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Topic: Eason's folly contract for friends?

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El Supremo

Rush job: Contracts for scrutinized federal grants in Flint were approved years ago under deadline threat

Print Email Kristin Longley | klongley1@mlive.com By Kristin Longley | klongley1@mlive.com
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on July 25, 2012 at 11:15 AM, updated July 25, 2012 at 12:52 PM
flint city hall.jpg
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Flint City Hall
FLINT, MI -- Two contracts for Flint grant projects now under scrutiny by federal officials were hastily approved two years ago by the Flint City Council under threat of a deadline.
The two contracts were worth a total of $494,916 -- nearly half of the $1 million the U.S. Department of Housing and Urban Development is asking the city to repay because of "evidence of noncompliance" with federal regulations detailed in a monitoring report sent to the city in June.

The Flint City Council approved the contracts at a June 2010 meeting at which then-City Administrator Gregory Eason pleaded with council members to move them forward or risk losing some of the federal Neighborhood Stabilization Program grant dollars, according to Flint Journal files.

Eason told city council members at the time that Flint was already behind on spending the grant funds because of past internal problems under previous administrations, and the contracts needed to be approved to show HUD the city could be "responsible" and "timely," according to a Flint Journal article on the meeting.

Council members passed the measures on a 7-1 vote despite having only a few hours to read and discuss the proposals.

Councilman Joshua Freeman, chairman of the finance committee, said on Tuesday that the council was in a difficult position at the time because members have to rely on information from administrative officials to make their decisions.

But he also said both the administration and the council should have done more research.

"We have just as much responsibility as the administration does. We should have done our homework and it wasn't done," he said. "The council was relying on information given to us by the administration by that department (of community and economic development). It's gotten us into trouble in the past and here it's getting us into trouble again."

Eason was unable to be reached for comment this week.

Flint Mayor Dayne Walling said the city will respond to the HUD report's findings, which are not yet final, "but in retrospect it is clear that errors were made."

The NSP program was new at time when the city was undertaking the activities scrutinized in the monitoring report, he said.

"It is important to acknowledge mistakes and then make corrections," he said. "(The Neighborhood Stabilization Program) is not an easy program to administer but that's no excuse for inadequate oversight."

He said he fired staff members in the department of community and economic development in November because he was "not satisfied with the NSP program."

As for asking council to approve the NSP contracts with little notice, Walling echoed Eason's message at the time referring to grant spending deadlines.

"There was deadline pressure for the NSP and other programs that have made for a difficult working environment, but again that's not a justification for inadequate performance," he said.

This is at least the third time in the past four years that the city has been threatened with repayment of HUD grant funds related to projects dating as far back as 2000. The city has already started repaying a $1-million penalty stemming from an October 2010 monitoring report.

The city has also committed its available resources to completing the Smith Village federally subsidized housing development under threat of penalty.

Freeman said the critical reports show the city needs to re-examine the way it awards grant contracts and spends grant funds.

"It shows the city doesn't have the capacity to monitor these dollars," he said.

One of the contracts approved by council that was included in the recent monitoring report was for $250,000 to Saginaw-based nonprofit Circle of Love for homebuyer education and counseling services. Officials wrote in the report that Circle of Love was not HUD certified, so the contract was ineligible for the grant money.

The other contract was for $244,916 for Detroit-based Community Improvement Group to manage the city's NSP grant program. The report says the city failed to solicit a significant number of bidders to ensure the contract was competitively bid.

Messages left with Circle of Love and Community Improvement Group on Tuesday were not returned.

Councilman Delrico Loyd was the only council member who voted against approving the contracts at the June 2010 meeting. Councilman Scott Kincaid was absent.

Loyd said he was uncomfortable with considering such large contracts on such short notice.

"I had major concerns with the way the money was being allocated," he said. "In the future, we need to do a better job as a city when dollars are being spent."

Griffin Moores | MLive.com
Officials with the U.S. Department of Housing and Urban Development says the city misspent $550,000 in grant money on activities related to building the new Michigan Department of Human Services Building, pictured here, on Clio Road in Flint. HUD says government buildings are ineligible for Neighborhood Stabilization Program grant funds.
Other findings in the report include the state's new Department of Human Services Building on Clio Road in Flint. The city used $550,000 in grant funds on the project. HUD says in the report that government buildings are not an eligible use of NSP funds.
Another was the rehabilitation of a house on Grand Traverse Street that HUD says didn't meet code compliance standards.

Freeman said that the city council and mayor, once the state takeover is ended, need ensure the community and economic development department is properly managed.

"These dollars can really help people," he said. "Paying them back $1 million at a time, it doesn't make sense in a cash-strapped city like Flint."

Tracy Atkinson, the new director of the economic development department under emergency manager Michael Brown, said the city has until next week to respond to some of the findings in the report.

In some cases, she said, the city was under the belief that it was acting in compliance with HUD guidelines because of communications among local, state and federal officials at the time. In the case of Circle of Love, she said the agency was certified by the state housing development authority.

Atkinson said the city's goal is to reduce the repayment amount to reduce the effect on the city's general fund, which pays for city services like police and fire.
Post Mon Aug 21, 2017 8:43 am 
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El Supremo

Bob Ficano.Randy Richardville | The Bain Report
Dec 7, 2014 - The Friends and Family program and the Business Buddies fund ... With the help of Wayne County, developer Ron Boji received federal funds to build it. ... in Lansing and construction of a new building for Senators' offices.
Post Tue Aug 22, 2017 1:38 pm 
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El Supremo

Boji was the developer that had the state contract for the human services building on Clio Road. HUD ruled that Flint could not purchase the land for the building when the contract was under the state.

Circle of love was a Saginaw company but had Board of Director associated with a Flint bank.

Eason fired 3 employees and a 4th retired because of a hostile work environment. The 3 were whistleblowers and won their jobs back. They had notified the Office of Inspector General about the selection of Advanced Solutions for the Department of Energy Grant. The grant was investigated, lost and had a payback. (see Karen Morris lawsuit)

Eason hired Jackie Foster, who was working with him at Jobs central, and paid her $80 per hour to relocate 4 residents from Greenview manor. He also hired a former Black newspaper owner and others with no experience with grants and HUD.
Post Tue Aug 22, 2017 1:53 pm 
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El Supremo

Post Tue Aug 22, 2017 2:03 pm 
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El Supremo

Page 2 of above:

When the FBI and other federal agencies seized records from the Flint department of Community and Economic Development (DCED) the city hall grapevine says the contracts and related documents of Community Improvement Group (CIG) were among the documents under review.

It will not be the first time CIG has come under scrutiny by the Office of Inspector general (OIG) for HUD. On January 12, 2010, Heath Wolfe, the Regional Inspector General for this region (5AGA) sent Memorandum NO 2010-CH-1801 to Jeanette Harris, the Director of HUD's Community and Planning and Development prior to her retirement. The memorandum concerned Wayne County and the need for the county to improve its ability to administer the Neighborhood Stabilization Program (NSP). This program provided grants to communities to help them purchase and rehabilitate homes that were foreclosed or abandoned in order to stabilize neighborhoods and sten the decline in home values.

Hud rules for procurement of services requires full and open competition. The federal Register, dated October 6, 2008, stated the HUD regulations at 24 CFR Part 570 applied to the Neighborhood Stabilization Program. Regulations within this segment (24 CFR 570.502 (a) says that governmental entities that are recipients or subrecipients must comply with 24 CFR 85.36. These regulations require full and open competition and any action to the contrary is considered to restrict competition.

Key to the process is regulation section 85.36 (d)(3)(iv) which says the process must base awards of contracts through competitive proposals and award the contract to a responsible firm with the proposal that is the most advantageous to the program, with Price and other factors considered. There must be a cost or price analysis with every procurement action.

When Wayne County entered into a subrecipient agreement with the Wayne County Land Bank (Corporation) to assist in the procurement of management services to help with the NSP grant, the Corporation was required to also comply with the HUD rules.

The County did not ensure that the Corporation fully complied with the regulations when they selected Community Improvement Group (CIG) for management services for the NSP program. The Corporation did not consider price when they selected CIG and this was contrary to HUD's rules.

The county as of December 16, 2009 had failed to provide HUD with a complete policies and procedures manual for the NSP program. The draft lacked a section on policies and procedures for monitoring to ensure that the funds were used in an appropriate manner. It also failed to amend the section of the manual that applied to land banks and had several omissions.

The Corporation initially planned on the provider of management services, CIG, to develop the policies and procedures manual. The delay in contracting caused the County to begin the process. O October 13, 2009, the senior executive project manager stated the manual would not be finalized until it was reviewed by CIG and the document would be completed by November 1, 2009. The document was not completed until December 16,2009 and was failed to provide the monitoring procedures and the amendment regarding land banks and appraisals.

The recommendations to HUD was a cost analysis of the CIG contract and if the county did not perform the cost analysis, it should use funds other than HUD funds for these services. Other options included amending the CIG contract and/or voiding the contract.

Now, I am not sure what the OIG is looking at specifically in regards to Flint's contract with CIG , but i am aware that there have been problems with contracting services in a full ond open competive manner.
Post Fri Jun 10, 2011 6:38 pm

July 18, 2010 8:00 PM
Communities race to commit HUD grants for neighborhoods
Wayne, Oakland counties well ahead
By Nancy Kaffer
| | | | | |
Developer finds new opportunity offering housing grant assistance
For developer Mark DeMaria, the federal Neighborhood Stabilization Program couldn't have happened at a better time.

By the fall of 2008, the private development market had come to a standstill and the downtown loft market in which DeMaria had worked extensively had all but disappeared.

But development dollars were beginning to flow through the stabilization program, which has sent billions into communities around the country.

So DeMaria, along with partner Jason Strayhorn, started the Detroit-based Community Improvement Group,a company whose sole purpose is to administer federal housing grant programs for municipal and county governments.

To date, DeMaria said, the company has scored stabilization program contracts to administer Wayne County's $25.9 million allotment, the Detroit Land Bank Authority's $6.2 million and the city of Flint's $4.2 million.

DeMaria and Strayhorn Douglass Diggs, former city of Detroit director of planning and development, is also a company leader hope to expand the business around the country by year's end.

The Community Improvement Group won a contract to administer Wayne County's stabilization program in more than a dozen communities, and it is looking for business around the country.

We went as far as San Bernardino County, Strayhorn said. We went on the road with this real heavy ... and we're starting to get more interest from communities outside of the area ... because they have funds they have to get out the door by a September deadline.

Spending HUD dollars requires rigorous review and documentation, DeMaria said, a process that's sometimes beyond the capacity of local governments to administer.

For DeMaria, it's all about opportunity.

We're looking at $100 million in new contracts for the year, that's our target, he said. We're getting close. I think we can reach it.
Nancy KafferWhen Wayne County earmarked the last of its federal Neighborhood Stabilization Program dollars, it marked a milestone for Wayne County Chief Development Officer Turkia Mullin.

After a January U.S. Department of Housing and Urban Development audit critical of the county's ability to handle stabilization funds, the county designated its entire $25.9 million allotment in June, well before a September deadline to determine how program funds would be spent.

But as that deadline nears, other communities are still working to get money out the door.

Approved in 2008, the first round of neighborhood stabilization funding distributed $3.92 billion to state and local governments, with the largest sums targeted to communities with high foreclosure rates.

Money must be obligated to specific projects by September and spent by 2012.

Some communities have struggled to earmark neighborhood stabilization dollars, said Brian Sullivan, a public affairs specialist in HUD's Washington, D.C., headquarters. He noted that the capacity to handle the large sums has been a challenge for communities used to seeing the same amounts of federal money each year through programs like Community Development Block Grants.

Then bam, they get $25 million and they have three people, and they don't have ... the capacity to go into, let's say, looking at buying, rehabbing and re-selling 200 homes, he said. And they just don't have the local contracting capacity to act in a timely fashion.

A second round of stabilization funding was approved earlier this year.

And this fall, the federal government will begin the process of taking back unspent funds from the program's first round which could supply a third round of funding.

Nationally, 40 percent of the program's funds have not been obligated, according to HUD data.

For the state, the city of Detroit and Macomb County, the amounts not obligated are higher. As of June 14, 61.8 percent of Michigan's $98.6 million isn't earmarked, according to HUD data; in Macomb County, 47 percent isn't obligated. The city of Detroit, said a communications manager, has 41.8 percent left to earmark.

Sullivan said HUD hasn't yet determined how it will take back unspent funds.

In Wayne County, officials paired stabilization funds with other federal program dollars, Mullin said, to green-light even more projects.


Wayne County has contracted with the Community Improvement Group (See related story at right.) to manage its stabilization program.

The county was able to satisfy HUD's objections, and Mullin said that the county's results show it was up to the task.


When we knew we were getting money, we spent a lot of staff time developing the specific programs that could use it, going over what would or would not work, and going over various what-ifs. There's been an awful lot of communication with communities about it, he said.


Nancy Kaffer: (313) 446-0412, nkaffer@crain.com
Post Fri Jun 10, 2011 6:50 pm


While Crain's states Wayne County was able to satisfy the OIG findings, I believe Flint will be hard pressed to measure up. HUD monitored Flint in late march and April 1 and the monitoring report is said to be extremely critical of the city and their staff in DCED.
Post Fri Jun 10, 2011 6:53 pm

About CIG - Community Improvement Group
Jason Strayhorn - Chairman
Strayhorn As Co-Founder of CIG Group Jason has solid relationships with several of the nations business and government leaders including the U.S. Department of Housing and Urban Development.

In 2010, Jason led his team in securing over $38 million in contracts in for the Neighborhood Stabilization Program (NSP). Most recently CIG Group answered the call to successfully obligate the Detroit Land Bank Authoritys $6.2 million NSP grant within 30 days.


This article raises issues. There is no discussion of any Request for Proposal or bid process. Without this process, HUD would have violated their own process. HUD is not allowed to make recommendations. To me this press release implies that HUD did so .

06/14/2010 - City of Flint moves forward on $4M NSP grant06/14/2010 - City of Flint moves forward on $4M neighborhood stabilization grant under threat from feds Flint Journal

Earlier this month, The Journal reported that federal officials wrote a letter to Flint Mayor Dayne Walling to express its concerns that Flint is at risk of not meeting the deadline for committing the neighborhood stabilization funds, which are federal grant dollars awarded to fight foreclosures and redevelop housing.

Flint contracted with Detroit-based Community Improvement Group for Program Management for the city of Flint.

Eason said HUD approved and said Community Improvement Group will be hired by the city to manage the grant funds because the city doesnt have the internal capacity to do it on its own.

For what were getting from them (CIG), were getting more than our moneys worth, Eason said.

This is a company HUD has 100 percent confidence in.

Flint Journal
Post Fri Jun 10, 2011 7:35 pm

See thread on whether Smith Village is stalled as CIG is involved in a lawsuit against the city, Greg Eason and Charles Young.
Post Wed Sep 07, 2011 1:15 pm

Last edited by untanglingwebs on Thu Sep 22, 2016 4:44 pm; edited 1 time in total
Post Thu Sep 22, 2016 3:13 pm
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El Supremo

HUD is not supposed to make recommendations regarding contracts. But in the articles there is repeated talk about how this is a contractor hat HUD has complete faith in.

Flint went down from over 22 employees to a minimal staff level. Some employees were transferred in from other departments after a series of layoffs. Only a few of these staff members were unqualified, however, the whole department complained of being micromanaged and sometimes not allowed to perform their jobs.

Flint had to return money to HUD over the improper contracting of CIG.
Post Thu Sep 22, 2016 3:32 pm
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El Supremo


ID Num: E16423

Assumed Names

Type: Domestic Limited Liability Company

Registered Office Address: 43422 W OAKS DR STE 184 NOVI MI 48377

Mailing/Office Address:

Formation/Qualification Date:12-4-2008

Jurisdiction of Origin:MICHIGAN

Managed by: Managers

Status: DISSOLVED Date:5-2-2014
Post Thu Sep 22, 2016 4:12 pm

CIG dissolved in May of 2014.

From Flint Talk Operation Unification and more- How much fraud
discussion of Operation Unification lawsuit

OU further alleges the delay were caused by Community Improvement Group (CIG). I cannot imagine the city contracting with CIG after they filed a lawsuit against the City over Smith Village. HUD did disqualify CIG and stopped payment on their contract. But was this because of complaints made by OU and city employee Jacqueline Foster or because of Flint's noncompliance with procurement?
Post Thu Dec 18, 2014 2:58 pm

There are allegations CIG did not turn over records to the City of flint, but it was acknowledged that CIG did help HUD with the accounting.

Tracy Atkinson stated the City did not pay per the contractual schedule.

EM Mike Brown said in his deposition that 0 houses were completed. He also said that there was about $4 million in HUD repayments being negotiated.
Post Thu Dec 18, 2014 5:43 pm
Post Thu Sep 22, 2016 4:37 pm

EM 2012EFM081
Mike Brown

Resolution to authorize $13,686.25 to Community Improvement Group, LLC for program management services for the Neighborhood Stabilization Program (NSP1)
The Housing and Economic Recovery Act (HERA) of 2008 was approved by Congress on July 30, 2008 with regulations for the NSP program issued on September 29, 2009. The overall purpose of the NSP program is to assist in the redevelopment of abandoned or foreclosed homes under the portion of HERA entitled Emergency Assistance for Redevelopment of Abandoned and Foreclosed Homes.
On, March 23, 2009, the City of Flint was allocated $4,224,621 in funding through the U.S. Department of Housing and Urban Developments (HUD) Neighborhood Stabilization Program 1 (NSP1) authorized by HERA. Program management staff during this time solicited for proposals from developers and other
support services that facilitated the implementation of the NSP 1 program.
During April, 2010, the City hired new program management staff for assignment to the NSP1 program.

Subsequently, a monitoring review was conducted by FIUD after new staff was hired to manage the NSPI program. During HUDs review, it was recommended by HUD that the new program management staff lacked the capacity to manage the NSP1 program and suggested that City retain Community Improvement Group, LLC., for program management services. Community Improvement Group, LLC. was retained by the City and a contract for $244,916.00 was executed for services beginning July, 2010 through September, 2011. Two payments totaling $13,686.25 are due to the organization at this time. Upon receipt of payment, the organization is to return all
documents pertaining to program management services for the NSP1 program.
Funds for this purpose are to be charged to account 101-000.000-202.600.
IT IS RESOLVED, that appropriate City Officials are authorized to do all things necessary to make payment in the amount of$13,686.25 to Community Improvement Group, LLC., for program management services for the NSP1 program.

Peter M. Bade, City Attorney

City of Flint moves forward on $4M neighborhood stabilization grant under threat from feds

Kristin Longley | klongley1@mlive.com By Kristin Longley | klongley1@mlive.com
on June 14, 2010 at 10:12 PM, updated June 15, 2010 at 9:01 AM
FLINT, Michigan The threat was clear: Act now on nearly $700,000 in federal grant funds or risk losing it all.

Faced with that ultimatum from City Administrator Gregory Eason, the Flint City Council on Monday night moved forward on committing the grant funds some of them to out-of-county vendors despite having only a couple hours to read and discuss the proposals.

The federal government is threatening to pull the plug on the citys $4 million neighborhood stabilization grant if the city doesnt take action on spending it, Eason said.

Please, pretty please, do not jeopardize this money, Eason said to the council. We need to show we can be responsible, we can be timely.

The city is up against a September 27 deadline to have all $4 million of the grant funds committed to be spent.

The federal government awarded the money to the city in 2008. Eason told the council he was on the phone with the undersecretary for the U.S. Department of Housing and Urban Development (HUD) on Friday and made a commitment that the city council would follow through on the funds.

After a heated discussion with Eason on Monday night, the council approved six contracts totaling about $697,000.

With those contracts approved, Eason said the city now has at least 75 percent of the grant funds allocated and is on track to allocate the rest.

But some city council members werent happy about approving large contracts on such short notice.

Really this bothers me, Council President Delrico Loyd said. We cant act in the best interest of the public if we cant digest the information.

Earlier this month, The Journal reported that federal officials wrote a letter to Flint Mayor Dayne Walling to express its concerns that Flint is at risk of not meeting the deadline for committing the neighborhood stabilization funds, which are federal grant dollars awarded to fight foreclosures and redevelop housing.

Because of internal problems in the previous administrations community and economic development department, Eason said the city was already behind on spending the grant funds when Walling was elected.

We cant keep explaining why we cant spend these dollars, Eason said. This is an albatross around our neck.

The council passed the proposals on a 7-1 vote, with Loyd dissenting.

Council members questioned Eason about some of the larger contracts going to out-of-town vendors, including $250,000 to Saginaw-based nonprofit Circle of Love for homebuyer education and counseling services and $244,916 to Detroit-based Community Improvement Group for program management for the city of Flint.

Eason said HUD approved of those vendors and said Community Improvement Group will be hired to help the city manage the grant funds because the city doesnt have the internal capacity to do it on its own at this time.

For what were getting from them, were getting more than our moneys worth, Eason said. This is a company HUD has 100 percent confidence in.

Audience member Pamela Gerald said the funds should have gone to Flint businesses.

You keep talking about the Flint economy, Gerald said. Why are you pouring it into other cities?

flintriverbottem Jun 15, 2010
I have been saying for a while now that someone needs to over see where all the grant money is going. How do we know if every penny is going into the neighborhoods or some one's pocket. When large sums of tax dollars are given away for grants can one be certain it is not lining someone pocket. Some neighborhoods in Flint are getting large sums of grant monies but you still don't see the improvement that you should see for the amount of money being spent.

doinit4me Jun 15, 2010
Typical politicians wasting money. I mean come on. $250,000.00 for "homebuyer education and counseling services." What the heck is that and why are taxpayers funding it?

Why is it that our "leaders" are more concerned about out-of-town companies getting the money than they are about learning what the money was for in the first place. How do they know that a company located in the county exists and is qualified to administer the funds if they don't know what the money was for? Kudos to Loyd, September is still more than 2 months away and the approval process should have been tabled.

Further, why is that Flint has to hire someone to oversee this process? Isn't that what our "leaders" were elected to do? It's like being asked to give someone money to buy parts so they can fix their car then learning that they don't know what the parts are for or how to install them.

It sounds like only a small fraction of the total grants will be used to actually do something beneficial for Flint, the rest will likely be eaten up by administration costs after all of the people needed to run these financial contraptions are hired.

Don't be surprised if one of the companys used or one that will be used with this money has close ties to a person or persons charged with the disbursement of the funds.

Spending $697,000.00 with only "a couple hours" to figure out what you are buying is borderline negligent.

This is a prime example of why the Tea Party doesn't have to advertise and a crying shame.

Last edited by untanglingwebs on Fri Sep 23, 2016 5:48 pm; edited 1 time in total
Post Fri Sep 23, 2016 5:45 pm

Flint also had to pay back money from Circle of Love. The Flint connection was Charlotte Edwards, who also seved on the FAIF Board.
Post Fri Sep 23, 2016 5:47 pm


Smith Village fraud and lawsuits much of the CIG saga is in this link. CIG was awardes an NSP contract on 6-14-2010. They were also a part of Smith Village Development LLC , CIG, and Jason Strayhorn and Mark DeMaria as individuals against Young, Eason and Flint over being stipped of the development contract for Smith Village.
Post Fri Sep 23, 2016 6:06 pm
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