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Topic: Flint Shadow Government- #1 Salem Housing
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untanglingwebs
El Supremo

Flint switches developer on six home rehabs as work remained unfinished 'after several years'

Print Email Ron Fonger | rfonger1@mlive.com By Ron Fonger | rfonger1@mlive.com
on January 05, 2015 at 5:00 AM, updated January 05, 2015 at 5:03 AM

Habitat for Humanity volunteers empty material to use while working on a house as part of the Habitat for Humanity Builders Blitz on Fifth Street in Flint in this 2012 Flint Journal file photo.


FLINT, MI -- The city is hiring a new contractor to complete the rehabilitation of six homes after waiting "several years" for another group to do work that was never finished.

Emergency manager Darnell Earley signed a resolution Dec. 12, authorizing a new contract with Habitat for Humanity to complete the work started by Salem Housing Community Development Corp., a Flint-based nonprofit.

A staff review attached to Earley's resolution says Salem had been selected as developer to complete the rehabilitation work, but did not finish the job -- even "after several years."

MLive-The Flint Journal could not reach Tracy Atkinson, chief officer of Flint's Department of Community and Economic Development, or Chief Planner Megan Hunter for additional information about the new contract.

But Jane Richarson, special projects facilitator for Salem, said her group did not have the needed cash flow to finish the work because of new city policies on reimbursements.

"All but one (of the homes) are 95 percent complete," said Richardson, who said one of the six homes has also been sold since the emergency manager's resolution was written.

"We regret that we are at this point," she said. "We are leaving the housing market" but continuing with other activities, including home buyer preparation. "The housing was dragging us down."

The city's staff review for the new HOME Investment Partnership funds contract with Habitat says $181,000 has been canceled from Salem's existing contract and moved to an uncommitted account it can be transferred to Habitat.

"Moving these funds to an organization with capacity will allow the city to complete the rehabilitation ... and make (the homes) available for purchase," the review says. "Once purchased, the city can close these activities and reduce the number of open HOME activities."

Richardson said Habitat has the cash flow to make it a good choice to finish work on the homes for the city.

Salem's Web site says it was created in 1984 by five neighborhood organizations and a church on Flint's north side out of concern for deteriorating housing stock and vacant homes in their area.

Its service area is a 132-block area bounded by Pasadena Avenue on the north, Saginaw Street on the east, Wood and Begole streets on the south and Dupont Street on the west.
Post Fri Aug 25, 2017 10:08 am 
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untanglingwebs
El Supremo

When I speak of a Shadow Government, I am not referring to the illuminati. I am thinking of the shadow government as the nonprofits and Quasi governmental entities that strongly influence our local politicians and in many aspects actually are responsible for government decisions. In Flint, some of the economic development and housing entities wielded enough power that the city was willing to overlook their lack of transparency and accountability until the complaints and misdeeds hit the news.

I was ordered to"baby sit" Major Grants for two weeks. During that time one of the employees was pushing to have months of salary for the Director of Flint Nipp transferred to a federal grant. Flabbergasted, I asked how this could be correct. My response was no way because there was no corresponding time sheets to verify time worked on the federal grant. Plus I had seen this type of transfer at GCCAA. I seriously doubted the director worked daily on that grant. The employee told me that Flint Nipp was so "good" that staff did not need to scrutinize the expenditure. Later, we got a HUD finding because after I left that BS expenditure went through and HUD disallowed it.
Post Fri Aug 25, 2017 10:29 am 
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untanglingwebs
El Supremo

Mayor Williamson asked to come to his office. I found the 4th Ward councilman there asking for the money that Ed Kurtz allowed the agency in his ward to have as he was leaving.

I explained that the three houses the agency got money to demo had never been completed. The agency, GECA, had Quit Claimed the properties back to the Land Bank. The Land bank was not happy as they had not agreed to this decision. As taxes were owing on the properties, they would now be the obligation of the Land Bank.

Then Treasurer Dan Kildee told me banks were asking to have the land Bank take over some of their foreclosed homes and the Land Bank did not want to start a precedent. Once these properties had gone through the system, the issue of taxes would be resolved. Many of the banks left the taxes unpaid. The housing crisis was leaving a glut of vacant homes in the city.

Also the agency the councilman wanted funded had received funds towards the rehab of three houses and after a year they had done little, two of the homes were open and vandalized. They were later condemned. The agency had spent all of their administration funds. There was a question of ownership n the third house. GECA has sold the house on a land contract that was still in effect and was holding the money to buy the house for nearly a year and had not consummated the buy back. The time limit was up and GECA had not requested an extension.
Post Fri Aug 25, 2017 10:54 am 
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untanglingwebs
El Supremo

The most difficult agency to deal with was Salem Housing. They defied attempts to review their records despite some very public coverage of the poor construction used in their attempts to rehab the owner occupied houses in Smith Village. The grant was to cover exterior siding and other features so that these homes did not stand out in the final development. Code violations were also to be covered. HUD raised the $35,000 rehab limit to $50,000 for these homes.

Raymond Hatter told the media he never received a final report. Mayor Williamson did not want these reports disseminated.

Council,in an attempt to circumvent analysis of these organizations, moved funding to stop the investigations. However numerous complaints went to both Detroit and national HUD offices.
Post Fri Aug 25, 2017 11:02 am 
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untanglingwebs
El Supremo

Salem operated outside the scope of their agreement with the City for HUD CDBG funding. Their bills presented to the City were often not accurate and when costs were disallowed payment delays occurred as staff had to recalculate and amend bills.

The on-site records were not always accurate. The amounts recorded did not match the amounts shown on the checks. The spread sheets reflected these errors resulting in inaccurate repair costs on the homes.
Contractor bills often did not specify the work performed. There were instances in which contractors were paid in advance and never performed the work. Salem did not seek restitution and instead paid another contractor to complete the work.

The City of Flint totally lost control of the projects and could ot ensure the CDBG/HOME funds were being used appropriately.

Salem used two contractor' licenses. Salem had their own and Director Raymond hatter had a license for his company Palladium. Salem acted as the general contractor and pulled the majority of the permits except for the mechanical and electrical. Salem often did not request inspection by the City of Flint. They did however in many instances used independent inspectors, some which were laid off inspectors from the City, for the initial code enforcement inspection and final inspection.
Post Fri Aug 25, 2017 11:29 am 
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untanglingwebs
El Supremo

I had serious concerns about Salem's workforce development program.

Did this program have an affiliation with the state strategy on workforce development?
How is the program designed?
How do individuals learn about the program and how do they apply?
How and by what means are they selected and is there a written agreement detailing the conditions and responsibilities of the training?
Who is responsible for the oversight of the program such as training and supervision?
What are the performance measures and is there a verifiable program-specific performance measure?
Were they considered to be employees and how were their salaries determined?
Does Salem receive any funding for the program?
Post Fri Aug 25, 2017 1:35 pm 
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untanglingwebs
El Supremo

Memo Trail
Raymond Hatter
4-26-2005
Went you first sent us your letter, dated February 2005, we had already provide this information to the city's Major Grants department. And we have a response back from HUD regarding the HuD complaint.
Please inform that department and Salem Housing of your intent regarding the complaint if it will supercede there report to HUD.
(typed as written)

my response
Mr. Hatter
Your response is woefully inadequate. My report is to the Mayor and the City Administrator . I have been informed that the response from Major Grants to the HUD complaint is not complete. I respectfully request that you respond to my correspondence.
Post Fri Aug 25, 2017 1:49 pm 
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untanglingwebs
El Supremo

from Raymond Hatter cc: Tamar Lewis and Jane Richardson

Our WORKFORCE DEVELOPMENT INITIATIVE is an internal program not funded using any CDBG or HOME funds. It is a philosophy at Salem Housing that says to our community we as an organization is committed to the the development of local skilled laborer in their attempt to become licensed independent contractors. The following statements are in a direct response to yur letter mentioned above.



We are not affiliated with any local workforce development entity in Geneee county or the State of Michigan.

Our efforts to assist local laborers is an ongoing one and was practiced prior to m coming to Salem Housing in 1994.
Post Fri Aug 25, 2017 2:09 pm 
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untanglingwebs
El Supremo

continued:
There is no application process to this initiative/ There is no written workforce development agreement but we do have a contract for work with these individuals.

This initiative is not an employment agreement with these subcontractors only a contract for work.

This initiative is the primary responsibility of the program construction assistance.

Once a subcontractor is awarded a contract we work with them in identifying problems, developing solutions, assisting with cash flow issues, and directing them to training opportunities within their area of expertise.

This is not a structured program.Our assistance to our subcontractors is on-going and we take training to there desired field of work.
Post Fri Aug 25, 2017 2:30 pm 
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untanglingwebs
El Supremo

continued:

Yes other contractors have have used subcontractors that have received work from Salem Housing.

We have not received any CDBG or HOME funds for our workforce development initiative but we have charged local local skilled laborers to receive training.

Again this is not a structured program assisted with any local, state or federal funding.



(typed as written)
Post Fri Aug 25, 2017 2:40 pm 
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untanglingwebs
El Supremo

By making them subcontractors Salem did not pay workman's comp for these workers. They were nor assisted into an internship program. The state was operating a Contractor Assistance Program at the time.

Interview excerpts LV 3-10-05 2:45 pm

LV stated they believed the Workforce Development Program was the concept designed by Pastor Fuller to create opportunities and tach individuals how to be contractors.

Salem found a loophole. Those with a DBA could work under Salem's license and the labor cost could be cut.

Board of Director Bill Hammond and Hatter told LV it was legal if the cost was kept under $600.00.
Post Fri Aug 25, 2017 2:51 pm 
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untanglingwebs
El Supremo

LV
Some classes were taught at Mt tabor, such as a lead based paint class. Classes cost $5 to cover food, but salem eventually wanted to charge. The Health department gave grants to cover the costs of the class.

LV did not believe Salem was a real contractor. LV noted"price is price" and ray was always trying to lower the price.
Post Fri Aug 25, 2017 3:01 pm 
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untanglingwebs
El Supremo

As a non profit subrecipient of the City of Flint's CDBG/HOME programs Salem was unique in that it was the only agency with it's own Residential Builder's License (ID #210212580) It was that license that was the source of much of the controversy surrounding the agency. Raymond Hatter, Executive Director of Salem Housing, served as the qualifying officer of the corporate license issued under the Occupational Code, Act 299 of 1980, Article 24 (330.2405) section 24_5. "The qualifying officer shall be responsible for exercising the supervision or control of the building or construction operations necessary to secure full compliance with this article and the rules promulgated under this article."

The way Salem Housing circumvented using licensed contractors and subcontractors. was Section 339.2403 which states " a person may engage in the capacity of a residential builder or a residential maintenance and alteration cr contractor or sales person in this state without having a license if the person is one ofthe following:
Post Fri Aug 25, 2017 8:35 pm 
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untanglingwebs
El Supremo

......(e) a person other than the sales person who engages solely in the business of performing work and services under contract with a residential builder or a residential maintenance and alteration contractor licensed under this article."

The manner in which Salem Housing used the concept of a workforce development program actually disenfranchised the low to moderate income residents that Salem was purporting to help.They also violated city and federal rules. HUD ultimately pressured the agency to discontinue the process.

On July 18, 2003 Amy Bostwick and Glenda Dunlop toured some projects and asked Salem Housing employees why they were exceeding the HUD limits on some houses using Home funds. They asked the agency to cease any new projects until an evaluation was completed by the major grants department. They alsorequested a report.

On 11/11/2003 Karen morris of Flint's Major grants sent a communication to L. Franklin of Salem's construction program.
Post Fri Aug 25, 2017 8:54 pm 
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untanglingwebs
El Supremo

The report had asked for :
1. How much was spent per project
2. cost to finish
3. copies of specs

A previous communication on 11-4-2003 expressed concern over the lack of consistency in bids

Karen Morris
"In many instances, your projects have substantial change orders which may be some thing could or could not be seen during inspection. What contingency are you building in with your project costs? Since you are tracking in soft costs per proec, this should be builtin your total?

Other considerations were costs to finish the project and lead abatement services.

* Salem had more than one grant
Post Sat Aug 26, 2017 8:24 am 
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