Police, Fire, Parks, Millage Funds & Pools Soaked By City’s IT Fund For Millions of Dollars In Assessments
Dan Rainey, the City of Ann Arbor’s IT Director, raked in a six-figure salary as one of the highest paid employees in the city. Now, he’s off to work for former Ann Arbor Director of Public Services, Sue McCormick. Shortly after former City Administrator Roger Fraser took his pension and decamped for a six-figure job with the State of Michigan, McCormick decamped with her pension for a six-figure job with the City of Detroit. Former Ann Arbor Police Chief Barnett Jones “retired” with his pension to a six-figure job as the Police Chief of Flint and a six-figure job with Sue McCormick at the Detroit Water and Sewage Department leading the office of (seriously) Integrity and Security. That bit of double-dipping resulted in front page headlines in the Detroit newspapers. After the scandal broke, the Michigan Department of Treasury, where Roger Fraser works (Fraser recommended Jones for the Flint job to that city’s Emergency Financial Manager), inserted language in future EFM contracts that says “emergency financial manager appointees can not engage in other employment, unless approved by the EFM.”
As it turns out, Dan Rainey will fit right in with McCormick and Jones at the Detroit Water and Sewage Department. Ann Arbor’s most recent audit revealed that while Rainey’s Department had $150,000 dollars allocated to projects such creating and implementing a disaster recovery plan, in the event that the city’s computer data were lost, no such plan had ever been created or implemented. The IT Director sat on the allocated $150,000 for over two years, according to the city’s March 2013 Revenue Budget Performance report. In fact, a list of special projects were funded, including money for contracted services, but never completed under Rainey’s tenure:
Jury Management System ($5,000 allocated)
Disk Array/Disaster Recovery ($150,000 allocated)
Project Management Business Improvements ($17,000 allocated)
Barton Canoe Livery Asset Management System ($25,000 allocated)
Kiosks ($55,000 allocated)
Tax Assessing Software Upgrade ($20,000 allocated)
Then, there are the contingency funds. Under Rainey, the IT Department sat on hundreds of thousands of dollars in “just in case we want to spend it money.” This money includes a $65,000 contingency fund for software purchases, a $60,000 contingency fund for “business intelligence,” and a $50,000 contingency fund for “intrusion prevention.” This bit of mad money is particularly amusing given the fact that the 2012 audit dinged Rainey and his department for not requiring computer passwords to be changed regularly, and for neglecting to set up computers so that screens lock when employees leave their work stations. The IT Department’s budget includes $75,000 in contingency funds for a Water Data Mart project that wasn’t done.
In 2009, Rainey, ever the generous ITsar came to the attention of A2Politico when he “volunteered” taxpayer-funded IT services to his professional association which needed it website redesigned, a project that can cost a company anywhere from $20,000-$100,000. In 2009, A2Politico posted this piece:
Looking though the City’s web site where recruitment listings are posted, evidently, has the draw of a great garage sale to some people. You never know when you’re going to find something fascinating. According to someone who regularly enjoys a good rummage through the City’s online resources, on August 28th, the City of Ann Arbor posted a job for an unpaid intern to work on the redevelopment and launch of a new web site. The unpaid intern would report directly to the City of Ann Arbor’s Chief Information Officer and IT Director Dan Rainey.
No news scoop there. Unpaid internships are de riguer in this economic climate. Heck, AnnArbor.com relies on loads of unpaid “contributors” to produce their editorial content. Unpaid workers are in, Sweetie.
Back to the City’s unpaid internship. The job advertisement begins innocently enough:
“The City of Ann Arbor is committed to providing excellent municipal services that enhance the quality of life for all through the intelligent use of resources while valuing an open environment that fosters fair, sensitive, and respectful treatment of all employees and the community served.”
So far so good. Then the intelligent use of resources hits the fan, as it were.
The August 28th job description continues: ”We currently have a great opportunity for an Information Technology Intern for fall semester 2009. This is an unpaid internship.The primary project will involve redevelopment and launch of a new website for the Metropolitan Information Exchange (MIX) organization (www.mixnet.org), a national group of public sector Chief Information Officers. Reporting directly to the City of Ann Arbor’s CIO, You will be given lots of support and direction with this highly visible project. This is a great way for you to showcase your talents and get some great exposure to various public and private sector organizations.”
Ann Arbor’s CIO Dan Rainey, who oversees an IT department that is budgeted to cost taxpayers $7.4 million dollars in 2009, is seeking to hire an intern to redevelop a web site for the Metropolitan Information Exchange. There are several obvious problems with Rainey’s scheme, not the least among which is that employing an IT intern under the auspices of the City of Ann Arbor to do work wholly unrelated to the city’s IT needs amounts to cheating the taxpayers. The intern will use city resources (office, computer, software, phone, office supplies, etc….) to do the work and CIO Rainey, who earns $160,000 in salary and benefits, will supervise the intern’s work on behalf of MIX.
After A2Politico revealed the CIO’s scheme to “donate” IT services to MIX, the announcement for the internship was quietly removed from the city’s website.
Then, there’s the IT Fund. Certain city departments and even millage funds are being assessed proportionally higher IT Fund charges, specifically the city’s Park Maintenance & Capital Improvement Millage Fund, the Parks & Rec Department, the AAPD and the AAFD.
In 2012 Argo Canoe Livery paid $10,320 to temp. workers, employees who rent canoes, sell concessions, teach summer camp classes, and tend to the equipment. That same year, Argo livery was charged $12,041 by the IT Fund. Gallup Canoe Livery was charged the same amount by the IT Fund. The Ann Arbor Senior Center, threatened with closure for the want of operating funds, was assessed $18,825 for the IT Fund, or 10 percent of the Senior Center’s $188,000 annual expenses. The Field Operations Department oversees Parks Operations, which spent $180,360 in 2012. Of that amount, $57,713 was turned over to the IT Fund, 33 percent of the total. According to comprehensive budget documents posted to the city’s website, in 2012 taxpayers spent $12,129 for chemicals and $14,716 for water for Fuller Pool. Fuller Pool pool was also assessed $11,700 for Rainey’s IT Fund. Mack Pool paid $18,814 for electricity and was soaked $17,391 for the IT Fund. The Leslie Golf Course spent $12,639 on water, $26,502 on retiree medical insurance and was chipped for $36,824 for the IT Fund. Huron Hills Golf Course was assessed a whopping $60,000 for the IT Fund in 2012.
The Park Maintenance & Capital Improvement Millage Fund, which raises about $5 million dollars per year from taxpayers, is paying high IT Fund assessments, as well. In 2012, the Maintenance & Capital Improvement Millage Fund was assessed over $167,000 for the IT Fund. The Open Space & Parks Acquisition Millage was assessed $10,412 for the IT Fund, but the Natural Area Preservation program was charged $67,959 for the IT Fund, 25 percent of NAP’s $268,069 expenditures. Neither the Street Repair Millage Fund nor the Art in Public Places Millage Fund paid anything into the IT Fund in 2012.
Like the parks millage, the Parks Department is expected to pay a relatively high IT Fund assessment in 2013, $179,000. Conversely, the City Attorney’s Office is budgeted to pay $152,800 to the IT Fund and the Solid Waste Department is budgeted to pay $143,000 to the IT Fund, respectively, in 2013.
The Downtown Development Authority, on the other hand, is budgeted to pay no IT Fund assessment in 2013 and paid none in 2012.
Like the city’s parks, preservation and open space programs, safety services are assessed significantly higher IT Fund charges than other departments. Ann Arbor employs 124 police officers. The Police Department paid $1.32 million dollars to the IT Fund in 2012, $100,000 more than the AAPD is projected to pay to fund retiree medical insurance in 2013 and $300,000 more than the AAPD is projected to spend in 2013 on medical insurance for its active patrol officers. The Ann Arbor Fire Department, with 90 officers, was assessed $338,000 for the IT Fund, or triple what is budgeted for maintaining and repairing the city’s firetrucks in 2013.
What can be done? A Council member suggested that it’s time to “go after fund balances” such as the “contingent” money that sits in the IT Department’s budget and other city funds. Stephen Lange Ranzini is the president of a local bank and, for the past 12 months has been vocal in his support of emptying what he calls the city’s “buckets.” In December 2012 Ranzini wrote this in response to a piece about budgeting by city officials: “Some (city) funds are overstuffed with cash (for example the 1% for art fund), overall the city has over $100 million of cash trapped in various buckets not restricted by millage or the source of the funds but “restricted” *only* by vote of city council, while the mayor and city manager assert that the general fund *only* has $15 million in cash and therefore doesn’t have enough funds to properly staff the fire fighters and to keep all five fire stations open. Overall the city’s many funding buckets earned over $30 million last year, but we have “no money” to find basic priorities like fire, police and roads! Drain the buckets!”
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