By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
Don't hold your breath.
The money's there--$22 million in federal funds. The problem is, the city council and the mayor have better things to do with it, mainly pork-barrel projects for well-wired special interests.
Before the recent city council election, Mayor Ron Kirk and a slew of council candidates all talked big about getting "back to basics," focusing on potholes instead of on big-ticket luxury deals like a new sports arena and the 2012 Olympics bid. They all said they had heard the voice of the people. Two weeks after the election, they're deaf again.
The biggest chunk of easy money for neighborhoods is the $22 million community development block grant--budget-free money from the federal government, with a stated legal purpose of helping decaying neighborhoods.
At the first official council hearing on the CDBG budget a week ago, the back-to-basics thing was already in the ditch. First of all, fully a third of the CDBG money that is supposed to go straight into curbs, gutters, potholes, and fire stations is going instead to the coffers of a handful of nonprofit agencies.
Rather than spending the cash on street repairs, for example, the proposed budget calls for giving away $100,000 to the African-American Men of Peace, a southern Dallas nonprofit that works with young people. The line item in the budget calls for the city to make the donation to AAMP for a "building expansion."
In reality, according to a spokesman for AAMP, the money will help the organization move out of the back of a church, where it now has its offices, into a new proposed $1 million office and sports complex a block away.
The budget also calls for giving twice that amount, $200,000, to the Artist and Elaine Thornton Foundation for the Arts to convert an abandoned industrial building into a light manufacturing facility and school of theater arts.
Other groups in store for major gifts from the city are Kathy's Sunshine Outreach Center, Inc., down for $100,000; The Alameda Heights Community Outreach Center, for $175,000; the Dallas Life Foundation, for $100,000; and Fahim Minkah's Southern Skates roller-rink.
Southern Skates has already received a million dollars in CDBG money from the city to build a private nonprofit rink for inner-city kids. This year's $60,000 is for the skates.
In all, if this budget stands as proposed, a handful of nonprofits will rake in $750,000 from the city's 1999-2000 CDBG funds. One of the biggest stumbling blocks in any back-to-basics campaign, in a city with an estimated $3 billion backlog of infrastructure repairs, is that major repairs can wipe out poor homeowners. That's because the city, by law, must assess property owners for a stiff share of the cost of adjacent street and alley repairs.
Since poorer homeowners could be forced out of their neighborhoods by costly new alleys and curbs, they seldom petition to get the work done. That's why one of the major aims of the whole CDBG program is to give grants to poor neighborhoods and help them pay off their street-repair assessments.
In this year's $22 million citywide proposed CDBG budget, what's the amount proposed to help poor homeowners shoulder the cost of back-to-basics streets repairs?
That's less than what they want to give away for roller skates.
At last week's hearing, a few council members did seem struck by the enormity of what was being proposed. Lois Finkelman questioned the basic drift in recent years of hundreds of thousands of dollars in so-called public improvement funds to non-profits ($300,000 last year to the Urban League alone for its new building).
She raised an interesting point: Most of the money isn't even going into programs carried out by the nonprofits to help people. It's going for new buildings to house the nonprofits. So what if the nonprofits go out of business?
"We are spending public taxpayer dollars in the private sector with no guarantee," Finkelman said, "that those dollars will continue to be out there with an organization or an entity that is going to continue to provide the same kind of services. In other words, if they go under, those bricks and mortar dollars are gone, and there is no benefit to the public."
The Dallas Observer asked Karen Bradford, the city official in charge of all this money, if the city does any kind of due diligence checkup on nonprofits in line for major CDBG grants. Bradford said the nonprofits fill out an application for money. Later in the process, after the city council has approved them for a grant, the nonprofits provide some financial information as part of actually signing a contract with the city.
At first Bradford said she would fax a list of the nonprofits that have applied for money in recent years along with their applications, and she indicated that the Observer would be able to view the contracts and backup financial declarations.
Later, Bradford called to say the Observer would have to talk to the city attorney about looking at the financial information or the contracts. Still later, she said by fax that she would not be able to provide even the names of organizations in time for this story that have been granted money in the past, let alone those that have applied and been turned down.
All of which raises an interesting possibility: Maybe there is no due diligence or backup information to provide.
Artist Thornton II, who is the chief financial officer of the foundation formed by his parents, longtime southern Dallas community activists and actors Artist and Elaine Thornton, laughed out loud when the Observer asked whether there was anything confidential or secret in the information he had given the city as part of his grant application.
"We don't have the capability of having anything to hide," he said. "In terms of dollars, we don't have any to hide. In terms of being funded, this [the proposed $200,000 city grant] would be our first funding opportunity."
Thornton's parents are respected community leaders in southern Dallas with a long track record. They led the fight for the development of the South Dallas Cultural Center in 1986, paid for by the city with $1.5 million from the 1982 city bond election. Thornton II, who wrote his master's thesis at North Texas State on corporate support for nonprofits, said a circuitous route had brought him and his parents to the knowledge that CDBG money might be available for their theater school. He said people in the Texas Commission for the Arts steered him to a nonprofit job-training and arts program in Pittsburgh, where the executive director advised him to ask city officials in Dallas about CDBG money.
From his point of view, Thornton was just being an effective nonprofit manager, seeking out available financial support. But council member Laura Miller--one of a very small minority on the council last week who found anything amiss in the proposed CDBG budget--saw something wrong with this picture. Only the nonprofits that are well-wired politically get the cash, she said. The rest don't even know it's there.
"With all of the conditions of our parks, our recreation centers, libraries that need work, this long waiting list that we have on the home-improvement program, for us to be spending hundreds and hundreds of thousands of dollars and giving money to nonprofits for their building projects is bizarre," Miller said. "It's not like we have a policy of doing that. It's not like we're asking all of the nonprofits in the city to compete for this money. It just happens to be which nonprofit gets the ear of somebody and gets on this list."
But council member Sandy Greyson spied something in the proposed budget that may be even more audacious than giving so-called "public improvement" dollars to private entities. What Greyson found may be proof that City Hall suffers from some kind of financial attention deficit disorder.
Two years ago, in response to criticism that the city was spending CDBG money on itself--on staff salaries--and precious little of it on the neighborhoods for which it was intended, the city council ordered a mini-reform. The point was to shift $1.5 million of the staff salaries out of the annual CDBG budget. The city could pay its own staff out of its own tax revenues and put the federal money where it was intended to go.
The shift of $1.5 million per year would be phased in over three years: the amount available for neighborhoods in the first year's budget would be $500,000, in the second year $1 million, and every year thereafter $1.5 million.
In its resolution, the council said the freed-up money was to be spent on housing needs. The first year, that's what happened. The CDBG budget shifted the $500,000 for salaries to housing programs. This year, in the second year of the reform, Greyson assumed there should be $1 million in new money budgeted for housing. Indeed, the CDBG budget had cut the amount for staff salaries this year by $1 million as planned. But the amount of new money budgeted for housing was still down at the $500,000 amount.
They saved the extra $500,000. So why wasn't it going to housing too? Where was the other $500,000? Greyson asked.
The answer was here, there, and everywhere. This year's $500,000 had wiggled off into the slop of pork-barrel projects favored by various council members.
Bradford, who is in charge of community development, told Greyson the council's resolution technically said only that the money saved by not paying staff salaries had to go into housing the first year. It never specified that the saved money had to go to housing every year.
The real trick in all of this, of course--in spite of the objections by Finkelman, Greyson, Miller, and Alan Walne, who also seemed uncomfortable with some of it--is that the city council itself is the trickster here. This budget technically is proposed to them by the Community Development Commission, and then the council holds a series of hearings to review it.
But the members of the Community Development Commission, which devised the proposed budget presented last week, are appointed by the council. They're the council-persons' pals. They didn't shift that second $500,000 into favored little pork-barrel deals here and there because they thought it would make their council-persons mad.
In fact, when the CDC was going through its own budget process earlier in the year, city staffer Bradford recommended they put that second $500,000 annual increment into housing the way they obviously were supposed to. It was the political appointees on the CDC who said no, gimme-gimme. Later, at their direction, Bradford came up with the deal about "you never said every year."
The truth is that the gimme-gimme deals are wired long before they ever get to the council. And according to remarks most of the rest of the council made last week, those deals aren't about to get unwired.
So if your street needs fixing or your alley needs paving, ask yourself a question. How wired are you? If the answer is "not very," then ask yourself another question. How well do you skate?