County to repay $150,000 MSHDA grant

By Kyle Leppek

Pioneer News Network

LAKE COUNTY — Due to overall insufficient grant and project management, the Michigan State Housing Development Authority is requesting Lake County to repay a $150,000 grant that was administered to rehabilitate and repair homes in the county.

The county received a $150,000 Homeowners Assistance grant which was funded by MHSDA’s Community Development Block Grant program. The grant had a term from July 1, 2010 to Dec. 31, 2012, and was provided to fund rehabilitation assistance for five owner-occupied homes and emergency repairs to five homes.

“It was money that was made available to homeowners, only homeowners, to make emergency repairs – furnaces, roofs, windows – to make their houses more energy efficient for them to live in so they weren’t spending so much money in fuel and heating and all that kind of costs,” said Shelly Myers, Lake County clerk, register of deeds and chief financial officer.

On June 27, MSHDA’s Community Development Division (CDD) conducted an on-site monitoring of the grant and reviewed six portions of the program and another seven areas of review in the project file.

What resulted was a four-page monitoring follow-up addressed to Lake County Commission Chair Karl Walls and signed by CDD Director James Tischler. The Oct. 8 follow-up summarized the findings as follows:

“Grantee is below expected proficiency in financial management, procurement, contractor and applicant selection, project and contract management, record retention, housing rehabilitation standards and cross-cutting requirements (environmental review, fair housing and Section 3).

“Overall grant and project management is insufficient; federal funds were not expended in compliance with relevant statutory and regulatory requirements.

“In addition, all projects are ineligible for reimbursement with federal funds because the environmental review of projects was not done. Unverified income to prove eligibility will also result in ineligible projects.”

According to the letter, nine out of 10 proposed units were completed with grant funds.

The letter concluded by stating Lake County was required to repay the grant in the amount of $150,000. A Nov. 5 letter, again addressed to Walls from Tischler, stated a payment schedule could be negotiated. The commission approved to repay the grant at its Nov. 13 meeting.

The county has received the grant before in the late 1990’s, Myers said. She remembers, even at that time, the grant seemed like a larger undertaking than the county could handle.

“(The grant) is very, very time consuming,” Myers said. “I think it is a grant that takes an almost full-time person to administer, but the county cannot afford to hire a full-time person. The grant doesn’t give you money for that.”

When the county received the most recent grant, the commissioners appointed Commissioner Sandy Clarke to assist with the program. Clarke also assisted the state during the on-site monitoring in June.

During the monitoring, the team made 13 findings which required action to be taken and seven comments with recommendations. In addition to the findings and comments summarized in the letter, the team also mentioned that various educational information was not distributed and an applicant packet was non-existent.

During the project file portion of the monitoring visit, only one file was reviewed and contained many deficiencies, according to the Oct. 8 letter. Clarke stated the same documentation would be found in the other files, the letter adds.

“Were there lessons to be learned, of course,” Clarke said. “Could there have been paperwork as to our reach activities, housing assistance forms, fair housing brochures and homeowner packets that were seamless in nature, of course, as with any home emergency repair project.”

Brochures were available, Clarke said, but they were located at the county building and not provided in a packet.

When dealing with grants in the future, Clarke believes the county would benefit from having a third-party administrator, a work-specifications writer and a data entry assistant.

“The county is very supportive of meeting the needs of our low-income homeowners in the county, provided due diligence in terms of working with our housing committee and our contractors to be able to provide the assistance needed.”

The Oct. 8 letter states that once the grant is repayed, “MSHDA will require documented proof of capacity or employment of a MSHDA approved third-party administrator before future application for MSHDA funds will be considered.”

Although MSHDA is requiring the grant to be repaid, Clarke believes the county’s measurable outcome to increase homeowners’ quality of life and upgrade homes so they are safe and sustainable was met. She references a letter from one homeowner who received assistance that said their quality of life had improved because of a new roof, shower replacement and kitchen renovations.

The grant also provided an internship opportunity for five high school students, Clarke added.

“It’s a wonderful grant,” Myers said. “It’s a wonderful concept and it helps our local contractors, it helps our homeowners, it helps everybody. It’s just that the paperwork and bureaucracy that you have to jump through is way beyond this small community.”