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

2. Tenant Escrow**- Tenant Escrow accounts are in essence trust accounts. During 2003 some of the tenant escrow funds from Salem CDC was loaned to Salem nonprofit Housing Corporation. These funds should be returned to Salem as soon as possible.

Management response-We will comply


3. Bidding-We would recommend that the company come up with a policy and threshold on bidding projects, The major projects are being bid out but the smaller projects may or may not be put out for bid.

Management response- Bidding policy for Salem Housing C.D.C.: All government fund contracts are bid prior to contracts being awarded. Additional to this bidding policy: Change orders within a contract in progress will be bid if the work was not initially included in the specifications and exceeds the $3,500 cap set by the City of Flint, and for change orders that are not of a time urgent nature nature in contracts in progress when estimates would indicate that these change orders will exceed $3,500.

Maintenance repairs will be negotiated and will be bid when estimates indicate they will exceed $5,000.
Post Mon Aug 28, 2017 10:15 am 
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untanglingwebs
El Supremo

4. Employee Accounts Receivable- ** At the end of the year the company has a balance due from some of their employees. It is our recommendation that the company refrain from from advancing employees money. At the very least, the company should have a policy on repayment of the amounts owed.

Management response- Policy: Employee advances will be permitted only under the most extenuating circumstances. Such advances can be approved only by the Executive Director. A written agreement will establish a repayment plan using payroll deduction. Vacation time off will be encumbered by the amount of the advance until it is repaid.
Post Mon Aug 28, 2017 10:30 am 
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untanglingwebs
El Supremo

The employee loan issue in the 2003 audit was also addressed b a HUD OIG hotline Complaint NO. HL-04-1547. Allegation #3 Giving a loan using HUD funds to a former employee (Lance Rison) to keep him out of jail. The amount was $2,000.

Salem Housing representatives met with Mayor Williamson and legislative Liaison Joe Conroy in response to a Citizen Hotline complaint received by the City on July 20,2004.

Initial responses on the list from the Citizens Hotline complaint follow:

1: Salem never billed out of program area or out of approved purposes. As you know we carry out the work and seek reimbursement-contractors do receive a 25% start up with percent of work completed determining further releases. This process is typical in construction that a percentage of the payment is fronted to begin the work, Sale is not a typical agency in that our process is to pay our contractors and get reimbursed by the city .
Post Mon Aug 28, 2017 10:59 am 
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untanglingwebs
El Supremo

Most other agencies are invoiced by the contractor and they in turn invoice the city-the City pays the agency and the agency pays the contractor. Other agencies may pay a contractor after the agency is paid but due to outside forces (our fundraising efforts and private donors ), Salem Housing pays the contractor with supportive documentation and then is reimbursed by the City . Flint HOME or CDBG funds upon completion. It is only after final inspections and certifications are complete that final payments are released to the contractor.

2. Time sheets were revised at the City's request from "working on contractor files" to specific file being worked on-changes were to tie these billings to specific projects.

3. No government dollars were loaned to Mr. Rison

4. Changed line items. This project was written with a developer fee. At the request of the City of Flint staff, the line item was changed from "developer fee" to "soft costs".

5. No CDBG or HOME dollars in jobs to friends or relatives.
Post Mon Aug 28, 2017 11:17 am 
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untanglingwebs
El Supremo

6. Salem Housing uses it's General Contractor's license in workforce development with some skilled workers. Salem pulls the permits and is responsible for workers comp and liability insurance on all work, (All mechanical contractors are licensed and pull their own permits) This has been an acceptable approach to workforce development including our encouragement for each of these skilled worker's participation in MSHDA's
Contractor Assistance Program (CAP), MSHDA's lead safe practices , and sound business practices.

7. Lead Abatement activities-assessments and final clearances are carried out by Wilco, a certified lead abatement contractor. Salem Housing sponsored lead-abatement training for more than 40 local contractors, We will review to verify that all work includes trained contractors and/or that our certified staff is on site. We had four trained staff and now have three-one of these individuals is working property maintenance full-time and it is appropriate that we review this supervision process.
Post Mon Aug 28, 2017 11:37 am 
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untanglingwebs
El Supremo

* Note previously the Executive Director denied coordination with CAP or any other workforce development organization. These "skilled workers" were said to be contract workers not employees, thus why would the agency pay workman's comp or liability insurance?
Post Mon Aug 28, 2017 11:40 am 
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untanglingwebs
El Supremo

There are some additional things you should know. We had an employee go astray who had a great deal of responsibility and had earned our trust. When it was discovered,she was dismissed and managed to convince me that the inappropriate action would never occur again. I suspended her for two weeks with the result that the relationship was permanently ruptured. Finally I dismissed her under our "at will" clause and since then one allegation after another has placed us under investigation.


Note: The city had one whistlleblower complaint and one formal complaint from another employee. Both of these employees also filed complaints with other entities, some federal. There were other complaints, some verifiable and some believable but not as easily verified.
Post Mon Aug 28, 2017 1:45 pm 
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untanglingwebs
El Supremo

1. You will note that in March a paket of information was sent to HUD in DC, Detroit, Your Neighborhood Department and any others. We have responded with complete cooperation throughout that investigation. Your staff Neighborhood and Community Services and that of Building and nspetion have investigated carefully both our records and the work on the homes. Ms Glenda Dunlap indicates that the report is complete and ready to go to HUD. We have not seen a copy and want to do so.

2. In early june, Councilwoman Sims did a referral on the same complaint of incomplete work in the Homeownership Zone-and the work is not complete...14 of 20 homes are complete and the remaining six are waiting for the release of re-programmed dollars n order to be completed. A resolution appropriating those dollars is one of the resolutions awaiting your review.


Last edited by untanglingwebs on Tue Aug 29, 2017 9:06 am; edited 1 time in total
Post Mon Aug 28, 2017 1:59 pm 
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untanglingwebs
El Supremo

The staff of the Department of Neighborhood and Community Services have reviewed the work complete and the work still to be completed and approved these expenditures as appropriate. We would like very much to be permitted to complete the work. The Flint Journal photographed the incomplete work-there is no defense except that we do not have enough dollars in the grant to complete the work. The requirement for the Homeownership Zone are that owner-occupied rehab begin with the exterior and if there are remaining dollars, to correct main system defects and any cosmetic repairs necessary after these defects are corrected. The weakness in this is that one house may have major roof repairs and another not need decking- different dollars are"left" when one gets to the inside. In addition the funding source changed in the middle of the project from CDBG to HOME dollars and that changed the lead abatement requirements to the necessity of addressing all lead in a house even if it were not being disturbed and posed no risk to the family-with this change the osts increased and the need for additional dollars became a necessity.
Post Mon Aug 28, 2017 2:17 pm 
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untanglingwebs
El Supremo

There will be findings from your monitors-we have found these problems-hence the dismissal and a number of very stringent new processes that will prevent such abuses in the future. We take responsibility for those problems and request the opportunity to demonstrate to you our capacity to complete high quality affordable homes.
----------------------------------------------------------------------------------------

Salem Housing was visited on July 27 and 28. Jane Richardson confirmed that a $2,000 loan was given to an ex-employee lance Rison. She denies the funds were HUD funds. She gave me copies of two checks; one drawn on Salem's Bank One account (#20752 Nov. 7, 2003) for $1,250, and one drawn on their Paine Webber Money Market account
(#318 August 25, 2003) for $750. According to Richardson, the $1,250 check was drawn from unrestricted general funds and was received as donations and the Paine Webber account is Mott Foundation funds. Both checks were to Rison's attorney, Mark latchana and are shown on the salem book's as a loan. Rison was subsequently terminated and the loans were not repaid triggering an audit finding. Raymond hatter the Executive Director was the only one who can authorize a loan.
Post Mon Aug 28, 2017 2:36 pm 
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untanglingwebs
El Supremo

Lance Rison is the son of Vera Rison, Former State Representative and former County commission, At the tie of the complaint Vera Rison was employed by Senator Robert Emerson in his Flint office. Salem Housing had entered into a contract with the Genesee County Land Bank to perform maintenance and lot clean ups for the land bank. Raymond hatter's son, Raphael, was a supervisor and worked on the same crew as Rison.
In 2003, Rison had 2 felony child support cases in Genesee County Circuit Court.
Post Mon Aug 28, 2017 2:47 pm 
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untanglingwebs
El Supremo

A whistleblower stated some Hud contracts were with Joseph Hatter , Raymond's brother. They also alleged a girlfriend, niece and nephew of Haters were also employed by Salem.

Raymond's son was supposed to manage the county crew. allegedly there was reluctance to hire Hatter's son, but hatter was said to insist 'a young man with a baby needed a job" Raphael was said to be one of three employees that got a $4 raise in pay.

A Genesee County Land Bank administrator admitted that they had received large phone bills to a phone sex line from their equipment storage building on Hemphill. In order to install a burglar alarm, the county had to install a phone line , but they did not install a phone. The Salem crew member took his own phone to make the calls.

This same crew member got drunk and arrested in Detroit while using a land bank vehicle. The Land bank had to send employees to Detroit to retrieve the vehicle. The salem contract was pulled.
Post Mon Aug 28, 2017 3:07 pm 
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untanglingwebs
El Supremo

Was there favoritism in the work done on houses. There was a house on Mary that employees went way beyond the guidelines.

24 x 8'7" porch with 2 wrought iron handrails
4 security doors (every side)
2 steel entry doors

6 newstorm window on basement
2 new vinyl windows in entry
new kitchen cabinets
insulation and drywall in every room
new flooring and even the attic was carpeted. (19 x 20)

Mind boggling when other homes had carpets repaired . The staff sid the attic was carpeted because the elderly male liked to sit up there.
Post Tue Aug 29, 2017 8:34 am 
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untanglingwebs
El Supremo

I contacted the contractor that performed the work on this house. This house and others demonstrate the need for possible photographic documentation of repairs. It seems that a number of grandchildren were in the home. No one would say if they lived there or were just visiting. there was no documentation of their presence or if any income was involved. The contractor indicated these young people were responsible for some damage after construction.There was a possible connection to a high ranking official in the Sheriff administration.

Income verification seemed to be sketchy. Also no one in the agency seemed to verify the property taxes and home insurance stayed in effect as required by the grant . The south side of Mary was in the zone that eliminated most of the property taxes, while north side was not. Some houses were on the delinquent county tax list during our investigation.
Post Tue Aug 29, 2017 9:05 am 
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untanglingwebs
El Supremo

Individuals getting contracts while not on the bid list was a complaint made by former employees and other contractors who were at the bid openings. Salem did their own bids versus having the bids opened at City Hall.

In one instance reported by former Salem employee a Jamison Street contract was changed after the bid opening. Allegedly a contractor friend of Hatter's (WC) had a late bid submission (after hours) The employee stated 4 bids were on the board and a contract written when they left. The next day WC had submitted a nearly identical bid and a new contract was left on their chair.
. The employee stated they were angry because the other contractor guaranteed their work. The employee was emphatic that WC had worked his bid over the winning bid.

Employees also stated that Raymond Hatter's company Palladium may have been used because the license was posted on the wall.
Post Wed Aug 30, 2017 7:25 am 
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