EDITORIAL: Ann Arbor SPARK—More Money Despite Missing Audit
AT ITS MOST recent meeting, the Ann Arbor City Council once again showed a deplorable lack of respect for transparency, process and the public, as did City Administrator Steve Powers. At the September 2 meeting, an item to approve $75,000 in general fund money for Ann Arbor SPARK was added to the agenda at the last moment. Council rules state clearly: “The City Administrator shall submit the draft agenda and supporting materials to the members of the Council Administration Committee for review and comment 10 days prior to the next Council meeting. Such review and comment shall be made no later than 7 days prior to the next Council meeting. Once reviewed by the Council Administration Committee, no matter from staff shall be placed on the agenda.”
Placing the item on the agenda at the last moment meant that the public had no advance notice that the SPARK funding was being discussed and voted on.
Furthermore, the request for $75,000 was placed on the agenda by a member of SPARK’s Board of Directors, once again bringing front and center the serious conflict of interest that exists in permitting the City Administrator to sit on SPARK’s Board and allowing him to allocate funding to SPARK under the auspices of his job as City Administrator.
Paul Krutko, CEO of SPARK, recently claimed that the entity has created slightly more than 700 jobs in Ann Arbor. This number is both horrifying—given the millions of dollars which have been diverted from the school aid fund—and suspect. SPARK’s job creation numbers come from estimates made by those accepting financial assistance from SPARK. In a decade, SPARK officials have not audited claims to determine exactly how many projected jobs were actually created.
A recent report delivered from the MEDC to Gov. Snyder revealed that the default rate on loans made by SPARK to start-ups has been 30 percent. That default rate suggests 30 percent of jobs promised by enthusiastic entrepreneurs in exchange for SPARK loans ultimately never materialized.
Council members who voted to give yet more money to Ann Arbor SPARK are irresponsibly refusing to hold a contractor accountable. We commend Council members Kailasapathy, Kunselman, Eaton and Anglin who each voted against the expenditure.
Adding agenda items at the last minute is unacceptable. Whether the item is postponed or tabled, it should be put on the agenda so the public understands what is going to be discussed. It appears to me that the city administrator violated not only council rules but the spirit of the rules that are set up so that the public knows what the heck is going on at the meetings.
CM Warpehoski explained it to me like this..
“Part of the problem w/ tabling rather than postpone, can only be taken off table at meeting. Added to agenda @ start of meeting”