'This agency deserves to be forgiven': Ex-employees, community members advocate for SDC at hearing

After a hearing Friday, the Social Development Commission's future as a community action agency remains uncertain, but the anti-poverty agency still has the support of community members and former employees.

The Wisconsin Department of Children and Families held a public meeting Friday afternoon to determine if it should end SDC's designation as a community action agency, which makes it eligible for millions in federal funds.

Jeff Pertl, the state department secretary, will make a final decision in the coming weeks after reviewing additional documents from SDC and comments from the public, he told the Milwaukee Journal Sentinel.

He said it was clear that SDC was supported by employees and community members and that programming needs to return as soon as possible.

"What I care about is turning back on services," Pertl said.

All 10 community members at the hearing advocated for SDC to keep its status as a community action agency.

Antonio Butts, the executive director of Walnut Way Conservation Corp, one of SDC's community partners, said SDC losing this designation would "destabilize the entire safety net of the community."

He urged the Wisconsin Department of Children and Families to give the community more time to voice its support for SDC.

"The public just hasn't had this opportunity to speak up," Butts said. "There are thousands of people who will want to know about this today."

Former employees shared stories of how the agency's many programs benefited the community. Lasonda Buck, a former housing division manager at SDC, said her department disbursed over $90 million in rental assistance, taught people how to budget and helped homeowners keep up with their mortgages.

"Because of a mistake, you would take that away from a community?" Buck said. "Who else would run it better than SDC? I don't believe there's an agency that could do it."

SDC closed its doors and halted services last April. It opened again last December, but the Wisconsin Department of Children and Families says SDC hasn't resumed the services it is responsible for providing as a community action agency.

As a result, the department said SDC is out of compliance with state and federal law and its contract. The department also alleges SDC has continually given state officials inaccurate information about its financial health.

SDC is the only community action agency in Milwaukee County. This designation makes the agency eligible for the federal Community Services Block Grant, which provides funding to hundreds of local agencies around the country to reduce poverty.

William Sulton, SDC's attorney, was skeptical about the state agency's ability to find another organization to fill SDC's shoes.

"SDC is truly the city and county's best chance at dealing with poverty," Sulton said.

Former employees, community partners continue to support SDC

Nearly a year after the anti-poverty agency shut its doors, Thomas Hines, a former manager for youth and family services at SDC, says he still gets calls from parents. He says some of the children who received mental health and substance abuse services from SDC are now incarcerated.

"We have to somehow salvage this organization," Hines said.

SDC board members, including Jorge Franco, Dessie Levy and Walter Lanier, defended SDC at the hearing.

Levy, who was introduced as SDC's newest commissioner during an emergency board meeting Thursday night, grew up using SDC's services, she said at the hearing.

Her family used SDC's free tax preparation services, and the agency once filled a hole in her family's roof, she said.

"SDC's services are extremely valuable," said Levy. "This agency deserves to be forgiven."

Lanier also stood by SDC on Friday. He declared there had been "no scandal at SDC," just "mismanagement." He added that SDC's now seven-member board is "a sufficient size" and echoed Levy's calls for forgiveness.

"One of the challenges, particularly for Black organizations in Milwaukee and across the country, is where the majority of organizations are given second and third chances, even where there has been scandal," Lanier said. "I'm encouraging you to allow us to move forward."

Franco, who is the chief executive of both SDC and the Hispanic Chamber of Commerce of Wisconsin, shared a statement from the chamber's board of directors encouraging the state agency and SDC to work out their issues.

"We urge DCF to do what is right in immediately re-establishing antipoverty services to Milwaukee County through SDC and its infrastructure while the details of SDC's recent woes are worked out with you," the chamber's letter read. "We also urge SDC to do whatever is necessary to immediately establish these federal mandated antipoverty services now."

Sulton, SDC's attorney, has said that losing the grant won't be the end of SDC, which had a $30.5 million operating budget last year.

The public can still share comments with the state Department of Children and Families by emailing dcf.csbg@wisconsin.gov.

More of SDC's financial troubles come to light

The Wisconsin Department of Children and Families raised more questions about SDC's financial standing in a letter on Wednesday. According to the letter, SDC has not provided sufficient documentation to support expenses that it is asking the state department to reimburse.

The department says it came across more than $3.8 million in "outstanding payments," according to a note in SDC's March 2024 bank reconciliation.

"It is unclear to DCF as to what portion, if any, was reimbursed previously by DCF," the letter says. "DCF is concerned about this unresolved issue which could result in SDC needing to repay DCF for previously reimbursed amounts that were never received by the intended recipients."

The letter confirms that SDC has provided "various financial files" to DCF since December 2024, including employee timesheet reports, monthly bank statements and vendor invoices, according to the April 2 letter.

However, the state department says it still hasn't been able to "entirely identify" records that substantiate expenses SDC reported in contracts with the department.

This isn't the only trouble SDC is facing. The agency is also at risk of losing its main office at 1730 North Ave., a warehouse at 1810 North Ave. and several parking lots to foreclosure due to unpaid mortgages.

SD Properties Inc., the real estate arm of SDC, is facing a $2.98 million foreclosure lawsuit. Forward Community Investments is suing SD Properties for $2.3 million for a 2020 construction mortgage and about $679,000 for a 2023 mortgage, according to the complaint.