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Corruption and Fraud In the City of Jackson? Do we know?

Hiring Employees Without Advertising Positions

When it comes to quid pro quo, is the city in the game?. Shane LaPorte retired from the Jackson police force in August 2014. Shane was an outstanding office during his 25 years behind the badge and will be missed according to comments on MLive. Shane ran for county commissioner and lost by a few votes. Shane suddenly appeared as a housing code inspector working for Patrick Burtch. It seemed an odd transition but then we recalled Shane's vehement anti-landlord ranting's at a council meeting where he made a presentation supporting demolition of properties deemed blighted and how ridding the neighborhoods of all these sources of criminal activity was good for the city.

Shane made an outstanding Power Point presentation on his Demolition Survey documented in the City of Jackson Agenda Packet for the meeting held November 26, 2013 (cc__agenda-11-26-2013A). Less than a year later he retired from the police department and is now a city inspector

We decided to write a Freedom of Information Act (FOIA) request to the city asking for copies of the job posting for the position Shane filled as well as the names of the other applicants for this position. Unexpectedly, the response came back that no such documents responsive to the request exist. A second FOIA revealed that Shane was hired without submitting an application or resume showing his qualifications for the position. So it appears that Shane was hired bypassing the normal city procedures for advertising positions and interviewing candidates to determine the best qualified. Why do you suppose that is and why would the city appear to engage in this illegal violation of their own procedures? I suspect that all the struggling unemployed but qualified potential candidates in Jackson would like to know why they didn't get a shot at the position?

Favoritism In Rehab Loans Using CDBG Funds? Could that be possible?

When it comes to the city allocating CDBG funds for rehabilitation loans, some actions seem questionable and demand a full explanation.

Melissa Morse owns a home at 222 N. Wisner in Jackson. She was granted a rehabilitation loan with a limit waiver on September 9, 2014. The resolution read: Waive the local rehabilitation loan limit of $75,000 and award a rehabilitation contract in the amount of $93,912 to Turn Key Home Improvement for 222 N Wisner St.

Council Meeting 12/2/2014: RECOMMENDATION To approve change order #1 in the amount of $5,450.00 to the owner-occupied rehabilitation contract for the property located at 222 N. Wisner Street.

At the request of the owner, the Neighborhood & Economic Operations Department (NEO) sought additional prices for upgrades to items included in the original contract which resulted in some cost reductions as well as additions. The net increase to the contract is $5,450.00.

  • 42” high kitchen wall cabinets instead of the standard 30” high to accommodate the high ceiling;
  • Ceramic tile will be installed in both the kitchen and bath over the proper underlayment;
  • A granite counter top will be installed rather than the original Formica laminate in the original bid.

NEO staff believes the changes in the scope of the project will provide the homeowner with enhanced durability of the items and will positively impact the property value.

Council votes unanimously to approve a change order for a home rehab at 222 N. Wisner St. in the amount of $5,500. The extra funds will be used for a granite counter top, among other improvements to the home. "Now this is because the owner specified that they wanted these changes for an additional cost?" Jaquish asked. "You guys approved the original contract amount, this is from CDBG funds," Burtch said.


More to the point, who is Melissa Morse of 222 N Wisner St. Jackson to request granite counter tops and ceramic floor tile while having the ability to purchase a home for $100,000 and now feeding at the government trough? Most residents of Jackson could not afford a $100,000 home let alone a $50,000 home. How could Melissa Morse qualify for a tax funded CDBG $89,000 loan + a $5,000 + change order intended for low to moderate income residents? The contract with the city, obtained by a supporter through an FOIA request stipulates Melissa pay about $73 per month for 10 years and the remaining $80,000+ will be forgiven. Perhaps Melissa heard about the loan program from Darryl's owner and decided to give it a shot. Perhaps Laura Schlecte suggested the idea to her close friend and political supporter.

Perhaps HUD needs to start a criminal investigation of the goings on at city hall which gives at a minimum, the appearance of corruption.

A little history: Melissa purchased the home in 2005 for $100,000.

Sale Date
Sale Price

And to demonstrate the city's judicious use of taxpayer dollars:

222 N. Wisner St. - Taxable Value 2015 $27,150; Taxable Value 2014 $26,400; Taxable Value 2013 $27,100; Taxable Value 2012 $28,350

So here we have the city investing $99,362 to rehabilitate a house worth $54,000 that was purchased for $100,000 in 2005. What is wrong with this picture?

Who is Melissa Morse?

Melissa Morse (center) - Candidate For 4th Ward Councilperson with 4th Ward Councilperson and Candidate for Mayor Laura Schlecte (right) Friends Forever?

Fraudulent Use Of CDBG Funds - Double Dipping For Housing Inspection Charges

The city charges owners of non-owner occupied dwellings $175 per unit to perform code enforcement inspections. For 2012, the city alleges the following:

Code Enforcement and Rehabilitation From July 1, 2012 through June 30, 2013, the Department of Neighborhood & Economic Operations continued its efforts to provide decent, safe, affordable housing through its nonowner occupied residential property inspections and rehabilitation programs. In addition, enforcement of the City's blight ordinances provided a more suitable living condition in its residential neighborhoods.

Due to the initiation of JOES, a hiatus was placed on housing inspections for most of PY 2011 and the first quarter of PY 2012 to allow inspectors the time required to evaluate over 800 vacant residential properties. Inspectors still responded to tenant complaints about housing conditions, but, for the most part, new systematic inspections of non-owner occupied housing were put on hold. However, revenue from the advent of the NOORPR and FVARPR allowed the City to hire additional inspectors and support staff. From October 2012 through the end of PY 2012, non-owner occupied housing inspections were scheduled as follows: • 1,807 initial inspections scheduled • 1,824 buildings were part of those initial inspections • 3,041 individual housing units were scheduled for inspection

3041 housing units times $175 come to $532,175. The information from the CAPER indicates that $587,000 of CDBG money was allocated for Code Enforcement activities.

So which is it? Were the inspections paid for with CDBG funds and the monies collected from landlords diverted, a violation of Michigan statutes or were the inspections paid for with the fees collected and the CDBG funds diverted in violation of federal law? No money to clean or patch streets but over $4 million stashed in the surplus to "look good" and no money for increased police patrols to reduce crime nor retaining firemen facing layoff?

Favoritism Using CDBG Funds To Build Special Parks? Couldn't Happen Here?

The Park at Mason And Blackstone - One Of A Kind In Jackson

When it comes to special favors, it appears that the city will go to no end to reward political supporters.

The beautiful park you see above is like nowhere else in Jackson. After buying the corner lot at the county tax sale and demolishing it to "eliminate blight", Pat Burtch requested a change order for the demolition contract in the amount of $9,000 to plant trees and landscape the lot for a special neighbor.

It is rumored that this neighbor switched allegiance in the then upcoming council election shortly after the city blessed this corner with the only park of its kind in the city. Your tax dollars hard at work buying votes perhaps? Can't prove it but it sure seems suspicious.

How many other hard working, tax paying residents around town with a vacant weed filled lot where once a home stood would welcome such an amenity in their neighborhood?

And the city thought so much of spending CDBG funds on this project to benefit low income residents that they used the image on the front of the CDBG Consolidated Annual Report for 2012-2013 And Included A Sweet Little Sticky Note Probably From The Beneficiary On An Official Document From The City

Jackson Laundering Treasury/MSHDA Grant Money Through Local Non-Profit Retirement Home To Support Home Demolition.

The John George Home

When it comes to special efforts to get grant money, the city will go to no end to find a willing partner.

The U.S. Treasury decided to use TARP funds which were meant to be used to help our homeowners facing foreclosure stay in their homes. Part of that money has been diverted through MSHDA to various cities in Michigan to fight blight, not by helping responsible but underwater homeowners, but instead purchasing and demolishing serviceable homes that are currently vacant as shown by low water usage.

Six area realtors have been enlisted by the city to approach owners of these identified homes and offer then a cash buyout. Once title is secured by the "Eligible Grant Partner", in this case, the John George Home, the city can use the remainder of the $25,000 allocated to each purchase/demolition to have the homes demolished.

The John George Home was selected to be the "Eligible Partner" after the city's proposed scheme was turned down by CAA and the county Land Bank. Interestingly enough the President of the John George Home Board is none other than ex-mayor Martin Griffin. On the BOD also sit city manager Patrick Burtch and councilman Derek Dobies. It appears that these folks are everywhere that questionable activities arise.

On November 18th, the Jackson City Council voted 5-2 Tuesday to grant Burtch the authority to oversee the program without regular council approval. "If the grant money is received, the city must move quickly to meet very fast-paced program requirements," City Attorney Bethany Smith said in a memo requesting council members sign off on the plan.

What this means is that the council will have no oversight nor ability to intervene if Burtch wants to move ahead and destroy houses in the Historic District. There are procedures in place to prevent this and force review but those procedures have been ignored previously.

Burtch is using this program, H4HH, to clear out the patchwork of remaining homes in the areas devastated by the previously city and CDBG funded demolitions. His ultimate objective is reducing the housing stock to increase the likelihood of developers coming to town in the city core. Both Burtch and the council are complicit in this conspiracy. The Key issues that are being looked at in this program are:

  • Mismanagement Of The Grant.
  • MSHDA approved application knowing the City of Jackson had a Blight Partner that did not meet the Grant requirements for the program.

    The requirement of the H4HH grant states an "Eligible Grant Partner must have the capacity, knowledge, and be owner of record to the property in order to be eligible..." The City of Jackson selected The John George Home, which is a "Home for Aged Men", in which the City of Jackson owns. Admittedly, in the application from the City of Jackson stated, "Although not under its normal realm of business... (John George Home) has a close relationship with the City of Jackson...they lack the time and specific knowledge of demolitions programs necessary; the City of Jackson will assume all other responsibilities of the program through a management agreement, including: acquisition of blighted property, bidding and contracting for demolition, pre-demo, demo in process and post demo requirements, data entry on MATT system, Financial aspects of the Grant, maintenance of vacant lots."

  • A phenomenal Waste Of Taxpayer Dollars
  • MSHDA approved grant based on the City of Jackson stated that they were targeting "272 properties within the Project Area (45% of the City of Jackson) are likely vacant due to lack of water service from the City." These properties simply have low or zero water usage due to vacancies. The City is working with six local realtors to try and purchase these homes for this grant to demolish. These homes are not blighted, they are simply vacant and the majority are valued at $18,000+ based on SEV's (State Equalized Home Values) which means the market value to be $36,000+. The median home value in City of Jackson is currently $52,500.

  • Abuse and Conflict Of Interest
  • MSHDA, the Consumer Energy based Anchor Initiative, and the City of Jackson, have been working together to find a developer to redevelop a vacant building called the Hayes Hotel in our central business core. MSHDA financed a Target Market Analysis study for $30,000 to build new housing in this business core over one year ago. In the City of Jackson's grant it states, "...lenders are unwilling to finance downtown housing developments as the sizeable number of vacant or blighted housing units outside of downtown artificially inflates supply and lowers values. " MSHDA and the City of Jackson want to eliminate housing stock to get financing for their central business core new housing. MSHDA, Anchor Initiative and the City of Jackson have just formalized one such agreement with a development company for the Hotel Hayes for a $1 option.

    The Michigan State Housing Development Authority (MSHDA) sells tax-exempt notes and bonds and loans the proceeds to private developers. These developers use the money to build, own and operate low- and moderate-income rental housing. MSHDA does not own the housing, but makes loans and regulates operation of the developments which typically range in size from 24-150 units.

  • Hardest Hit Funds Misuse.
  • TARP'S Hardest Hit Fund (HHF) was created by Treasury to help those hardest hit by the financial crisis. These funds are being diverted to The City of Jackson by MSHDA to fund the Neighborhood and Economic Operations (NEO's) Department and the City's Attorneys Office. The Citizens that are hardest hit by foreclosures do not receive any of this funding.

    The City of Jackson stands to receive $891,000 just for demolishing the first 55 homes in their possession: $25,000 - ($8,000 demolition average + acquisition cost ($200 from tax foreclosures) + $600 hazard inspection ) = $16,200.00 x 55 tax homes = $891,000

    Investigations and charges are now being developed concerning the misuse of funds and mismanagement of this program in ways that congress never intended. The program was to help stabilize neighborhoods by preventing foreclosure, abandonment and the resulting blight. Butch has taken this program to a new low with eliminating all the intermediate steps and demolishing properties with no oversight from the council.

    This council majority has abdicated its responsibility to protect the city, the residents and the taxpayers against this kind of abuse.

    This council majority must be replaced with responsible and knowledgeable citizens who want to save Jackson.

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