HUD slaps Lansing's Development Office

June 22, 2022

I've written stories here about two homeowners who had bad experiences with the City of Lansing's Homeowner Rehabilitation program, a community development block grant (CDBG) program funded by the U.S. Department of Housing and Urban Development (HUD). Now we've learned that deficiencies in administering the program were pointed out to Brian McGrain, Director of the city's Department of Economic Development and Planning, in a November 12, 2021 "non-compliance" letter from HUD regional director Keith Hernandez. The letter mentions complaints from two homeowners, but does not name them. However, it says the contractor in both cases was "Frederickson". Scott Frederickson Construction of Bath was the contractor in both cases I wrote about.

The letter lists these deficiencies:

Policies for procurement, contractor selection and dispute resolution are inadequate.
No policy or practice exists for contractors that fail to perform, or receive legitimate complaints.
Failure to follow dispute resolution procedures; failure to respond in writing within 10 days to a written complaint.
Relaxed contractor oversight - the contractor was not cautioned concerning workmanship and unprofessional behavior.
Complaints were not tracked.
Quality of work not evaluated before paying contractor.
Poor staff management; no routine staff meetings or annual staff training.
Failure to properly use project management software provided by HUD.
Insufficient list of pre-qualified contractors from whom to solicit bids as needed to encourage competition.
Failure to monitor new and on-going occupants of low- and moderate income rental units to make sure they meet income requirements.

Both cases involved roof replacement. In one, a leak did extensive damage to the interior and improper roof ventilation resulted in ongoing excess moisture and mold formation. In the other, there were issues with the shingles, and musty air from an unventilated crawl space continues to be a problem. In both cases, as far as the homeowner knew, Scott Frederickson was the only bidder.

Reporter Todd Heywood of the City Pulse posted a story on the HUD letter on June 20 which includes a response from Scott Bean, communications director for Mayor Schor's office. Mr. Bean brushed the letter off as a routine, trivial matter, ignoring the fact that problems with two roof installations have resulted in continuing health issues for the homeowners:

As a grant administrator, the City of Lansing regularly receives communication on many programs. After a review, the federal Department of Housing and Urban Development found some areas of general process improvement in the administration of this program. The City accepted these findings and moved to successfully implement those changes at that time with no further input from HUD.

Heywood reports that Mr. Bean said also that HUD did not withdraw any grant dollars or fine the city for the findings or find the city’s response inadequate in addressing the concerns. However, the Homeowner Rehabilitation program no longer seems to be offered by the City. There is no mention of it on the Development Office website. Instead, there is a Homeowner Emergency Repair Program. Did Lansing lose the Homeowner Rehabilitation program due to the shoddy work of the Development Office?

Development Manager Donald Kulhanek retired in July 2021 and Barbara Kimmel took his place.

The Development Office is in the Department of Economic Development & Planning, which also includes Code Enforcement. That office has been known to red tag homes without doing an inspection. All of this should call into question the competence of Brian McGrain, the department director, and his boss, Mayor Andy Schor.

Send comments, questions, and tips to stevenrharry@gmail.com, or call or text me at 517-505-2696. If you'd like to be notified by email when I post a new story, let me know.

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