Pass the popcorn. The best drama Thursday night in Wyandotte County was at Kansas City, Kan., City Hall, where the mayor and some of the Unified Government commissioners continued their fight over CDBG funding.
Even more, it could become a series that boosts ratings on UGTV, as the commission’s temporary solution was to make the decision later.
Mayor Mark Holland at the 5 p.m. budget workshop Thursday said he would veto a budget resolution that would give the Argentine Betterment Corp. $400,000 in Community Development Block Grant funding to build new housing in the Highland Crest area on the south side of Kansas City, Kan.
Despite that, the commissioners held onto their previous positions, and a new straw poll of 6-4 in favor of approving the block grant to ABC showed that the commission votes were unchanged. Six votes were enough to pass the resolution, but a seventh vote would have been needed to override the mayor’s veto. Voting in favor of the block grant to ABC were Commissioners Mike Kane, Jim Walters, Angela Markley, Brian McKiernan, Hal Walker and Ann Murguia.
When the mayor said he would veto the majority, it set off Commissioner Mike Kane.
“Is anybody upset what he just did, that he wants to veto?” an upset Commissioner Kane asked after the 6-4 straw poll. “I’ve been here 10 years and never seen it. If he doesn’t get his way, he goes round the bushes, shakes them all up and has another revote. And this is wrong. Mayor, you should be bringing us together as a group instead of splitting us up. And by your threat right out of the gate that you’re going to do a veto, shows lack of leadership. The way it should have been done is exactly the way we were talking about earlier, we made this decision and you said you would go along with the majority of the commission when we were absent a commissioner. Now we’re at the point where the majority of the commission has spoken, and you try to bully the commission by saying ‘no, I don’t like what you said, I’m going to veto it.’ That’s absolutely the wrong thing to do.”
“We are splintered and you’re not helping, and I’m extremely disappointed that you would throw that out there and act like, ‘what do you do because I’m the mayor?’” Commissioner Kane said.
“We’re all elected to represent the people. The majority of the people have spoken, and what you’re talking about has never been used since I’ve been here,” Commissioner Kane said. The committee members working extremely hard on this topic, who did something they felt proud of, and then got raked over the coals for it, would be extremely disappointed, Commissioner Kane said.
“I realize we have a strong mayor, but this is ridiculous. We don’t throw that power out there like ‘I’m going to do it no matter what you folks say,’” Commissioner Kane said.
The commission could not come up with enough votes to pass two alternatives that were proposed – either opening up the CDBG application process again to all interested applicants, or delaying giving the money to Argentine Betterment Corp. until it had met further criteria that would be established by the commission. There were only four votes in favor of both of those ideas, not enough to pass.
But after much discussion, Commissioner Hal Walker suggested a compromise – designating the funds for bricks-and-mortar housing projects, leaving the details to be determined later. It was an idea which the commission and mayor said they accepted in order to move forward with the budget Thursday night. Walker said the commission could come back at a later date and decide to put it in escrow, open up the process again, go with the original plan or decide on some other plan.
The commission then decided to make another last-minute CDBG change, to allocate $50,000 for the Doing Real Work program that works in the court system, and to designate, not allocate, $350,000 for bricks and mortar housing projects.
Mayor says he’d veto approval of the CDBG grant to ABC
“I don’t think there’s any impropriety, I don’t think anyone’s making any accusations of legal impropriety, the ethical standards are the appearance of impropriety,” Mayor Holland said about the ABC grant.
“I think these items, as a totality, don’t look good, and don’t present a fair process to our whole community, and I’m going to stand by that,” Mayor Holland said.
He said the UG has done a lot to increase the transparency of its processes, and that it could do a better job in the transparency of this issue that would help it to move forward in a better way.
He said he supported the $400,000 grant for Highland Crest funding, but he supported opening the application process again to allow more agencies to submit applications.
Mayor Holland read a list of five incidents that he said look bad and make it hard to convince the public that the UG is doing things the right way.
– He said that in January 2014, the UG had received about 38 applications in requests in its first year requiring applications, with nine potentially eligible for CDBG funding and only two recommended for funding, the Doing Real Work project and the ABC-Argentine Neighborhood Development Association project of $258,000 for a housing project on Strong Avenue near Commissioner Murguia’s home.
Commissioner Murguia, responding by telephone, said she wasn’t clear about what he was trying to imply. The project is attached to another project on the other side that ANDA was doing for people 55 and older. It was low-income housing, and she said was not concerned and was OK with low-income housing in her neighborhood. “One of the areas we struggle with in Wyandotte County is having people being accepting of low-income people,” she said.
– In July 2014, according to the mayor, ABC was designated to receive $500,000 in CDBG re-appropriations for the Turner Highland Crest project. According to the mayor, there wasn’t an application filled out for this project.
Commissioner Murguia said she was not involved in this application, just there to provide technical advice. ABC hasn’t built a residential structure yet, but it has built a $3.5 million grocery store in Argentine, she said.
– From Feb. 20 to July 2015, the UG received 14 proposals in requests, with five of them potential CDBG-eligible, Mayor Holland said. One was forwarded for recommendation, the ABC, which was recommended to receive $400,000 for the Highland Crest project.
Commissioner Murguia said she had not seen that budget for this $400,000 project and did not have it in front of her at the present time. She was asked about acquisition and rehabilitation of homes in the Highland Crest neighborhood, but she did not have the details of how that money should be spent, since that money does not come through ANDA.
– Mayor Holland said on June 2, Commissioner Murguia presented a financial pro forma to the CDBG subcommittee about the development of housing that was tied to a project in Argentine. This pro form had listed ANDA as the project manager.
Commissioner Murguia responded that she did not personally make a presentation on that, but that it was presented by attorneys for ANDA.
Commissioner Angela Markley responded that the pro forma at the June 2 meeting was just an educational example given so that Housing and Urban Development officials could explain to the subcommittee how the CDBG funds could be spent.
– On June 25, ABC received $45,000 in casino grant funds from Commissioner Murguia, with ANDA listed as a key community partner in the application, Mayor Holland said.
Commissioner Murguia said she spoke to the ethics administrator on Wednesday and had an in-depth discussion about ethics, and the ethics administrator did not mention any concerns about ANDA being listed as a partner to any organization in Wyandotte County. However, the ethics administrator did mention concerns about the UG’s application, she said. It’s great for transparency, but there needs to be a section added to the application that states that elected officials are not benefiting. “We all know that, and we all abide by that,” she said, “but she wants that added to our actual application for the public clarity on that.” Commissioner Murguia asked the administrator if she had violated ethics in any way, and the ethics administrator responded no, she said. “Well, that does not seem to be the interpretation of our mayor,” Commissioner Murguia responded, “and she said, ‘As far as I am concerned, you have not violated ethics, and this matter is closed.’”
Mayor Holland said he had seven reasons, if a CDBG allocation to ABC passed in its current form, that he would veto it.
His reasons included:
– that ABC’s application appeared that there would be a sharing of funds between ABC and ANDA, quoting the ethics administrator’s memo;
– that several persons said they were concerned about the process, including some representing agencies;
– the CDBG subcommittee changed the focus to bricks and mortar in 2015 and no one was notified of the change;
– ABC is slated to receive $258,000, $500,000 and another $400,000, which is $1.2 million or 96 percent of all new non-recurring allocations given out in the last two years;
– ABC in the application listed budget expenses of personnel, $30,000, supplies, $5,000 and other, $465,000. He said there wasn’t a plan here, but an idea;
– ABC had not spent the first $758,000 in allocations they have, and it’s not good practice to give money to a group that hasn’t been successful with a new amount;
– ABC has never done a residential development, and with ANDA withdrawing from the application, ABC doesn’t have the capacity to do the project.
Commissioners respond: ‘Political theater’
“Mayor, I’m really disappointed that if you had five major concerns about this, that never one time you picked up the phone to call me,” Commissioner Murguia said. The mayor requested the commissioners to call him before bringing up issues in public, and he has not returned that same kind of treatment, she said. Good leaders gather their facts before they jump to conclusions, she said. “Your accusations are very, very personal. I think it’s unprofessional and inappropriate.”
She said he could have called her and she could have explained it, instead of turning it into some kind of “political theater.”
Commissioner Murguia also offered to meet with the mayor to talk about and resolve issues.
A straw poll on cooperating with each other
Commissioner Markley’s statement:
“Because of their (the subcommittee) willingness to accept and tackle, with great dedication, very difficult work above their normal commission duties, it was particularly offensive when Mayor Holland brought forward, on July 13, just two weeks before budget adoption, a concern he apparently believed was critical, but a concern into which he had done no prior research,” Commissioner Markley, the CDBG subcommittee chair, said. “The mayor and commissioners had more than four months to review the budget applications submitted by the public, and the mayor had multiple staff members in his own office to assist in that review. He has spent many hours in the presence of committee members, including one-on-one sessions with each commissioner per his own tradition, offering him every opportunity to raise any questions regarding the CDBG application submitted, or the intent of that committee. Never once did the mayor ask the committee members about the ABC application, prior to publicly alleging ethical violations on July 13.
“As we all know now, our ethics administrator confirmed by memo this week that no ethics violation occurred, and merely recommended that our application form be amended to clarify that only those entities receiving money should be listed as partnering agencies on our application,” Commissioner Markley continued. “The ethics administrator’s remedy, ‘Having said the above, but asking all of you to cooperate with each other, a simple solution to this is to have Mario Escobar of ABC go to City Hall, and prior to the vote on July 30, 2015, take a marker and delete ANDA as a partnering agency. I clearly cannot compel that, but it would resolve the problem and allow a potentially worthwhile project to go forward.’
“The procedural concern raised by the ethics administrator is easily resolved,” Commissioner Markley said. “What is less easily resolved is a mayor who publicly demanded that commissioners pick up the phone and call before raising controversial issues in a public meeting, but failed to follow his own advice before attempting to damage the reputations of multiple hard-working and honorable commissioners.”
She called for a straw poll that the commission cooperate with each other as the ethics administrator recommended; however, that straw poll was not taken.
‘Appearance is not an actuality’
Commissioner Hal Walker said he had read the ethics administrator’s memo at least four times and could find nothing in that memo that suggested the slightest impropriety or wrongdoing on the part of ANDA, Ann Murguia, Mario Escobar, and several people who have been “dragged through the mud” in this instance.
“The aspersion that they have somehow engaged in some type of unethical activity is out there,” Commissioner Walker said.
He read from the ethics memo: “Commissioner Murguia is also entitled as the executive director (of ANDA) to partner with any local or private group so long as ANDA does not receive any UG funds and she is not inappropriately using her title as UG commissioner. Any commissioner is entitle to act in such a capacity as long as they do not personally receive UG funds, or have a substantial interest in the entity.”
Commissioner Walker pointed out that these public committee meetings were not secret, and that the mayor had staff present at most of the meetings. Commissioner Walker said there’s no exclusive turf and any agency should be able to go and do work in any area of the community. He added that he didn’t always agree with the mayor’s assessment on these issues. Referring to one of the mayor’s points about a building near Commissioner Murguia’s home, Commissioner Walker said the building probably should have been torn down 30 years ago because it was an eyesore at a commercial intersection.
“Appearance is not an actuality,” Commissioner Walker said about the idea of appearance of impropriety.
He said before the advent of ANDA and ABC, the Argentine area did not get hundreds of thousands in CDBG money, and he didn’t believe any CDBG money of any significance had ever gone into Highland Crest, yet that district is in dire need of redevelopment dollars.
“When others feel neglected, I’m going to tell you, you’re not the only part of the community that’s neglected. Highland Crest is neglected, and there’s a need there for those dollars,” Commissioner Walker said.
On a deadline
Commissioner Brian McKiernan said the UG’s efforts got compressed as it worked toward the budget deadline, resulting in not the best possible outcome that there could have been.
He thought it was a good shift to move toward bricks-and-mortar spending of the CDBG funds, while he also thought spending on social services could still benefit the community. He said programs such as social services and emergency home repair needed to be moved into the general fund, where the commission could control the funding instead of depending on the volatile federal funding.
He also proposed the $400,000 be allocated, but held back until ABC could demonstrate capacity to bring a project to completion. If it didn’t meet the requirements, the funds would go into a new request for proposals offer, he said.
Fair treatment for similarly situated agencies
Commissioner Gayle Townsend said for her, it was not about appearances, but about procedures.
She said the straw poll recently taken at another workshop meeting was for $300,000 that should be officially put in the emergency home repair fund. Some constituents can afford better housing, some may not be able to afford new housing but are trying to stay where they are and not get in trouble with code violations, she said.
Last year, she told the Northeast Development Corp. (NEDC) that it would have to use what it has already, and she could not support a new application if it had not completed what it had already.
“So to me where this other $400,000 goes is a matter of procedure, and treating similarly situated entities the same way,” Commissioner Townsend said. Maybe the process needed to be reopened for fairness, she added.
Ex post facto rules
There was some talk about making some new rules and then having an agency abide by it after action had been taken, but Commissioner Walker said that shouldn’t be done.
“You can’t create a rule and apply it ex post facto to events that occurred prior,” Commissioner Walker said.
There is no rule that if an agency has money and didn’t spend it, that it couldn’t receive more money, Commissioner Walker said. If the commission wants a rule like that, the commission should make it a written policy to go into effect in the future, he said.
Also, there’s no rule that an agency can’t do work outside its own neighborhood, he said.
Re-opening the application process
Commissioner Harold Johnson said he agreed with Commissioner Townsend’s idea of giving opportunities to other agencies.
He said a community development corporation in his district has said that it was not aware these funds were available, and had the organization been aware of it, it would have applied for the funds.
Commissioner Townsend said it was a matter of equity and fairness, rather than the unwritten rules. The committee was shifting the use of the $400,000 for people who need a furnace or roof, to put the money into brick and mortar for new buildings.
Agencies should ‘look in the mirror’
Commissioner Jim Walters said he saw some policy issues that could be improved, and more implementation issues where there was an opportunity for improvement. While the conversation has been focused on the commission, there are a lot of opportunities that come through, he said.
“I’ve responded to a lot of RFPs in my life,” Commissioner Walters said. “When we’ve received an RFP from somebody, from an organization that we thought we had a really good relationship with, and we received an RFP that we were not expecting to see, or that we had no idea what it contained, we saw that as a real breakdown on our part. I think the organizations that are now coming out and commenting, if we had only known, and we would have done this, or the organizations have forwarded us promotional material about their successes, which is all great. But if they’re trying to comment about the process and their lack of participation I think they probably need to look in the mirror a little bit and question just how close the relationship they had with the UG, either the commissioners or the mayor’s office or the UG staff, and maybe those relationships need to be worked on a little bit. I do not think this money should be reallocated to other groups. There will be a new and improved process next year, and I hope they all apply for it and move the county forward.”
Commissioner Kane said for the entire 10 years he’s been there, the commission has made a decision now, and if changes need to be made, it will make them for the next year, not go back and redo a decision it has already made.
UG budget adopted
The $323 million UG budget adopted Thursday at the 7 p.m. meeting was a flat rate, not changed from the 2014 budget. The proposed city mill levy rate was 43.473 mills, and the proposed county mill levy rate was 38.488 mills. The administrator said earlier this month that valuations were up slightly.
The changes that were made to the administrator’s proposed budget included:
– The waiver of building fees, including $66,500 to waive single-family building permits and $146,000 from the sewer enterprise fund to reduce sewer connection permits.
– The Self-Supporting Municipal Improvement District, the downtown improvement district, saw an increase in funding of $50,000 from the city general fund.
– The Wyandotte County Fair Association saw an increase of $25,000 from the county general fund for a feasibility study update for the fairgrounds.
– Transit services received an extra $5,000 to purchase new trash cans for bus stops.
– Reserves were decreased $55,000 from the city general fund and $25,000 from the county general fund to pay for the items, leaving a $2.35 million fund balance in the city general fund and a $1.39 million fund balance in the county general fund.
The PILOT (payment in lieu of taxes) on the Board of Public Utilities bills, which goes to the UG, will remain the same as last year.
The commission also reached a consensus at the budget workshop to go ahead with a Quindaro-Tremont development plan, but the commission did not formally vote to approve funds for it this budget year. Commissioner Townsend promoted the master plan, which received unanimous approval in a straw vote at the 5 p.m. meeting. If the UG secures grant funding of about $60,000, then in the future the commission would provide a matching amount for the master plan.
A video of the meeting is online at YouTube at https://www.youtube.com/watch?v=e-ezq654fCU.
For an earlier story, see https://wyandotteonline.com/ethics-administrator-weighs-in-on-cdbg-funding-issue-agencies-speak-up-at-public-hearing/.