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Topic: Eason's plans destroy FAEC-5 board members quit
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untanglingwebs
El Supremo

Intermingles, Icons, Hoofers and more.

I can empathize with Mayor Weaver. When during the investigation of Intermingles, a connection arose linking Harold Hill to a Cool Cities application for 511 N. ML King, I sent a FOIA request to Major Grants (formerly DCED) for a copy. The department head at the time refused to cooperate with any investigations. The second request had to go through the Mayors office. Should have been a courtesy and shouldn't have required a FOIA.

The application was a surprise. The FAEC offices had architectural drawings on the board. A call to the creator of the drawings revealed they were created for a business to be located on the site of the proposed Intermingles. The drawings were commissioned by Harold Hill and allegedly not paid for.

However, some of the facts of the application were not accurate. Although Aubrey and Ruffin had lost the properties in question, CCDC was not the owner,.


Last edited by untanglingwebs on Sat Jul 16, 2016 12:54 pm; edited 1 time in total
Post Fri Jul 15, 2016 9:44 pm 
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untanglingwebs
El Supremo

Per the application, "Community Capital Developer owns the building valued at approximately $100,000. A grant application is being prepared for submission to the Homedepot Foundation for building material donation. The Powergroup, Inc. has pledged support for audio/video equipment. The Apollo Theatre Foundation has pledged donations for decorations, props,etc."

The proposal also stated QIX (Quality Internet Express) was planning to set up a tower on the facility to accommodate broadband and other communication services throughout the immediate area.

The proposal was to create a prime entertainment center near downtown. Patners included:
*Flintstone Hoofers
*Creative Expressions Dance Studio
*Flint Area Investment Fund
*Apollo Theatre Foundation
*Greater Flint Arts Council
*Flint Cultural center
*Flint Board of Education
*City of Flint Parks and Recreation
*Bradley & Associates
*Bradley Tap Festival
*Phi Eta Psi Fraternity
Post Fri Jul 15, 2016 10:04 pm 
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untanglingwebs
El Supremo

The proposal called for using funds from the Community Foundation Facade grant, The proposal stated it would be close to Carriage Town, a mixed residential-commercial location and the area was targeted for restaurant and entertainment venues.
Post Fri Jul 15, 2016 10:12 pm 
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untanglingwebs
El Supremo

The grant application was calling for $12,500 to be used as a match for the Facade improvement grant they had applied for from the Downtown Business Association/Community Foundation.

Hill, in his resume, stated he was board member of Flint Community Development Economic Development Corporation-Genesee County, and the Flint/Genesee Corporation for Growth. He also showed e was the National President for Phi Eta Psi Fraternity, Inc.

The Flint Community Development Corporation became Community Capital Development Corporation. I don't remember economic being in the title.
Post Sat Jul 16, 2016 6:10 am 
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untanglingwebs
El Supremo

In my communications with the individual who prepared the building plans and the drawings themselves, the building at 511 ML King was to be united to the adjacent building to the north. Leewonder Ruffin had originally inherited both, but had lost one. She also had planned to use both for the Intermingles night Club.

My records show Ryan Eashoo as owner of the adjacent building. Eashoo was working with Hartley to develop the two buildings. Hill had united with Michael Shumpert to develop the two buildings into a tap dance venue and office space. After Eashoo made a complaint that he FAIF loan board had not seen their offer, it was decided by the FAEC Board to rebid the sale of the building.

Aubrey moved to the Glenwood site by himself and renamed the project Icons. Financial problems followed and the building owner evicted him.

The building at 511 N ML King has been torn down. No one, especially the City of flint, got any benefit from these buildings.
Post Sat Jul 16, 2016 6:25 am 
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untanglingwebs
El Supremo

Mayor Williamson approved the request of Nancy Jurkiewicz-Rich for intervention by the city in monitoring the records of the Flint Area Investment Fund (FAIF). Nancy had been denied access for nearly three years, although she was obligated to monitor them annually for the grant. Emergency Manager Ed Kurtz had denied her requests.

At the insistence of the Mayor's office, the records were opened and the monitoring began. It took over a month because of the length of time access was denied.

On December 14, 2004 DCED staff and some board members of FAIF met at the offices at 804 Welch Blvd. I presented a draft report in which I recommended the City of Flint reclaim the revolving loan fund on behalf of the Flint Area Enterprise Community. There was a strong possibility that either the federal government or the State of Michigan would take over the funds. It was also recommended the City of Flint honor their contractual obligations to FAEC and restore the funding taken from FAEC during the financial crisis.
Post Sat Jul 16, 2016 11:28 am 
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untanglingwebs
El Supremo

Some of the concerns expressed to Mayor Williamson included: co-mingling of the FAIF with those of Community Capital Development Corporation (CCDC); the improper disposal of corporate records; the conversion of FAIF assets to the personal use of the Executive Director,; the lack of accurate and complete monthly financial records and the refusal of the Executive Director to produce such records and loan information; significant operating losses and capital depletion due to a deteriorating loan portfolio; the lack of internal controls; te charging of ineligible costs to the revolving loan fund of FAIF by CCDC and the possible billing of costs incurred by and already reimbursed by other programs.
Post Sat Jul 16, 2016 11:37 am 
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untanglingwebs
El Supremo

BACKGROUND:

The City of Flint and Mt. Morris Township received $2,947,368.00 in Title XX of Social Services Block Grant Program money from the Michigan Department of Social Services and the United States Department of Health and Human Services when they received the Enterprise Community designation. The City of Flint (under Mayor Stanley) sub-granted these funds to the Flint Area Enterprise Community, Inc., who in turn sub-granted the funds to the newly formed Flint Area Investment Fund. Community Capital Development Corporation was to manage this fund for a fee.

The funds, initially meant to finance a community bank, became a revolving loan fund. The role of FAIF, as a sub-grantee of the Health and Human Services/ Michigan Department of Social Services grant agreement with the Flint Area Enterprise Community holds the revolving loan fundsin trust to serve the purpose for which the grant award was made. The five areas addressed by the strategic plan are: neighborhood and housing development; health and human services; safety, education; and business development.

A HUD Memorandum of Agreement used $591,265.11 of 108 loan interest income to create a fund for the establishment and management of the the Flint Area Enterprise Community. The City of Flint breached the Memorandum of Agreement in 2002 when the remaining money was taken because of the City of Flint's financial crisis.
Post Sat Jul 16, 2016 12:02 pm 
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untanglingwebs
El Supremo

INEFFECTIVE CORPORATE GOVERNANCE

FAIF failed to operate the Revolving Loan Fund in accordance with lending practice generally considered to be prudent for public loan programs. These practices include loan processing, documentations, loan servicing, and administrative procedures.


* Disregarded sound underwriting practices by making highly speculative and nominee loans;
* Disregarded bylaws of the Corporation and exceeded the $100,000 loan limit;
* Co-mingled assets and funds of the FAIF with those of CCDC;
* Failed to provide the Flint Area Enterprise Community and the City of Flint with monthly performance and financial records, as required in their sub-grantee agreement;
* Failed to ensure that the Executive Director and staff maintained complete and accurate records of transactions, maintained the records as required by federal regulations for federal monies, and followed procedures allowed for the disposal of records;
*Failed to maintain a semblance of "transparency" in the actions of the board by allowing a father of one board member to receive a housing loan without following the approved HUD disclosure rules of public disclosure of the transaction;
Post Sat Jul 16, 2016 12:28 pm 
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untanglingwebs
El Supremo

* Failed to document if HUD disclosure rules were followed when the employee of another agency, Salem Housing, purchased a home from Salem Housing after marrying a participant in a federally sponsored housing program and receiving down payment assistance from Citizen's bank through FAIF;
* Failed to address allegations that the board was politically operated and the loan process attempted to benefit friends of former Mayor Stanley, resulting in a "whistleblower" lawsuit by a former director and a signed affidavit from a former board member alleging political influence in loan requests, political activities performed by staff of the corporation, and politically favored employees with falsified credentials.
Post Sat Jul 16, 2016 12:38 pm 
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untanglingwebs
El Supremo

FAILED TO PROTECT THE ASSETS OF THE REVOLVING LOAN FUND

*Allowed the Executive Director to convert assets of the corporation to his personal use;
*Failed to obtain adequate and appropriate collateral from the borrower;
*Failed to act diligently to protect the assets of te Revolving Loan Fund through collections, foreclosure or other recovery actions on defaulted loans.
* Failed to follow the guidelines set up for the Revolving Loan Fund by allowing loans to exceed the $100,000 limit established by the by-aws, gave out loans without a quorum, permitted the use of fax polls to vote, which was not a practice allowed by he bylaws;
* Failed to establish and implement a policy dealing with the disposition of real property and other assets, resulting in maintenance costs, storage costs, and in one instance a property on the Flint demolition list.
* Created liabilities for the corporation by failing to dispose of real property from foreclosures.
Post Sat Jul 16, 2016 12:49 pm 
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untanglingwebs
El Supremo

THE BOARD OF FAIF, THE BOARD OF CCDC, AND THE EXECUTIVE DIRECTOR OF CCDC/FAIF EXHIBITED A PATTERN OF MISMANAGEMENT OF THE REVOLVING LOAN FUND.

*Conspired with CCDC to manipulate the assets of FAIF by allocating the administrative costs of CCDC to FAIF. Administrative costs should not exceed 15% of the Revolving Loan Fund income per year. (staff working on other programs had their salary paid by FAIF.)
*Allowed joint meetings with CCDC in which CCDC board members, who were not board members of FAIF, to vote on loans;
* Allowed staff to participate in the voting procedure of FAIF loans, although prohibited by the by-laws;
* Failed to insist on detailed minutes, which would describe loan discussions, specify dissenting opinions and record the actual vote;
* Minutes and credit proposals were frequently vague, and failed to document related interests, affiliates, business associations, interrelated borrowing relationships, as well as actual and apparent conflicts-of-interest;
* Allowed loans which were debt consolidation loans, although this was not the purpose of the revolving loan fund;
* Failed to insist on segregation of duties with the staff and allowed the Executive Director to perform multiple financial functions despite allegations of improper use of the financial assets of the corporation by a loan participant;
* Failed to require monthly financial records and at one time had such inadequate records that the accounting company had to locate and prepare the necessary record to complete the audit;
* Disregarded the sanction letter from FAEC director/consultant and failed to act on the concerns expressed in the letter;
*Allowed a conflict-of-interst when they placed Jacky King on the FAIF board, although Mr. king was the first loan ever issued by the FAIF and he subsequently refinanced the loan.
Post Sat Jul 16, 2016 1:33 pm 
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untanglingwebs
El Supremo

EXECUTIVE DIRECTOR AND STAFF DID NOT FULFILL THEIR RESPONSIBILITIES TO OPERATE THE REVOLVING LOAN FUND IN A SAFE, PRUDENT, AND SOUND MANNER

*Did not recognize loan losses and other weaknesses in timely manner;
*Failed to provide the required financial statements to FAIF and the City of Flint major Grants Division;
*Gave inaccurate information to board members and provided an inadequate financial analysis;
* Charged osts to FAIF that were ineligible, such as costs properly charged to SBA or CCDC;
* Failed to underwrite the loans in a safe and prudent manner to ensure lien and other guarantees were placed on the correct parties;
* Failed to identify conflicts-of-interest involving board members and their families;
* Allowed "nominee loans" and failed to adequately ensure that sufficient collateral was in place to protect the loan;
* Failed to diversify the loan portfolio which when combined with poor underwriting and poor loan administration, contributed to significant material loss;
Post Sat Jul 16, 2016 1:48 pm 
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untanglingwebs
El Supremo

* Converted the use of a repossessed Chevrolet van to his own personal se and violated city and federal property disposition rules when he sold the van after being questioned regarding the vehicle;
* failed to provide financial information to the FAEC board and refused to give the FAEC Director/Consultant access to loan records;
* Maintained incomplete loan rcrds and improperly disposed of records involving federal monies by disposing of them before the time allowed by federal records and without board approval;
*Misrepresented the success of Mainstreet and other activities.
Post Sat Jul 16, 2016 1:59 pm 
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untanglingwebs
El Supremo

THE CITY OF FLINT FAILED TO PROPERLY ADMINISTER AND MONITOR THE REVOLVING LOAN FUND

A past HUD for the City of Flint involved the failure of the city to implement a monitoring plan for Odyssey House. Despite past performance failures, the City of Flint also failed to establish and/or implement a procedure for monitoring the Flint Area Investment Fund. This omission may have been by design, as allegations during the "whistleblower" lawsuit by Chris Davenport against the City of Flint, many supported by affidavit and board minutes, that attempts were made to use this fund in inappropriate and politically motivated ways by the Stanley administration.

In 1998, zone consultant Dora lagrande conducted a assessment of the FAIF. Based on her suggestions, Robert Turk, then Director of the Department of Community ad Economic development, recommended changes to the governance system of the FAIF. These changes were never implemented, as board members who are currently affiliated with lending institutions were to be limited to two seats on the board of FAIF. Turk stated the organization was not producing business loans at that time was because it did not have a full time on-site loan officer. Six years later nothing has changed and the organization still does not have this position filled. In addition, the credit counseling recommended by Turk does not appear to be happening.

Under the Emergency Financial Manager, the City of Flint ceased to honor their contractual obligation to fund the FAEC operations using the 108-loan proceeds fund established for this purpose. The move jeopardized the entire upgrade from Enterprise Zone to a Renewal Zone designation and this designation could have been lost for nonperformance. The Renewal Zone designation put both the City and Mt. Morris Township in an advantageous position when applying for grants and other federal loans. Without adequate funding, FAEC would be unable to meet their performance benchmarks and the Renewal Zone designation could be lost.
Post Sat Jul 16, 2016 3:06 pm 
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