Recently someone brought to my attention some comments on the Kavanaugh nomination written by a so-called “leader” in Great Falls, Tracy Houck, and posted last week on Senator Steve Daines’ public forum page. Here’s a screenshot of her comments:
After seeing her comments here’s what I wrote on my FB page in response, and then I’ll give you an interesting update that someone pointed out to me yesterday.
“Here’s Houck representing herself as a Great Falls public official actually lecturing Senator Daines on the Kavanaugh nomination.
Regardless of what one thinks about this national issue, Tracy Houck is the last person in Great Falls that I and many, many others want speaking as a GF elected official on the Senators comment page. What a total embarrassment she is to my hometown.
Houck is an incompetent, dishonest buffoon who is once again doing a disservice to the good and honest folks of Great Falls by representing herself in a public forum as someone who speaks in an official capacity.
Since she has so arrogantly presumed to lecture my senator and condescendingly offer him “advice” as an elected official from Great Falls, perhaps it’s time once again to remind the public through documented evidence obtained in public records requests and elsewhere, that Houck has been demonstrated to be a serial public liar and a fraud.
She is guilty of violating Montana campaign-finance law, backdating official state documents in an attempt to cover her lies to the public, the press, and the state Commissioner of Political Practices, and of abusing her position of public trust in attempts to benefit herself and her employer financially.”
And now the update:
In a letter dated March 14, 2017, written and signed by Houck wherein she attempted to justify her dishonest actions concerning the Community Development Block Grant funding process, Houck stated that “…Harmony indicates intent to file a sexual harassment charge against a PGS staff person. Similar letters were sent to various staff…A subsequent investigation was conducted…Absolutely no truth was found to support any of the allegations.” (emphasis added) You can read the entire letter and included documents here.
“A subsequent investigation (into sexual harassment) was conducted…Absolutely no truth was found to support any of the allegations.” says Houck. Does that sound familiar in light of recent events?
So, when unproven, uncorroborated sexual harassment allegations affecting Houck and her employer are raised, Houck becomes indignant and insists that those allegations be ignored and set aside so she can get her pile of taxpayer money.
So, when unproven, uncorroborated SEXUAL HARASSMENT allegations affecting Houck and her employer are raised, Houck becomes indignant and insists that those allegations be ignored and set aside so she can get her pile of taxpayer money.
But when Judge Kavanaugh is slimed with unproven allegations by the “resistance”, which Houck supports, she thinks it’s her responsibility to lecture Senator Daines and educate him about “…statistics as to the number of men and women who have been sexually assaulted in their lifetimes.”
In “Pretty Little Lies: Part One” we were looking at how Great Falls city commissioner Tracy Houck’s recent comments on a local Facebook post provide “an example of how public officials and politicians skew and massage facts to make themselves look better or avoid accountability.”
Continuing now with Houck’s “clarification” (You can see the screenshot of the entirety of Houck’s comments here) let’s take look at her phony representation of how her employer, Paris Gibson Square, came to be removed from consideration for funding from the local Community Development Block Grant pot of taxpayer dough:
“Upon review, it was accurately determined that there was a conflict. In an effort to maintain fairness, we removed the Square (and the request for less than $50,000 for an ADA bathroom) from the funding consideration.”
Notice the use of the word “we” here? This statement goes beyond spin or sneaky deception; it’s a flat out intentional lie. Houck got caught trying to scam the system, get a do-over on the Community Development Council process, and manipulate it to benefit her and her employer, PGS. As I cited in Part One, her attempt to do this resulted in a reprimand and warning from the City Attorney.
Removing the Square from the funding consideration was not some noble effort in which Houck participated in order to “maintain fairness”, it was the result of direct intervention by the U.S. Department of Housing and Urban Development which denied the PGS funding due to Houck’s blatant conflict of interest. Does Houck think we’re all just a bunch of bumpkins who don’t know what’s going on in our city and can’t read?
Why is Houck so determined to lie, spin and obfuscate, trying to make it appear to the public that she had something to do with removing PGS “from the funding consideration”? It’s very clear and unambiguous that she is lying about that.
“I am very happy to report it went to other local non-profitS and stayed in our community. That is how you make a community better – you build each other up and share.”
Great Falls Housing Authority: $40,000 for boiler purchase, entry door system and furnaces
Great Falls Public Works: $27,495 for sidewalk and curb ramps
Great Falls Park and Recreation: $45,000 for a play structure at Kranz Park
Great Falls Park and Recreation: $28,000 for a pavilion and amenities at Kranz Park
It’s interesting also that Houck was required to abstain from the actual vote on this item at the 4/9/18 special commission meeting due to her conflict of interest issues. She, as well as Bill Bronson, have eliminated themselves from voting on any such items because of their self-interested conflicts surrounding CDBG funding.
Furthermore, Houck didn’t even bother showing up for the May 15, 2018 city commission meeting at which the 2018/2019 Community Development Block Grant (CDBG) Funding
Priorities were voted on. So I’m sorry, I’m not buying the phony, preachy gibberish from her about how “…you make a community better – you build each other up and share.”
This kind of overt dishonesty and habit of lying to the public by Houck is unacceptable. If you wonder why Great Falls is struggling to remain stagnant, and worse, start by looking at the inability of some of our so-called “leadership” to meet even the barest standards of honesty.
I happened to be reading a Facebook comment thread the other day in which quite a few Great Fallsians were weighing in on what they’d like to see in our town. One of the comments, from Great Falls city commissioner Tracy Houck, provides an example of how public officials and politicians skew and massage facts to make themselves look better or avoid accountability.
Houck starts her comments with “Just a few clarifications here…”, but what follows aren’t really clarifications at all, but rather lies of omission and spin.
There are public officials at all levels, including here in Great Falls, who assume that the public is under-informed as to the details of public policy and official activities. This assumption, which many times is correct, can lead to folks like Houck taking advantage and trying to slip little deceits and sneaky lies into the public dialogue.
So let’s unpack Houck’s comments line by line and attempt to uncover the tracks she tried to cover up. In response to a thread comment which suggested that the City of Great Falls lost $200,000 in grant funding, Houck writes the following:
“Another clarif, no one, including the city, lost a $200,000 grant this year.”
The fact is that in a February 5, 2018 (this year) letter from HUD it was confirmed that $199,153 in 2017 CDBG local funding was suspended by the U.S. Department of Housing and Urban Development (HUD). That money had been approved for NeighborWorks Great Falls, Great Falls Development Authority, Habitat for Humanity, Opportunities Inc., and Rural Dynamics. The removal of funding for those local nonprofit organizations was due to conflicts of interest, including by Houck, in the CDBG fund distribution process.
Contrary to Houck’s misleading statement, those local Great Falls organizations lost their funding. In addition Paris Gibson Square (Houck’s employer) had their funding, $27,927 denied retroactively by HUD due to Houck’s own conflict of interests.
So while $200,000 was not technically “lost” to the City of Great Falls, Houck knows full-well that several local organizations lost almost exactly $200,000 in funding and we taxpayers may still be required to pay back $522,252 in already spent CDBG funding if all the corrective requirements aren’t met to the satisfaction of HUD, as outlined in the letter linked above. All because of Houck’s, and others, intentional conflicts of interest since 2012.
Here’s another line from Houck in which she attempts to further obscure the truth and deceive the public in order to evade responsibility:
“When I saw the final scores of the CDBG allocations, I questioned the process.”
Questioned the process? Actually what Houck did was to try to use her position and influence as a city commissioner with access to inside information in order to reverse the decision made by the Community Development Council to not fund PGS, her employer, an action for which she was reprimanded and warned in a hand-delivered letter from the City Attorney.
Once again, the HUD letter makes it very clear that Houck’s actions in this instance are a conflict of interest and a violation of HUD rules and standards, as she is listed as one of 14 individuals who had access to inside information etc.
“With regard to the City of Great Falls, we consider any member of the City’s Commission or Community Development Council to be in a decision-making position and able to gain “inside information” on the CDBG funding process. The City’s letter dated December 20, 2017 identified 14 individuals who participated in the Commission or Council between 2012 and 2017, and who would also be identified as persons covered by Section 570.611(c). In total, $522,252.00 was awarded by the Commission and Council between 2012 and 2017 to entities from which the 14 members noted above, or those with whom they have business or immediate family ties, obtained a financial interest or benefit.”
I wish public officials like Houck would just be honest and stop with all of the obfuscating and intentional deception. We’re not children or fools who are incapable of understanding facts or what’s going on in our local government.
Citizens now have the tools and resources to inform themselves and we are becoming more and more aware. The phony, pretty little lies will no longer work.
“One has to understand the ‘special’ relationship between the City Commission and the Great Falls Public School District. In many respects, I think the school district has more influence on what goes on in Great Falls than does City government.”
Having researched and written several pieces here and elsewhere about the topic, I know something about the good ol’ boys and gals club in Great Falls and our current dishonest, do-nothing city commission. There is no longer any doubt that the current crony system is still alive and well here in River City. If anyone doubts it I would refer them to the following:
But back to Faccenda’s contention about a special relationship between the City Commission and the school district – I did a little digging. And it didn’t take too many shovelfuls to discover that the relationship is not just ‘special’ but so cozy as to be downright intimate.
Here are some facts concerning our current city commissioners:
Bob Kelly – On her LinkedIn profile, Sheila Kelly, Mayor Bob Kelly’s wife, is listed as a “Community Organizer” for the local political action committee Kids Education Yes (KEY) from “Dates volunteered Apr 2006 – Present Volunteer duration12 yrs 3 mos…KEY advocates for a strong school system, educates voters on school funding issues and mobilizes community resources to ensure adequate funding for Great Falls Public Schools.”
Tracy Houck – Houck is currently the Executive Director at Paris Gibson Square Museum which is housed in a school district (taxpayer) owned building and property. That property is leased from the District for $1 per year contingent on yearly District approval.
Mary Moe – Moe is a former GFPS Board of Trustees Chair and longtime advocate for and employee of our local public education system.
Owen Robinson – Robinson donated $10,000 in 2016 to the Yes For Kids political action committee to promote and advertise for the passage of the taxpayer funded $98 million local Great Falls school infrastructure bond.
Bill Bronson – Bronson as a city commissioner in 2010 encouraged a GFPS Facilities Task Force to get some city Community Development Block Grant funds because there was some “grumbling” going on in the City about how those funds were being distributed and apparently he was concerned that the dishonest, crony process would change before the District could get some. You can find the details here.
Is there anything inherently wrong with these kinds of City Commission/school district relationships? No, not at all. In fact in most of the cases listed here the work by these folks is quite admirable and worthy of respect and kudos.
“When it comes time for our current City Commission to vote on or to exercise their individual or collective influence on any matter at the nexus of City and District interests, it appears very clear where their biases lie.”
But these relationships are also informative and in the interest of transparency the public should be aware of them. When it comes time for our current City Commission to vote on or to exercise their individual or collective influence on any matter at the nexus of City and District interests, it is very clear where their biases lie.
In addition, since apparently these city commissioners have never met a local tax increase they weren’t in favor of, whether it’s a Park District or a School District tax increase, it makes one wonder who’s looking out for taxpayers like Joe and Betty Sixpack here in Great Falls.
The current District construction projects within the city are one such example in which we’ll see this intimate relationship between the City Commission and the GFPS District play out.
I am very optimistic about the future of Great Falls, in part because so many citizens are starting to pay more attention to local public affairs and officials.
Recently someone sent me the minutes from a May 25, 2010 Great Falls Public Schools Facilities Task Force Focus Group meeting at which then and current Great Falls City Commissioner Bill Bronson was a guest. I found Bronson’s comments at that meeting 8 years ago to be very interesting in light of the recent fiasco surrounding the City Commission’s disbursement of Community Development Block Grant (CDBG) taxpayer funds.
I also found those comments to be further confirmation of what I and others have been saying concerning the blatant conflicts of interest within our City Commission – and that is that Bronson (and others) knew that what they were doing was wrong. Their self-serving conflicts of interest were entered into intentionally and possibly with full knowledge that the City’s CDBG allocation process did not comport with the Federal Department of Housing and Urban Development’s (HUD) standards, ethics and rules.
Here is the portion of the minutes reflecting Bronson’s comments to the Facilities Task Force:
“Also keep in mind that within the city, there is a little grumbling how we are allocating the City’s CDBG Community Development Block Grant money. He expects changes will be made over next few years. They might want to look at a few big projects and fund them now and get them done; have the other projects wait until the bigger ones are accomplished.”
In other words, “get as much money as you can now before they change ‘how we are allocating’ the CDBG funds, because there’s some grumbling going on.”
In hindsight we now know that the Community Development Council, members of which were appointed by Bronson and others on the City Commission, was comprised of folks who were applying for funds at the same time they were voting to decide who got the funds. Nice little racket, huh?
“In hindsight we now know that the Community Development Council, members of which were appointed by Bronson and others on the City Commission, was comprised of folks who were applying for funds at the same time they were voting to decide who got the funds. Nice little racket, huh?”
“With regard to the City of Great Falls, we consider any member of the City’s Commission or Community Development Council to be in a decision-making position and able to gain “inside information” on the CDBG funding process. The City’s letter dated December 20, 2017 identified 14 individuals who participated in the Commission or Council between 2012 and 2017, and who would also be identified as persons covered by Section 570.611(c). In total, $522,252.00 was awarded by the Commission and Council between 2012 and 2017 to entities from which the 14 members noted above, or those with whom they have business or immediate family ties, obtained a financial interest or benefit.” (emphasis added)
Of the 14 individuals referenced in the HUD letter as being “in a decision-making position and able to gain ‘inside information’ on the CDBG funding process” since 2012 only Bronson is named by the City for each year – 2012, 2013, 2014, 2015, 2016, 2017 – as being in conflict and violation because as a City Commissioner Bronson voted to approve hundreds of thousands of CDBG dollars to NeighborWorks Great Falls while his spouse was employed there.
From the HUD letter: “Carol Bronson’s relationship to Bill Bronson and her position with NeighborWorks Great Falls creates a conflict of interest, because of the exposure to ‘inside information’ and potential for financial benefit for herself and the organization.”
But now it appears that Bronson knew something wasn’t exactly kosher about the process back in 2010 and even encouraged the Facilities Task Force to get it while the gettin’s good.
If you read the minutes carefully you’ll also see that “Carlie and Bill also stated that their committee Weed and Seed may have an account…” etc. What’s not mentioned in the minutes is that Bronson’s wife was the paid Director of the Weed and Seed program at the time.
The ‘grumbling’ Bronson referred to back in 2010 has now turned into a loud roar and HUD has severely chastised the City of Great Falls for allowing the dishonest distribution process to go on for so long. In addition HUD has revoked and rescinded tens of thousands of dollars and identified over $500,000 in CDBG funds improperly allocated in Great Falls. We taxpayers may have to pay some or all of that back.
Why are we in this position? Because public officials like Bronson betrayed our trust and continued wallowing in their self-serving conflicts of interest even when they knew it wasn’t right. Let’s make sure those days are over.
A local good old boys and gals club does exist in good ol’ Great Falls, and it has real impact on our community. Despite those who yell that I am just being negative, the facts tell the story.
Crony capitalism exists to some extent everywhere and at every level, including right here in Great Falls. Anyone who believes otherwise is either naïve or intentionally ignorant. Unsurprisingly it is often the case that those who most adamantly deny the existence of a Great Falls good old boys and gals club are the same ones who benefit most from it.
In this article I will show one example of how the local crony system has worked, who has benefitted and what the consequences have been to the rest of us.
First is my definition of the good old boys and gals club, hereafter referred to as The Club:
The Club is the relatively small group of people who know each other, have common financial and political interests, often socialize together, and belong to the same clubs and organizations. They serve on each other’s bank, business and non-profit boards of directors and work together behind the scenes to effect policies that benefit each other. The Club poobahs are very good at nominating and appointing their friends and business associates to government and non-profit organization (NPO) advisory boards over those who are just as qualified but not part of the clique.
Many who belong to The Club are in the same or similar economic, social, and professional ranks – lawyers, NPO executives, CEO’s, politicians and former and current government officials etc. They contribute to each other’s political campaigns and give public and private support to each other. You can usually determine who’s “in” by looking at the political contributions of some who hold elected positions of power and seeing who gives them support. Follow the money – and the influence.
They trade in political/professional/financial favors and scratch each other’s backs. One thing The Club hates more than anything is someone who is not afraid to ask questions and call attention to conflict of interest issues, or someone who simply wants there to be full transparency and some public scrutiny.
“The Club poobahs are very good at nominating and appointing their friends and business associates to government and non-profit organization (NPO) advisory boards over those who are just as qualified but not part of the clique.”
Let’s review a series of events which transpired in 2017 concerning the distribution of federal Community Development Block Grant (CDBG) taxpayer funds by the Great Falls Community Development Council (CDC) and the Great Falls City Commission. This sequence perfectly illustrates how The Club operates:
City appoints members of organizations which receive CDBG funds to the committee that recommends allocation of those funds, the CDC.
City gets big pile of taxpayer CDBG funds.
In their FINAL 2017 meeting the CDC recommends $0 for Paris Gibson Square Museum of Art.
City Commissioner Tracy Houck is the paid executive director of PGS and she doesn’t like zero dollars for her organization.
Tracy Houck leverages her position as city commissioner to get an unprecedented do-over on the entire CDBG allocation process.
Given time to do some backroom wheeling and dealing PGS miraculously goes from $0 to $28,000 in CDBG funding.
The city commission approves the funding with only two votes out of five.
Someone notices and says “Hey you can’t do that! Two votes out of five means it does not pass!”
City commission gets another do-over and votes again, this time approving the $28,000 for PGS with a 3 to 1 vote.
City commissioner/PGS Executive Director Tracy Houck gets your money. Houck’s daughter was also an employee of PGS,
Commissioner Bill Bronson’s son was also an employee of PGS. Bill voted yes for PGS to get the money.
Fortunately several Great Falls citizens were paying attention and called BS on this whole shady, dishonest process and wrote letters of complaint to the Federal Department of Housing and Urban Development (HUD) office in Denver, which oversees Great Falls’ CDBG distribution. As a result HUD began to inquire and investigate.
“With regard to the City of Great Falls, we consider any member of the City’s Commission or Community Development Council to be in a decision-making position and able to gain “inside information” on the CDBG funding process. The City’s letter dated December 20, 2017 identified 14 individuals who participated in the Commission or Council between 2012 and 2017, and who would also be identified as persons covered by Section 570.611(c). In total, $522,252.00 was awarded by the Commission and Council between 2012 and 2017 to entities from which the 14 members noted above, or those with whom they have business or immediate family ties, obtained a financial interest or benefit.” (emphasis added)
So how is it that these people were in a position to gain “inside information” in the Community Development Block Grant funding process?
Well, 11 of those 14 individuals were serving as members of the CDC, which was responsible for screening applications and making recommendations as to which local organizations would receive CDBG funding. The problem is that they were at the same time also employed by or board members of the organizations they were screening and recommending funds for.
The other 3 individuals are Great Falls city commissioners who not only appointed the CDC members but were also either employed by, board members of, and/or had immediate family members employed by the organizations applying for and receiving the taxpayer funds. Those same city commissioners make the final decision on which organizations get the CDBG funding, which can be tens of thousands of dollars per organization.
Here are the names of the 11 CDC members who were board members of or employed by the organizations they approved funding for.
Tina Cubbage – CDC Member – Employed by Big Brothers/Big Sisters which received $5,005 (2012)
Sandy Wright – CDC Member – Employed by Children’s Museum of MT which received $6000 (2012), $5000 (2013)
Anita Fisher – CDC Member – Employed by Paris Gibson Square Museum which received $3000 (2012), $5000 (2014)
Jolene Bach – CDC Member – Employed by Rural Dynamics which received $18,000 (2012), $7500 (2013) – Employed by GFDA which received $22,780 (2015), $40,000 (2016)
Dave Sutinen – CDC Member – Employed by Quality Life Concepts which received $7500 (2013), $5500 (2014), – Employed by Rural Dynamics which received $11,250 (2017)
Carry Koppie – CDC Member – Employed by NeighborWorks Great Falls which received $84,903 (2014)
Neil Fortier – CDC Member – Employed by NeighborWorks Great Falls which received $84,903 (2014), $22,780 (2015), $75,000 (2016), $82,903 (2017)
Dave Fink – CDC Member – Board member Rural Dynamics which received $10,000 (2015), $11,250 (2017)
Harmony Wolfe – CDC Member – Employed by Paris Gibson Square Museum
Jennifer Fines – CDC Member – Executive Director of Habitat for Humanity which received $25,000 (2015), $70,564 (2016), $65,000 (2017)
Susan Wolff – CDC Member – Board Member GFDA which received $40,000 (2017)
The level of insider rigging of the system here is stunning and it’s outrageous that it was allowed to go on for so long. This was corruption, plain and simple.”
“The level of insider rigging of the system here is stunning and it’s outrageous that it was allowed to go on for so long. This was corruption, plain and simple.”
None of these folks were knowingly violating HUD rules and standards in my opinion but those rules and standards were nevertheless violated by their actions, actions for which there have already been consequences and may well be even more serious consequences to come. And that raises an important point regarding The Club – thinking that “it’s always been done this way” doesn’t make it right and isn’t a justification for participating in a system of cronyism involving public funds. Nor does it absolve any of us from the consequences.
Those who should have known better, and I believe actually did know better but went ahead anyway, are the two city commissioners and the Mayor. For them there is no excuse.
Bill Bronson – City Commissioner – Spouse Employed by NeighborWorks Great Falls which received hundreds of thousands of dollars since 2012 which Bronson voted to approve. From the HUD letter: “Carol Bronson’s relationship to Bill Bronson and her position with NeighborWorks Great Falls creates a conflict of interest, because of the exposure to “inside information” and potential for financial benefit for herself and the organization.”
Bob Kelly – Mayor – Board Member GFDA which received $40,000 (2017)
Tracy Houck – City Commissioner – Executive Director Paris Gibson Square Museum. Houck directly intervened as a city commissioner in the process in an attempt to direct funds to PGS, her employer.
So what are the consequences of this one example of the local The Club? Let us count the ways:
Destruction of public trust in City government
Public officials unable to do their jobs because of their previous conflicts of interest
Some organizations being left out of funding because they didn’t have an employee on the CDC
The very real possibility that the City will be required to repay over $500,000 to HUD
In conclusion, not only has Great Falls been a community shoulder deep in serious cronyism, but Great Falls wins the gold medal in the Good Old Boys & Gals Olympics! Let’s stop pretending otherwise, stop allowing it to happen, and demand accountability so we can move forward with some honesty and integrity.
Doing some research recently on the local CDBG funding debacle I came across a couple of interesting exchanges from the June 20, 2017 Great Falls City Commission meeting which illustrates why so many folks consider our current city commission to be so out of touch with citizens.
In this first short video Commissioner Bronson is in the midst of a long-winded legal explanation as to why it’s okay for him to not have to follow the clear, unambiguous rules that are laid out in HUD guidelines. The rub here is that Bronson then calls on City Attorney Sexe to publicly validate and corroborate his justification for engaging in a blatant conflict of interest regarding the allocation of taxpayer funds.
Now take a look at another exchange between a citizen, Mr. Haffner, and Mayor Kelly that occurred at the same meeting just minutes later. Here, Mr. Haffner attempts to ask Ms. Sexe a question clarifying a legal matter but is immediately corrected by the mayor and told to direct his questions to the Commission, not Ms. Sexe.
So a city commissioner can direct a city employee in a public meeting to inform the public how justified that commissioner is in allocating our money to an organization his son works for but a citizen can’t ask that same city employee a question?
Have these people forgotten who works for who? Maybe it’s because of some kind of silly protocol but it sure comes across as arrogant and unfair.
Mr. Bronson, Mr. Kelly, Ms. Sexe and all the others up there are servants not lords. Their Cadillac city health insurance, salaries, and even the big table and fancy black chairs they’re perched on are paid for by citizens like Mr. Haffner. Like you and me.
Every week should be ‘Sunshine Week’ when it comes to informing citizens about what their local public officials are up to.
E-City Beat has asked me to do some research and writing concerning the recent Community Development Block Grant conflicts of interest issues involving Department of Housing and Urban Development funds and the Great Falls City Commission and Community Development Council.
You can read my piece about Mayor Kelly and his ‘apology’ concerning HUD rescinding CDBG funding here.
Since the local media has chosen to mostly ignore or minimize this embarrassing chapter in our City Commissions handling of taxpayer funds I, and possibly others, will be doing a full expose in the coming days and weeks. A good place to start will be the February letter from HUD to the City of Great Falls detailing the matter.
Below is the full text of that letter. Every citizen should read it a couple of times in order to understand the continuing problems for all of us arising from this fiasco which was totally preventable and one hundred percent intentional.
February 1, 2018
U.S. Department of Housing and Urban Development
Community Planning and Development Region VIII, Denver
Gregory T. Doyon, City Manager
City of Great Falls
Subject: Conflict of Interest Finding
Dear Mr. Doyon:
We appreciate the thorough review of the City of Great Falls’ 2012-2017 CDBG funding decisions. Your letter dated December 20, 2017 concluded that the City did not violate Community Development Block Grant (CDBG) Conflict of Interest rules at 24 CFR $ 570.611. The City’s opinion appears to be based on a narrow interpretation and application of the regulations.
The U.S. Department of Housing and Urban Development’s Region VIII Office of Community Planning and Development must take a broader approach to the enforcement of those regulations to preserve the integrity of the program. The Department’s opinion on this matter is detailed within this letter, which includes a Finding constituting a regulatory violation of the CDBG Conflict of Interest rules at 24 CFR $ 570.611.
Review of Great Falls Funding History
The CDBG conflict of interest regulations at 24 CFR $ 570.611 are necessarily broad. No person in a position to either exercise decision-making authority or to gain inside information may obtain a financial benefit. The regulations cover any “employee, agent, consultant, officer, or elected official or appointed official of the recipient, or of any designated public agencies, or of subrecipients that are receiving funds.” 24 CFR $ 570.611(c).
We emphasize the broad scope, interpretation, and application of the conflicts of interest rules; the purpose is to avoid the appearance of impropriety in the CDBG funding process. Note that a subrecipient organization must also abide by the conflict regulations. While a subrecipient organization may receive funding from multiple sources, the aggregate funding allows the organization to function as a whole. HUD will not trace specific budget allocations in determining whether a conflict exists. If an individual with access to the CDBG funding decision making process works with a subrecipient, there is a conflict. A benefit is available to both the individual and the subrecipient organization.
The broad nature of the conflict regulations does not necessarily preclude those with an apparent conflict from participating in a CDBG activity. Requests for exceptions are available under 24 CFR $ 570.611(d).
With regard to the City of Great Falls, we consider any member of the City’s Commission or Community Development Council to be in a decision-making position and able to gain “inside information” on the CDBG funding process. The City’s letter dated December 20, 2017 identified 14 individuals who participated in the Commission or Council between 2012 and 2017, and who would also be identified as persons covered by Section 570.611(c). In total, $522,252.00 was awarded by the Commission and Council between 2012 and 2017 to entities from which the 14 members noted above, or those with whom they have business or immediate family ties, obtained a financial interest or benefit.
Further, it is the opinion of this office that the Anderson Zurmuehlen & Co., P.C. audit is unnecessary. The introduction of CDBG funding into a subrecipient organization, whether intended or not, supplants other resources and otherwise contributes to the total capacity and growth of an organization as to create a net benefit for all individuals associated with the entity. Carol Bronson’s relationship to Bill Bronson and her position with NeighborWorks Great Falls creates a conflict of interest, because of the exposure to “inside information” and potential for financial benefit for herself and the organization. That her responsibilities and wages are not associated with CDBG activities will be significant and useful information to consider in a request for a conflict of interest exception.
The City of Great Falls must take action to resolve both past violations of HUD’s Conflict of Interest rules and develop protocols to avoid the appearance of future conflicts. The Finding below summarizes the conditions leading to the violation, HUD’s criteria for compliance, the cause of the conflict, its effect on the City’s funding, and the required corrective action to close this Finding.
Finding – Conflict of Interest
Condition: Between 2012 and 2017, both the City of Great Fall’s Commission and Community Development Council included members who had existing business or personal relationships with organization seeking CDBG funding.
Criteria: 24 CFR $ 570.611 prohibits those in a position to participate in the decision-making process for CDBG awards or gain information about such funding decisions from receiving a financial interest or benefit from organizations seeking CDBG funding, either for themselves, family members, or business relations.
Cause: Between 2012 and 2017, the City of Great Fall’s CDBG decision making process included a Community Development Council made up of employees and board members of agencies receiving regular allocations of CDBG funds. The City Commission membership, the final approving authority for the City’s CDBG funding, also included members with business or personal relationships with employees of CDBG subrecipients or subrecipients themselves.
Effect: At a minimum, these actions create the appearance of impropriety in the CDBG funding process, as well as actual conflicts of interest I some cases. As a result, it is likely that the City of Great Falls CDBG funding did not reach the full spectrum of agencies within the community that would have otherwise been eligible.
Corrective Actions:
The City must develop new Project Selection, Citizen Participation and Conflict of Interest policies and procedures that prevent CDBG funding from benefiting a person in a decision-making position at the City or a person with a business or personal relationship with those in a decision-making position at the City. These policies and procedures must be submitted to HUD in advance of the formal adoption for a review of consistency and compliance with applicable policies and regulations.
The City of Great Falls must submit an Exception request pursuant to 24 CFR $ 570.611(d) for its 2017 funding decisions.
Corrective actions must be completed ninety (90) days from the date of this communication. Failure to comply will require the repayment of funds identified as subject to conflicts of interest from 2012 to the present.
Remaining 2017 Allocation
It is our understanding that the 2017 CDBG funding awards for Habitat for Humanity, Rural Dynamics, and NeighborWorks Great Falls have been suspended as a result of the associated conflicts of interest. As noted in the City’s letter, and referenced throughout the Commission and Council meeting notes, there was a procedural error in the initial scoring of the 2017 applications. We need a more precise description of these procedures and the error before our office can provide guidance to help the City move forward with its outstanding CDBG awards. What procedures were violated; when and how were they violated; how was the violation identified; and how did the City respond?
The City may also submit requests for conflict of interest exceptions in order to proceed with the 2017 CDBG awards to Habitat for Humanity, Rural Dynamics, and NeighborWorks Great Falls.
Finally, we are concerned with an exchange between the City Commission and the City Attorney as it relates to the 2017 allocation. The minutes for Great Falls’ June 20, 2017, regular City Commission Meeting, contain a statement by City Attorney Sara Sexe that “a representative from the Department of Housing and Urban Development had reported that there was not a conflict of interest.” This statement is false. While we do not need a response to this issue, we do want to make it clear that this office did not previously review and excuse the City of any Conflict of Interests. We are currently engaged in that process.
If you have any questions about this letter, or need assistance in preparing the corrective action, do not hesitate to contact Don Morris, Senior CPD Representative, at (303) 672-5418 or don.r.morris@hud.gov.
Kudos are in order for Great Falls Mayor Bob Kelly. Well, sort of at least.
At the 2/20/18 City Commission meeting, the Mayor apologized to citizens and to the organizations that won’t be receiving almost $200,000 in CDBG grants. Well, kind of apologized anyway.
The reason that some local non-profit organizations will not be receiving the grant money they rely on from last year’s CDBG distribution is because the US Department of Housing and Urban Development revoked the funding due to conflicts of interest occurring within the local Community Development Council and from within the City Commission itself.
I truly appreciate Mayor Kelly’s attempt to take some responsibility here. I think it’s a refreshing and somewhat surprising departure from what has been a disturbing lack of honesty, transparency and accountability within the City Commission for a while now.
You can find the Mayor’s comments and apology here, starting at 42:17 and going until 45:34 on the video. It does seem, however, that the Mayor is still in a little bit of denial about the nature of the conflicts of interest that are at the heart of this entire fiasco.
Kelly: “So I think the best thing to do and something I feel very strongly about is to take full responsibility for the confusion and for the apparent conflict of interest…” (emphasis added)
Confusion?
Well, yes the public has been confused by the contradictory words and behavior exhibited by Kelly and other commissioners as it pertains to their votes to distribute taxpayer funds. But it’s pretty clear that there was no confusion on the part of the commissioners themselves. They knew exactly what they were doing and in some cases they clearly knew it was wrong.
Commissioner Kelly didn’t seem ‘confused’ when on July 21, 2015 at a city commission meeting on the controversial Thaniel Addition, after he had just resigned as a member of the board of NeighborWorks Great Falls, and when a potential conflict of interest loomed large in the public eye, he said: “I have every legal right to vote…but I’m going to choose to abstain. It wouldn’t be appropriate to resign on one issue so I could come back and vote again…Sometimes there’s things that are legal, sometimes there’s things that are right.”
And from the minutes of that meeting: “He (Bob Kelly) explained that he did resign from the NeigborWorks Board after the last Commission meeting. It became apparent that in order for him to do this job, he had to give up the areas of what he perceived to be a conflict. He has every legal right to vote on this item tonight because he was removed from his responsibilities as a Board of Director, but chooses not to.”
Nor did he appear to be confused at a March 21, 2017 city commission meeting when he abstained from voting to give Community Development Block Grant (CDBG) Timeliness funds to the Great Falls Development Authority (GFDA), while he was a member of the GFDA Board. One could conclude from this that Kelly knew the clear, unambiguous HUD definition of conflict of interest:
“1. Know the Requirements – In general, conflicts of interest occur when one’s private interest and public duties overlap, resulting in a real or perceived lack of independence or impartiality. Common situations include: Elected officials voting on awarding of funds to organizations where a family member is on the staff or where the elected official is on the subrecipient’s board;…” (emphasis added)
However, at the April 18, 2017 meeting of the commission, Mayor Kelly did not abstain from voting to give the GFDA an additional $40,000 in CDBG allocations for economic development. The Mayor stated he had just resigned from that board, and that he would now participate and vote on the matter. “I feel free and clear of that obligation as a matter of fact,” he said.
‘However, at the April 18, 2017 meeting of the commission, Mayor Kelly did not abstain from voting to give the GFDA an additional $40,000 in CDBG allocations for economic development. The Mayor stated he had just resigned from that board, and that he would now participate and vote on the matter. “I feel free and clear of that obligation as a matter of fact,” he said.’
In addition to the HUD rules (see above), common sense should dictate that if you serve on the board of an organization, like GFDA, you can’t as a City Commissioner vote to allocate funds to that organization. Even if Kelly resigned immediately prior to his affirmative vote in this case, the appearance of impropriety should be obvious, not confusing.
Twice Kelly abstains because of his position on the boards of organizations receiving funding, knowing that “sometimes things are right”, but then he goes ahead and votes on approval of funds for GFDA even though he had recently resigned from that board. What was different?
I would feel a lot better about the sincerity and genuineness of Kelly’s apology had he taken a minute to explain to the ‘confused’ public and clear up the contradictions in his own actions and words as a commissioner and mayor.
By the way, the amount of funding that HUD rescinded from GFDA was the same amount, $40,000, that Kelly felt “free and clear” to vote for. The HUD CDBG requirements are crystal clear and easily accessible and if Kelly didn’t know them, he should have.
In his apology statement the Mayor also referenced “…apparent conflicts of interest”.
Apparent?
According to the HUD letter, which can be read in full here, there were actual conflicts of interest: “At a minimum, these actions create an appearance of impropriety in the CDBG funding process, as well as actual conflicts of interest in some cases.”
Also from the letter, “Carol Bronson’s relationship to Bill Bronson and her position with NeighborWorks Great Falls creates a conflict of interest, because of the exposure to “inside information” and potential for financial benefit for herself and the organization.” (emphasis added)
And finally, from the letter, “The City Commission membership, the final approving authority for the City’s CDBG funding, also included members with business or personal relationships with employees of CDBG subrecipients or subrecipients themselves.”
Is Bob Kelly reading the same HUD letter the rest of us are reading? How in the world can he possibly interpret the HUD conclusions as anything other than findings of not just the appearance of conflicts, but actual conflicts of interest? Including from currently sitting City Commissioners.
So while I sincerely appreciate the Mayor’s attempt to apologize, unfortunately the effort falls short. What is he apologizing for if it’s all just “confusion” and only an “appearance” of impropriety? What it boils down to is a slick way of giving the illusion of remorse while at the same time saying you have nothing to be remorseful about.
“So while I sincerely appreciate the Mayor’s attempt to apologize, unfortunately the effort falls short. What is he apologizing for if it’s all just “confusion” and only an “appearance” of impropriety? What it boils down to is a slick way of giving the illusion of remorse while at the same time saying you have nothing to be remorseful about.”
What if you told your kids that they could go outside to play but that they better not play in the mud. Then after a little while they come in the house all muddy.
You: “I thought I told you not to play in the mud, but you did anyway, so you need to apologize for not doing what you were told.”
Oldest kid: “Okay. I’d like to apologize for the confusion here and the appearance that we were playing in the mud.”
You: “You’re all muddy. Are you telling me that you weren’t playing in the mud?”
Oldest kid: “Well, that certainly wasn’t our intention so please accept our sincere apology.”
Would you as a parent just say “Okay, let’s move on then.”? I doubt it. Yet, what message are we sending to the citizens of Great Falls, including our youth, if we pretend that this CDBG fiasco and the HUD findings is all just a well-intentioned misunderstanding?
So far the only ones being held accountable are the organizations that won’t be getting their funding. It appears that no one, not one person who is actually to blame for this debacle, is being held accountable or taking responsibility in any meaningful manner. That includes Mayor Kelly and his kind-of-but-not-really apology.
And finally, it should be pointed out that Kelly’s apology cannot be taken as a blanket butt-covering for the other city commissioners who are directly culpable – Bill Bronson and Tracy Houck, who sat in stony silence when the Mayor twice gave them the opportunity to comment on this issue, a chance to offer their own apologies.
I wonder why Mayor Kelly is willing to tolerate and excuse their conflicts of interest? And how much money will it cost us taxpayers and our local nonprofits because of his excuses and failure to address these issues head on, as a real leader?
Stay tuned for upcoming episodes in this series covering a full explication of the recent HUD letter, the details and history of the other City Commissioners roles in the recent Great Falls CDBG funding circus, its implications, and how we are going to move forward.
Golf is a valued recreational activity in Great Falls, however, some are now voicing concerns regarding the long term sustainability of two municipal golf courses in Great Falls and the Park and Recreation Department’s ability to continue to operate them.
The City of Great Falls is responsible for Anaconda Hills and Eagle Falls golf courses. Unfortunately, the golf course fund is $1,199,882 in the red as of December 2017 and according to Finance Director Melissa Kinzler, the debt gets worse every year.
From the February 6, 2018, city commission work session:
“Director Kinzler reported that the golf course ending fund balance is negative $1,199,882 as of December 31, 2017. She explained that the revenues are less, which may be due to weather; however, it still has the full time expenses of staff. The cash balance gets worse every year, as well as an increase with the intercap interest.”
Apparently, city golf course operations were shored up by the city’s general fund for a number of years, as noted in the city commission’s work session notes, dated February 2, 2016:
“Director Kinzler reported that the last debt service payment was made in September for the golf courses. Manager Doyon commented that the consultant will touch on whether or not the City should have two golf courses in the Park & Recreation Master Plan. Just because the debt service is relieved, the golf courses still owe the general fund a significant amount of money.”
Despite the debt service retirement in 2016, it seems the city still has a financial situation on its hands with the golf fund’s negative balance of over a million dollars. At least one city official would like to see the city take a different approach in running the municipal golf courses.
“City Manager Greg Doyon expressed concern with regard to resolving the golf course debt. He commented that the golf course fund needs to be operated like a business. If it can’t be sustained, other areas in Park and Recreation, as well as the flexibility of the General Fund that could address other priorities, would be affected.” February 6, 2018, city commission work session.”
Yes, it appears we have a problem with the city-run golf courses’ financials. But Great Falls is far from alone in its municipal golf woes. A quick search online shows many communities across the country are dealing with the dilemma. For example, Duluth, Minnesota is one community facing financial difficulties with its courses:
Participation in golf has been in decline for almost a decade. The Great Falls Parks and Recreation Master Plan, October 2016 (Master Plan), includes statistics from the Sports & Fitness Industry Association’s Sports, Fitness & Recreational Activities Topline Participation Report 2016, which notes that golf participation nationally has decreased 7.7% from 2010-2015.
An online search of golf statistics will back up that truth—golf as a leisure activity is declining in popularity. Factors leading to the decline have been noted in a variety of online news articles and golf industry research and include millennials lack of interest in golf, time constraints with current golfers and cost of play.
Great Falls is above the national average for the number of municipal golf courses per population, according to the Master Plan. The Master Plan used recreational industry service standards to compare to current Great Falls park amenities. The standards recommend one municipal golf course per 50,000 population. Great Falls has one course per 29,491 population.
“Great Falls is above the national average for the number of municipal golf courses per population, according to the Master Plan. The Master Plan used recreational industry service standards to compare to current Great Falls park amenities. The standards recommend one municipal golf course per 50,000 population. Great Falls has one course per 29,491 population.”
According to the Parks and Recreation Master Plan, Great Falls needs to answer the question of whether or not the golf courses should be subsidized. The Master Plan also raises some doubts about the city’s ability to sustain two courses:
“Golf is highly valued in the community, however, questions arose regarding the long term sustainability of the department’s ability to operate two, eighteen-hole golf courses.”
Highly valued might be a bit of an overstatement. The Great Falls parks survey showed that only 16% of the respondents listed golf as one of their top four recreational choices in Great Falls. The top valued recreational choice for Great Falls was trails, at 48%.
Great Falls needs a solution to its golf dilemma. Continued “mulligans” from the general fund aren’t the answer. I would tend to agree with Doyon, the courses should be run more like a business. What does a business sometimes do when it can no longer operate all of its facilities? It makes the tough decision to shut some of them down.
A local good old boys and gals club does exist in good ol’ Great Falls, and it has real impact on our community. Despite those who yell that I am just being negative, the facts tell the story.
