Warren City Council held a special meeting Monday night, where it approved the hiring of a third-party accounting firm to conduct an investigative audit of the downtown development department.
Counsel for lawmaker Jeffrey Schroeder of law firm Plunkett Cooney said the contract with Remann Corporate Investigative Services would be written for no more than $ 20,000, and he estimated the procedure would take “three to four weeks.” The inspection should be for last year. Remann Corporate Investigative Services is based in Troy.
Board member Eddie Kabatinsky voted against hiring an accounting firm; Board member Ron Papandrea was absent.
Kabatinsky asked where the audit funding came from, saying that there were no appropriations in the budget for 2021-2022. Council Secretary Mindy Moore said the council’s budget was indeed $ 377,000 and that it was more than enough to pay for the audit.
“I do not see funding for this audit,” said Kabatinsky. “I’m not against the audit, but we can’t use money that we didn’t vote for and didn’t approve in this budget.”
Board member Harry Watts called for an DDA audit during a previous City Council meeting, and at that time the Council ordered Schroeder to look for an accounting firm that had not previously worked with the City of Warren that could manage the audit.
Schroeder said the audit is being conducted in response to a statement from the Michigan Treasury Department after last November the Council asked him to consider possible improper DDA spending.
“The Michigan Treasury Department has said that after reading the allegations, they have concerns about the appropriations being made by the downtown Development Office without the approval of the Council,” Schroeder said. “They said they needed an audit to take action.”
Raman will submit a report to the Council upon completion of the process, and, according to the Charter, this report should be published.
“At the time of the audit findings, the recommendation will be to send them to the Michigan Treasury Department so they can take further action,” Schroeder said.
Adviser Angela Ragensues questioned the question of hiring any accounting firm without a tender procedure. Schroeder pointed to section 8.13 of the Warren Charter, which states: “Special independent audits may be conducted at any time that may be appointed by the Board. All such inspections should be conducted by a chartered accountant appointed by the board. The results of each such audit shall be published in accordance with the procedure established by the Board, and copies thereof shall be kept in the office of the Secretary and the Controller. “
“We are in a situation where the Council is investigating the administration and claiming that I believe these are illegal appropriations in the budget of the City Center Development Office,” Schroeder said. “If you have a process (request for a proposal), you will have an administration that will sit with you, trying to choose a person who will investigate the administration for potential appropriation.”
Rogensuez said that even if the bidding procedure is not specifically required, she believes it speaks to the transparency of consideration of multiple vendors.
Mayor James Fauts is the chairman of the DDA, and his deputy is Joseph Vicari. Other participants include Gregory Jackson, Nicholas Lovedos, Tom Petzold, Hank Riberas, Michael Wiegand and Oscar Zamora. Tom Bamarito, director of public, economic and central development, also sits on the board.
The DDA was included in the city’s annual audit conducted by Plante Moran and approved by the Council in December.
The City Center Development Office is a type of tax increase funding body (TIF). The DDA records a certain portion of property tax revenue in a specific DDA area. The Warren DDA runs from 11 Mile Road to 14 Mile Road and includes the General Motors Technical Center, Heritage Village and much of the commercial property along Van Dyke Avenue.