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Topic: Why Flint grants administration failed
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untanglingwebs
El Supremo

This figure does not include any repayments to HUD that may be required because of non-completion of projects;that figure could be several million dollars.Nor is the cost of funding some city activities from the General fund rather than CDBG (street resurfacing, water looping, demolition, code enforcement, boarding, weed and trash abatement, victim advocacy, fair housing, etc. ) included in the above calculation. That cost alone is upward sof $1million. Also not included is the potential loss of other federal and non federal grants because of a HUD determination of lack of capacity. We currently hold grants from the EPA, DEQ, Mott Foundation and Foj totaling over $3 million . Without city oversight all could be subject to recapture, and any future funding would most likely be out of the question."
Post Tue Apr 10, 2018 12:57 pm 
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untanglingwebs
El Supremo

This department needs adequate funding and the hiring ond a grants specialist to run the department.
Post Tue Apr 10, 2018 12:59 pm 
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untanglingwebs
El Supremo

FLINT NEWS

Flint's history of emergency management and how it got to financial freedom
Posted January 16, 2018 at 07:00 AM | Updated January 16, 2018 at 07:36 AM
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snyder-flint-water-006-202df4b51dcf2a91.jpg
Jake May | MLive.com
By Oona Goodin-Smith | ogoodins@mlive.com
FLINT, MI – With a state board’s stamp of approval to withdraw from day-to-day city financial management, Flint appears to be one step closer to escaping a seven-year span of state oversight.

The cash-strapped city first fell under state control for a two-year period from 2002 through 2004 under former Gov. John Engler, then again in 2011, after Gov. Rick Snyder declared Flint in financial emergency. Even though Snyder declared an end to Flint's financial emergency on April 29, 2015, the Receivership Transition Advisory Board, which is appointed by the governor, has continued to review financial decisions in the city.

Here’s a look back at Flint’s history of state oversight, how we got here, and where city officials say we’re going next.

Michigan Weather 009
Jake May | MLive.com
What is emergency management?
Emergency managers have broad power to intervene in financially struggling municipalities and school districts.

Following his election in 2010, Snyder and the Republican-controlled state Legislature expanded the powers of emergency managers. Michigan voters, through a November 2012 ballot proposal, repealed the controversial law.

But less than two months later, Snyder signed replacement legislation that he said improved upon the former law. It offered four pathways for struggling schools and municipalities: A consent agreement, Chapter 9 bankruptcy, mediation or emergency manager.

Michigan's emergency manager law is facing scrutiny in federal court, where plaintiffs argue that the law is unconstitutional because it disproportionately targets black communities and continues a "narrative of structural and strategic racism."

Michigan's emergency manager law is racist, lawsuit argues

State of the State address
Andrew Kuhn | akuhn@mlive.com
The players
Flint has had a total of four emergency managers: Ed Kurtz, Mike Brown, Darnell Earley and Gerald Ambrose. Both Earley and Ambrose are currently facing charges of criminal wrongdoing in relation to the city’s lead-in-water crisis, which occurred after the DEQ failed to require the city to treat Flint River water to make it less corrosive to lead.

LA ENGLER 2
Gov. John Engler delivered his State of the State Address entitled "The 1995 Taxpayer's."

KATHY KIELISZEWSKI
2002-2004
Gov. John Engler declared a financial emergency in Flint – which had roughly a $30 million deficit, according to Flint Journal archives – recommending Kurtz take the city over as manager. The city attempts to fight the state takeover in court, costing city more than $245,000, but is ultimately unsuccessful.

James Rutherford is elected mayor to complete the term of recalled mayor Woodrow Stanley.

Kurtz implements a new code enforcement program that includes plans for rental inspections and emergency demolitions, and slashes pay for mayor and council (later reinstated), and health benefits for the majority of city officials.

Kurtz orders city retirement board to end controversial pension that would reduce the pensions of about 350 retirees by 3.7 percent, but the state attorney general later says Kurtz doesn’t have the authority to issue orders to a retirement system.

Over two years, he issues nearly 120 city directives, including: temporarily closing Flint’s recreation centers, closing city ombudsman’s office, raising water bills by 11 percent, laying off city workers, approving more than $1 million for sewer and road improvements.

A December 2003 audit shows the city deficit is reduced to about $14 million. Estimates for the 2003-04 budget later reduce the number to $6 million to $8 million.

Don Williamson is sworn in as mayor in Nov. 2003, butting heads with Kurtz. Kurtz recommends ending the state’s takeover in June 2004.
Post Wed Apr 11, 2018 8:56 am 
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untanglingwebs
El Supremo

BUdget cuts in the 90's reduced the size of the department and the finance department. Grants staff complained about the length of time it took to get invoices from Finance and wanted them directly sent to their department. During that time Flint had the most paybacks to HUD in th region.

On December 1, 2004, Jason Gamlin Flint Field Office Director, sent an annual Performance and Evaluation Report to the City of Flint. After praising the accomplishments of the Department, Gamblin addressed a list of concerns.

" HUD Offices have received numerous complaints regarding non-payment of invoices for services rendered under the Community Block Development Grant program. Representatives from the Community Planning and Development Division at HUD's Detroit Field Office met with staff regarding this issue. It was agreed that the City of Flint would pay any outstanding and eligible costs incurred under the 2003 program year contract. To date the City has not paid all outstanding eligible invoices.
Post Wed Apr 11, 2018 10:32 am 
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untanglingwebs
El Supremo

The lack of ongoing monitoring/review of subrecipients; which is exacerbated by the Grants Management staff remaining in City Hall during working hours. This restrictive interaction between the staff and subrecipients will result in continued actual and perceived mismanagement on the part of the subrecipients. It is essential that project managers go-on site in order to visually assess progress and performance , to review files, and to interview clients. At minimum, site visits should be made for each open project at least twice a year. One visit should be announced and one visit should be unannounced.

The report also provides a discussion of the lack of activity with regards to the Community Development Block Grant,HOME,American Dream Down Payment Initiative, and Emergency Shelter Grant program.As a result, HUD questions the City's commitment guiding principles of HUD's programs: to improve the living conditions and economic vitality of the City of Flint. ...
Post Wed Apr 11, 2018 10:51 am 
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untanglingwebs
El Supremo

While Flint should be commended for rising out of the State receivership and trying to remain on economically firm ground,the actions or rather non-action, of the City with regard to CDBG, HOME, ADDI, and ESG funds lead to speculation regarding the City's management capacity and commitment to carry out the the Community Development Act of 1974. as amended, and the Cranston-Gonzalez National Affordable Housing Act of 1990,as amended.

The Community Planning Development Division of the Detroit Field office remains ready to assist the City of Flint in any way that it can. However, the City of Flint must be willing to comply and implement its program in accordance with the Community Development Act and National Affordability Act. With every day of inaction, the City is digging a deeper hole for itself. I this continues, there will come a time when only an actof Congress will assist the City.
Post Wed Apr 11, 2018 11:07 am 
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untanglingwebs
El Supremo

HUD also noted that Flint had eight open findings, one hotline complaint and 3 citizen complaints that had not been resolved.

On top of the HUD grants, staff had to oversee the battle going on with CCDC over their role in managing the Flint Area Investment Fund for the Flint Area Enterprise Community zone. It too a month for two of us to review the files. A total of four city employees met with board members in a meeting that had the potential to evolve into a brawl. The highlight of the meeting was when Nancy Jerkowicz-Rich (who may be 5 foot 1) lean across the conference table telling the Director that the organization was "run like slush fund).Besides my draft report FAIF had to deal with the state staff that was supposed to oversee the grant and HUD to review their CDBG funds, HUD wote that as they came in the front door,the Director was going out the back. The HUD files were never produced,
Post Wed Apr 11, 2018 4:21 pm 
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untanglingwebs
El Supremo

GAO

In three municipalities—Detroit, Flint, and Stockton— this downsizing
directly impacted city staff responsible for the management and oversight
of federal grants. For example, Detroit’s Planning and Development
Department, which administers HUD’s CDBG and HOME grants received
by the city, lost more than a third of its workforce between 2009 and
2013—falling from 173 to 110 FTEs. According to Detroit officials, it was
difficult for the staff that remained to carry out all of the department’s
grant compliance and oversight responsibilities. They said the loss
ultimately contributed to adverse single audit findings, monitoring findings
and special grant conditions from HUD. For example, in a 2013
monitoring report for the CDBG program, HUD found seven deficiencies,
such as incorrect grant charges for staff time and failure to demonstrateorganization is institutionally prepared for grant management and
implementation, including its ability to employ technology for grant
oversight and reporting. A lack of capacity in any of these three
dimensions can adversely impact a recipient’s ability to effectively
manage and implement federal grants. We found challenges related to
each of these three types of capacity at the four municipalities we
reviewed.
All four municipalities experienced reductions in their human capital
capacity due to fiscal crisis, but the effect of those reductions on the
management of selected grants varied. From 2009 to 2013, these
municipalities experienced workforce declines ranging from 18 to 44
percent (see table 1). In an effort to cut costs, these municipalities laid off
city employees, imposed furloughs, and cut wages (which according to
officials in Stockton, in turn led to higher staff attrition rates)
Post Thu Apr 12, 2018 9:52 am 
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untanglingwebs
El Supremo

Note: FTEs reflect the total number of regular straight-time hours (i.e., not including overtime or
holiday hours) worked by employees divided by the number of compensable hours for each fiscal
year.
In three municipalities—Detroit, Flint, and Stockton— this downsizing
directly impacted city staff responsible for the management and oversight
of federal grants. For example, Detroit’s Planning and Development
Department, which administers HUD’s CDBG and HOME grants received
by the city, lost more than a third of its workforce between 2009 and
2013—falling from 173 to 110 FTEs. According to Detroit officials, it was
difficult for the staff that remained to carry out all of the department’s
grant compliance and oversight responsibilities. They said the loss
ultimately contributed to adverse single audit findings, monitoring findings
and special grant conditions from HUD. For example, in a 2013
monitoring report for the CDBG program, HUD found seven deficiencies,
such as incorrect grant charges for staff time and failure to demonstratereceived by the city can also influence how severely grant management
staff are impacted.20
In addition to having a sufficient number of staff, municipalities also need
to have personnel with the right knowledge, skills, and abilities to manage
their grants effectively. Local officials in Detroit, Flint, and Stockton told us
that reductions in staff due to fiscal crisis led to grant management skills
gaps in their workforce. With overall lower staff numbers, remaining staff
were left to cover a larger set of responsibilities, including managing grant
programs that they had not been familiar with prior to the staff reductions.
Officials representing Detroit and Flint told us that when they lost grant
management staff, the resulting skill shortage sometimes contributed to
violations of grant agreements or grant funds remaining unspent in city
accounts.
For example, Flint’s Department of Community and Economic
Development, which administers HUD’s CDBG and HOME grant
programs, lost a number of key staff during its fiscal crisis through layoffs
and attrition, including an experienced employee who reviewed and
approved grant expenditures. Flint officials as well as HUD’s technical
assistance providers for the CDBG and HOME programs told us that
losing staff with critical grant management knowledge contributed to
compliance problems, resulting in a series of critical audits of Flint’s
HOME program by HUD’s Inspector General from 2009 to 2013.21
20Grant managers who administer Highway Planning and Construction program funds in
Detroit provided an example of how grant management staff can operate largely
unaffected by significant city budget cuts through the use of nonlocal revenue sources.
These grant managers told us that they were not affected by the city’s fiscal crisis
because they did not use local funds to pay for their staff. Rather, special revenue streams
from state transportation taxes provided the funds to cover the cost of staffing their
projects.
According to staff from HUD’s Office of the Inspector General, staff
turnover in Flint contributed to grant management knowledge gaps and
subsequent audit findings. These findings had serious monetary
consequences for the city of Flint. Flint officials told us that the city owedHUD approximately $1.1 million in 2014 because Flint could not ensure
that its indirect costs had been appropriately calculated and allocated
across HUD’s grant programs.22
Officials in two municipalities—Detroit and Stockton—told us that turnover
in senior- and mid-level management contributed to federal grant
management challenges. According to city officials, this happened for two
reasons. First, because some cities in fiscal crisis must furlough
employees, lower salaries, or reduce retirement benefits, senior staff
members chose to leave their positions while they could still vest their
retirement benefits based on their highest salary levels. Second, more
experienced staff members had more marketable skills and were able to
find other jobs more easily than the junior staff members. Officials in
In addition to increasing the risk of
violations of grant agreements, losing grant management skills made it
more difficult for officials in Detroit, Flint, and Stockton to draw down grant
funds. For example, staffing levels in Detroit’s Department of
Transportation, which administers FTA’s Federal Transit Formula Grant
program, fell from 1,514 FTEs in 2009 to 809 in 2013. In addition, over
the span of 3 years, the department had 4 directors. According to Detroit
officials, this change in management caused a lack of direction and
consistency in priorities, which particularly affected the departments’
procurement staff. Federal Transit Formula grantees—including Detroit—
use these grant funds to finance the procurement and maintenance of
transit equipment and facilities, such as buses and bus terminals. A lack
of employees with the skills to process procurement requests and
administer grants caused some grant funds from FTA to remain unspent
Post Thu Apr 12, 2018 10:00 am 
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untanglingwebs
El Supremo

HUD to Greg Eason Flint City Administrator May 20 2011

Subject: Monitoring Review HOME Investment Partnership Program
NO. M09-MC 260204

The Office of Community Planning and Development (CPD) has conducted a review of the captioned grants, pursuant to the applicable regulations for the HOME Investment Partnership Program. This review is required to determine compliance with applicable laws and regulations and your community's continuing capacity to carry out the HOME program in a timely manner.

Steven Spencer, Senior CPD Representative, who completed site visits on April 1, 2011, and met with members of the Flint Department of Community and Economic Development (DCED), conducted the monitoring review.Program progress, Program adminidtration, Rehabilitation and subgrantee management was reviewed.
Post Thu Apr 12, 2018 1:28 pm 
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untanglingwebs
El Supremo

Though there have been reminders communicated to the DCED staff the City is overdue
in its response to our letter of March 25, 2011 concerning the finding made in Office of Inspector General (OIG) Audit 2011-CH-1001.If we do not receive an immediate response, HUD will have no choice but to disallow all of the costs questioned in the audit.

The conclusions of the review are summarized as follows, with full details in the enclosed monitoring report.
Post Thu Apr 12, 2018 1:35 pm 
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untanglingwebs
El Supremo

The administration of the HOME Program by the City of Flint is currently in a state of disarray.We have not received a response to our monitoring findings from our 2010 evaluation of the Community Development Block Grant and HOME programs. This response has been promised many times and is long overdue. Virtually none of the corrections promised while we were on-site in June of 2010 have been achieved. There are findings that have been repeated in the last three HOME monitoring reports. Since the City removed housing provision activities from its non-profit housing partners and brought all housing activities, new construction and rehabilitation (except for the required Community Development Housing Organization (CHDO) activities) effective July 1, 2010, the City has committed to no new projects.The City, in the 2010 Action Plan, stated it would rehabilitate 5,possibly 6 owner-occupied units with HOME funds. It took preliminary applications in the spring of 2010 and has not progressed from that point since. The City committed to a new monitoring program that began January 1, 2011, yet no documented monitoring has occurred since our last monitoring visit. Though we found the DCED staff cooperative and willing to learn, of all of the staff interviewed, none was truly knowledgeable of the HOME regulations and requirements. The City is very close to a finding of no capacity to operate a HOME program. Such a finding would prevent the City from receiving future HOME allocations until its capacity sufficiently improves.
Post Thu Apr 12, 2018 1:59 pm 
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untanglingwebs
El Supremo

There are five findings and two concerns in the attached report. The first Finding and Concern having to do with data entry into the Integrated Information and Disbursement System (IDIS) and the lack of progress in completing projects, are virtually identical to findings in our previous monitoring reports. The next finding and concern question the apparently excessive amounts of funds the City committed and/or expended on two HOME projects. The other findings are about the City's lack of oversight of its subgrantees projects.

Please review our conclusions, and submit to the Detroit Office of Community Planning and Development, your response to the findings indicated within 30 days of the date of this letter. If additional time is needed or if you need assistance, you may contact Mr. Spencer....... The City has the right to question the validity of any finding based upon data available at the time of the monitoring review or bases upon a different interpretation of statutes and regulations.

Keith hernandez, AICP, Director, Community Planning and Development,Detroit Field Office

CC ms Wendy johnson,Director DCED
Post Thu Apr 12, 2018 2:29 pm 
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untanglingwebs
El Supremo

After the City responded to the findings, the OIG evaluated them.

Comment 1: The City's commitment to new approaches in it's use of Federal funds, addressing personnel issues, and revising its procedures and controls, if fully implemented,should improve the City's management of its Program.

Comment 2: The City did not provide specifics regarding its statement that many of the recommendations refer to actions as dar back as 1995. However,although some of the recommendations may involve issues where initial actions occurred as far back as 1995, the projects and activities were still acive as of the scope of our audit and incorrect reporting of past Program accomplishments in HUD'system caused current Program accomplishments to be inaccurate.

comment 3: We added to this report that on September 1, 2010, and as a result of our audit, Flint Project, (Flint NIPP) converted the land contract for home buyer project number 1415 to a conventional mortgage.
Post Sat Apr 14, 2018 2:19 pm 
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untanglingwebs
El Supremo

Note, HUD removed the recommendation that $48,866 repayment be removed but insisted on adding that the property could not convert back to a land contract.

comment 4: The City would also need to provide documentation to support that the home buyer projects for the five homes meet property standards before converting the home-buyer projects to rental projects,and then obtain approval from HUD to convert four of the rental projects back to home-buyer

comment 5. The City's planned corrective actions, if fully implemented, should resolve the issues and recommendations cited in this audit reports, as applicable.

comment 6. Note that Salem must sell and transfer the remaining homes (project numbers 1206 and 1254) to an eligible buyer by December 15,2010.
Post Sat Apr 14, 2018 2:40 pm 
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