s a stretch.

    The Township “pads” every third party invoice by an additional 25% billed against the developer’s/ land owners’ escrow account. The non-interest bearing cash escrow account is paid upfront at the onset of the developer’s/land owners’ /application for the permission to sneeze in this Township. The 25% , egregious handling fee, goes into the general fund.

    In addition , the building permit fees generate more revenue than the department expenditures. There have been many transfers from the building department to the general fund in violation of state law. Such issues have been called out from the Home Builders Association in written dialogue with Township administration.

    Hmmmmm, perhaps the Township’s incredulous position would be to charge the Developer for the 6 legal opinions, aka opinion shopping, plus 25% regarding the Oakland County Zoning Committee issue that ping-ponged back and forth from November 2012 thru June 2013.

    The applicable legal review fees for any land use application should be covered by the application costs upfront. All other adjacent communities do not charge back their legal fees to the land owner/applicant.

    Perhaps if the developer/land owner is paying the legal fees plus 25% , should not the written opinions be available to the responsible party for payment. Errrrrr, To whom does
    the privileged and confidentiality belong ? The payer/responsible party should have the privilege, no?

    Somethings to ponder.

    Best Regards,
    Dominic J Moceri

    Reply
  2. Pingback: Were residents misled by Supervisor Gonser regarding the Parks and Recreation Commission’s legal fees? | Oakland Township Watchers

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