STATE OF MICHIGAN RICK SNYDER GOVERNOR DEPARTMENT OF LICENSINGAND REGULATORY AFFAIRS STEVEN H. HILFINGER DIRECTOR MICHIGAN COMMISSION FOR THE BLIND PATRICK D. CANNON STATE DIRECTOR LANSING Memorandum DATE: 3 May 2011 TO: Mark Rothenhauser, BEP Licensee FROM: Constance Zanger, BEP Manager SUBJECT: Compliance Review of 28 April 2011 On 28 March 2011, a letter was sent to you informing you the Michigan Commission for the Blind was commencing the proceedings to revoke your license to operate a Business Enterprise Program facility in the State of Michigan. On 28 April 2011, a compliance review was held in Lansing at the Victor Office Center to review your actions. and compliance to the issues raised in the revocation letter. Present at the meeting were Mark Rothenhauser, BEP licensee; Constance Zanger, BEP Manager and Josh Hoskins, Promotional Agent. The following issues were discussed in the meeting: LARA is an equal opportunity employer/program. Auxiliary aids, services and other reasonable accommodations are available upon request to individuals with disabilities. 201 N.WASHINGTON SQUARE P.O. BOX 30652 LANSING, MICHIGAN 48909 TOLL FREE 800-292-4200(VOICE) 888-864-12120LOCAL 517-373-2062 FAX 517-335-5140 WWW.MICHIGAN.GOV1MCB Memorandum Page 2 3 May 2011 *Regarding violation of rule 27 (1), (2), (3), and (9) relative to licensee reporting requirements: Just prior to the compliance review, you submitted 3 payments: $177.45 for the January 2011 set-aside fees (an overpayment of $14.15), $170.73 for the February 2011 set-aside fees (an overpayment of $12.91) and a 3rdpayment of $300. The balance still owing as of this writing is $940.78. The attached table details the application of the payments made and the outstanding payments. Consequently, you are not in compliance with program rule 27, subrules (I), (2), (3) and (9). -Regarding violation of rule 27 (4), (6) (8) and (9) relative to licensee reporting requirements: Submission of set-aside fees has historically been a compliance issue for you, Mark. In fact, failure.to submit set-aside fees on a timely basis was allso a matter for a compliance review in March 2009. While you committed in the future to submitting set-aside fee payment by the due date, at this meeting you were unable to identify any changes to or new business practices that would ensure compliance. Memorandum Page 3 3 May 2011 *Regarding violation of rule 24 (I)(a), (d), and (k) relative to licensee health and safety obligations: This issue was not addressed at the April 28th meeting. Due to time constraints on both your part and the Commission's part, we agreed to meet again at 4 p.m. on Thursday, 5 May 2011. While in the past 30 days, you have given consideration to a plan for returning to compliance, Mark, please consider the following as you fine tune your plan: -Facility sales have consistently declined in the history of your operation of the State Capitol facility. In fact, sales have decreased by 50%. -Purchases as a percent of sales have substantially increased in the past 2 calendar years. -The facility has not returned 120% of federal minimum to the licensee. - In addition to the factors you mentioned at our meeting, have you changed any business practices that might have precipitated this change? - It appears you desire to remain in the Business Enterprise Program. Are you willing to investigate and commit to implementing new business practices to return to profitability? Memorandum Page 4 3 May 201 1 -If so, would you have more confidence in and be willing to work with a team, including a BEP peer, that investigates best business practices for a facility such as yours? We look forward to talking with you soon. In the interim, if you have any questions or require further information, you may contact your Promotional Agent, Josh Hoskins at 335.4263. Sincerely, . Constance Zanger Business Enterprise Program Manager Cc: J. Chaney (via e-mail), J. Hull (via e-mail), J. Hoskins (via e-mail), J. Wallace, File