The Mobile Housing Board of Commissioners is in the midst of absorbing employees from its nonprofit arm, Mobile Development Enterprises. Members were, therefore, hesitant to agree to create another nonprofit when it met Wednesday, Feb. 14, despite the recommendation of new Executive Director Akinola Popoola.

Instead, commissioners gave Popoola permission to explore the creation of another nonprofit, all while voicing their concerns.

“We’ve spent a year and a half winding down a nonprofit,” MHB Vice Chairman Reid Cummings said. “How will this differ from MDE?”

Popoola told Cummings it would be legally different from MDE and be used in the future to secure grants MHB wouldn’t be able to get on its own. As things currently stand, Popoola said, the authority would not be able to apply for grants on short notice. He said he felt uncomfortable using MDE given its history.

“We’re better off starting a new one, due to the various things that have happened,” Popoola said.

In June 2017, commissioners voted unanimously to begin absorbing most MDE positions into MHB. The move began as a result of a U.S. Department of Housing and Urban Development Inspector General report that, among other findings, determined a conflict of interest existed between the nonprofit and a contractor starting in 2011.

Commissioner Norman Hill, who was MDE’s first official employee when it began, defended the nonprofit, but acknowledged it didn’t operate as intended.

“It had a good set of bylaws and a good mission, I think,” Hill said. “How it got off course is another story.”

As for a new nonprofit, Hill asked Popoola for examples of what it would look like. Without a framework, Hill said, he didn’t understand why MDE couldn’t be used.

“Bring us what you want to do,” Hill said. “Let us review in draft, the bylaws, members and structure. I would’ve liked to have seen what you’re talking about.”

MHB attorney Raymond Bell told commissioners MDE would be dormant once the employees were officially transitioned through the Mobile County Personnel Board, but it would not cease to exist.

Commissioner Breanne Zarzour agreed, raising concerns over the need to create a new nonprofit.

“Why can’t we restructure the one we have now?” Zarzour asked Popoola.

MHB Chairwoman Kimberly Pettway also said she didn’t see the need for starting a new nonprofit.

Popoola reiterated it would be better to start fresh.

“It’s a good idea, but with what happened under MDE I believe it’s always better to start fresh,” he said. “We want it to have a fair chance.”

Most housing authorities operate nonprofits, Popoola said. Some have multiple organizations for various actions. Many of the region’s larger housing boards have nonprofits; however, none Lagniappe profiled operate like MDE.

The Housing Authority of the Birmingham District has two nonprofits, the HABD Scholarship Foundation and the Magic City Housing Development Corp., spokesman Joseph Bryant said in an earlier interview. The scholarship foundation provides education and training for residents with donated money and proceeds from an annual golf tournament, he said. Some of the scholarship’s board members are HABD employees, according to Bryant.

The Magic City Housing Development Corp. helps pay for other activities not covered by the authority and also sponsors an essay contest. The latter nonprofit is maintained through development fees from Park Place, a Hope VI initiative. At the time of the original interview, Bryant said, there is no ongoing fundraising for it.

Huntsville has a nonprofit to represent its tax credit entities, but at the time of the interview with interim Executive Director Sandra Eddlemon it was inactive. The Housing Authority of New Orleans, which recently redeveloped some of its properties, uses one nonprofit entity, office administrator Tomeka Jackson wrote in an email message last year.

The Crescent Affordable Housing Corp. has its own board of directors, which includes two HANO employees and a resident. It is operated as a subsidiary of HANO.

The nonprofit doesn’t handle any of HANO’s day-to-day operations and doesn’t share any bank accounts, Jackson wrote. The funds for the nonprofit, as with Birmingham and Huntsville, come from developer fees. The organization also doesn’t have its own employees, she wrote.

Unlike MDE, none of the nonprofits in Huntsville, Birmingham or New Orleans have their own employees.

In addition to working to make changes to MDE, commissioners were also ordered to have MHB pay back HUD $5 million in non-federalized funds. The board approved the repayment plan Feb. 14 as well.

The board is slowly making progress on its goal of absorbing MDE employees. The 18 employees still on the MDE payroll will become MHB employees soon, Bell said.

In other business, commissioners approved paying $151,000 for a bulk trash truck. The GVWR 33000-model truck would allow board employees to pick up bulk trash at the authority’s properties on a daily basis. Five or six employees will be trained to operate the truck through a local community college program. One MHB employee currently has a commercial driver’s license. The truck comes with a five-year warranty.

Under an old contract, the board outsourced its bulk trash pickup at a cost of $146,000 per year for one- or twice-weekly pickup.

“I don’t know if this is a good idea or not,” Cummings said. “I don’t know if by spending $150,000 we’re biting off more than we can chew.”