At a recent court hearing in the case of Warren City Council v James R. Fouts (Macomb County Circuit Court Case No. 2022-003334-AW), the judge and lawyers agreed on all aspects of the case except one – whether the Warren Downtown Development Authority is an account of the City of Warren.
Citing Michigan Compiled Law §125.4202(2), the attorney representing the DDA, Lawrence García, says the DDA is a separate unit of local government. However, the Council points to Section 8.13 of the Warren Charter which provides, “Special independent audits may be made at any time that the council may designate.” According to García, the Charter allows audits of “all accounts of city government” but does not apply to a separate unit of local government, like the DDA. “The statute provides, ‘An authority [like the DDA] shall be a public body corporate which may sue and be sued in any court of this state,’ and that’s as clear as it gets.” says García.
There is no argument about the fact that the accounting firm Plante Moran presented its audit of the City of Warren and the Warren DDA’s fiscal year ending June 30, 2021 to the Warren City Council at a December 21, 2021 council meeting. There was no question or controversy with Plante Moran’s audit at that time. Nevertheless, the pending lawsuit over Council’s ability to conduct a “special audit” of the DDA persists, and the judge is considering a motion which could compel the production of DDA accounting records for FY21.
On March 16, 2023, Rick Fox, Controller for the City of Warren and CFO for the Warren DDA, sent a letter to City Council which enclosed records requested by Council’s special auditor, the Rehman firm of Troy. Fox’s letter explained that since 2017, Warren has used computer software that allows City Council access to all of the requested records. He wrote, “To the extent Council needs further, ‘electronic access to or copies of accounting records of DDA,’ my office will assist Council or staff in using the BS&A computer software.”
I was pleased by the letter, Neither the City of Warren nor the Warren DDA has anything to hide, and I applaud the City Controller for offering Council all the records and access they want. The City has paid too much money for Plunkett Cooney fighting over nothing. I really hope this ends the matter in court.
Mayor Jim Fouts
City of Warren
One City Square- Suite 215
Warren, MI 48093-6726