On Thursday, May 28, Commissioner Walter Lanier filed a request for guidance from Milwaukee City Attorney Evan Goyke regarding questions over the Social Development Commission’s governance compliance.
Concerns cited in Lanier’s request were: failure to hold officer elections; failure to conduct elections for low-income/community representative seats; failure to maintain a full complement of duly elected officers; and repeated failures to timely prepare, circulate, approve and preserve meeting minutes.
Commissioners Jackie Q. Carter, Richard Diaz and Pam Fendt, along with Dessie Levy, joined in the request, according to Lanier’s letter.
“This request is intended to help restore lawful governance, regular elections, proper public process, and public confidence in an institution that remains important to Milwaukee residents and to the broader anti-poverty infrastructure of the community,” wrote Lanier in the letter to Goyke.
Jorge Franco, interim CEO and board chair of SDC, wrote in a response to the email thread that he was disappointed to see Lanier’s communication without vetting from the full board.
“All of the SDC commissioners support good corporate governance practices,” he said. “But our immediate duty is to confront financial reality and determine the best legally viable path forward, which may be reorganization or some type of liquidation.”
He has previously said that SDC remains fully in compliance with its bylaws and other regulations as it works with limited staff and resources to address the agency’s crisis. Franco said SDC will prioritize items like processing its recorded meeting minutes and holding elections once the agency is appropriately funded and has the staff to do so.
Dealing with debt
Lanier’s request comes after the same group of commissioners called an emergency meeting on May 19 that didn’t meet quorum but stirred up discussion over governance issues and the attendance of one commissioner. Two days later, the full Social Development Commission’s board met and spent most of the meeting on May 21 in closed session.
“Formulating a go-forward strategy in view of its insolvency, that’s really what we’re focused on,” said Franco after the board meeting held at Milwaukee Public Schools Central Services, 5225 W. Vliet St., on May 21.
For decades, the anti-poverty agency provided services that included tax assistance, weatherization, child care and job training before closing two years ago. Since then, the board has continued to meet to address SDC’s loss of funding, lawsuits and debts.
In March, Franco said SDC had $2.4 million in outstanding debt with adjustments pending and was considering talking with creditors, restructuring or filing for bankruptcy to address its challenges.
“I remain committed to SDC paying every dollar it owes to whomever it owes, and to collecting every dollar owed to SDC,” he said.
Levy attended, not counted in roll call
Levy, who was appointed to serve on the SDC board by the Greater Milwaukee Committee last year, attended both meetings but was not counted in the roll call on May 21.
Franco notified her earlier last week that she was removed from the board for exceeding the board’s policy for unexcused absences.
Levy and some commissioners disagree with her removal and the circumstances surrounding it, while Franco said he is following a legal interpretation of the agency’s bylaws.
He said he had no problem with Levy staying for the board’s closed session.
“I’m just going to continue to serve as the (Greater Milwaukee Committee) wants me to serve,” Levy said.
Franco said the bylaws and legal interpretation were shared with the Greater Milwaukee Committee, and SDC asked for a new commissioner to be appointed with expertise in reimbursement grant funding.
“They know SDC’s position on that appointment,” Franco said.
Heather Pechacek, communications and membership director for the Greater Milwaukee Committee, said the committee is reviewing the SDC bylaws to better understand how the decision was made.
“Until we have a clear understanding of the circumstances, we support Dr. Levy and believe she should remain a commissioner on the board,” said Cristy Garcia-Thomas, interim president of the Greater Milwaukee Committee. “At this time, we have no interest in appointing another commissioner.”
The Greater Milwaukee Committee is a private sector civic organization that focuses on finances, education, public safety, and infrastructure.
Lawsuits progressing
Franco said he gave the board an update on a lawsuit from TriShulla LLC and is now waiting to hear back from the information technology firm. A hearing for partial summary judgment is scheduled to take place on June 1.
The firm claims SDC owes about $472,000 in outstanding payments for software platform creation and other services it was contracted to provide.
Franco said he has not been briefed on a separate lawsuit filed against SDC by the former owner of its West Allis office, 20 Volga 9004 Lincoln LLC.
The company claims SDC owes months of unpaid rent and previously filed a lawsuit that was dismissed. Now, 20 Volga 9004 Lincoln has requested the judge make a default judgment because SDC has not responded to the summons and complaint.
SDC’s next board meeting is scheduled for 5:30 p.m. on Thursday, June 18.
Meredith Melland is the neighborhoods reporter for the Milwaukee Neighborhood News Service and a corps member of Report for America, a national service program that places journalists in local newsrooms to report on under-covered issues and communities. Report for America plays no role in editorial decisions in the NNS newsroom.
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