Tag Archives: Misuse of funds

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

2 Replies

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

Township Board approves potentially precedent setting (and costly) policy on Road maintenance

4 Replies

The Township Board approved spending $40,000 of funds from the ‘general fund’ to improve the gravel road portion of Silverbell Road at the September 9, 2014 Board meeting.  The Board approved spending this money by a 4 to 3 margin.  

Treasurer Langlois expressed concerns regarding:

  • the lack of having a comprehensive plan for our Township Road improvements that would ensure we were addressing the most critical roads,
  • the use of ‘general funds’ for this project, and
  • the precedent setting action of the Township assuming responsibility for the safety of the roads.  The Oakland County Road Commission has that responsibility.

This decision may cost the Township ‘dearly’ in the future.

At the September 9, 2014 Oakland Township Board meeting, Supervisor Gonser stated that the Road Commission had contracted for enough limestone to improve about one additional mile of gravel roads in Oakland Township. This limestone was in addition to the improvements that occurred on Dutton Road this year.

Road improvements in our Township (above and beyond what is required for safety) have historically been covered by what is called tri-party funds.  The dollars for these improvements come from three sources, 1/3 from the Road Commission, 1/3 from the County and 1/3 from Oakland Township (hence the name tri-party fund).   In other words, our dollars are ‘leveraged’.  The cost for the Dutton Road improvements was also shared between Oakland Township and Rochester Hills.  That improvement was totally covered by tri-party funds from both communities.

The cost for the additional mile of limestone could not be totally covered by the remaining 2014 Oakland Township tri-party funds.  It would require an additional $40,000 from Oakland Township’s ‘General Fund’.  Supervisor Gonser wanted to authorize the Road Commission to purchase and use the limestone on Silverbell road in response to safety concerns raised by citizens.

Treasurer Langlois indicated she was not in favor of using Township ‘General Funds’ to improve road safety when road safety was the responsibility of the Road Commission.  She also pointed out that the Township’s road improvement planning has deteriorated since we lost our previous Township manager.  Treasurer Langlois, Trustees Buxar and Bailey all expressed disappointment that a more comprehensive plan had not been developed that would ensure the most critical roads in the Township were being addressed.

The Township Board voted on the motion to purchase the limestone, and it passed with Gonser, Reilly, Thalmann and Giannangeli supporting the motion.  Langlois, Buxar and Bailey being the dissenting minority.

Here is a video of Treasurer Langlois’ concerns with this motion:

Why is this important to the citizens of Oakland Township?  The use of general funds for road improvements to eliminate safety concerns could be a precedent setting action.  The Road Commission may now look to the Township to pay for future road improvements that they consider safety related. Until now, the Road Commission has been responsible for safety.  The Board’s decision may cloud that responsibility going forward. If the Township becomes responsible for road safety, our taxes will certainly increase to cover those costs.

The politically expeditious decision by Supervisor Gonser, Clerk Reilly and Trustees Thalmann and Giannangeli may cost the Township dearly in the future!

Richard Michalski

 

Township attorney is buying lunches for Supervisor Gonser as part of Township’s retainer fee

9 Replies

At the July 8th Board meeting, it was disclosed that the Township attorney has been purchasing lunches for Supervisor Gonser.  The original bills were discovered on July 7th.  The lunches were in November and December of 2013.  These bills were reviewed and approved by Supervisor Gonser, since we did not have a Township Manager at that time.  Dan Kelly, our Township attorney, repaid the Township for one of the lunches on July 7th.  He did not agree to repay the Township for the other lunches since they were part of the Township’s monthly “retainer fee”.  During questioning at the July 8th meeting, neither the Township Attorney nor Terry Gonser found anything ‘inappropriate” about the Attorney purchasing Gonser’s lunches.  The other Board members did not express an opinion on the matter.

On July 7, 2014 the author of this post reviewed several bills that our Township attorney has charged the Township for Legal services.  This review was part of a Freedom of Information Request.  In reviewing the documents, it was discovered that the attorney had paid for 3 lunches with Supervisor Gonser.  The bill information is:

  • 11/21/2013    $23.08  Westwynd Grill        Terry Gonser
  • 12/02/2013    $38.43  Champps America   Terry Gonser
  • 12/11/2013    $40.00  Westwynd Grill        Terry Gonser

The actual bills can be seen here:

Township Attorney pays for Gonser’s lunches

On July 7th, when these charges were discussed with Manager Ann Capela, she said:

“This is not good, it will create problems!”

During the public comment portion of the Board meeting, the author of this post brought up the issue discovered on July 7th.  The Attorney indicate that he paid back only the $23.08 bill, since it had been charged inappropriately to the Township.  The other two lunch bills were not specifically charged to the Township, but were included as a noted item as part of a monthly retainer fee the Township pays the attorney.

Treasurer Langlois confirmed that two of the lunch bills were an ‘internal amount’ that the attorney was tracking against the monthly retainer fee ($1,500 per month).

When asked if it was appropriate for the Supervisor to have his lunches paid at the expense of the Township, even though it is part of the retainer fee, Dan Kelly responded by saying:

“It is not inappropriate!”

He went on to say that he spent hours with the Supervisor discussing legal issues in the Township.

Supervisor Gonser then said:

“Many times . . . I should not even say many times. . . .  there are times when we conduct business over lunch.  I guess I would have to say it is not inappropriate.  We are conducting Township business!”

Here is a video of the July 8th BOT discussion:

Why is this important to the citizens of Oakland Township?  Clearly one of the bills was inappropriately charged to the Township, and was repaid by the Attorney.  The other two bills may just be the ‘tip of the iceberg’ in terms of expenses that are being ‘buried’ within the monthly retainer fee.  Costs for lunches (and possibly other inappropriate charges) become the ‘baseline’ for the Legal firm to establish new monthly retainer fees in the future. If questionable expenses are included now, future retainer fees may rise without any transparent justification.

When Gonser was a manager at GM, GM had a policy where suppliers were not allowed to purchase lunches for employees.  When Gonser retired, he obviously felt that that policy was inappropriate for the Township Supervisor.

The entire Township Board should go on record for approving, or not approving, the cost for this type of ‘fringe benefit’.

Here is a link to recent similar issue that Gonser approved:

Township ‘administration’ authorizes paying for luncheon tickets – against wishes of several Board members

Richard Michalski

 

Township “administration” authorizes paying for luncheon tickets – against wishes of several Board members

3 Replies

At the July 8th Board meeting, it became known that the Township ‘administration’ made a decision to have the Township purchase 6 tickets to a luncheon that was to honor Supervisor Gonser for completing a program with the Chamber of Commerce.  This decision violated a previous Township practice and “The Principles of Township Governance” that was approved in June of 2013.  The decision was made even after concerns for purchasing these tickets were raised by several Board members. 

At the June 10, 2014 Township Board meeting, Treasurer Langlois requested that a bill not be paid, since she thought it inappropriate for the Township to pay it.  The bill was for $150 to cover 6 people attending a Rochester Chamber of Commerce recognition luncheon for completing some program.  One of the honorees was Supervisor Gonser.

After the June 10th meeting, Treasurer Langlois discovered that the bill had been paid prior to the meeting. This payment not only violated the policy of not paying bills without Board approval (other than those that have defined payment dates such as utility bills), but the Township practice for participants to pay for their own tickets to such events, and the “Principles of Township Governance”.

Treasurer Langlois indicated that when she received an email indicating that tickets would be purchased by the Township, she questioned the appropriateness of doing so.  Trustee Buxar responded in a similar manner.

Treasurer Langlois indicated that “the administration” had approved paying for 6 tickets, even though it had been against previous Township practices.  Several Board members and staff members attended the banquet thinking that they would not have to pay for the tickets.

Incredibly, Clerk Reilly said that when she was initially approached on attending the luncheon, she indicated she would not attend if she had to pay.  When she found out that the Township WOULD PAY for the tickets, she decided to attend.  As the Township Clerk, she also approved the payment of the $150 bill prior to the June 10th Board meeting, violating the approved payment policy.  She indicated that she had not repaid the Township, and did not offer to do so.

Supervisor Gonser indicated that two “attendees” had repaid the Township for the tickets, but did not disclose who attended or paid the Township back.  He indicated that the expense to the Township was “only” $100″, and “it was not the end of the world!”.

Gonser went on to say that this incident was due to a “misunderstanding and a lack of a policy”, even though several Board members indicated that this was against the previous practice of the Township.

The Board ultimately approved the payment by a 5 to 2 vote.  Treasurer Langlois and Trustee Buxar were the dissenting votes.

Here are portions of the July 8th Board meeting where this was discussed:

Why is this important to the citizens of Oakland Township?  This is yet another example of Supervisor Gonser’s leadership style. The ‘administration’ of our Township consists of Supervisor Gonser, Treasurer Langlois, Clerk Reilly and township manager Ann Capela.  The Treasurer indicated that she did not support the decision. The Clerk indicated she did not make the decision. In a phone call with our Township manager, Ann Capela indicated that Gonser had made the request and she approved it since she thought it was appropriate.  Gonser made this request in spite of the feedback given by Treasurer Langlois and the past Township practice.  Gonser did not have the courage to acknowledge his actions in public.  Gonser’s actions, as well as Clerk Reilly’s, violate the “Principles of Township Governance Policy” approved in June of 2013. We now know why, even though they voted to approve the policy in June of 2013, they refused to sign it!

Principles of Township Governance Excellence document

Richard Michalski

Board refuses to sign “Principles of Township Governance Excellence” Pledge

“State of Township” or “Self aggrandizement”?  You decide!

UPDATE: Oakland Township Board (CORRECTION – SUPERVISOR GONSER) potentially commits $431,875 of Township funds to improve private property outside ANY public meeting

1 Reply

At the May 13, 2014 Board of Oakland Township meeting, ECT, an engineering firm that has been working with our Township Board to get water flowing in the Paint Creek Cider millrace, gave a presentation on the status of their efforts. As previously reported on this website, on January 24, 2014, ECT submitted a request for regional support for a grant submittal that included over $400,000 of Township funds for the project. A portion of those funds would have been for improvements to private property. During questioning,  SUPERVISOR GONSER ADMITTED THAT HE HAD MADE THE REQUEST TO HAVE ECT SUBMIT THE REQUEST.   His request was NEVER REVIEWED OR DISCUSSED IN A PUBLIC MEETING! This is yet another example of our Supervisor making unilateral decision outside the public’s view.

After ECT made their presentation, the author of this post wanted to ask several questions. Supervisor Gonser was initially not willing to let me ask questions.  He ultimately allowed the questions.  Here are the questions and the answers provided:

  1. Who authorized the January submission to the CRWC and PAC?

After some delay in getting a clear answer from the ECR rep, Supervisor Gonser finally responded “The Supervisor specifically!”

  1. Under what authority was it submitted?

The answer was never provided, however, the ECT rep indicated that the letter was not a grant submittal.  He went on to explain that the January letter was submitted to determine if the Clinton River AOC (area of concern) PAC (public advisory council) would endorse an official grant request later. He indicated that the AOC PAC did not support this project, and “that was the end of it”.

The lack of a direct answer to this question indicates that there was no ‘”authority” for making this request.  The Township would have been in a very embarrassing position, if the PAC agreed to support the request only to have it later rejected by the Board based on citizen input during a public meeting.  The Township request wasted the time of the 25 member community representatives that are part of the PAC.

 

  1. Why do you feel it is appropriate to spend public funds on private property?

Once again, the question was not answered. When I mentioned that funds would include improvements on private property, Gonser said “I think that is a leap of faith that is simply untrue.”  The ECT rep said to me  – “You are right!” (that the letter included costs for improvement on private property because it included costs for the stream bank and the millrace.)

As stated by the ECT rep, the actual dollar amounts could change dramatically, however, it is not “a leap of faith” that public funds would be used on private property.  The submitted request explicitly stated so.

 

  1. Why did you feel it was not necessary to obtain citizen input, in a public meeting, on this proposal prior to submission to the Clinton River Watershed Council?

The Supervisor did not answer this question, he told me that my time was up.

Stay Tuned as more information will be posted as it becomes available.

Here is a copy of the January letter submitting the project for review:

ECT request on behalf of Oakland Township

Here is a video of the May 13 meeting proceedings:

Why is this important to the citizens of Oakland Township?  Having our Supervisor make an implicit commitment for spending tax dollars on a project that includes improvement to private property WITHOUT ANY PUBLIC DISCLOSURE OR DISCUSSION is totally inappropriate and exceeds the Supervisor’s authority.  By wasting the time of the 25 member community representatives, reviewing our Township’s proposal, certainly does not help our Township’s credibility on future grant submissions. We may never know what damage has been done in getting the other communities support on future projects.

UPDATE: Oakland Township sued for over $4 (now $5) million in Water Tap Fees

3 Replies

It was previously reported on this website that Oakland Township was being sued by two developers for fees they paid Oakland Township to connect with the Detroit Water System in the future.  Since the Township Board has decided to stop any future efforts to connect to the Detroit Water System, the developers are requesting that their fees be refunded (see previous post).  Recently the Pulte Company has also filed a similar lawsuit against the Township.

SUMMONS AND COMPLAINT – PULTE HOMES

Why is this important to the residents of Oakland Township? The significant amount of money that may have to be refunded to the developers and some homeowners will have to be decided in court, contributing to the already historically high legal expenses incurred by our Township.

Richard Michalski

Spend Our Trails Millage to Bailout a Subdivision?

5 Replies

At the 10/1/13 Planning Commission meeting Mr. Ron Hein, a  Planning Commissioner newly appointed by Supervisor Gonser and the Board, volunteered to serve on the Township Safety Paths and Trails Committee saying “I have a little bit of a vested interest in this.”  Ron went on to say that his subdivision (the Hills of Oakland at Adams and Dutton)  has safety paths that need repair and that rather than build new trails and connections the Township should maintain what we already have (watch the video below).

This is not a new idea.  Treasurer Jeanne Langlois proposed the same thing at a Safety Paths and Trails Committee meeting this summer.  She was told then that this would not be an appropriate use of taxpayer’s money.  Hein and Langlois, together, will be half of the body which has the responsibility of suggesting to the Board how our trails and safety paths millage money is spent.

The safety paths that Ron and Jeanne want to spend our money on are privately owned and their maintenance is the responsibility of the homeowners and their associations.  If they have been allowed to fall into disrepair, as Mr. Hein says, he and his neighbors need to pay for the repairs.  Is this why he says he has a “vested interest”?

The millage language that we, the voters, approved says precisely how our money must be spent.

“Nov. 2006

TRAILS SYSTEM MILLAGE PROPOSAL

Shall the Charter Township of Oakland be authorized to levy up to .25 (1/4) of one mill for a period of ten years, starting with the December 2007 levy, to provide funds for the construction and maintenance of a network of safety paths, trails and boardwalks to provide healthy recreational opportunities and safe routes to schools, parks and neighborhoods in the Township, and for the acquisition of property and right-of-way for such purposes?  Approval of this proposal would authorize a tax limitation increase of 25 cents per $1,000 of taxable value on all taxable property in the Township.  The proposal is for a new additional millage the revenue from which would be disbursed to the Charter Township of Oakland. It is estimated this proposal would result in the Authorization to collect $315,178 in the first Year, if approved and levied.”

Our money is to be spent to construct and maintain a network of trails that connect parks, schools and neighborhoods. It says nothing about bailing out subdivision residents.  Mr. Hein’s subdivision safety paths do not form a network nor connect to parks, or schools. We have millions of our tax dollars at stake.  Gonser and the Board know that unless we, the residents, make it plain that this misuse of our money is unacceptable they can do it and get away with it.  No one else is watching to be sure that the Board spends our trails money appropriately.  Make your voice heard!

Jim Foulkrod