Milwaukee comptroller: HACM owes millions back to city

MILWAUKEE - There’s more money trouble for the Housing Authority of the City of Milwaukee (HACM).

Money discrepancy

What we know:

The City of Milwaukee's comptroller Bill Christianson said the Housing Authority of the City of Milwaukee (HACM) owes the city a total of $5.1 million, including the $4.1m Christianson said he discovered last week.

HACM is independent of the city. It has its own board and its own budget. HACM broke off from the city back in the 2000s, Christianson explained.

He said employees at that time were grandfathered in. Technically, they stayed on the payroll for the Milwaukee Department of City Development [DCD}, but were HACM employees. HACM would pay the city back for the costs — salaries and benefits.

There once were 150 workers under this arrangement, Christianson said. Now, he says there are four. 

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At some point, the comptroller said HACM started underpaying the city. He said they found underpayments as far back as 2015 and there's no evidence of payment since 2021.

"To me, it’s not exactly clear why these positions were allowed to remain in the city budget," Christianson said.

Another discovery he found was HACM was given access to the city's financial management system, something he said was still in place.

"We did find a provision in the agreement that gave HACM access to the city’s financial management system, so as best I can tell, and this is speculation, because they didn’t put the why in there, the best I can tell is the intent of the agreement was to allow HACM to access the city’s financial management system so that they could self-service, determine the amount that they owed to the city and then make the payments themselves," Christianson told the Common Council's Steering and Rules Committee.

"From an internal controls perspective, it’s certainly not advisable to have external parties having access to your financial management system," he added.

Leaders respond

What they're saying:

"The first thing is we got to get to the bottom of the money," said Common Ground associate organizer Kevin Solomon. "Follow the money. You always follow the money. Once we follow the money, we can know who is responsible and what needs to be done."

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"I think Alderman Spiker put it very nicely: it seems like we’re floating them a huge loan that if they don’t pay back, it’s less money that the city has to use for its citizens. And we’re concerned about that. Our budgets are tight," said Milwaukee Common Council President José Pérez.

FOX6 asked Pérez if he thought the city would get the money back. 

"We hope to. We don’t know how, in the situation that HACM is in. We want to work with HACM," answered Pérez. "The new leadership has committed to transparency and change."

Alderwoman Sharlen Moore is not only on the Common Council, but she is also on the HACM board.

"We’re uncovering, as far as at HACM, so many things that the past administration wasn’t forthright with. So this is an opportunity for us to be completely transparent with our community," she said in an interview with FOX6.

Raising more questions

Dig deeper:

The agreement between the city and HACM has a date of March 2004.

Mayor John Norquist signed it, but he wasn't the mayor in March of 2004. Instead, he resigned in January of that year.

"Do you have any explanation as to how John Nordquist signed a document on March 30, 2004 when he was not actually the mayor?" asked Milwaukee Alderman Bob Bauman. "It is a curiosity, to say the least. And that is the agreement under which this reimbursable business was approved and basically engineered."