Heights council asks for answers on missing $1.4 million

By ZEINAB NAJM
Times-Herald Newspapers

HEIGHTS — An hour-long City Council study session Feb. 19 left many unanswered questions on where almost $1.4 million for city’s Public, Educational and Governmental fund ended up.

Councilman Ray Muscat said he spent time digging up past budgets and looking at outlines from Plante Moran’s audits to compare the two. He added that the numbers matched, but that there were no invoices or purchase orders to justify the missing money.

“Last April, all of us were sitting here when former Emergency Manger Bob Ankrapp said they need about $800,000 for a new studio and it said we don’t have the money, and here in just the last couple months we’re notified we have $890,000,” he said. “And it’s the first time I had ever heard of PEG funds being restricted.”

Muscat said his research into Plante Moran audits and budgets from 2003-04 led him to see that was the time when PEG funds were shown as restricted, then there was a seven-year period where they were intermingled with transportation and again the funds showed up in the Plante Moran audits for PEG fees.

He also said PEG funds were set aside for public, educational and governmental access channels including the equipment or facility upgrade purchases needed for filming videos broadcasted on the PEG channels and that those fees show up on residents’ cable bills.

Dearborn Heights resident Zouher Abdel-hak spent a couple months researching and looking at the numbers with Muscat, and both agreed the numbers were correct from year to year.

“The question is, ‘What did you do with the money?’” Abdel-hak said. “Show invoices and purchase orders. I did a Freedom of Information Act on resolutions passed by council on PEG and there isn’t anything to show that we spent the money.”

Mayor Daniel Paletko said there was a lot of time spent looking at the money and audits going back to 2003 and that he knows why questions are being asked by the city council so acting quickly on upgrading the equipment is important.

“It’s all accounted for and it’s all been audited by Plante Moran every year and we’re all on the same page in regards to what (Assistant Corporation Counsel) Mr. Neil Lehto’s opinion is what we’ve been following,” Paletko said. “I think we did the right thing and we are doing the right thing. The equipment we are using is so outdated and is on its last life. In fact, a couple times to find replacement parts, we had to go on eBay. We are running the risk of having no public access channel for residents at all.”

He added that PEG fees can be used toward salaries and fringe benefits for employees working on the city’s cable programs, which Muscat had questioned. Paletko said the city is doing everything right and if not they will correct it.

“I was given less than 24 hours to do my research,” he said. “Neil had refreshed my memory on how we developed this. It was studied and recommended that the PEG fund can be used for equipment and operation but not for anything else. The salaries of the three part-time employees are the only salaries being allocated out of the PEG fund which is considered operations.”

Councilwoman Denise Maxwell said if that amount of missing money was spent then why is the city buying cameras off of eBay that need to have bandaids put on them.

During the meeting, Councilwoman Lisa Hicks-Clayton said the council should look into an external auditor being hired, but Councilman Dave Abdallah said that because a fee was already paid to Plante Moran for an audit, they should present to the city council before another auditor is hired.

Councilman Bill Bazzi said the council suggested the study session be rescheduled because council members were not able to look through a packet of information they had just received. Muscat said he wanted to get a third party legal opinion, which could be discussed at the Feb. 26 city council meeting.

As for the cable studio upgrades, Hicks-Clayton said the presentation provided by the cable studio employees was “great” but that answering questions left on the table could lead to more money and better upgrades for the studio.

“If we can take a look and get those questions answered, you can get a state-of-the-art studio which would be a way better option for you and our community which certainly deserves it,” Hicks-Clayton said. “I think it’s really important we do that. We need to restore public trust.”

(Zeinab Najm can be reached at zeinabnajm92@gmail.com.)