Civic Accountability -- Honesty in Local Government III

The jumping off discussion area for the rest of the Deck. All things Lakewood.
Please check out our other sections. As we refile many discussions from the past into
their proper sections please check them out and offer suggestions.

Moderators: Jim DeVito, Dan Alaimo

Mark Kindt
Posts: 1005
Joined: Sat Dec 03, 2016 11:06 am

Civic Accountability -- Honesty in Local Government III

Postby Mark Kindt » Mon Sep 25, 2017 2:45 pm

Major Financial Misstatements in Official City of Lakewood Documents and Records

On October 13, 2016, the City Finance Director signed an affidavit under oath that was submitted to the Court of Appeals for the Eighth Circuit. (“Exhibit A” attached)

Just a month later, on November 15, 2016, the City Finance Director issued the official 2017 Budget for the City of Lakewood.

Each document contains wildly different estimates of amounts to be paid to the City of Lakewood under the Master Agreement.

My conclusion is that a false affidavit was knowingly and intentionally filed with the Court.

Let’s start with the sworn Affidavit of the City Finance Director that states as follows starting with paragraph nine:

“9. On March 1, 2016, $200,000 was paid by CCF to the City to begin the process of forming a new community wellness foundation. The Master Agreement requires an additional $32,200,000 be paid to the City by CCF for the community wellness foundation in various installments over 15 years commencing when the FHC opens.

11. The Master Agreement requires that CCF and/or LHA make additional payments to the City totaling $42,220,833.34.

12. The total cash payments that the City will receive from CCF and/or LHA as a result of the Master Agreement will total $51,889,314.89.”

I have underlined the key relevant text.

Clearly, each of these statements is false on its face given the actual terms of the Master Agreement.

The City of Lakewood is not receiving any of the total sums listed in these 3 quoted paragraphs of Exhibit A (Paragraphs 9, 11 and 12). (Obviously, it did get the $200,000 quoted in Paragraph 9)

Each paragraph in the city administration affidavit includes the value of future payments to a third-party (“New Foundation” in the Master Agreement) that obviously is not the City of Lakewood.

These three sworn paragraphs expressly over-value the actual future payments to be made to the City of Lakewood under the Master Agreement. If the total value of these payments were to be paid to the City of Lakewood, they would be reflected in the Master Agreement. They are not.

The sworn affidavit of the City Finance Director has major problems:

1. The city administration has propounded a false statement to an Ohio appellate court.

2. The city administration has made multiple material misrepresentations in that affidavit with respect to the financial condition of the City entirely inconsistent with the securities laws and the City’s own public documents.

The falsity of the sworn affidavit is not only verified by the text of the Master Agreement, but is confirmed by a second official City of Lakewood public record, the 2017 City Budget.

See, if you can find the missing $32 Million in the 2017 City Budget. We will take a look at that in the next post. Folks, it just ain't there. (Clue: start at page 2 in the Budget.)

What the hell is going on in our city administration?
Attachments
Exhibit A -- City Official Affidavit -- 10-13-2016.pdf
(62.58 KiB) Downloaded 25 times
Last edited by Mark Kindt on Mon Sep 25, 2017 3:11 pm, edited 1 time in total.


"The citizens of Lakewood rightfully expect their government of elected and appointed officials, and their employees to behave legally and ethically following principles of open government." Third Amended Charter, Article 8.1(a).
Mark Kindt
Posts: 1005
Joined: Sat Dec 03, 2016 11:06 am

Re: Civic Accountability -- Honesty in Local Government III

Postby Mark Kindt » Mon Sep 25, 2017 3:34 pm

Mr. Austin. I have not made any formal written complaints to the City of Lakewood other than my February 2016 letter to city council on other topics. I began exploring other issues beginning in December 2016.

Based on the record of the past three years, I have very low expectations for our city government.

I write on the Deck to vent my own frustration to the modest group of interested citizens that regularly post here, such as yourself.

Local lawyers, doctors, accountants, citizens, voters, taxpayers have been jumping up and down for the past several years to slight effect. (I am the least of them.)

I believe that the Exhibit A affidavit has tainted other City of Lakewood reporting to the obvious detriment of the integrity of the City's financial reporting with respect to the municipal bond market.

Finally, I believe that the court record in Skindell v. Madigan was tainted by the solicitation at the trial level of spurious testimony and that that testimony was compounded by the false affidavit filed on appeal where the false statements were integrated into the City's legal brief. My concern in that these problems now have migrated to other governmental venues.

You know, I could go on and on and I have (in this venue.) Thank you for both your interest and your patience.


"The citizens of Lakewood rightfully expect their government of elected and appointed officials, and their employees to behave legally and ethically following principles of open government." Third Amended Charter, Article 8.1(a).
Mark Kindt
Posts: 1005
Joined: Sat Dec 03, 2016 11:06 am

Re: Civic Accountability -- Honesty in Local Government III

Postby Mark Kindt » Mon Sep 25, 2017 4:44 pm

This is a little easier. Here are two relevant pages for the City's 2017 Budget that tells an entirely different financial presentation than that presented to the Ohio Court of Appeals. Clearly, there is not $32,200,000 coming to the City as future revenue. Please read both of these documents for yourself. See what I mean?
Attachments
Excerpt of 2017 Lakewood Budget.pdf
(120.01 KiB) Downloaded 32 times


"The citizens of Lakewood rightfully expect their government of elected and appointed officials, and their employees to behave legally and ethically following principles of open government." Third Amended Charter, Article 8.1(a).
Mark Kindt
Posts: 1005
Joined: Sat Dec 03, 2016 11:06 am

Re: Civic Accountability -- Honesty in Local Government III

Postby Mark Kindt » Mon Sep 25, 2017 5:00 pm

Any sign of the missing $32,200,000 in the City's most recent annual report? Nope. Here are some relevant pages.
Attachments
Excerpt from 2016 CAFR.pdf
(338.04 KiB) Downloaded 21 times


"The citizens of Lakewood rightfully expect their government of elected and appointed officials, and their employees to behave legally and ethically following principles of open government." Third Amended Charter, Article 8.1(a).
Mark Kindt
Posts: 1005
Joined: Sat Dec 03, 2016 11:06 am

Re: Civic Accountability -- Honesty in Local Government III

Postby Mark Kindt » Mon Sep 25, 2017 5:03 pm

But someone in the city administration made the decision to "push-the-envelope" with a questionable affidavit that over-valued the transaction. Why take the risk?


"The citizens of Lakewood rightfully expect their government of elected and appointed officials, and their employees to behave legally and ethically following principles of open government." Third Amended Charter, Article 8.1(a).
Mark Kindt
Posts: 1005
Joined: Sat Dec 03, 2016 11:06 am

Re: Civic Accountability -- Honesty in Local Government III

Postby Mark Kindt » Tue Sep 26, 2017 10:03 am

After reviewing the public documents posted above, does anyone believe that the City of Lakewood is going to be paid $51M under the Master Agreement? No, of course not. More than half of that money ($32M) will not be paid to the City, but will instead be paid to the future non-profit in the works.

The Exhibit A sworn affidavit is materially false and misleading and, unbelievably, filed in the appellate court!

Speculation: Thinking about the timing, my speculation is that the city administration feared negative effects at the ballot box on November 8th (2016) should they publicly disclose accurate figures on just how little the City was being paid in the hospital liquidation plan.

Finally, to protect its "Aa2" Moody's Investor Services bond rating, the City Finance Department had to report, not the sworn-to $51M pay-out, but the actual amounts due under the Master Agreement.

All very risky business, to my mind.


"The citizens of Lakewood rightfully expect their government of elected and appointed officials, and their employees to behave legally and ethically following principles of open government." Third Amended Charter, Article 8.1(a).
Brian Essi
Posts: 2243
Joined: Thu May 07, 2015 11:46 am

Re: Civic Accountability -- Honesty in Local Government III

Postby Brian Essi » Tue Sep 26, 2017 11:31 am

Mark Kindt wrote:Any sign of the missing $32,200,000 in the City's most recent annual report? Nope. Here are some relevant pages.



The City's claim in footnote 22 (that the "Clinic will demolish those buildings") is both false and misleading.

In fact, $3.1 million of money that the City should have received at the end of the 1996 Lease was used to demolish those buildings.

We have a city administration and finance director that continue to lie to the public and to and through the State Auditor.


“Success is not final. Failure is not fatal. It is the courage to continue that counts." Winston Churchill
Mark Kindt
Posts: 1005
Joined: Sat Dec 03, 2016 11:06 am

Re: Civic Accountability -- Honesty in Local Government III

Postby Mark Kindt » Wed Sep 27, 2017 8:17 am

The affidavit made under oath by the City Finance Director reminds us of a couple of other major taxpayer issues:

1. Knowing that the value of Lakewood Hospital was not publicly appraised and knowing that no public bidding was conducted, we can readily see that $32,200,000 of proceeds never hit (and will not hit) the books of the City. This is a naked $32M giveaway of what should have been public funds in the public treasury.

2. The next time reductions of City services or increases in taxes are proposed, ask your elected representatives why this $32+M was given to a non-existent private foundation, when it could have been used to off-set the decades long (future) shortfalls in lost lease revenues and hospital employee income tax revenues from the shuttered hospital.

3. This is a failure of basic stewardship that is a disservice to all Lakewood taxpayers. Many Lakewood taxpayers reside outside of Lakewood and, therefore, could not vote for candidates or referendums that would have protected the stewardship of tax receipts or other revenue streams.

4. Finally, we should also recognize that a similar failure of stewardship is being demonstrated by the local school district, in its no-bid contract and direct financial subsidies to a major private party (discussed elsewhere on the Deck by others.)

Hence, my previous statements that our local governments are ripe for reform.


"The citizens of Lakewood rightfully expect their government of elected and appointed officials, and their employees to behave legally and ethically following principles of open government." Third Amended Charter, Article 8.1(a).
Mark Kindt
Posts: 1005
Joined: Sat Dec 03, 2016 11:06 am

Re: Civic Accountability -- Honesty in Local Government III

Postby Mark Kindt » Wed Sep 27, 2017 9:51 am

In this Part III of "Civic Accountability -- Honesty in Local Government", I intent to continue my "Show me, I'm from Missouri" style of presentation with my usual caveat that I make these postings under the protection of the 1st Amendment to the United States Constitution to criticize our public officials and their public policies.

I will review public documents and make observations upon them. I will post the documents so that you can read them yourself and make your own judgments. I'm going to propose a very simple standard for this review.

To slightly paraphrase a quote from John Hay, a noted Clevelander and former U. S. Secretary of State, “No circumstances can ever justify a government in doing wrong; whether the government has acted rightly or wrongly can never be justly judged without the circumstances being considered.

How do we justly judge the circumstances of whether government conduct is right or wrong? Fortunately, for us, this will be easy. We can judge such conduct by the written standard set by the government entity (Lakewood) that is the focus of our review:

"Human Resources Policy 1.03 Ethics of Public Employment states:

All employees shall maintain the highest ethical and moral standards and perform their duties within the parameters of the laws of the State of Ohio and other ordinances rules and regulations that may, be set forth by the City. Employees should remember that their compensation is paid through taxes and user fees. Therefore; each employee assumes the responsibility to serve the public in an honest, effective and professional manner. Discourtesy or rudeness to the public will not be tolerated:''

This is the basic standard that I propose for our Part III review. The City of Lakewood itself tells us that we should look for the highest ethical and moral standards, compliance with law, and the values of honesty, effectiveness and professionalism.
Attachments
City of Lakewood -- Human Resources Policy Excerpt.pdf
(71.56 KiB) Downloaded 19 times


"The citizens of Lakewood rightfully expect their government of elected and appointed officials, and their employees to behave legally and ethically following principles of open government." Third Amended Charter, Article 8.1(a).
Mark Kindt
Posts: 1005
Joined: Sat Dec 03, 2016 11:06 am

Re: Civic Accountability -- Honesty in Local Government III

Postby Mark Kindt » Wed Sep 27, 2017 1:29 pm

Please review the attached page from the Master Agreement that shows the $32+M payment obligation to the "New Foundation". You will see that this is obviously not a payment obligation to the City of Lakewood.

Clearly, this public document (signed by the City) tells us that the relevant city officials (or outside lawyers) involved in the creation of the sworn affidavit of the Finance Director knew (or had a duty to know) that the statements sworn-to under oath were false.

To my knowledge, no steps were taken by the City to correct the false affidavit or file a replacement affidavit that would be consistent with the relevant public documents (Master Agreement and 2017 City Budget).

If there is an alternative explanation that demonstrates why no falsification occurred with this sworn affidavit, I have been waiting for 10 months to hear of it. Without a meaningful and convincing explanation, I view this as a serious (and reckless) breach of ethical, professional, and fiduciary duties for any City employee or legal counsel that participated in its promulgation to the court of appeals.
Attachments
15-Master-Agreement-City-of-LaClinic-fully-executed-12212015 11.pdf
(62.59 KiB) Downloaded 20 times


"The citizens of Lakewood rightfully expect their government of elected and appointed officials, and their employees to behave legally and ethically following principles of open government." Third Amended Charter, Article 8.1(a).
Mark Kindt
Posts: 1005
Joined: Sat Dec 03, 2016 11:06 am

Re: Civic Accountability -- Honesty in Local Government III

Postby Mark Kindt » Wed Sep 27, 2017 4:12 pm

Council Member Proposes The Falsification of LHA Documents

The City of Lakewood itself tells us that citizens should expect the highest ethical and moral standards, compliance with law, and values of honesty, effectiveness and professionalism in those in its employ.

Have the needs of a reckless political expediency designed to serve and benefit private parties overwhelmed these noble standards with a culture of dishonesty and falsification?

Here is an epic example of this problem from the publicly appointed members of LHA; one of whom is proposing the falsification of the LHA minutes. There are strong legal arguments that these are public documents. Many of you have already reviewed this document.

The highlighted text in the email speaks for itself. It speaks volumes about honesty, ethics, integrity and professionalism or, rather, the loss thereof.
Attachments
LKWD - MDGN & SMMRS000095.pdf
(1.06 MiB) Downloaded 50 times


"The citizens of Lakewood rightfully expect their government of elected and appointed officials, and their employees to behave legally and ethically following principles of open government." Third Amended Charter, Article 8.1(a).
T Peppard
Posts: 119
Joined: Tue Dec 15, 2015 12:49 am

Re: Civic Accountability -- Honesty in Local Government III

Postby T Peppard » Wed Sep 27, 2017 9:24 pm

Mark Kindt wrote:Council Member Proposes The Falsification of LHA Documents

The City of Lakewood itself tells us that citizens should expect the highest ethical and moral standards, compliance with law, and values of honesty, effectiveness and professionalism in those in its employ.

Have the needs of a reckless political expediency designed to serve and benefit private parties overwhelmed these noble standards with a culture of dishonesty and falsification?

Here is an epic example of this problem from the publicly appointed members of LHA; one of whom is proposing the falsification of the LHA minutes. There are strong legal arguments that these are public documents. Many of you have already reviewed this document.

The highlighted text in the email speaks for itself. It speaks volumes about honesty, ethics, integrity and professionalism or, rather, the loss thereof.
It absolutely speaks volumes, Mark. Yes, indeed an EPIC example. Thank you for the eye-opening link. Who could argue with that? Gilman, Marx, O'Malley, Anderson? Any counter-arguments? Is this honorable behavior by your city hall colleagues?

Reckless, unethical behavior by LHA member & Councilman Bullock, by LHA member & former Council President Madigan, by Law Director Butler & Mayor Summers.

It's truly disgraceful and very upsetting to know these civil servants could behave in such a manner and cause so much harm. Those council members silently accepting this are no better. $33million was stolen from our poor and our needy with the loss of the hospital & LHF. Our schools and are city services are going to suffer. I wish to be supportive of my leaders, but this behavior is so fundamentally wrong.


Mark Kindt
Posts: 1005
Joined: Sat Dec 03, 2016 11:06 am

Re: Civic Accountability -- Honesty in Local Government III

Postby Mark Kindt » Thu Sep 28, 2017 2:20 pm

So far in this series we have reviewed documents that confirm that:

1. The City of Lakewood propounded and filed a sworn-under-oath, but false, affidavit by a City employee in the Ohio Court of Appeals for the Eighth Circuit; and,

2. That a council-member for the City of Lakewood, serving as a public board member of LHA, proposed to falsify official minutes recording the votes of that body to adopt the plan that would close Lakewood Hospital.

Are there further documents that can be reviewed that illustrate a culture of dishonesty and falsification by other elected or appointed City officials? There are. I intend to review these documents and discuss them in my next series of posts.


"The citizens of Lakewood rightfully expect their government of elected and appointed officials, and their employees to behave legally and ethically following principles of open government." Third Amended Charter, Article 8.1(a).
Mark Kindt
Posts: 1005
Joined: Sat Dec 03, 2016 11:06 am

Re: Civic Accountability -- Honesty in Local Government III

Postby Mark Kindt » Thu Sep 28, 2017 4:41 pm

The City of Lakewood Has Propounded False and/or Misleading Testimony in the Ohio Courts.

The City of Lakewood has taken actions before the Ohio courts, both common pleas and appellate, that are prejudicial to the administration of justice and are sanctionable by those courts.

On December 21, 2015, its city council president testified as follows: “The agreement that was announced on December 7th did not exist when it was announced and, therefore, it is correct to say the council had not deliberated on the definitive agreement that wasn’t in existence yet, absolutely.”

Please follow me as I review public documents that establish that this testimony propounded to the court by the city’s president of counsel was false and/or misleading.

The city’s own documents establish that the Master Agreement existed on December 7th (2015) and had existed for months.

The city’s lawyers and the witness are misleading the court about the existence of the agreement with a legalistic "quibble."

The president of council is “splitting hairs” with this testimony that, as we will see, makes it materially misleading and, therefore, false.

Each lawyer should know better than to take these risks before the judiciary.

I have attached the relevant page of testimony with the transcript cover sheet. The quote above is highlighted on the attachment.

Once you review the documents I will post, you decide whether or not the agreement existed on December 7, 2015. We are experienced readers and experienced users of email. We have the competence to figure this out.
Attachments
City of Lakewood Testimony Excerpt page 63.pdf
(13.99 KiB) Downloaded 30 times


"The citizens of Lakewood rightfully expect their government of elected and appointed officials, and their employees to behave legally and ethically following principles of open government." Third Amended Charter, Article 8.1(a).

Return to “Lakewood General Discussions”

Who is online

Users browsing this forum: Google [Bot] and 9 guests