MUNICIPAL Downtown granted document on appeal By Lisa Brody
An appeal by Downtown Publications of a denial of a Freedom of Information Act (FOIA) request made to Bloomfield Township on September 14, 2014, seeking a copy of a Miller Canfield review of the pension obligation bond issue investments and accompanying fees, was unanimously approved by Bloomfield Township trustees on Monday, January 12, but the publication could not pick up the document until Monday, January 19. The township’s legal counsel in October denied the publishing group’s original request, saying it was exempt under “attorney client privilege.” Township attorney Bill Hampton said, “I think the decision to deny it based on attorney client privilege is correct. In his two-and-a-half page letter from the (Downtown Publications) publisher, he makes his case that the public has a right to know. If it is denied, the next step is to take it to circuit court.” Treasurer Dan Devine, in a rambling and at times disjointed rebuttal, said the document had “been prepared in light of keeping the document private. Several of the questions have been raised in study sessions in January and August 2014, so it seems to me the purpose it engendered was satisfied by the study sessions. If it was a document to be released, if the vendor has not been able to look at it, it would seem to me in fairness they would be able to respond to it, then it would be fair. If the document was just released, there would be questions that would be false. It seems to me the vendor should be able to see it first. I’m not comfortable with the precedence.” Devine continued, “In a confidential setting, you can take certain liberties rather than a document that the vendor could interact with. The vendor is not even aware of it. They should be able to read and respond to it. There is a merit in keeping things confidential, things that are advisory in nature for a policy making board.” It became clear through conversation that the vendor was investment company Gregory J. Schwartz & Co., the investment advisor the township used on the $80million bond issue in 2013. “You received that package fairly soon after I did, and my downtownpublications.com
Financial review committee created By Lisa Brody
he formation of a Bloomfield Township financial sustainability committee comprised of the township supervisor, treasurer, finance director, a trustee and three members of the community with financial knowledge in order to advise the board of trustees on the township’s defined benefit pension plan as well as other financial issues was approved by trustees on Monday, January 12. Supervisor Leo Savoie first broached the topic of an advisory board at a September 2014 study session, after concerns arose among trustees over fees paid to Gregory J. Schwartz & Company, the investment advisor the township used on an $80-million bond issue in 2013. The issue of the fees, and whether township treasurer Dan Devine and the investment advisory firm took the time to make sure township board members understood the nuances of the fees for the recommended investments, was then followed up in December 2014 with information that the township’s defined benefit pension plan, held and monitored by Prudential Retirement, had not only been underperforming and consistently not meeting its benchmarks, but was in fact forcing the township to raid the equity account held by Schwartz to fund its benefits. From that study session, information provided by Devine to the trustees revealed that Prudential needed an extra $22 million, over its projections, in 2014 to fund the township’s account. The creation of the financial sustainability committee is designed to assist the treasurer and trustees in making better informed financial decisions, but it will only be an advisory committee, township officials said. “I like that you acknowledged they have no decision-making abilities, that the decisions reside with us, but that they will advise this board,” said Savoie at the January 12 meeting. “We have a problem with Prudential. I think the problem could have been averted the last time the contract was negotiated in 2005 or 2006. It’s handcuffing Bloomfield Township to an archaic system from the 1960s.” “I agree it shouldn’t be a fiduciary committee, just an advisory committee, and it should look at everything financial – including Schwartz – that we’re doing,” said trustee Neal Barnett. Qualified candidates can include investment advisement advisors, pension attorneys and actuaries with specific experience in public sector finances. To be considered, candidates must live in the township and be a registered voter, 18 or older, a U.S. citizen, and have lived in the township at least 30 days. Applicants must write a letter of interest and submit a current resume. The board of trustees will review and consider information from all applicants and make the selection for appointments. The committee will meet at a minimum on a quarterly basis to review investment returns and as needed for future agenda items. Compensation for the appointed members will be $150 per meeting. Term of the appointment is three years. The letter of interest and resume must be submitted to the township clerk’s office by 5:30 p.m., Monday, February 2. The office is located at 4200 Telegraph Road, is open 7 a.m. to 5:30 p.m., Monday through Thursday. The documents may be emailed to clerk@bloomfieldtwp.org.
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recommendation was that you give it to the vendor. By giving it to you and giving it to them, it waived the attorney client privilege,” said supervisor Leo Savoie. “It’s been almost nine to 12 months. It was given to you a good two months before the entire board. They should have had the document. But, at the end of the day, I’m not looking for their response. Shepherd Kaplan (a registered investment advisory company hired by Miller Canfield) did not do it for them, but for us. I have no issue with it being released. If they
(Downtown Publications) feel there is anything newsworthy, they will seek them out for comment.” Devine continued to fight against the release of the document to satisfy the FOIA appeal, stating at one point, “Why would you want to release it? Why do they serve a public purpose? If the purpose is to embarrass someone, then I see it.” Trustee Neal Barnett responded, “By holding back, it looks like we have something to hide. It’s about how someone does business.” Trustee Corinne Khederian
DOWNTOWN
concurred. “We are the trustees of the public’s funds. We have a responsibility to let the public know what is going on with their money. I think the public has a right to know. There’s been a lot of innuendo.” “I’m for full transparency. If this allows the publication to get a handle on everything, I’m for it,” said trustee Dave Buckley. “Could we say the document is an incomplete work product without all the questions answered?” Devine asked. “I don’t see how the board can say how a series of questions serves the public purpose.” Hampton cautioned the board, “There’s a fairness question, but that’s not the issue. If we get into circuit court, they’re entitled to attorney’s fees if we’re wrong.” Devine said, “But we have a vendor we do not want to wrong.” “As a matter of terms, the vendor has answered all of the questions in the study sessions, and we did discuss the report,” countered clerk Jan Roncelli. “There are no allegations of wrongdoing, just questions. I do know in FOIA, you don’t create another document, you deliver the document. While (Schwartz) hasn’t seen it, they answered the questions in the study sessions.” Trustees eventually agreed to provide the document first to Schwartz & Co., and then to grant the appeal to Downtown Publications, permitting the publication to pick up the document on Monday, January 19, at the township clerk’s office, by a vote of 6-0, with trustee Brian Kepes not in attendance. The document, produced by Shepherd Kaplan at the request of Miller Canfield, examined the work of Schwartz & Co. in choosing vehicles to invest for the township’s equity fund, the compensation received by Schwartz and what it continues to receive. The question about fees paid to Schwartz was first brought to the attention of some township officials several months ago by at least one local resident with investment knowledge. While original estimates of fees to be paid on the pension obligation bond issue were suggested to be about $160,000, or 20 basis points in investment industry jargon, the actual fees were over $490,000 based on the nature of investments that were recommended to the board by the township treasurer and the investment advisory firm, in large part due to a clause in the contract with the investment advisory firm that allowed commissions, or concessions, 73