Housing Authority approves quarter‑end write‑offs, sells vacant house and adopts conflict‑of‑interest policy; board discusses nepotism probe, voucher contractor

The Housing Authority of the City of Milwaukee (HACM) board on Wednesday approved two fourth‑quarter 2024 resolutions to write off delinquent former resident accounts totaling $441,404.78, voted to sell a long‑vacant scattered‑site house for $1,000 and adopted a new conflict‑of‑interest policy after the authority released a third‑party investigation into personnel and nepotism concerns.

The board also authorized a closed session under Wis. Stat. 19.85(1)(g) for litigation strategy and heard staff reports on flooding damage to agency properties and continuing problems with the Housing Choice Voucher contractor that manages participant files.

Why it matters: The write‑offs remove old unpaid balances from HACM’s accounting records but do not cancel collection efforts; the board was told judgments may still be sought and unpaid accounts reported to the Department of Revenue. The conflict‑of‑interest policy change follows an independent investigation that identified questions about nepotism and gaps between HACM’s handbook and HUD requirements.

Accounting actions and board votes

• Fourth‑quarter 2024 public housing write‑offs: HACM presented $304,495.31 in write‑offs for public‑housing former resident accounts for the period Oct. 1–Dec. 31, 2024. Brad Kalik, HACM chief financial officer, told commissioners the authority’s 2024 rental income for the affected stock was about $2,700,000 and the $304,495.31 represents roughly 11% of that income. Kalik said the agency’s figure is below the HUD industry reference of about 15% for similar authorities. The board adopted the resolution (6 ayes, 0 no, 1 abstention).

• Fourth‑quarter 2024 write‑offs for Berryland, Northlawn and Southlawn: HACM presented $136,909.47 in write‑offs for those properties for the same Oct. 1–Dec. 31, 2024 period. Kalik said that portfolio collected about $1,700,000 in tenant revenue for the quarter and that the write‑off equals about 8% of that revenue. The board adopted the resolution (6 ayes, 0 no, 1 abstention).

Kalik explained that about half of the 48 vacating public‑housing tenants in the public‑housing write‑off group were recorded as having underreported income; the other half left with unpaid rents. He said HACM uses federal earned‑income verification tools and third‑party records to reconcile income during recertification and that adjustments are backdated to the recertification date.

Sale of vacant house

• Sale of 3156 N. 20th Place: The board approved sale of a single‑family scattered‑site unit at 3156 North 20th Place to AHA 1 LLC (a subsidiary of Axe Housing) for $1,000. Jeanne Dawson, senior program specialist, said the house has been vacant since 2017, has substantial damage and foundation issues, and that rehab estimates exceeded $100,000. HACM reported the sale will include a five‑year reversionary clause and a deed restriction requiring that the eventual buyer be at or below 80% of county median income. The motion passed unanimously (7‑0).

Investigation, policy change and next steps

HACM acting secretary/executive director Ken Barbot summarized a third‑party investigation that began with resident complaints in July 2024 about property management at Locust Court and that expanded after investigators identified possible nepotism. Barbot said the authority expanded the scope to look at relatives of employees who make or influence policy and that some investigator access to human resources records was limited, requiring HACM follow‑up work.

Barbot said the full investigation report is a public record attached to the board packet and that HACM will propose a revised conflict‑of‑interest policy aligned with HUD requirements. “This investigation is now, you know, a public record,” Barbot said during the meeting. He told commissioners that, if they adopt the revised policy, HACM will follow up with employee training and require disclosure statements for employees and board members.

The board adopted the revised conflict‑of‑interest policy (7‑0). Barbot told the board the policy broadens disclosure requirements to employees, board members, certain public officials and others HUD requires, and that HACM will seek to clarify which local officials are covered. He said the agency will update statements at least annually and requires immediate disclosure if a potentially disqualifying relationship arises in between annual filings.

Voucher administration, staffing and resident concerns

Commissioners and residents pressed HACM staff on ongoing problems with CVR Associates, the contractor administering the Housing Choice Voucher program. Barbot and staff said CVR is conducting a 100% participant file review under contract and that CVR billed at a higher share of available administrative fee revenue in year one (reported as about 85%) while bringing in temporary staff to address backlog and accuracy issues. HACM staff said CVR has recruited new hires but faces turnover and training challenges; HACM and HUD staff described the work as a multi‑month cleanup effort with a target to make more progress in about two months and complete the file review by year end.

Several commissioners and resident speakers described ongoing delays and confusing mailings that have led to stress and missed or delayed recertifications. Barbot said HACM and CVR have committed to correct errors when found and that, in some cases, CVR maintained subsidy payments at prior levels while late processing was corrected.

Flooding response and maintenance

Acting secretary/executive director Ken Barbot and staff reported storm flooding across southeastern Milwaukee has driven a surge of work orders. HACM reported about 803 work orders midweek related to the storm, with roughly 400 believed to be flood‑related; staff said they had closed about 110 of those at the time of the meeting. HACM is replacing water heaters and other equipment and is tracking material, overtime and contractor costs while pursuing insurance and other relief options.

Public safety and parking enforcement

Chief of Public Safety Marlon E. Davis reported that agency legal review determined HACM does not currently have a written authority to issue City of Milwaukee municipal parking citations from on‑site staff. As a result, public safety staff developed a lease‑violation parking compliance form and plan to include associated fees in lease language; the change will require SOP updates and training and return to the board for approval of any fee collection process. Commissioners and residents requested a fuller presentation on towing, photographic evidence, fee levels and grievance rights at a future meeting.

Votes at a glance

• Resolution: Approve Q4 2024 write‑off (public housing) — Amount: $304,495.31 — Outcome: approved — Vote: 6 ayes (Pez Classen, Moore, Schneider, Hazlett, Gotzler, Burrell, Nelson), 0 no, 1 abstain (Snyder).

• Resolution: Approve Q4 2024 write‑off (Berryland/Northlawn/Southlawn) — Amount: $136,909.47 — Outcome: approved — Vote: 6 ayes, 0 no, 1 abstain (Snyder).

• Resolution: Sale of 3156 N. 20th Place to AHA 1 LLC (Axe Housing) — Price: $1,000; deed restriction and five‑year reversionary clause to require sale to income‑eligible owner — Outcome: approved — Vote: 7‑0.

• Motion: Convene closed session under Wis. Stat. 19.85(1)(g) for litigation strategy — Outcome: approved — Vote: 7‑0.

• Resolution: Adopt revised conflict‑of‑interest policy (employee handbook) — Outcome: approved — Vote: 7‑0.

What the board directed next

Barbot said staff will bring the revised conflict‑of‑interest policy back for implementation with employee and board disclosures and training. Staff also said they will return with more details on the CVR contract, voucher reconciliation progress and a deeper presentation on parking enforcement, towing and resident grievance rights.

Ending

Board members and residents praised the release of the investigation report and the agency’s greater transparency, while several commissioners said they will continue monitoring the voucher cleanup, the implementation of the new conflict policy and the agency’s flood‑repair costs. HACM scheduled its next regular meeting per its posted calendar.