ADRIAN — Lenawee County has yet to receive the results of a forensic audit of Lenawee Now’s financials, but that hasn’t stopped some on the county commission in trying to get its funding approved.
In a special night meeting Thursday, commissioner Dustin Krasny, R-Cambridge Township, made a motion to approve a $150,000 yearly allocation to the economic development corporation.
The commission had just unanimously approved paying for an audit at an amount not to exceed $20,000 at its personnel ways and means committee meeting last month, but not without heated debate.
At Thursday’s meeting, commissioner Dawn Bales, R-Madison Township, took issue with Krasny calling her on the phone the previous morning and pushing her to vote in favor of providing the funding to Lenawee Now prior to the audit.
Bales said that Krasny several times during the conversation brought up her relationship with Premier Bank, which is a Lenawee Now investor. The bank’s CEO also sits on the Lenawee Now Board of Directors. Bales is a vice president and community banking center manager for Premier Bank, which has offices in Adrian and Tecumseh.
Bales said that when she votes as a commissioner her vote is on behalf of her District 4 constituents in Dover, Madison, Seneca (excluding Morenci) and Fairfield townships, not on behalf of Premier Bank.
She pointed out that many on the county commission ran in last year’s election on campaigns of transparency and questioned whether Krasny was acting on behalf of the county commission or on behalf of Lenawee Now.
Krasny brought up the commission’s vote in February to cover an amount not to exceed $520,000 toward paying the bills on a shortfall for the Kiwanis Trail Tecumseh Connection without a forensic audit.
That amount allocated to the Kiwanis Regional Trail Authority is being paid for with a $300,000 grant from the Michigan Department of Natural Resources and a combination of community organization and private donations.
Krasny said that Lenawee Now was the only economic development entity that does work countywide and questioned other commissioners’ support of training workers and bringing jobs to Lenawee County and said that the audit seemed to be a punitive measure.
The commission had pulled Lenawee Now’s funding last year just after county administrator Kim Murphy announced that the proposed Tecumseh sports, business and community complex dubbed Phoenix Project was shelved. At that time, Lenawee Now had asked for an independent audit of the finances of the project.
Commissioner David Stimpson, R-Tecumseh, questioned the authenticity of Krasny’s motion, saying that he wondered how many of Lenawee Now’s investors had contributed to U.S. Rep. Tim Walberg’s campaign. Krasny is Walberg’s district director of operations.
Commissioner Terry Collins, R-Adrian, said that all the commissioners ran on a campaign of transparency, credibility and consistency in November and emphasized that the vote to fund the forensic audit of Lenawee Now’s financials last month was unanimous and even Lenawee Now’s new executive director Patrick Farver supported the audit while present at that meeting.
“To compare this to the Kiwanis Trail Authority is not apples to apple,” Collins said, noting that the KRTA’s funding was a “loan with a rebate,” and that he was not even made aware that the Lenawee Now funding issue was being brought forward until Memorial Day weekend. He took issue with Krasny’s comment that some commissioners do not support economic development.
“How dare you accuse me of that. I take that as an insult,” Collins said.
Commissioner Kevon Martis, R-Riga Township, pointed out that he met with officials and citizens from six of the nine municipalities he represents in District 7.
“They all support the county restoring funding immediately. None of them could understand the need for a forensic audit. Several talked about the value Lenawee Now has brought to them in the past,” Martis said. “I told them I only voted for the forensic audit because it was the only path forward which could restore the relationship with Lenawee Now.”
He said he also told his constituents that he was disappointed when he found out that Murphy had audit data and tax returns from Lenawee Now and he was not given copies of the documents until after Farver brought them up at the May personnel ways and means committee meeting.
Murphy turned those statements over to the county’s corporate counsel for review and the firm found the statements incomplete.
Ebony Duff, representing the firm Garan, Lucow, Miller, P.C. of Detroit, Lenawee County’s corporate counsel, indicated at the committee meeting that a very limited amount of information was provided by Lenawee Now. She said there was not enough information to ensure that the nonprofit’s funds are being used in the best interest of the county, however, there was nothing to indicate in what was provided that there were any improprieties or misuse of funds. For that, she said, the firm needs a full forensic review.
Representing Garan, Lucow, Miller, P.C. via video conference during the May committee meeting, attorney Peter Wordon indicated that the cost of the audit would range from $5,000 at the low end up to $20,000 at the high end. He said there were questions surrounding a $240,000 donation made by an organization, which his firm had requested information on to verify whether the donation was actually a loan, but Lenawee Now declined to provide the information.
There were also questions surrounding the validity of Lenawee Now’s audit because its auditor was named on the organization’s website as an investor.
Farver said the $240,000 investment Wordon was referring to came from the LION fund. On Lenawee Now’s website it mentions that the fund was created by a group of investors and its name is the Lenawee Investment Opportunity Network Fund. The website says the fund is designed to provide entrepreneurs and startups access to funding to start or expand a small business.
“My opposition to the forensic audit has another root as well. How did a simple contract negotiation morph into an investigation of Lenawee Now? There has never been any claim of impropriety brought to my attention. And as I stated in the past, the timing and sudden nature of the motion and vote to repeal funding of Lenawee Now in relation to Project Phoenix cannot be disguised,” Martis said. “But far worse, by continuing to demand a forensic audit of Lenawee Now, aren’t we really saying that the leadership of Lenawee Now cannot be trusted to be honest stewards of our taxpayers’ money? … I am not willing to say that.”
Commission Chair Jim Van Doren, R-Tipton, once again chided some on the commission for bringing up his past relationship with Lenawee Now as its previous executive director. There had been questions surrounding Van Doren’s consulting relationship with Lenawee Now after he resigned. Van Doren again said that he no longer holds that position.
Van Doren said that Lenawee Now, which was founded in 1916 was the only economic development entity for the county and that it has relationships with the Michigan Economic Development Corporation, the Detroit Regional Partnership and the county’s school districts.
He noted that its board of directors is made up of educators, attorneys, certified public accountants, philanthropists and CEOs from around the county and said that it had positive audits for each year.
The commission ultimately voted 4-3 against restoring Lenawee Now’s funding prior to the audit. Krasny, Martis and Nancy Jenkins-Arno, R-Clayton, voted in favor of restoring funding and Bales, Stimpson, Collins and commissioner Ralph Tillotson, R-Adrian Township, voted against the restoration of funding. Commissioner KZ Bolton, D-Adrian, was absent.
In public comments following the vote, Adrian resident, Victoria Powell took issue with Krasny and Martis saying that the two commissioners were new to the commission and had little knowledge about the county’s funding for Lenawee Now. Krasny was appointed in January 2022 to his District 2 seat covering Cambridge, Rome and Woodstock townships to fill the vacancy left by the September 2021 resignation of John Lapham, R-Cambridge Twp. Martis was elected to the commission in November of last year.
She also said that it was not Van Doren’s place to give a resume for Lenawee Now or to sell it and that Farver’s absence from the sparsely attended meeting “gives a loud and clear message to the people. It certainly does for me.”
Scott Peters, a resident in Krasny’s district, brought up Project Phoenix and said that Jenkins-Arno was mistreated when she called for more time to study the issue prior to moving forward with the project. He said that he appreciated how Krasny has represented his district and the votes to restore Lenawee Now’s funding from Jenkins-Arno and Martis.
