Who Knew What And When? The Over Collecting Of The CSO Bond.

It’s come to light because a resident wanted answers on the money collected by the City to pay for the CSO bond. That the City over collected money from the taxpayers. The City will have over three million dollars after the bonds are paid off.  Troy Brown insisted that the Mayor give him an answer and the Mayor got an opinion from a lawyer on the subject. Read that opinion in full.  Now comes the question who knew what and when? Is there a state agency that follows how much money is going into this account? Was there ever anything sent by the state instructing the administration to lower the rate that the City was collecting from us?

When five years ago council members brought this to the Mayors attention did he being a CPA crunch the numbers? If he didn’t at least take a look at them why not? Was this opinion the first communication that Mayor has had with any lawyer about this subject? Is this bond looked at every year? If it is where are the reports for the bond? Who gets the report if there is a report? Did the council have access to the numbers? I would think so if some of them questioned the amount being collected as too much? Where are those reports? If there isn’t a state agency overseeing these accounts (our city isn’t the only one collecting for bonds.) Why not? If a law was violated what’s the punishment for the violation? Who gets punished? If the Mayor knew and kept collecting anyway what happens to him if anything?

What CSO bond reports do council members get? Have they ever asked for a legal opinion about the CSO bond? Have they approved charges for any opinion from a lawyer in the past about this bond? I think it’s time that our City Council take a very hard look at this. They have unlimited access to all documentation in the City according to our City Charter. If the reports/emails and or opinions from lawyers are not forthcoming from the administration. Take the administration to court on behalf of the residents that were overcharged.

Folks, there is a problem here and I think there are some very important questions we as residents should be asking. All the information I’m talking about is public information and should be willing given to whoever want’s to ask for it. No, I do not think that any resident should have to pay a dime for the information. We’ve already paid way to much if this was an honest mistake then information, should be willing given to whoever might ask for it. Full access Full transparency by this administration is required.

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13 thoughts on “Who Knew What And When? The Over Collecting Of The CSO Bond.”

  1. As I indicted in a previous post, time was needed to review information, and data by Plante Morna, the Comptroller and the Administration. The information is ready to discuss and a study session has been scheduled. The Dearborn Heights City Council will have a study session and discussion on the CSO Millage, outstanding debt, and the Miller Canfield legal opinion on Tuesday, September 29, 2015, 7:00 p.m., 6045 Fenton, Dearborn Heights. Open to the public. Public comments are welcome.

    Respectfully,

    Lisa Hicks-Clayton
    Dearborn Heights City Councilwoman
    (313) 348-9848

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  2. Councilwoman Lisa Hicks-Clayton says, September 2, 2015 at 8:30 am
    “The Dearborn Heights City Council meeting , August 25, 2015 has been posted on YouTube, effective September 1, 2015.”

    Thank for making sure the 8/25/2015 council meeting was posted on the internet on 8/31/2015 few hours after I blogged here asking Dearborn heights why it was not published yet after 6 days? My question to the honorable council member Ms. Hicks-Clayton after given her all the credits that she deserve for assisting the city IT department to complete the very difficult task “Publishing a council meeting on YouTube” This very difficult task took 6 long days. Please consult our IT consultants to make sure that the city IT staff are trained and capable of “Publishing a council meeting on YouTube” within 24 hours. Or better-off streamline the meetings live on city website or Facebook.

    Please contact several municipalities around our city who provide their council meeting live.

    Thank you for reading this blog, thank for considering the bloggers comments and responding accordingly.

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  3. I’m so sorry I said that the meeting on 8-25-2015 was a study session I have way to much going on right now. I’m glad the meeting was posted I can not take any credit for that I made no calls about the subject.

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  4. Often local governments will loan resources from one fund to another fund experiencing
    a temporary cash shortage. This is allowed under Michigan State Constitution. Interfund loans are addressed in GASB 34, ¶112(a).1: Interfund loans—amounts provided with a requirement for repayment. Interfund loans should be reported asinterfund receivables in lender funds and interfund payables in borrower funds. This activity should not be reported as other
    financing sources or uses in the fund financial statements. If repayment is not expected within a reasonable time, the interfund balances should be reduced and the amount that is not expected
    to be repaid should be reported as a transfer from the fund that made the loan to the fund that received the loan.

    In addition, in 2011, a opinion letter was received from the Michigan Department of Treasury, to the City of Dearborn Heights, Corporate Council, City Treasurer and Council members:

    Below is the opinion from Corporation Counsel asked for by the Council regarding inter-fund loans

    9-G
    Corporation
    Counsel
    Gary T. Miotke
    Corporation Counsel
    Daniel S. Paletko
    Mayor
    APPROVED FOR
    AGENDA OF
    March 29,2011

    VIA HAND-DELIVERY
    Honorable City Council
    c/o City Clerk Judy Dudzinski
    City of Dearborn Heights
    6045 Fenton
    Dearborn Heights, MI 48127
    Re: Interfund Loans
    Dear City Council Members:
    Per Motion 11-071, your Honorable Body directed that I research interfund loans
    and make a recommendation on my findings. More precisely, I was to research the
    propriety of interfund loans and how to properly effectuate them. Subject to what is
    otherwise stated in this letter, it is my opinion that the types of interfund loans that are
    specifically contemplated by the City are proper provided they are approved by your
    Honorable Body. – —
    – —-
    Treasurer Riley raised the issue in a letter to your Honorable Body. In his letter,
    Treasurer Riley referred to an email from Michael P. McGee, a public finance attorney
    associated with the law firm of Miller Canfield. In his emailv Mr. McGee concluded that
    a municipal interfund loan is “permitted provided it is properly documented and approved
    as a loan by city council so as to distinguish it from an inappropriate transfer.” Based on
    this communication, Treasurer Riley requested and your Honorable Body approved
    Motion 11-071.
    I agree with the opinions expressed by Mr. McGee and Miller Canfield.
    However, my opinion is also subject to the following.
    First, any such interfund loan must truly be treated as a loan in all relevant
    respects. Per Treasurer Riley, the four (4) funds from which interfund loans are likely to
    be made are water, major streets, local streets, and library. These funds are special or
    dedicated funds based on State law, dedicated millages, and/or user fees. Based on
    general law and Michigan case law from the 1800’s, “the well-settled rule is that special
    funds cannot be used for another and different purpose.” See McQuillin Municipal
    Corporations, Section 39.50, Volume 15, p. 186 and see Chaffee v. Granger, 6 Mich 51,
    57 (1858). Yet, there is authority that has been recognized in general and in Michigan
    City of Dearborn Heights·
    that a truly temporary interfund loan from a special fund is not inappropriate provided the
    fund receiving the loan has sufficient revenue to repay the loan and provided further that
    that the borrowed funds are idle, are loaned with the express intent that they are to be
    repaid, are available if needed to pay persons entitled to be paid from such fund, and are
    repaid to the fund from which they have been borrowed. See McQuillin Municipal
    Corporations, Section 39.50, footnote 5 (and authorities cited therein) and see Michigan
    Op. Atty. Gen. 1951, No. 1451 (August 1,1951), p. 327 (citing the McQuillin section just
    cited and an Illinois court opinion). Hence, interfund loans from special funds can be
    appropriate if they meet the requirements in the preceding sentence and otherwise are
    truly temporary loans.
    Second, any such inter fund loan must be approved by your Honorable Body. This
    is required by the Uniform Budgeting and Accounting Act. See MCL 141.437 and MCL
    141.439.
    Third, this opinion is limited to the propriety of interfund loans from the City
    funds for water, major streets, local streets, and library. Since I have not researched this
    issue in relation to any other City special funds, I am unable at this time to offer an
    opinion about the propriety of interfund loans from other City special funds.
    Fourth, I must caution that this opinion is based on rather meager authority. More
    specifically, there is very limited authority either supporting or opposing the conclusion
    that interfund loans from special funds can be appropriate. Yet, in my opinion, the
    limited weight of that authority tends to support this conclusion particularly where it is
    also supported by an opinion of the Michigan Attorney General.
    In conclusion, the contemplated interfund loans from the City’s special funds for
    water, major streets, local streets, and library are not inappropriate provided they are truly
    temporary loans meeting the requirements noted in this letter. To be effectuated, any
    such interfund loans must be approved by your Honorable Body as required by the
    Uniform Budgeting and Accounting Act.
    If you should require my further assistance regarding this matter, or any other
    matter, please feel free to contact me at your convenience.
    Very truly yours,

    GARY T. MIOTKE
    GTMleem
    xc via hand-delivery only:
    Mayor Daniel S. Paletko
    Treasurer John J. Riley II

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  5. Update regarding the CSO Millage and the collection of taxes for this item. As discussed, with the Mayor and Council Chair, Plante Moran , our Comptroller, and the Administration have been meeting on this subject. It is vital to review, assess and audit, completed annually, all records and information, in order to accurately present a study session. This is currently being done. In addition, a study session will be scheduled to present and discuss the audit and water rates. During the audit study session,( October), Council is presented, by Plante Moran, valuable information pertaining to outstanding liabilities, debt, etc for the water budget. As outlined in the Miller Canfield legal opinion, CSO millage collection should be applied. (i.e. Miller Canfield Legal Opinion on the CSO Millage collection/ taxation refers back to water budget and outstanding liabilities.)

    Respectfully,

    Lisa Hicks-Clayton
    Dearborn Heights City Councilwoman
    (313) 348-9848

    Like

  6. The Dearborn Heights City Council meeting , August 25, 2015 has been posted on YouTube, effective September 1, 2015.

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  7. To all concerned over taxed residents and property owners in Dearborn Heights: As a service to our community, I asked the Council Chairman about the meeting, that the Lawyer suggested in the CSO Bond Opinion from June 2015, and when this meeting was going to take place. Check out the response from the Dearborn Heights City Council Chairman. I think the new question is DO THEY CARE and the answer – well you will have to judge for yourself. Follow the link below!

    .

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  8. Hello drheights,
    Thank you for taking the time to research my request, the 8/25/ 2015 council meeting was on the 4th tuesday of August, that was finally published on youtube the same day I posted my question on this blog on 8/31/2015 after 6 days of the meeting. as follow:

    ” nok nok says:
    August 31, 2015 at 1:24 pm
    Thank you Dearborn heights, the meeting I’m looking for is on 8/25/2015? Do you think the city IT department having some technical difficulty downloading the meeting on YouTube for the last 6 days?”

    I don’t know what kind of magic this blog have?. But thank you for establishing such public blog to facilitate public dialog about public matters.

    The fact that the city IT department responded with speed to the request about the council meeting by a blogger is fantastic and a positive sign that this blog is been read by city official consistently.

    And by the way it may be a co-incident event or it may be a follow up by city officials?

    But it was in deed a long 6 days of “technical difficulty” to publish a “council meeting”, noting that the city have an” Information Officer” on payroll supported by the city of Dearborn IT department.

    I hope the “Information Officer” publish on this blog or on youtube the reason why the task of publishing the “8/25/2015 council meeting” took 6 long days to accomplish?

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  9. Thank you Dearborn heights, the meeting I’m looking for is on 8/25/2015? Do you think the city IT department having some technical difficulty downloading the meeting on YouTube for the last 6 days?

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  10. From the Facebook, Posted by:
    “Lisa Hicks-Clayton, Plante Moran met with the Administration and Comptroller last week. There will be a City Council study session ( I will request it be taped and available ), to review outstanding liabilities, accounts receivables, included on the water fund/ budget, etc. As per the Miller Canfield legal opinion, these items must be addressed in respect to the overage in the CSO millage.
    August 21 at 12:10pm”

    Councilwoman Ms.. Lisa Hicks-Clayton, thank you for keeping the public informed about the CSO fund overage the best you can, for fairness, you are the only DH council member who is talking publicly on this blog about this important issue and for that you are showing the transparency expected from all elected officials. You are committed and trusted to represent the best interest of DH electors. Given the consideration and noting all the above, I have to turn your attention to the facts about the CSO bond fund, this CSO bond fund have nothing to do with the “water fund” what-so-ever, “NO RELATIONS”, Please read again “the Miller Canfield legal opinion” and correct me if I’m wrong on this blog. This CSO bond fund according to the approved ballet should be used to pay the CSO bond payments only, and the municipality should access and collect property tax mills every year enough to pay the bond payments obligation as set in the bond contract agreement. The water fund is separate municipal fund responsible to pay for water and sewage related operational activities,
    The CSO bond fund suppose to have no surplus if the city collected only what needed to pay the payments, you may end up with some dollars in the fund balance, but those dollars will be accounted for and included in the tax mills calculation and depleted every year, NOT “A CSO BOND FUND SEPLUS IN THE MILLIONS”. That “SURPLUS” equal about 4 CSO bond payments. Please continue your effort to find out what caused that “SURPLUS” to accumulate, and please propose a council resolution to have a mandatory process for the city council to follow before voting on any tax mills, that process should include the corporation council review and approval that the tax mills proposals are in full compliance with governing laws and regulations.
    Please do as you did to find-out about the ADA parking at city hall, you stated you contacted the “justice department” to find the correct answer, please contact whoever responsible for governing the CSO bond tax mills to find-out for yourself as an elected official as you did for the ADA parking laws, how to vote on using that “OVERAGE as you stated”.
    Noting your quote about the “ADA parking” from this page Facebook

    ” I have reached out to the Mayor on this subject. After speaking with a representative from the Department of Justice, the original disabled parking space had an access aisle, plus the lot has room to accommodate an access aisle. Therefore, the access aisle must be included, or it is a violation of the ADA of 2010.”

    Again, thank you for been the only elected council member who communicated with the public on the CSO matter on this blog. And for that reason and for your, honesty, transparency, and commitment to serve the public as trusted based on your ability and capability, I will and encourage others to vote for you, hopping you will win and go back to your council seat next year among others who share the same public services philosophy.

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  11. Kathy:
    You sound frustrated! You are not alone. I was there way back when the Plante Moran balance sheet was released and I immediately laid eyes a 6.8 million dollar “CASH” balance for some fund called the “CSO Reserve”. It wasn’t long before I starting getting excuses from council and the administration as to what this 6.8 million dollars represented and as to it’s where abouts. Remember they still have not answered a April question as to where the money is currently located, which account! Then I suggested using it to fix a problem in the city, the flooding along the NBECD and you would have thought I hit a bee hive!

    Wow we have come a long ways from that meeting way back in October!

    I do have some answers to your questions and the facts to back them up. Some of the questions are still a mystery to me and that is why I am perusing the answers, at the risk of being accused of “attacking” I respond with the following below IN CAPS.

    “From what I’ve been told a law was violated in the over collection of money from the residents” THAT IS TRUE, ACCORDING TO MCL 141.2701(4) “SHALL ADJUST”

    Is there a state agency that follows how much money is going into this account? THERE IS OVERSIGHT SINCE THE NUMBERS ARE REPORTED EVERY YEAR TO THE STATE.

    Was there ever anything sent by the state instructing the administration to lower the rate that the City was collecting from us? YES. STATE LAW MCL 141.2701(4). LIKE ALL MUNICIPALITIES THEY ARE EXPECTED TO KNOW AND FOLLOW THE LAW. ADDITIONALLY THAT IS WHY WE PAY CORPORATE COUNCIL. THAT IS WHY THE STATE AUDITS MUNICIPALITIES FROM TIME TO TIME! HMMMM.

    Was this opinion the first communication that Mayor has had with any lawyer about this subject? I CAN FIND NO PUBLIC RECORD OF ANY ADDITIONAL OPINIONS.

    Is this bond looked at every year? YES EVERY YEAR IT IS VOTED ON PRIOR TO THE PASSING OF THE BUDGET. REFER TO THE MAY AND JUNE MINUTES WHERE THE COUNCIL VOTES ON THE MIL’S TO ASSESS FOR EVERY TAX, EVERY YEAR.

    If it is where are the reports for the bond? THIS IS THE QUESTION I HAVE BEEN ASKING. MY PLAIN QUESTION TO COUNCIL LAST MEETING WAS THIS “WHAT DATA DID THIS COUNCIL USE TO APPROVE A TAX FOR EVERY RESIDENT AT 1.25 MIL FOR THE CSO LEVY IN 2014 AND FOR THE PRECEDING 4 YEARS, WHAT DATA?”

    Who gets the report if there is a report? ACCORDING TO THE CHARTER AND THE CITY GUIDELINES THE COUNCIL HAS INDIVIDUAL AND COLLECTIVE AUTHORITY TO REVIEW EVERY DOCUMENT, IN EVERY DEPARTMENT. PERIOD!

    Did the council have access to the numbers? ACCORDING TO THE CHARTER AND THE CITY GUIDELINES THE COUNCIL HAS INDIVIDUAL AND COLLECTIVE AUTHORITY TO REVIEW ANY AND EVERY DOCUMENT, IN EVERY DEPARTMENT, PERIOD.

    I would think so if some of them questioned the amount being collected as too much? YOU WOULD THINK THAT A GOVERNMENT FOR THE PEOPLE AND BY THE PEOPLE WOULD HAVE DONE THIS, YET IT WENT ON FOR AT LEAST 4 YEARS AND PROBABLY EVEN LONGER. Where are those reports?

    If there isn’t a state agency overseeing these accounts (our city isn’t the only one collecting for bonds.) Why not? THE BOND HOLDERS OVERSEE FROM THEIR END TO MAKE SURE THAT THE BILL IS PAID. WE ARE AT THE MERCY OF OUR LOCAL ELECTED COUNCIL AND MAYOR ON THE TAXATION SIDE. THAT IS WHY THE COUNCIL NEEDS TO BE THE POWERFUL LEGISLATIVE ARM OF THE CITY GOVERNMENT THAT THE CHARTER CALLS FOR. IF NOT, YOU HAVE AN ADMINISTRATION THAT IS OUT OF CONTROL.

    If a law was violated what’s the punishment for the violation? Who gets punished? THERE IS SOME GRAY AREA HERE. THE LAW STATES THAT THE INDIVIDUAL RESPONSIBLE FOR THE BOND PAYMENT IS PERSONALLY LIABLE, THAT IS WHY I ASKED THE QUESTION, “who is responsible for this bond” IN MY EMAILS. HOWEVER IF YOU READ THE LAW IT ONLY MAKES SENSE IF THE BOND PAYMENT IS NOT MADE. IT DOES NOT TAKE INTO CONSIDERATION FOR OVERCHARGING AND THE VIOLATION OF ITEM 4. THEY FIGURE THAT THE PEOPLE WILL KICK THEM OUT OF OFFICE IF THEY ARE OVER TAXED! I AM CURRENTLY LOOKING INTO THE DIFFERENCE BETWEEN SURPLUS AND OVERCHARGE TO SEE THE CITIES OPTIONS SINCE MOST OF THEM DON’T EVEN THINK IT IS THEIR BUSINESS. OF COURSE I WILL HELP. I WANT TO FOLLOW THE MONEY.

    If the Mayor knew and kept collecting anyway what happens to him if anything? NOTHING, HE IS PROTECTED BY COUNCIL SINCE THE COUNCIL APPROVES IT EVERY YEAR, UNLESS HE IS THE PERSON RESPONSIBLE AND IT GOES INTO DEFAULT. OR YOU CAN HELP VOTE HIM OUT AT THE NEXT ELECTION!

    What CSO bond reports do council members get? NONE, ACCORDING TO A CURRENT COUNCIL MEMBER

    Have they ever asked for a legal opinion about the CSO bond? NO PUBLIC RECORD OF THAT IF THEY DID. CITY GUIDE LINES AND CHARTER GIVE THEM ALL THE AUTHORITY AND POWER TO DO THIS.

    I think it’s time that our City Council take a very hard look at this. IT IS TIME THEY DO THEIR JOB COLLECTIVELY. THEY LOOK AT IT EVERY YEAR!

    They have unlimited access to all documentation in the City according to our City Charter. YES AND ACCORDING TO THE GUIDELINES, IT IS BOTH A COLLECTIVE AND AN INDIVIDUAL AUTHORITY IN WHICH THEY CAN INVOKE / APPLY.
    If the reports/emails and or opinions from lawyers are not forthcoming from the administration. Take the administration to court on behalf of the residents that were overcharged. THE COUNCIL DOES NOT HAVE TO TAKE THEM TO COURT, THEY ARE THE COURT. THEY HAVE THE POWER TO SUBPOENA AND PUT PEOPLE UNDER OTH. THEY JUST NEED TO DO THEIR JOB, COLLECTIVELY, TO PROPERLY AND JUSTLY REPRESENT ALL THE PEOPLE OF DEARBORN HEIGHTS.

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  12. If they started collecting $1.25 per $1000 of properties taxable value back in 2011, that about $1.4 millions per year, that approximately equal to the CSO annual payment. If 1+1=2, then the $6.8 millions that been called surplus was in the CSO back then in 2011. Therefore most of the overcharging was done before 2011 (the question is for how long?). I’m puzzled about the fact that few council members questioned this CSO bond fund 5 years ago and did not follow-up to find out if the CSO tax mills rate they are approving is in compliance with all laws and regulations that govern the CSO bond?. All what they had to do is asking the city lawyer who is sitting on the same council half-moon table next to them if they can collect CSO taxes when the fund balance had enough money to pay the bond annual obligations? Assessing and collecting property taxes from properties owners is very serious matter and regulated by state laws. Taxes rate effect the mortgage payments tax escrow, the rent rate for commercial properties, the tax deductions on the owners IRS tax fillings. The actions of elected council members regarding properties taxation is the most important public duty that voters trusted their elected legislators to carry on their behalf.

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