Cityscape

Demo contractors billed whatever they wanted for dirt, Detroit News finds


September 25, 2019, 11:07 AM

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Homrich was among contractors flagged by state administrators for billing what seemed to be too much for demo dirt. (Photo: Violet Ikonomova)

Waste surrounding Detroit's demo program seems to be the theme of the day.

On our site this morning is a story about how Detroit has been randomly paving sidewalks at demo sites in areas where there are no connecting sidewalks — costing taxpayers about $2,500 a pop — because it has no specific rules in place for when and when not to pave.

The Detroit News, meanwhile, has unearthed something even more jaw-dropping: 

Contractors charged the federal government whatever they wanted for more than two years for dirt used to fill holes left behind from thousands of torn-down houses in Detroit's controversial demolition program, emails obtained by The Detroit News show.

The unrestricted charges occurred because no rules were in place to limit dirt costs, eventually prompting state officials to worry about overbilling.

Deadline contributor Charlie LeDuff raised questions over the rising cost of demolition dirt several years ago, pointing out that contractors were using far less dirt per demo than they had under a previous administration, but somehow billing way more per parcel.

The News' reporting unravels that mystery.

It flagged unusually high reimbursements of $3,750 to more than $7,000 per property in before mid-2017, when cost controls were put in place.

The News published exchanges in which the billings were questioned by staff with the Michigan State Housing Development Authority — the state agency that disburses the federal funds. They were ultimately told the billings were so high because there were no rules.

Here's one of the emails, from former Land Bank demolition program director Becky Camargo:

[... a] MSHDA contractor asked how two properties on Carter — one with 2,208 square feet and another with just 920 square feet — "can both have a charge for dirt = to $5,000 for each?"

"As previously discussed, contractors were operating under a directive to simply place a cost in the dirt column," Camargo wrote in response on April 24, 2017, of the property also under contract with the firm Salenbien. "It is not necessarily reflective of the actual cost."

The limit for dirt today is $2,000 to $3,000, depending on the size of the property.

The findings come as Detroit seeks to keep up the pace of its demolition program using all city funds. Detroit Mayor Mike Duggan wants taxpayers to allow his administration to bond for $250 million to help support the program through 2025.

Separately, an ongoing federal criminal investigation is looking into the demo program. The Special Inspector General for the Troubled Asset Relief Program is also auditing federally funded demolition activities.


Read more:  The Detroit News


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