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Detroit — State Rep. LaTanya Garrett is calling for hearings on what she described as "improper use" of the federal Hardest Hit Fund by Detroit's land bank and building authority.

Garrett, who represents the state's 7th District, introduced a resolution Tuesday that says the city's blight elimination program has been "mired in controversy" since its inception in 2014. She's asking the leaders of the state's House Oversight and Government Operations committees to conduct hearings on the use of the fund.

But the head of the Land Bank defended the program's practices and that the federal government has "shown its confidence in our program."

The program has been the focus of a federal criminal investigation, and state and local reviews since it came under scrutiny in the fall of 2015 amid concerns over bidding practices and soaring costs. 

In a released statement, the Detroit Democrat said allegations of mismanagement of federal demolition dollars awarded to the land bank and building authorities arise "with each passing day."

Garrett's resolution refers to recent contractor violations over the use of unapproved dirt or dirt that contained demolition debris to fill in holes at some demolition sites, and a contractor's failure to properly dispose of demolition debris before dumping new dirt on top.

"In the spirit of transparency and open government, it is imperative that the residents of the state of Michigan and the city of Detroit get accurate answers to their questions pertaining to the operations of the Detroit Land Bank and Building authorities," Garrett said. "The citizens of the city of Detroit and the state of Michigan deserve answers.”

Land Bank Executive Director Saskia Thompson told The Detroit News in a statement that federal authorities have not raised concerns about the land bank's practices with demolition dirt.

"The fact is the Detroit Land Bank Authority developed protocols and policies to ensure all approved dirt meets MDEQ standards and we have worked closely with the Detroit Building Authority to enforce those policies aggressively," Thompson said, referring to Michigan Department of Environmental Quality standards.

In her resolution, Garrett also pointed to news reports that have cited rising demolition costs and a state audit that found millions in improper billings by the land bank.

Thompson, who took over the authority in September 2017, said other issues raised by Garrett in the resolution "were all resolved years ago."

Mayor Mike Duggan released the state review of the program's billing practices in 2017, saying it had turned up $7.3 million in "inappropriate" or "inaccurate" costs. The majority were in connection with a controversial set-price bid pilot in 2014 designed to quickly raze houses.

The land bank agreed to a $5 million settlement in addition to $1.37 million it repaid earlier to address expenses found improperby auditors.

Detroit's funding under the federal program is administered by the Michigan Homeowner Assistance Nonprofit Housing Corp., which was created by the Michigan State Housing Development Authority. 

The program was suspended by the U.S. Treasury Department in the summer of 2016 to address concerns involving paperwork, billing and misallocation of funds. It was reinstated two months later. 

The state, Garrett wrote, "has a responsibility to its citizens to ensure funds are spent appropriately and public health and welfare are protected."

"Not only does the improper management of funds impact those the program is trying to help, but the Detroit Land Bank Authority receives demolition funds through the MHA and MSHDA, making this a state issue ..." the resolution said. 

The resolution was referred to the Government Operations Committee.

Garrett's move comes after the Detroit City Council's second in command put out a call last month to have the U.S. House Oversight and Reform Committee convene a congressional hearing, citing a Detroit Free Press report that raised the possibility that dirt being used to fill holes under the program may have been from contaminated or unverified sources, including soil from the recent reconstruction of Interstate 96 in western Wayne County. 

Thompson said Tuesday that the U.S. Treasury Department has "shown its confidence in our program" by releasing more funding toward the effort annually, totaling more than $265 million over five Hardest Hit Fund rounds.

"As a result, we’ve knocked down 11,000 structures with (Hardest Hit Fund) dollars so far, fighting blight in the city of Detroit at an unprecedented pace and scale," she said. 

cferretti@detroitnews.com

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