Arbor Update

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Ann Arbor City Council Retreat Recap

12. January 2009 • Nancy Shore
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The Ann Arbor City Council met for a retreat this past Saturday. The event was covered by the Ann Arbor News and the Ann Arbor Chronicle.

Based on those articles, here is a brief summary of the main items discussed at the meeting:

  • Priorities: The City Council set three priorities for the coming year: land use policy, economic sustainability, and improved communication and service delivery.
  • Communication: City is looking to use social networking tools such as Twitter and Facebook to help publicize and communicate about Community Services activities.
  • Conference Center and New Blake Transit Center: There was talk of both building a Conference Center on top of the proposed underground parking structure on Fifth Ave and replacing the AATA Blake Transit Center with a new structure that would have a roof that would stretch over Fourth Ave.
  • City Income Tax: In light of the current economic situation, there was some interest among some City Council members of exploring a City income tax (and issue that has been discussed at length here). It appears the Mayor is not supportive of this idea.
  • Zoning: There was interest in finishing the master planning of the City, which includes the rezoning and other changes that are involved with the City’s A2D2 efforts.
  • Regional Cooperation: City managers also outlined the many ways the City is looking at regional cooperation, such as creating a joint data center with Washtenaw County and coordinating fire services.
  • Other Issues: Other issues on the horizon included engaging the public in a question of the future of Argo Dam.

  1. I hope people read the Chronicle’s coverage of the apparently unauthorized purchase of 11 large plasma TV screens for the Wheeler Center. It’s at the bottom, called “Coda: Plasma Screens and P-Cards, Use of Public Funds”. The auditors caught the fact that City staff bought these TVs, circumventing the purchasing controls.

    Embedded in this coverage is a link to the extremely pointed e-mails by Councilmembers Briere and Rapundalo about the staff having bought this unauthorized equipment.

    These are big TVs. They must have been noticed by supervisors. Why were they installed? If staff installed them without any supervisor noticing, why were they subsequently not removed?

    It seems that citizens have gotten three things for their city taxes in recent years: Service cuts, big ugly buildings, and misappropriation of public funds.

    And we are supposed to approve a city income tax so that these folks have even more money to play with?

       —David Cahill    Jan. 12 '09 - 09:43PM    #
  2. “It seems that citizens have gotten three things for their city taxes in recent years: Service cuts, big ugly buildings, and misappropriation of public funds.”

    You’re right Dave, that’s all citizens have gotten for their tax dollars.

    Staff was in the wrong in the use of these funds but as usual, your comments are so far over the top that they distract from a very legitimate point. Perhaps that was your goal.

       —John Q.    Jan. 12 '09 - 11:09PM    #
  3. PlasmaGate!

       —Fred Zimmerman    Jan. 13 '09 - 12:11AM    #
  4. Not to belittle the point, but according to the Chronicle the total cost for the screens was $16,252.98. So yeah, mistakes were made and should be duly addressed, but we are not talking about millions of dollars here.

       —Nancy Shore    Jan. 13 '09 - 12:36AM    #
  5. Actually, I think my comments were quite moderate.

    It took several staff, acting together, to circumvent the City’s procedures. I think this goes beyond the typical “mistakes were made” passive-voice stuff, don’t you?

       —David Cahill    Jan. 13 '09 - 12:48AM    #
  6. The staff people who are responsible for this need to be held accountable. How does that justify the broad brush you use to tar the entire city. I can recall the financial mismanagement at the library a number of years ago but I wouldn’t have used that situation to trash the library as a whole. Did you?

       —John Q.    Jan. 13 '09 - 03:52AM    #
  7. I attended both audit committee meetings. A supervisor signed off on the TV purchase. While the expense may be modest it points to a bigger problem of poor internal control. The city found out about the violation of credit card and purchasing policies because the outside auditor caught it. That indicates that the city finance department is not providing adequate spending oversight. The auditor only flagged this because it violated policies. There may be other wasteful purchases at year end that did not evade policies but are still a waste of money.

    I was unconvinced by McCormick’s explanation that the auditor did not have the correct information. I’ll believe her explanation when the auditor issues a new report.

    Problems with credit card purchases have been regularly flagged by the auditor. When I investigated misuse of credit cards flagged in earlier audits, I discovered Fraser was one of the big offenders. I’m glad that some of the veteran council members are finally concerned with this but it’s too bad they allowed past problems to be solved by liberalizing the rules on what could be charged to city credit cards to accommodate Fraser’s behavior. That sets a very bad example for employees.

       —karen sidney    Jan. 13 '09 - 05:59AM    #
  8. Since many of you seem to know more about this incident than the average citizen, why, pray tell, would the Wheeler Center need so many flat screen tv’s? Are they turning the place into a convention center? Who’s in charge of purchasing in Sue McCormick’s unit? Are they going to return the tv’s? As with any organizations, if you hand out credit cards to the employees without any checks and balances, abuse is bound to occur.

       —scooter62    Jan. 13 '09 - 06:23AM    #
  9. Karen, can you share more about your investigations into credit card use? Your statements are interesting, and I’d like to know what the “big offenders” were doing, and what liberalizations have allowed.

       —Matt H    Jan. 13 '09 - 06:36AM    #
  10. This type of conduct is appalling. I hope all ofthe offenders are identified and there is accountability.

       —Mark Koroi    Jan. 13 '09 - 06:49AM    #
  11. Not sure how they can actually rectify this situation as it’s not as if they can return the tv’s to their place of sale. But if they were purchase without going through the proper channels then they should be removed and distributed elsewhere or sold and the profits returned back to the City.

       —scooter62    Jan. 13 '09 - 07:23AM    #
  12. Its funny. When the whole story comes out, all this sound and fury is going to look pretty silly. Actually, it already looks pretty silly. All these usual suspects taking shots at their usual victims. I’d yawn if I could muster the interest.

       —Marvin Face    Jan. 13 '09 - 07:32AM    #
  13. Yet you “mustered up the energy” to post on this blog? Hmmmmm, ok.

       —scooter62    Jan. 13 '09 - 07:36AM    #
  14. Yep. That’s right scooter. Mustered up the energy to post. Glad it Ok with you. Just couldn’t muster enough hate to pile on with the rest of the lemmings here. That’s all.

       —Marvin Face    Jan. 13 '09 - 07:44AM    #
  15. Who are the usual “suspects” and “victims”?

       —Mark Koroi    Jan. 13 '09 - 07:55AM    #
  16. I don’t think that it’s “hateful” to question the purchase of the HDTV’s…especially when the folks that purchased them went outside of the normal procedures to buy them. Sounds like accountability more that “hatin”. Folks in government-work can’t use public funds as if they work in a privately run business. Just my two cents….and of course the opinion of the auditor.

       —scooter62    Jan. 13 '09 - 07:58AM    #
  17. Mark, are you kidding me? Cahill and Sidney vs. city of AA and Roger Fraser. It’s practically a cage match. Fraser could save a litter puppies from drowning and all we’d hear about from them is the flaws in his backstoke technique.

       —Marvin Face    Jan. 13 '09 - 08:04AM    #
  18. Whew. Clearly I am over my head here. Talk about a hot button issue! Karen, thanks for your insightful comment.

       —Nancy    Jan. 13 '09 - 08:09AM    #
  19. “Cahill and Sidney vs. city of AA and Roger Fraser. It’s practically a cage match”

    That cage isn’t doing a very good job of preventing Mark Koroi’s outside interference.

       —HNG    Jan. 13 '09 - 06:39PM    #
  20. It seems reasonable to me that the operations of the Wheeler center might benefit from adding 11 TVs. I would like to hear more about what was the thinking behind adding them.

    The real question is, why buy $3000 TVs instead of $500 ones?

       —Fred Zimmerman    Jan. 13 '09 - 07:02PM    #
  21. “The real question is, why buy $3000 TVs instead of $500 ones?”

    If I read HD correctly it was $16k for 11 screens making them $1,500 each. Not quite $500, but also not $3,000.

       —abc    Jan. 13 '09 - 08:17PM    #
  22. Yes, we recently bought a 46” HD at home and with installation, mount, dvd player & everything it came to almost $3000.

    When I walked through Sears looking at TVs, I would say that at least 4/5 of the display units (of ALL tvs on sale) were 52”, that seems to be the new standard.

       —Fred Zimmerman    Jan. 13 '09 - 08:25PM    #
  23. I don’t know any of the people involved but it appears someone knew how to illegally split the transaction into several smaller ones in order to sidetrack the puchasing regulations. Having just paid my December taxes, every PENNY should be watched and someone needs to be held accoutable. It might not be a big issue to some of the folks who responded here but this is a symptom of a much larger problem out there—a lack of financial oversite.

       —Alan Goldsmith    Jan. 14 '09 - 12:49AM    #
  24. Alan, I entirely agree that splitting the transactions into smaller ones to bypass accounting controls was not acceptable (although, to be sure, it has occurred to every manager who has to deal with accounting controls…) and that as some of the comments above suggest there is a need for improved financial oversight at all levels of city government.

    My point is that, leaving aside the accounting controls issue, it actually may have been a reasonable investment of $, given current prices & all the costs of installation, etc., to spend $16K to buy 11 plasma screens. the accounting issue is procedural, no one has stepped forward to explain WHY the 11 plasma screens might help the Wheeler center function better. I am willing to hear it…

       —Fred Zimmerman    Jan. 14 '09 - 01:37AM    #
  25. I agree. The reason this procedure was set up was just for that reason—to make sure higher dollar transactions have a higher level of approval. It appears this situation was just sumbled upon by accident. Have similar tranactions like this taken place in the past—i.e. spliting purchase order to game the system? And if 11 plasma screen were really needed, the higher level of approval shouldn’t have been an issue….

       —Alan Goldsmith    Jan. 14 '09 - 02:01AM    #
  26. Matt,

    I did a post for Citizens News Service ( on the earlier credit card abuse. It’s been documented in the last few audits although I had to FOIA the statements to document that Fraser was involved.

    The justification for the TV’s at Wheeler that I heard at the two audit committee meetings were:

    Wheeler was wired for these TV’s so this was just finishing the installation

    TV’s were needed for weather reports because Wheeler staff handled snow removal

    TV’s were used for employee training (safety videos, etc) and for conference presentations. It was more convenient to have employees train at Wheeler than go to the downtown HR conference room, which also has a TV for training.

    McCormick said the largest TV (first one purchased) was put in the Wellness Center because of the viewing distance. I found the Wellness Center. The TV was in front of the stationary bikes and the viewing distance appeared closer than the one in the conference rooms. If the TV encourages people to exercise and reduces health care costs it could be the best deal of the bunch.

    The audit committee was told that 4 of the TV’s were or would be removed from Wheeler and put elsewhere, possibly the police/courts building.

    There were 3 separate TV purchases. One TV was purchased prior to fiscal year 2008 before the move to Wheeler (I think FYE 2007 but I don’t have my notes with me). Three more were purchased in the first part of fiscal year 2008 and the 7 that the auditor questioned when reviewing a sample of purchases were purchased in June 2008, the last month of the fiscal year.

       —karen sidney    Jan. 14 '09 - 02:22AM    #
  27. Thanks, Karen. Is there a way to review all credit card purchases? That is, must each be documented, or do you have to have the often-cryptic credit card statement in one hand and cross-reference it with some other document? In any case, do you or anyone else publish the raw data once you get it via FOIA?

       —Matt H    Jan. 14 '09 - 03:10AM    #
  28. John Q, you mentioned the financial mismanagement at the Library in 1999. I read press reports as the scandal unfolded in early 2000 in the press. I told Sabra “I can do better than that,” and she urged me to run for the Library Board. I even won! That embezzlement scandal tainted the Library for years and led to the departure of the Library Director in the fall of 2001.

    I have no idea where PlasmaGate is going. But when I heard about the auditor’s report I said “This is the kind of thing that can kill an administration.”

       —David Cahill    Jan. 14 '09 - 09:19PM    #
  29. Did you use the library’s financial problems to trash the library generally like you’ve done here?

       —John Q.    Jan. 14 '09 - 09:26PM    #
  30. Nope, nor I have I trashed the City generally here. Read my comments again carefully. The City does some things well; for example, the Police Department has improved dramatically under Chief Jones. However, there are serious problems with controls over spending, as the auditor’s report shows.

       —David Cahill    Jan. 15 '09 - 01:43AM    #
  31. Here is the audit report, from the City’s website. See page 11. Also, on pages 10-11, the auditor has repeated the finding from the 2006 audit on misuse of credit cards.

       —David Cahill    Jan. 15 '09 - 01:53AM    #
  32. Looking at the findings for 2006 (6 findings) and 2007 (5 findings), 2008 was an improvement, with 4 findings (counting the recurrence of credit card use violation as in 2006.) Also good to see that past findings have been resolved. However, the credit card recurrence might warrant a stronger response.

    I read DD’s comments again, carefully. Give it up, John Q.—he’s oblivious.

       —Steve Bean    Jan. 15 '09 - 09:02AM    #
  33. I agree that comment #1

    “it seems that citizens have gotten three things for their city taxes in recent years: Service cuts, big ugly buildings, and misappropriation of public funds”

    was an overstatement, since as David amends and extents his remarks in #30, obviously, the City “does some things well.”

    However, comment #28 is reasonable and does not fall under that heading of “trashing.”

    Steve, I seem to remember a recent AA Chronicle thread where you objected to mentioning a particular high-ranking public official by name in a discussion of city finances. How is calling David “oblivious” any better?

       —Fred Zimmerman    Jan. 15 '09 - 07:06PM    #
  34. An important distinction needs to be made, however, that the audit report only goes on to state that the credit card disbursements were “inappropriate” and lacking suppoting documentation. I have seen no finding or heard any allegation that these purchases were for anything other than normal city business. So it appears that these purchases may have violated internal control standards but no breach of fiduciary duty was found, e.g. purchased items used for personal purposes; same with the plasma TV sets (they were utilized for legitimate municipal purposes). I nevertheless thank the citizens who brought this matter to the public’s attention, as it should have been.

       —Mark Koroi    Jan. 15 '09 - 11:55PM    #
  35. It’s not any better, Fred, it’s just different. By the way, I didn’t “object”, but I’m not interested in explaining it beyond that, so you’re on your own.

       —Steve Bean    Jan. 16 '09 - 04:23AM    #
  36. Well, Steve, let me be more clear, so you don’t worry about having to explain anything:

    In 3-d social situations, it is rude to talk dismissively about another person in front of them in a public setting, as you did in comment 32. It is rude here, too.

       —Fred Zimmerman    Jan. 16 '09 - 07:21PM    #
  37. “Progressives of Washtenaw, People Against Corruption, and Ask Voters First”


       —Marvin Face    Jan. 18 '09 - 05:49AM    #
  38. I filed a FOIA request for copies of the master statements for city purchasing cards, covering from June 1, 2008 through January 15, 2009. You can view the data, sans card numbers (add card holder names — hm). To download an Excel file, browse to File->Export As. Note that the statements are spread across multiple worksheets.

       —Matt H    Jan. 21 '09 - 03:34AM    #
  39. Eh, Fantasy Attic Costumes?

       —Alan Goldsmith    Jan. 23 '09 - 12:55AM    #
  40. amendment to #39 — file / save as requires login — but look for the disk icon on the nav row, which says “Download/Export” — that doesn’t require login

    “6th Floor Coffee with Roger”?

       —Fred Zimmerman    Jan. 23 '09 - 07:48PM    #
  41. I would caution against any strong interpretation of purchases until names are associated with records. I’m confused as to why the city would redact them, as it makes explanations for purchases hard to infer.

       —Matt H    Jan. 23 '09 - 08:24PM    #
  42. The information on the credit card spreadsheet in column’s G,H and I tell you which fund or department got charged. Column G is the fund number and name. The first 3 digits of Column H is the agency. Agencies in the general fund include
    010 mayor
    011 city administrator
    012 HR
    014 city attorney
    015 city clerk
    018 finance
    021 courts
    031 police
    032 fire
    033 building
    040 public services (includes street lights)
    060 parks under Miller
    061 parks under Henderson

    As an example, the Fantasy Attic costume was charged to the general fund, parks under Miller. That part of the parks function handles the programs, so my guess is that this is related to a children’s program.

       —karen sidney    Jan. 23 '09 - 11:11PM    #
  43. What do columns C and D mean?

    And what are we to conclude from a transaction where G, H, and I are blank? I see these – not exhaustive, there are a few others:

    In the June 4, 2008 statement, $602.69 to HYATT HOTELS SAN ANTON on 5/23/2008

       —Edward Vielmetti    Jan. 24 '09 - 06:32PM    #
  44. Column C is the date the charge was made and column D is the date the credit card company posted the transaction.

    Columns G, H, and I contain the information needed to record the transaction in the city’s books. This is not something that comes from the credit card company. Having those columns blank just means the city staff person responsible for entering the accounting coding data did not enter information for some of the charges in this spreadsheet.

    The accounting code date would come from lots of departments so the person doing the spreadsheet probably has to do some nagging to get all of the information. In the real world, the unidentified charges get posted to an account called something like “P-card” or “suspense” and when the accounting department finally gets the accounting codes, the charges are moved to the correct account. I noticed the later months had complete information so maybe the finance department is doing more nagging.

       —karen sidney    Jan. 28 '09 - 03:07AM    #
  45. I wonder what City Council is going to do to ensure that situations such as Plasmagate do not recur. I believe the employees responsible for this behavior should be made examples of. It reflects poorly on the entire city government that precious revenue dollars are being squandered while a significant percentage of residents are losing their homes in foreclosure procedings.

       —John Dory    Feb. 2 '09 - 02:57AM    #