Ann Arbor SPARK to Post Financials
The economic development nonprofit Ann Arbor SPARK will be posting its financial statements on its website, according to a letter written by SPARK executive director Paul Krutko on Dec. 4, 2013. Krutko’s letter was sent to Washtenaw County board of commissioners chair Yousef Rabhi and Ann Arbor city administrator Steve Powers – both of whom are members of SPARK’s board. The letter came after an Ann Arbor SPARK board of director’s meeting on Nov. 25, 2013.
The meeting and the letter came after SPARK had declined several previous requests for its financial statements – from rank-and-file residents, journalists as well as elected officials. SPARK’s previous decision not to release past statements became moot when Ann Arbor resident Kai Petainen received the past records on request from the state of Michigan Attorney General’s office.
Ann Arbor SPARK contracts with the city’s local development finance authority – an entity that’s funded through tax increment financing (TIF) – to operate a business accelerator. SPARK also receives grants from several public bodies, including the city of Ann Arbor and Washtenaw County. [.pdf of SPARK's 2006-10 audited statements]
Based on Krutko’s letter, it now appears that SPARK will itself be providing past as well as future financial statements on its own website.
Krutko’s letter was included in a message that Rabhi sent to an online group – called “aa better local politix” – with a positive update on what he described as his efforts to increase SPARK’s financial transparency. Rabhi described the Nov. 25 SPARK board meeting as tense, but was positive about the nature of the board’s conversation and the outcome. From Rabhi’s message:
By the end of the meeting, staff were empowered by the board to develop a comprehensive recommendation on how to move forward and to begin with initial implementation. In my perception, staff actually seemed energized by the way in which I framed up the issue and the ensuing discussion at the board table.
Krutko’s letter to Rabhi and Powers cites specific steps that SPARK will now be taking:
- We have posted our most recent financials on our website.
- We are developing a “Frequently Asked Questions About SPARK” summary to be posted on our website.
- We are preparing to post our 2013 Financial Statements upon completion by our Auditors in Spring 2014.
- We are requesting your help in being placed on an upcoming Board of Commissioners and City Council agenda at that time to answer any questions in these public forums about our financial statements.
- We will develop a Use of Funds Quarterly Report to elected officials, on activities supported by public funding provided to SPARK.
- As we have done in the past, we will continue to respond to specific questions from elected officials at any time.
[.pdf of Dec. 4, 2013 letter from Ann Arbor SPARK's Paul Krutko] [.pdf of Dec. 4, 2013 message from Yousef Rabhi]
Congrats to Yousef for breaking this info loose from its jail!
Credit more properly goes to Citizen Kai Petainen, whose discovery of the information via the AG’s office pushed SPARK and local officials into an untenable position. Mr. Rabhi, and pretty much every other local elected official, has voted repeatedly to fund SPARK with our tax revenues with no accountability. The County Commission even found a way to impose a new millage without voter approval in order to funnel even more money to SPARK and other silliness like the “Aerotropolis” (and then proceeded to spend weeks nitpicking the Humane Society over animal control spending).
The other seldom-questioned flipside of this, of course, is the actual data showing the poor results of these public/private economic development schemes. A 2010 Free Press investigation of the MEDC’s 21st Century Jobs Fund found that four years in to that billion-dollar program, only about 1100 jobs had been created.
I’m tired of tax revenues being diverted into these crony-capitalist money pits (with their inflated salaries) or in to various TIF schemes while our school budgets are cut, our infrastructure is neglected, and services that are fundamental to the existence of government are put into the hands of private corporations that only answer to their shareholders.
Kai Petainen does indeed deserve praise for his persistence and good research skills in unearthing not only the SPARK financials but much about their business practice. The Chronicle previously linked to his Forbes blog [link], where he has published a number of observations.
But Yousef Rabhi has shown an unusual (in elected officials) willingness to act on this information in order to effect a policy change. There was a great synergy here between citizen action and responsiveness on the part of an officeholder.
Laurels to both.
I join Tom Whitaker in questioning the value of SPARK and other such secretive entities.
Yousef Rabhi had the courage to look into this while Ann Arbor City Council and the Ann Arbor News/Com were as silent as church mice for years. Kudos to Yousef and Kai Petainen for their work. No kudos to anyone jumping on the trasparency train now that it’s rolling. Where were some of those folks the past few years when everyone was demanding the accounting documents be released? The past County Commission was equally as quilty but instead of calling it the Mayor’s Council Party perhaps it’s time to call it the Democratic Church Mouse Party.
In addition to the efforts of Kai Petainen and Yousef Rabhi, First Ward Council member Sumi Kailasapathy deserves credit for seeking answers to questions from her constituents about the financial reports of SPARK.
I think the actions of Mr. Rabhi and Ms. Kaialsapathy illustrate the difference between public officials who sit at the table with neither a sense of curiosity nor a modicum of skepticism. How many local officials have been members of the SPARK Board without questioning that entity’s secretiveness? How many local officials have voted to provide public money to fund SPARK without seeking accountability?
Council member Kailasapathy took the concerns of her constituents to SPARK and demanded release of their audited financial reports. County Board of Commissioners member Rabhi was appointed to the SPARK Board and used that position to seek change in that group’s policies. I hope their efforts with SPARK will inspire other public officials to work for transparency and openness in publicly funded organizations.
Jack, you are correct about Sumi Kailasapathy deserving a share of the credit. I mentioned that fact with other comments, but not here. Thanks for the reminder.
Where was our city manager in all this? Isn’t he on the board of SPARK?