All Smiles While Moving Funds Out Of Senior Housing.

The more I dig into this muck in my local hometown, the more I want to take a hot shower for at least a day. The only problem is that water here is more expensive than oil right now. I kid you not.

As I have covered in my previous articles on the local government here in Fraser, the previous city manager, who is now running for a seat on the council, left a mess. A really gross, puss-filled mess.

Here are the previous offerings on this subject…

City Of Fraser Had ‘Deficiencies’ In Its 2015 Audit Report. What Were They?

In Fraser, Ignoring Sexual Harassment Claims At City Hall Means You Should Run For Office

Today we deal with the Senior Housing building in the city.

The city website gives details as to what the housing center offers.

Fraser Website

The City of Fraser has a senior housing complex located on 15 Mile Road, just west of Utica Road. This three-story, 75-unit building offers one- and two-bedroom apartments for independent senior living. The complex is situated in close proximity to local stores and is just across the street from the Senior Activity Center. A low-cost van service is available through the center.

This is located right across the street from an activity center and is meant to give the elders a place to hang out and talk about what it was like before smartphones and someone named “Snooki” who became famous in somewhere on the Jersey Shore.

I’m putting it lightly when I say this facility has been a bit of a political football for years. Also, the upkeep has fallen behind and the facility needs a lil’ more than some T.L.C.

So first off, let me explain what an Enterprise Fund is in the state of Michigan. The senior housing building is considered to be one of these funds so this is very relevant point to this story.

According to the State of Michigan, there are some rules that need to be followed. On page 117 of this link it says in section “b”  that…

Laws or regulations require that the activity’s costs of providing services, including capital costs ( such as depreciation or debt service), be recovered with fees and charges, rather than with taxes or similar revenue.

(Also take a real quick scroll down to page 130 and 131 about water and sewer funds. That is related to another article coming soon.)

Simply put, the money that this building generates should all be used for the purpose of providing services for that building.

Why does this matter?

In Haberman’s flyer, he cites that he used “creative solutions” for the 6 years that he was the city manager. That he left a balanced budget (which he had to by law) and the city maintained services. So let’s take a closer look at how he managed the housing for our seniors.

In the balance sheet for the end of the fiscal year in 2013, the city had in its TOTAL FUND BALANCE (essentially its rainy day fund) $2,115,792. (Two million, one hundred and fifteen thousand, seven hundred and ninety-two dollars).

Scroll to the bottom of the PDF’s to see the highlighted area.

Budget 2013

For the balance sheet for the end of the fiscal year 2014, the city had a TOTAL FUND BALANCE of $1,523,278 (One million, five hundred and twenty-three thousand, two hundred and seventy-eight dollars).

Budget 2014

Haberman’s creative solutions depleted that fund by almost $600k in one year.

So, I’m sure you might be thinking, well sometimes you have to go into the rainy day fund. That is what it is there for right? Sure, that seems fair.

Except for this: money was moved out of the Senior Housing Enterprise fund in these years and moved to the general fund of the city budget. Now, having already established that an Enterprise Fund is supposed to be used for the sole purpose of the activity that the money is raised for, why would anyone ever move money out of it for some other purpose?

Creative Solutions?

Listed below is the sheet showing money being moved out of the Senior Housing Fund by Richard Haberman.

Senior Housing

Some might say that moving $70k over 4 years is not a big deal. Yet, why would you need to move any money out of a dedicated fund into the general budget? What other Enterprise Funds that the city was operating did Haberman manipulate to make everything look good on paper? (See above comment about page 130 and 131.)

The Senior Housing units have not been kept up and this was well known during the 6 years that Haberman was the city manager. He had the complaints and yet instead of dedicating all the money raised and using it to try and keep more things from falling apart, he moved money out from the Senior Housing and into the general fund. In one of the city audits, it was recommended that these monies were to be replaced. Yet, why were they taken in the first place?

Adding insult to injury, Haberman was approached sometime in 2014 or early 2015 to see if the city wanted to sell the building off to a property management company. However, he did not know that the city didn’t have the title free and clear and was informed of this by the company looking to buy the property. How embarrassing is that?

The whole incident lead to confusion among the seniors who were worried about what might happen to them.

Would their rent increase?

Would their issues in the building get fixed?

Most of those seniors did not get golden parachutes when they were told their services were no longer needed as Haberman did by the city of Fraser in January of 2017. They live on fixed incomes and taking money from the building to put into the general fund was wrong. Also putting the uncertainty of the place they call home being sold was just horrible policy.

None of this seems “creative” to me. All of it seems like the “solution” was to play shell games with the city money from year to year and hope the spit and bubble gum held up.

Was any of this illegal?

No, not from what I can tell.

Was it unethical?

Why don’t you take a look and make your mind up for yourself?

More to come.

Check out my other posts here on Red State and my podcast Bourbon On The Rocks plus like Bourbon On The Rocks on Facebook and follow me on the twitters at IRISHDUKE2