It’s already been reported elsewhere that the Detroit Housing Commission owes the city $18 million, and that the city is unlikely to ever see that money. Blood from a turnip and all that.
But City Council Fiscal Analyst Irvin Corley Jr. says the commission owes the city another $4 million that no one’s yet talking about.
Here’s the backstory: The city’s Housing Commission has operated more or less independently for years, but Mayor Kwame Kilpatrick’s administration and Detroit City Council disagreed on whether the commission was actually a completely separate entity.
Council said the commission was part of the city, while Kilpatrick maintained that it wasn’t. His position isn’t surprising, considering the commission is appointed by the mayor. Why let the council go sticking its nose into things?
The dispute wound up in litigation that went all the way to the Michigan Supreme Court, which in 2003 ruled that the commission was indeed an independent entity separate from the city — and council oversight.
Though the commission was officially not part of the city at that point, it wasn’t exactly ready to stand on its own feet. The commission depended on the city for certain services, such as administering its payroll and pension systems, and providing things like electricity and snow removal at its offices.
The $18 million tab was racked up prior to the court’s ruling.
After the robed ones issued their decision, it was agreed that the commission would formally contract with the city for those services, which the city has continued to provide while the actual terms were spelled out in something called a “Memo of Understanding.” The MOU, as such documents are charmingly dubbed, never came to fruition, but the city kept providing the commission with an array of services. The result is that, during the time between the court decision and now, the Housing Commission has run up an additional $4 million debt to the city, Corley says.
Would you be surprised to learn that the commission, much like the city itself, has, shall we say, severe cash flow problems?
News Hits tried to call the Housing Commission for more information. It’s not that they didn’t call us back, or were slow to provide the information.
They didn’t even answer the phone.
News Hits placed several calls to the commission’s general number. Each time, the phone rang and rang and rang, but no one answered. At least they aren’t spending money on surplus office staff eh?
Recently, the Kilpatrick administration made the decision to write off the $18 million debt. At this point, that’s good financial sense, Corley says — it throws off the books to keep reflecting a debt that’s not collectable.
There’s only one problem: The administration can’t make that decision. City Council is the only body in the city that can forgive such a debt, Corley says. Council is theoretically discussing whether to forgive the debt, and planned in January to start holding public hearings on the topic.
Let us check our calendars ... June, huh? Well, we’re sure they’ll get to that any day now.
There’s no word yet on what will happen with the additional $4 million the commission owes the city.
The good news, Corley says, is that the commission is now administering its own pension and payroll systems, so it shouldn’t be running the tab much higher. Unfortunately, there’s still no formal agreement detailing what services will be provided, and at what cost.
But, hey, what’s a few million dollars between friends?
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