Milwaukee’s public housing authority owes city over $5M

Milwaukee’s embattled public housing authority has failed to reimburse the city for staff who are on the payroll in another city department. It’s the latest financial misstep for the agency that oversees public housing properties across the city.

The Housing Authority of the City of Milwaukee, or HACM, is an independent agency. But under an agreement with the city, some agency staff are on the Department of City Development’s payroll.

City comptroller Bill Christianson said there were once 150 employees working for the housing authority who were housed under the Department of City Development. That number has dwindled to four employees now, according to Christianson. 

Even so, Christianson told the city’s Steering and Rules Committee on Monday the agency hasn’t made any payments to the city for those employees since 2021. He said the housing authority owes the city $3.6 million in salaries and benefits.

“It was a surprise, not only to myself, but several of my colleagues who weren’t sure … how HACM owed the city that amount of money and for what,” Milwaukee Common Council President Jose Perez said. “We wanted to get to the bottom of it.”

Christianson, who was elected as city comptroller last year, is looking into how it happened. 

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

Christianson also told the committee he thinks the city should select a department to “be responsible for the financial oversight of this arrangement and ensuring that HACM does make payments for what is owed.”

A spokesperson for HACM said CFO Brad Leak wasn’t available for an interview Monday. But a statement from the agency said it was “aware of the information.”

“HACM’s new leadership team will conduct a thorough review and collaborate with the City to assess its current financial obligations,” the statement said. “Moving forward, HACM is committed to establishing a more transparent and efficient process to ensure financial clarity and accountability.”

Milwaukee Alder Sean Spiker said the issue was concerning. 

“If we think of it in terms of the city’s exposure — if  HACM were to go to belly up tomorrow, then we’d have $3.6 million in uncollectible debt,” Spiker said.

The financial error comes two weeks after it was announced that the housing authority improperly diverted $2.8 million from its Section 8 voucher program into its central office to help cover payroll.  A December report from the U.S. Department of Housing and Urban Development also said HACM is “unable to provide accurate financial reports” to its own board.

“An agency charged with providing for some of the neediest among us has fallen, and while it attempts to stand back up, it’s been hit with another leg crippling blow,” Perez said Monday.

HACM owes the city nearly $1.5M

Christianson also revealed Monday that the agency still owes the city $1 million from its PILOT program in 2024. That program, or Payment In Lieu of Taxes, is for tax-exempt properties in Milwaukee that agree to a voluntary payment.

“It’s essentially to … cover the cost of things that property taxes would otherwise pay,” Christianson said. 

The city website said payments from HACM under that program are “typically for public services and facilities furnished to the properties.” 

The agency also owes the city just over $500,000 for city services offered to the agency. That includes legal services and internet and data connectivity. 

“This is essentially billings from city departments for services rendered to happen,” Christianson said.

Milwaukee chief information officer David Henke appeared at the meeting and said the housing authority still owes around $189,000 for telephone services, internet and data connectivity and licensing for employees for services like Microsoft.

HACM continues search for new director

The search for a new executive director is underway after HACM’s previous director, Willie Hines, retired on Jan. 1.

Perez said the goal now is to ensure the success of the agency. Many of the residents at public housing properties across the city are people of color, low-income, senior citizens and disabled adults.

Perez said it’s important the city gets the money back, but he also wants to ensure the mishap doesn’t happen again. 

“We want to be helpful to HACM moving forward, because we believe that you really can’t steer the ship in the right direction without understanding and evaluating how you got there,” Perez said.