The Beachwood compliance issue the Ohio Auditor's Office has not completed their review of yet.
On Thursday, October 19th, Beachwood Law Director Stewart Hastings allowed the City to publish this blog post on their website titled "City Receives Clean Audit - Separating Truth From Fiction Debunking False And Unsubstantiated Claims", despite the day before receiving the email below, from William Ward of the Ohio Auditor's office. As you can see, Mr. Ward's email informed all City of Beachwood officials, including Mr. Hastings, that the Ohio Auditor's office was releasing the annual audit for 2022 the next day to allow the City to provide it to the rating agencies, without including the Ohio Auditor's office's findings on certain compliance issues, as the review of those issues were NOT completed yet.
Here is the exact email from Mr. Ward and below it I will explain the compliance issue I am fairly certain the Ohio Auditor's office has not completed their review of yet.
The reason I am fairly certain I know the compliance issue the Ohio Auditor's office is looking into and have NOT concluded their review of yet, is because I provided this information to them, after providing it to Mayor Berns and Law Director Stewart Hastings, which they both ignored and dismissed. This compliance issue in question isn't complicated or hard to understand. Here is all you need to know…
The 2022 annual contract between the City of Beachwood and GPD requires that for all other engineering work not included in the work GPD must provide in return for the $1,850 monthly retainer ($22,200 for the 12 month term of the contract), the City has the discretion to 1) solicit bids for this work from other engineering firms or 2) choose to include/add it into the terms of the annual contract with GPD, if GPD submits a proposal for this work, which the city accepts.
However, Clause #16 of the contract requires that “ANY alteration to the contract” over $25k must be approved by Council.
In January of 2022, the Mayor accepted a $299,506 proposal submitted from GPD to provide engineering design work on a sewar infrastructure project, without Council's knowledge or approval, and approved a purchase order for this amount, which the annual contract for 2022 requires before GPD can begin this work.
Beachwood Law Director Stewart Hastings’ bizarre legal opinion/position is that the requirements of clause #16 (council approval for changes to contract over $25k) doesn't apply in this instance because when there is engineering work outside what GPD must provide in return for the $1,850 monthly retainer, and the City decides against soliciting bids for this work from other engineering firms, and instead accepts the proposal submitted by GPD to perform this work and issues a purchase order allowing it to be added onto the original terms of the annual contract, like this example from January of 2022, that adding $299,506 of compensation and engineering work to the original $22,200 terms of the annual 2022 contract with GPD, DOES NOT qualify as “ANY alteration to the contract” that clause #16 requires must receive Council approval, if the alteration is above $25k.
The fact that the annual contract between the City and GPD goes out of its way to make it clear that the City is allowed to award this engineering work to other engineering firms, and in order to award it to GPD, GPD must submit a proposal, which the City must accept and authorize a purchase order to be issued, kills any competent legal argument I think could exist that adding $299,506 of compensation and work onto the original $22,200 terms of the contract, does not qualify as “ANY alteration to the contract” which clause #16 requires must receive Council approval if the alteration is above $25k.
This information was provided to the Auditor's office and we are waiting for them to conclude their review of this compliance issue. If they agree that Law Director Stewart Hastings' legal opinion/position is absurd, crazy and impossible to defend, this $299,506 example from January of 2022, is just one of many examples and if they go back only three years, this issue may very well result in the largest finding for recovery ever issued by the Ohio Auditor’s Office.
Since intent is important, it must be noted that I made Law Director Hastings and Mayor Berns aware of this issue in 2022, verbally and with a documented email. They ignored and disregarded this but it seems clear to me that they were well aware that I was right on this issue, because later in the year when they asked Council to approve the contract with GPD for 2023 and beyond, they made clear changes to clause #16, which makes the non compliance issue in 2022 and previous years, legal and compliant going forward. Here is the redline version of clause #16 showing the changes they made...
All we can do is wait for the Ohio Auditor’s office to release and explain their findings on this issue. I am fairly certain that anyone who looks at this issue will conclude that Stewart Hastings' legal opinion/position/argument on this issue involving clause #16 is absurd, crazy and impossible to defend, which isn't new as that was everyone's reaction to his bizarre legal position/opinion/argument advocating to City Council to approve hiring the Minc Law Firm, so the city could unmask and punish whoever used their 1st Amendment free speech rights to express criticism of city officials which they did not like, agree with or approve of.
It seems that Stewart Hastings either does not realize or refuses to accept that the First Amendment prohibits a City from actively doing anything, let alone hiring a law firm and filing a lawsuit, in order to stop, prevent, chill or deter people from using speech protected by the First Amendment.
Stewart tried to defend his position by claiming the City had a legal duty to hire the Minc law firm because they were in jeopardy of a hostile workplace environment lawsuit being filed against them by the police chief if they don't. Of course, no such legal duty exists for a number of reasons that should be obvious to any attorney, not just those who understands hostile work environment claims. This absurd reasoning prompted Stewart's former boss, Subodh Chandra, who is a local civil rights lawyer/leader/advocate, to post this 15-tweet thread, pointing out how ridiculous Stewart's legal argument that was.
If anyone has any questions about this issue, let me know.
Mike Burkons
216-832-6771
