Ludington City Council Has a Do-Over on Grants

[XLFD]

At the November 9. 2015 meeting of the Ludington City Council, a public hearing was held for what was noticed as a Homeowner and Rehabilitation Program grants administered by the state's housing development authority MSHDA.  The problem was that no such program existed, though there was a similarly named one for home buyers called "Homebuyer's Purchase with Rehabilitation". 

During the public hearing I summarized after explaining the problem at around the eleven minute mark in the video: 

"Since this meeting has been noticed for non-existent "Homeowner and Rehabilitation Program" Grants, and not for the "Homebuyer Purchase & Rehabilitation" Grants, it will be improper and unlawful passing a resolution for Homebuyer Purchase & Rehabilitation Grants, as that will not have been given proper public notice. I encourage this council to table the vote on this resolution until the meeting can be properly noticed in accordance to law and protocol."

Following my statement, Community Development Director (CDD) Heather Tykoski went to the podium, and gave roughly seven minutes of description of the administration of the program, but didn't reveal much of what the program was about.  I could find out more about the program from a paragraph in a MSHDA summary of it and similar programs.  Councilor Johnson and Krauch asked a couple of questions during her time about topics which they should have been on top of, since they were voting on the application. 

But never was there a question about the public notice, nor was there any clarity about the program and how it would be used for our area, other than in the general sense.  Except an admission by the CDD in that it would be "aiding potential homeowners in the purchase of FOUR homes which would be purchased, rehabilitated and put back in play for the city."

November 9, 2015 Ludington City Council from Mason County District Library on Vimeo.

 

As usual for this group of councilors, they passed the application unanimously without any problem that the public had been told it was for homeowners, not potential homebuyers, and that it sounded that there were FOUR homes already chosen by someone to receive the grants even before they have been applied for, and without any advance public notice to potential home buyers.  Such arrangements in Ludington are not unheard of, to the detriment of the general public, since typically, those in the city network seem to get first crack at state gifts.

The Wednesday after the meeting, I made some calls to some people at MSHDA, got the ear of a couple folks who apparently felt there was something procedurally wrong with what happened at that meeting, and made their point to the powers that be in Ludington.  In the city council packet, the city manager explained why this public hearing was coming back to them

I would add that the 'minor error', which totally covered up who would be eligible for the grant (owners instead of buyers), was made by the CDD in her public notice, but a major error of judgment was made by the city council, manager and attorney in conducting a vote at that meeting without a proper public notice. 

Yet even now, my plea for more information has gone for naught, as there is nothing new other than Mr. Shay's memo in this meeting's packet.  A request to find out about the four homes she mentioned was also dismissed in a subsequent FOIA response.  The number four used was odd, since the maximum amount per home is $40,000 and the total amount available will be just under $300,000:

The grants would then cover minimally eight houses, probably even more considering the maximum won't be used for each receiver.  I am hopeful, we can get that information at this next hearing from our CDD, who doesn't seem to be able to manage details too well. 

[Willy]

It's rather unbelievable that no official caught the "error" before it was posted. I'm curious to know if this proposal is for Ludington residents only or can anyone purchase a home in Ludington and fix it up. Also why does this program exist.  I would rather see money spent on homeowner / occupied homes. Actually I would rather not see this program at all. Why are our tax dollars used to help someone else fix up their home. I would like to keep my money and put it into my own house. No wonder were so far in debt.

[XLFD]

Public officials don't get that aspect of things, their rationalization might go something like this on the state level: $150,000 for an HPR grant to Ludington represents one and a half cents per state resident (assuming MI population as 10,000,000).  They figure that a poor family of four can't fix a house up with six cents, so let's redistribute the wealth, so we'll have a few less trashy houses in Ludington.

But if we consider for simplicity sake that the program is distributed evenly across the state, we may as well figure that the rest of Ludington is paying for this HPR, so everyone's contribution here is nearly $20.  Your family of four is paying $80 to help someone you don't know fix their property up-- or do whatever else they might do with the money such as making a new construction or for the down payment for purchase and acquisition of the property (legitimate uses) or spend it on lottery tickets and ouzo (illegitimate purposes). 

As long as they submit the proper paperwork to the out-of-county grant administrator, everything is cool.  And they can learn from Chamber of Commerce President/Downtown Development Authority Treasurer Kathy Maclean that they don't need to follow the rules for the money received, so they may as well have the rest of us fix it up while they flip it for a hefty profit later, and start the cycle again. 

[stump]

It's interesting that the maximum money per house would be $40,000 when most houses that are in need of repair aren't selling for that. Put 40,000 in and they will be worth $45,000. Another waste of tax payers money.

[XLFD]

There looks to be so many ways to exploit the money in this program such as:  Have one of your qualifying buddies purchase your house on a land contract, have him put up to $10,000 down for the payment, use some of the rest of the $30,000 to make some cosmetic changes you probably would have made anyway, while having the contractors inflate their invoices, and share the remainder of the profits with your buddy, who forfeits the property back to you when he defaults on payments. 

If you get caught by a local investigative journalist there is no need to worry, since those who will be qualifying are part of the Ludington established crony corner, and nobody who has power here or at the state cares about the improprieties.  Meanwhile, the state raises your gas taxes and the city raises your water rates more to pay for these crazy government-crafted programs.

[stump]

Don't forget that the city will also raise your taxes on the newly purchased property to offset the taxes that the city manager and certain councilors don't pay their share of.

[XLFD]

The city manager made a point last night to 'make a point' that when he brought his property that the previous owner did not have a homestead exemption, which is why his rate immediately went down dramatically.  I have reviewed the records and that does seem to be the case; I hadn't noticed that in 2003 the property was non-homestead, which was the only year on record that that was the case.  He brought the property after summer 2003 taxes were assessed.

But if we start at 2004, when Shay originally owned the property and it became a homestead again, in the twelve years since it has advanced 16% total, much less than the 500% hike that the property at 102 E Second Street had since 2003, where it was always commercial property.  And dramatically less than the 25-fold raise the nearby vacant lot at 1001 S Washington undergone in just three years.  He failed to explain why that happened.