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The Reporter takes you inside a closed-door meeting at City Hall

By Frank Parlato Jr.

The issue of accountability for the public’s money was front and center at a closed-door city hall meeting held on the afternoon of May 15, on the final report from Global Spectrum on the Holiday Market.

 The differences at the meeting seemed to focus on whether or not the public is entitled to know how its money was spent for this venture or whether the details of how $760,000 of mostly public money was spent should remain private.
The meeting, held at the City Council offices, was attended by Council Chairman Sam Fruscione, Councilmember Glenn Choolokian, City Corporation Counsel Craig Johnson, USA Niagara President Chris Schoepflin, Global Spectrum Manager Ryan Coate and the city’s Media and Public Relations person, Kevin Ormsby.

The Niagara Falls Reporter through a FOIL request obtained the minutes to what would otherwise be a private meeting not open to the press or public.

The minutes reveal an interesting dimension of how government operates and tells a further story about the publicly-funded Holiday Market.

This story will quote liberally from the minutes.

Mr. Fruscione, who convened the meeting, opened it by presenting a letter to Mr. Coate, manager of the Conference Center, the man who was charged with monitoring the expenses of the Holiday Market for Mark Rivers, the Idaho developer entrusted with $450,000 of public money to develop the Market. Mr. Rivers was not in attendance.

The letter asked that a number of questions be answered, one of them being a detailed report on $114,000 in salaries Mr. Rivers paid to various, unnamed people – with public money- for his 37 day event.

Mr. Coate, after reading the letter, “responded respectfully saying the salaries of the Holiday Market event were private.”
According to the minutes, Mr. Schoepflin “stated (the) same and a discussion took place regarding those salaries, the notion of what is and is not private in relation to the city contributing to the event and so on.”
Mr. Coate and Mr. Schoepflin argued the public was not entitled to know who got paid with public money or what they did for that money.

Mr. Rivers has claimed (including to this writer) that he developed the market out of “love of the community” and spent more than $114,000 in salaries.

Mr. Fruscione thought it might be worth learning more about it.
Love takes us only so far. Especially love from a man who was handed $450,000 and loves us at a distance. Mr. Rivers lives in Boise, Idaho .

Mr. Fruscione said, “The salary line is very troubling.”

Mr. Choolokian said, “It is unacceptable that the city would contribute in the way it has and have information withheld!”

Mr. Schoepflin said, “Perhaps a city employee might be allowed to look at the salary records, such as (city controller) Maria Brown. But all information would remain private and not for publication.”

His view is the public can’t know who was paid by Mr. Rivers and perhaps check to see if these are real people, whether they work for Mr. Rivers for something else, whether they put in the time, whether they gave some of the money back to Mr. Rivers. Whether he loved us as much as he said he does.

Mr. Coate said, “All time sheets of all workers are in my possession.”

Mr. Fruscione “noted that one of those employed by the Holiday Market was a former USA Niagara employee.”

Mr. Schoepflin “acknowledged same” and said there was nothing inherently wrong with this.

Mr. Fruscione “noted that he has been in touch with representatives of Aaron Neville and he has concerns as to how the concerts had been booked and billed.”

The Global Spectrum report was to be a fact-based report for the public to judge how its money was spent and how successful the Market was. It was not supposed to be colored by interpretations in lieu of facts. Mr. Coate, in his report, described Mr. Neville as having a “soul quenching voice” which, by the way, may be the first time that a financial report on a publically –funded concert ever tried to quantify soul-quenching values in lieu of monetary ones.

I mean, after all, how to you put a price tag on having your soul quenched?

Lamentably, few thirsty souls ever got the chance. Mr. Neville, a performer at one of four, money-losing concerts at the Market was allegedly paid $25,000. Along with other costs associated with the concert, the soul – quenching event cost the public more than $40,000 and brought in $9,000.

Mr. Rivers “booked” the concert but did not appear at the soul –rewarding show. In fact public records show he wrote a bounced check to the production company – Advanced Production Group – who almost did not do the show- since they liked to be paid for their work in cash and not in soul – quenching nectar.

At the meeting, Mr. Fruscione expressed doubts that Mr. Neville really was paid $25,000 since he generally books for about half that amount and suggested Mr. Rivers might have skimmed a bit, booking through middle men, a common practice when fools, who should not be in the concert business, get separated from their (or in this case, the public’s) money.

The Reporter contacted Mr. Rivers on this matter and when asked how much he really paid Mr. Neville, Mr. Rivers hung up the phone and declined to take further calls.

Mr. Coate and Mr. Schoepflin “noted,” according to the minutes, “they have all the concert information in their office and can share same. They do not share Fruscione's concerns as to how the concerts were billed and booked.”

"I want you to be honest,” the minutes quote Mr. Choolokian as saying. “Do you think there was $760,000 (invested in the Market– as was reported)?”

Mr. Schoepflin: "Yes. It was good."

Mr. Choolokian contradicted: "There's no way his thing cost (nearly) $800 thousand. This report is a joke. I want receipts and backup."

Mr. Fruscione: "The Council has the fiduciary responsibility here…. We haveto answer for how this money is spent."

Mr. Schoepflin “expressed disappointment that he was not consulted ‘before you (Mr. Fruscione) ‘'went to the media.’"

Mr. Fruscione “stated that he believed a ‘bait and switch’ had been pulled with regard to the participation of Tony Walker (at the Market).

“Mr. Schoepflin did not believe this had occurred.”

Before he got the $450,000 of public money, Mr. Rivers promised that Tony Walker, a high end apparel and accessories company, would take ten booths at the Market. They never showed, but curiously Mr. Rivers’ website continued to advertise Walker prominently throughout the days of the market as one of the vendors.

Contrasting Walker’s non appearance at the Market was the generally unknown fact that the man who loves us so dearly as to operate a Holiday Market for us – for free – just out of love – Mark Rivers - had vending booths that he operated himself.
“A discussion took place” the notes continue “regarding (Mr. Rivers’) consignment sales. Fruscione questioning the figures of the report. Fruscione asked Schoepflin and Coate if they knew how many booths Rivers himself operated during the Market. Fruscione stated he suspected Rivers was operating possibly seven of the booths himself. Fruscione questioned whether sales tax was properly collected throughout the event by the 30 vendors.”

Mr. Schoepflin “stated several times that he was upset that the Council Chair had not discussed the final report with him before talking to the media.”

Mr. Fruscione replied “he could have been much more pointed in his public remarks but held back. He also noted he received the report on the day of a Council meeting and purposely declined to make a public statement until he had time to study the report. He noted that in the interim … some people leaked the report to the media before he could make an official public statement.”

Mr. Choolokian and Mr. Fruscione pressed for more details. Among these was the high cost of the ice rink. Mr. Coate and Mr. Schoepflin said the actual cost of the rink was less than originally reported.

It was the Reporter that exposed the ice rink’s true cost after contacting Ice Rink Events manager John Civiletto who said the cost was $99,000 and not as Global Spectrum reported $146,000.

“The new figures (for the ice rink) were offered at this time,” the minutes report. “(Mr. Coate) also said he would offer a correction for the concert line.”

Mr. Choolokian said, "So we were given an inaccurate report?"

Mr. Coate and Mr. Schoepflin said “it was a simple error and was now corrected.”
The councilmen questioned the more than $15,000 in travel Mr. Rivers charged to the public. “No further details as to where and when travel was made were offered.”

Mr. Choolokian said, "Our phones are ringing off the hook with angry taxpayers. We got taken plain and simple. There'll be no more projects like this any more, no more money being (wastefully) spent. We got to stop the nonsense!”

Mr. Fruscione said several people “who have done business with Rivers during the event are giving him information. He said he will work to get to the bottom of how the event was put together and how the city's money was spent. He noted a discrepancy with regard to WNY Family Magazine (who was stiffed on their bill by Mr. Rivers.)”

Mr. Schoeplin said, “the number of complaints from those being paid were small in proportion to the overall picture.”
Attorney Johnson noted there is “still a need for the city to ‘drill down for more information and to get the details’ of the Market overall.”

Mr. Fruscione noted the high cost of rental tents - at $61,000.

Mr. Coate said “he was not an expert on tent rental costs but this particular tent renter is considered to be excellent.”
What was the name?

(As an aside, the Reporter interviewed Scott Erwin of Custom Tent Rentals of Lewiston to try to ascertain whether $61,000 for tent rentals was reasonable. Mr. Erwin previously gave general examples of pricing his company might charge for certain types of tents. In a second interview, he indicated that, judging solely from pictures, it would be difficult to judge another company’s pricing. When we contacted Mr. Rivers, before he hung up on us, he said he could not recall who he rented the tents from.)

“In summation,” the minutes record, “Fruscione and Choolokian repeated their desire to investigate further to see if improprieties had been committed. They emphasized their disappointment in the event, in Rivers' report, in the spending of city money and the lack of needed details.

“Choolokian stated several times ‘This is nothing personal (to Coate and Schoepflin) but… taxpayer money has been spent here."
Mr. Schoepflin admitted “the event was not perfect, was a good effort and hopes it will not keep the city from working mutually on future development projects... projects such as bricks and mortar, not necessarily entertainment. Schoepflin said perhaps it was a mistake, too ambitious, to book four concerts instead of just one.”

Mr. Schoepflin and Mr. Coate agreed to provide all invoices and records they have and left some with Mr. Fruscione and Mr. Choolokian.

After the Market defenders left the meeting, according to the minutes, Mr. Fruscione asked Mr. Johnson “if there was any chance of pursuing Rivers on a criminal or fraud charge. Johnson said it looked like there was no option in that regard and even if significant evidence were to be found showing his intent to commit fraud, it would be a civil not criminal situation.”

The Reporter made a FOIL request for all documentation received at the meeting and received 60 pages of material. We are reviewing it now.

The Reporter will make a further FOIL request for any and all additional documentation promised by Mr. Schoeplin and Mr. Coate - both of whom declined to return multiple calls by the Reporter.



Niagara Falls Reporter www.niagarafallsreporter.com May 22, 2012