Lansing City Council Agenda, 10/28/13

7/27/2019 Lansing City Council Agenda, 10/28/13

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AGENDACommittee of the Whole

Monday, October 28, 2013 6:30 p.m.10th Floor Counci l Chambers, City Hall

Councilmember Carol Wood, ChairCouncilmember ALynne Boles, Vice Chair

1. Call to Order

2. Roll Call

3. Approval of Minutes

Minutes of October 14, 2013Minutes from Closed Session October 21, 2013

4. Public Comment on Agenda Items

5. Discussion/Action:

A. Board of Water and Light

Audited Financial Statements

BWL Return on Equity Agreement

Verification if a RFP was done for the BWL Outside Counsel List

B. Internal Auditor Memo Dewpoint Inc.C. Internal Auditor Memo Outside Counsel Breakdown (FY)

6. Other7. Adjourn8. Pending

Budget Policies

Vacant & Unfunded Positions & Position Eliminations- Administration provide Citywide organization chart for FY 2013-14, and provide detail department list

Capital Improvement Projects - Internal Auditor Report FY overruns and underexpenditures. Deadline 1/31/2014

City Capital Improvement & Maintenance Plan Review by 9/1/2013


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Pending from 9/16/2013

Verification if a RFP was done by BWL for their Outside Counsel List

IT Department Restructuring Update- Administration

Internal Auditor Report Dewpoint Inc.

Progress Spreadsheet on the items in the Financial Health Team Plan

Memo on items that were eliminated in the Financial Health Team Plan

Provide a breakdown of the expenditures for the pool at the Schmidt Center. This is toinclude the renovations and upkeep of the pool. (Originally requested 8/5/2013)

Provide Council with a detailed listing on how the millage funds for the Fire Departmentwere spent in FY2013. (Originally requested 6/10/2013)


Provide information on the safety at Frances ParkPending from 7/22/2013

Provide an update on the street signage on Lenore Avenue

Provide an update concerning the signs in the right-a-way for Parks and RecreationPending from 06/24/13 meeting

Provide information regarding the flooding prior to the year 2000.

Provide information on the assessment district and supporting documentation.Pending from the 06/10/13 meeting

Provide information regarding the Basement Back-up Program to be initiated in Fall2013


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MINUTESCommittee of the Whole

Monday, October 14, 2013 6:30 p.m.Tenth Floor Conference Room Lansing City Hall

CALL TO ORDERThe meeting called to order at 6:34 p.m.

ROLL CALLCouncilmember Carol Wood, PresidentCouncilmember ALynne Boles, Vice PresidentCouncilmember Derrick QuinneyCouncilmember Jessica Yorko-arrived 6:36Councilmember Kathie DunbarCouncilmember Brian JeffriesCouncilmember Jody WashingtonCouncilmember Tina Houghton

OTHERS PRESENTDon Kulhanek, Law OfficeSherrie Boak, Council Staff

Randy Hannan, Mayors Executive AssistantJames DeLine, Council Internal AuditorKarl Dorschimer, LEAPSteve Willobee, LEAPMary Elaine Kiener, CitizenDale Schrader, Walnut Street NeighborhoodRenee Risper, Walnut Street Neighborhood Association

APPROVAL OF MINUTESCOUNCILMEMBER BOLES MADE A MOTION TO APPROVE THE MINUTES FROM THESEPTEMBER 30, 2013 MEETING AS PRESENTED. MOTION CARRIED UNANIMOUSLY(7-0).

PUBLIC COMMENT ON AGENDA ITEMSRenee Risper, acknowledged LEAP for the work they had done with Niowave, LLC and theneighborhoods, and City Council. Ms. Risper spoke in support of the tax abatement forNiowave, LLC.

Dale Schrader spoke in support of the tax abatement for Niowave, LLC, and acknowledgedCouncil and LEAP for working with the neighborhood on the issues.

Mary Elaine Kiener spoke in support of the tax abatement for Niowave, LLC.


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DISCUSSION/ACTIONRESOLUTION PPE-01-12; Application for Exemption of New Personal Property submittedby Niowave, Inc. for property located at 1012 N Walnut Street

Mr. Dorschimer gave a brief overview of the project, explaining about the public hearing heldon March 11, 2013, and neighborhood concerns with regards to the faade of building. Sincethe public hearing, the issue was moved to Committee of the Whole and the action to table

until concerns with the faade are addressed. Mr. Dorschimer stated that after working withthe neighborhood and Niowave, there was an amendment to the development agreement forNiowave to address the faade concerns within one year of the approval of Personal PropertyExemption.

Mr. Willobee referenced faade and color rendering in the Committee packet, cost breakdownon costs covered under the 328 Agreement, and clarified that the revolving fund will not covercosts to fix the faade but to demolish the existing faade. Based on an approval, NiowaveLLC would have 365 days to make the faade corrections, at which point LEAP will file areport stating the conditions have been met. This requirement is part of the developmentagreement, as the 5th Task, and if the task is not completed, they could have their taxincentives revoked.

Council President Wood asked who would be making the recommendation to Council if theagreement was not fulfill. Mr. Dorschimer stated that EDC does all the developmentagreements, and an audit, and will in turn report to the Director of Finance. There is wordingin the amendment that states the incentive may be revoked, however the company will havean opportunity to explain why they might not have met the requirements to the Council andthey would make the recommendation.

Council President Wood asked if the agreement had been reviewed by the City Attorney officewith regards to may be revoked. Mr. Dorschimer stated the same language has been in all theagreements, and gives the City Council the opportunity to review the project and actaccordingly.

Mr. Willobee stated that the funding source is a local site remediation revolving fund, and theproject was approved previous as Brownfield Plan #28, where funds were captured and usedfor other project. This project is a grant. Mr. Dorschimer added that funds have been usedover years, and used up front on some projects, and in this case they do not expect to recoverit.

Councilmember Jeffries asked if the landscaping plan that was presented was part of therequired work that needed to be completed in one year. Mr. Willobee confirmed thateverything must be complete in one year.

Councilmember Quinney asked about the AE fees. Mr. Dorschimer stated those are

architectural engineering fees, and the demo fees are for demolition of the faade structure tomake room for the improvements.

Councilmember Yorko acknowledged all the groups willingness to discuss options and obtaina solution, and reminded the public that an ordinance was passed to prevent any situation likethis in the future.

Council President Wood informed Mr. Dorschimer that the two (2) parking signs in the R.O.W.are to be removed, because they are not allowed by ordinance. Mr. Dorschimer stated hewould investigate the signs.


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MOTION BY COUNCIL VICE PRESIDENT BOLES TO APPROVE THE RESOLUTION FORPPE-1-12; NEW PERSONAL PROPERTY EXEMPTIONFOR NIOWAVE, INC. AT 1012 NWALNUT STREET BASED ON THE AMENDENT DEVELOPMENT AGREEMENT. MOTIONCARRIED (8-0)

INFORMATIONNo further information.

OTHERNo Comments

PENDING


IT Department Restructuring Update-Administration

Internal Auditor Report- Dewpoint Inc.

Internal Auditor Memo- Outside Counsel Breakdown (FY)Verification if a RFP was done by BWL for their Outside Counsel List

Progress Spreadsheet on the items in the Financial Health Team Plan

Memo on items that were eliminated in the Financial Health Team Plan

Provide a breakdown of the expenditures for the pool at the Schmidt Center. This is toinclude the renovations and the upkeep of the pool. (Originally Requested 8/5/2013)

Provide Council with a detailed listing on how the millage funds for the Fire Departmentwere spent in FY2013. (Originally Requested 6/10/2013)


Provide information on the safety at Frances ParkPending from 7/22/2013

Provide an update on the street signage on Lenore Avenue

Provide an update concerning the signs in the right-a-way for Parks and RecreationPending from 06/24/13 meeting Provide information regarding the flooding prior to the year 2000. Provide information on the assessment district and supporting documentation.Pending from the 06/10/13 meeting Provide information regarding the Basement Back-up Program to be initiated in Fall

2013.

ADJOURNThe meeting was adjourned at 6:54 p.m.Respectfully Submitted by,Sherrie Boak, Council Staff

Approved by the Committee on _________.


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CITY OF LANSINGINTERNAL AUDITOR

124 W MICHIGAN AVE FL 10LANSING MI 48933-1605

(517) 483-4159Fax (517) 483-7630

REPORT

DATE: October 23, 2013TO: City Council

Mayor Virg BerneroChris Swope, City Clerk

FROM: Jim DeLine, Internal AuditorRE: Audit of City of Lansing Relationship with Dewpoint, Inc.

Per the City Charter, The Internal Auditor shall make a full report to the City Council of each individualaudit and file a copy with the Mayor and City Clerk.

Background / ResearchThis audit was prompted by the Committee of the Whole on Monday, September 16,2013, after hearing from Lynne Meade, Business Representative of the Teamsters 580bargaining unit, during public comment at its regular biweekly meeting. Ms. Meadeexpressed a concern that, per Chad Gamble, City of Lansing Chief Operating Officer,an agreement with Dewpoint, Inc. was being entered into by which the City would pay$52,000 per month to take over the core functions of the Citys Information Technology(IT) section. It was her understanding that the agreement was for two years. Herconcern was that, at the end of the two years, the City employees whom she representswould have lost some of their IT skill sets and their upward mobility would be severelylimited.

Present at the September 16, 2013 meeting was Randy Hannan, Executive Assistant toMayor Bernero, who was requested to work with me to provide the Request forProposal / Quote (RFPQ) for any current Dewpoint purchase order as well as thecontract. He agreed to do so.

On Tuesday, September 17, 2013 I met with Stephanie Robinson, the Citys purchasingagent to request the RFPQ and learned that none was on file as Dewpoint had beengranted sole source status. She agreed to provide documentation to that effect, butlater in the day, informed me that none was available as Dewpoint was, in fact, a vendorwith a contractual agreement with the State of Michigan and, per the Citys purchasingordinance, could be granted a purchase order without competing bids being requested.Ms. Robinson provided me this information via email with a copy sent to Angie Bennett,Interim Finance Director. Ms. Robinson suggested I contact Eric Tumbarella foradditional information and Ms. Bennett informed me that Mr. Tumbarella was out for theweek and I should request information regarding Dewpoint from Chad Gamble.


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Through a search of the Citys IFAS accounting software, I was able to view purchaseorders and payment history to Dewpoint. Line item detail on purchase order (PO)P083382 issued July 5, 2013, simple read, Project Management and was issued for2,088 hours of services @ $90.00 for a total of $187,920.00 charged to IT fund 630.

Upon pulling an invoice paid on P083382, it simply itemized a Dewpoint employee andtime spent. No detail as to services performed was provided on the invoice. I went to theCity Clerk and, searching back to July 1, 2013, could find no contract with Dewpoint onfile there.

On Wednesday, September 18, 2013 I sent an email to Chad Gamble requesting toknow the scope of services being performed by Dewpoint relative to P083382. OnFriday, September 20, 2013 Mr. Tumbarella came to my office and told me that he wasapproved to provide any / all information that I requested. I asked if I would be getting asigned contract and he indicated that I would be getting that and more. A follow-upemail was sent to Mr. Tumbarella on September 26, 2013 asking for when I might

receive the information.

As of the date of this report, none of the information requested of Randy Hannan, ChadGamble or Eric Tumbarella has been received.

AnalysisWithout the cooperation of the administration, I am still able to conduct research on theIFAS accounting system, in the vaults and archives of the Finance Department, and inthe office of the City Clerk. For this audit, that has been (for the most part) the extent ofmy research. As of the date of this report, promises made by the administration to

provide information have not come to fruition. An analysis, at this point, would beincomplete. The audit is considered incomplete. Certainly, if Dewpoint is providingtechnical support services previously performed by City employees, the next step in thisaudit would be to ask the administration if a cost / benefit analysis (CBA) had beenconducted.

RecommendationIt is recommended that the administration be more forthcoming to the Internal Auditor.The lack of cooperation does not bode well for them. It might lead the City Council, thepress and the public to believe they are not willing to be forthcoming with how taxdollars are being spent.

Last fiscal year, the City of Lansing paid over $250,000 to Dewpoint, Inc. An audit of theCitys current relationship with Dewpoint is very much in order.

It is my contention that the City Charter mandates that any / all information requested bythe Internal Auditor be supplied to them. A further lack of cooperation would indicatethat I need to employ other forms of information gathering. Sadly, these include


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requesting information under the Freedom of Information Act (FOIA), and utilizing thesubpoena power granted to City Council by the City Charter. These steps are extremeand, hopefully, can be avoided.

While, as stated above, this audit is considered incomplete, attempts will continue to be

made to obtain the information necessary for its completion.


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CITY OF LANSINGINTERNAL AUDITOR

124 W MICHIGAN AVE FL 10LANSING MI 48933-1605

(517) 483-4159Fax (517) 483-7630

REPORT

DATE: October 23, 2013TO: City Council

Mayor Virg BerneroChris Swope, City Clerk

FROM: Jim DeLine, Internal AuditorRE: Audit of City of Use of Outside Counsel in FY 2013

Per the City Charter, The Internal Auditor shall make a full report to the City Council of each individualaudit and file a copy with the Mayor and City Clerk.

Background / ResearchThis audit was prompted by a request from Councilmember Brian Jeffries made before Iassumed the position of Internal Auditor. It was reiterated at a meeting of City Councilon August 26, 2013 when passage of a resolution expanding the list of approvedoutside counsel vendors was approved. At that meeting, City Attorney, JaneneMcIntyre, agreed to work with me to provide a list of outside counsel firms utilized andthe reason for such. On Thursday, August 29, 2013 I sent a follow-up email to herasking if we needed to meet concerning this report, and requesting if she could estimatea completion date.

In my computer files, I found a spreadsheet done by my predecessor, Arnie Yerxa,itemizing invoices paid to outside counsel firms from fiscal year 2008 through andincluding fiscal year 2012. Also included, was the general ledger expense line to whicheach invoice was charged. Using this spreadsheet, I created pie charts to graphicallyillustrate the data. These were emailed to Council members on September 12, 2013with the notation that I had not received any information from the City Attorneyregarding our request. I sent another follow-up email to her on October 8, 2013.

AnalysisAs of the date of this report, the City Attorney has not provided the informationrequested. I have offered to research the Citys IFAS accounting software and providesimilar data as Mr. Yerxa, but that offer has not been accepted. No analysis can beoffered at this time. The audit is incomplete.


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RecommendationIt is recommended that members of the administration, including the City Attorney,follow through on providing promised information on a more timely basis. While, asstated above, this audit is considered incomplete, attempts will continue to be made toobtain the information necessary for its completion.


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City of LansingOutside CounselFY 2008 - FY 2012

Firm

Total

Expenditures

Clark Hill 694,559Miller, Canfield 671,097

Fraser Trebilcock 526,307

Foster, Swift 487,787

Varnum LLP 447,423

Keller Thoma 211,112

Plunkett&Clooney 97,088

Brookover, Carr 24,259

Oade Stroud 22,458

Knaggs Harter 12,869

McGinty Jakubiak 7,108

Murphy, Brenton 3,007 Data Compi led By: Arnie Yerxa 4/25/2013

3,205,074 Chart Created By: Jim DeLine 10/23/2013

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694,559

671,097

526,307

487,787

447,423

211,11297,088

24,259 22,458 12,869 7,1083,007

Expenditures by Firm

Clark Hill

Miller, Canfield

Fraser Trebilcock

Foster, Swift

Varnum LLP

Keller Thoma

Plunkett&Clooney

Brookover, Carr

Oade Stroud

Knaggs Harter

McGinty Jakubiak

Murphy, Brenton


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City of LansingOutside CounselFY 2008 - FY 2012

Department / Cost Center

Total

Expenditures

General Admin 601,423

Property Tax Levy 313,897

Finance-Operations 307,089

Pension Contributions 284,639

Transportation 249,179

Other Fringe Benefits 209,051

Transportation-Parking Maint 195,121

City Attorney 161,944

Tax Roll Adjustments 158,176

Labor Relations 125,864

Finance-Assessor 102,069

Workers Comp 101,027

District Court 85,760

Sewage Disposal 84,677

Transportation-N Grand Ramp 49,815

Consolidated Facilities Proj 30 000

601,423

313,897

307,089

284,639

249,179

209,051

195,121

161,944

158,176

125,864

102,069

101,027

85,760

84,677

49,815

30,000

23,613

21,533

19,57217,732

17,085

13,3669,8769,456 8,756 3,623

365 212 8572

Expenditures by Department / Cost Center

General Admin

Property Tax Levy

Finance-Operations

Pension Contributions

Transportation

Other Fringe Benefits

Transportation-Parking Maint

City Attorney

Tax Roll Adjustments

Labor Relations

Finance-Assessor

Workers Comp

District Court

Sewage Disposal

Transportation-N Grand Ramp

Consolidated Facilities Proj

Police Department

Baseball Stadium

CDBG FY2011

Econ Dev Corp

Mult Dwell Reg Code Compliance

Tri-County Metro

Documents

Lansing City Council Agenda, 10/28/13