Crowley Supports Replacing SDC

It appears that Milwaukee County is ready to work with the state to find a new community action agency to replace the Social Development Commission, the embattled agency that has provided anti-poverty services for more than 60 years.

In an email to NNS, a spokesperson from the press office of Milwaukee County Executive David Crowley stated: “Given the urgent need for supportive services in Milwaukee County, and in light of SDC’s ongoing challenges, we stand ready to work with the Wisconsin Department of Children and Families and other local partners to identify another eligible entity or entities who can receive [Community Services Block Grant] funds and provide needed services to county residents.”

The Social Development Commission, also known as the SDC, is eligible to receive these federal block grant funds administered by the state through its status as a community action agency, which the state is considering rescinding.

The email from the county was sent in response to a question about whether the Milwaukee County Board of Supervisors and City of Milwaukee Common Council are required by state law to approve any decision to rescind SDC’s designation as a community action agency.

The background

The Wisconsin Department of Children and Families, or DCF, is scheduled to make a final decision on SDC’s community action status in the coming months.

DCF held a public hearing on April 4 to discuss SDC’s designation and future. At the meeting, some SDC board members and current and former employees testified about the crucial need to maintain the agency.

The department’s leadership said SDC has not created a realistic financial plan to restart services and perform its community action duties under the law, and it continues to have financial, programmatic, operational and service delivery concerns.

SDC reopened in a limited capacity in December after abruptly shutting down in April 2024, when problems included failing to pay employees and contractors on time and using grant dollars for one program to cover costs for another.

The agency has since missed state deadlines to pay employees their owed wages and also still owes some contractors for completed work.

In addition, SDC’s property corporation, SD Properties Inc., is facing a foreclosure lawsuit and owes nearly $3 million in mortgage payments on its North Avenue buildings, according to court records.

Who’s responsible?

Jorge Franco, interim CEO of SDC and chair of its board, said  Wisconsin law requires both the Common Council and County Board of Supervisors to approve a decision to de-designate SDC as a community action agency before the state can take that action.

Franco is referring to Wisconsin Statute 49.265, which states the following: “The approval of a community action agency may be rescinded but only if there is good cause and if the decision to rescind is made by both the legislative body of the county, city, village or town that granted the approval and the secretary.”

According to the organization’s former website, SDC became a community action agency in 1964, shortly after the Economic Opportunity Act created the Community Action Program.

Because SDC was established through a collaboration that involved the city, county and other organizations, there is a lack of clarity over which legislative body actually granted SDC’s approval as a community action agency.

It’s also unclear which legislative body must weigh in on the commission’s potential de-designation based on state statute.

According to a spokesperson from the Milwaukee County Executive’s Office, a review of records found that the county board and City of Milwaukee enacted an ordinance establishing SDC as a commission, but not specifically as a community action agency.

“We have not found any records indicating that the County Board ever took any action relative to SDC’s status as a CAA,” an email from the Milwaukee County Executive Press Office said.

Because the county board did not approve SDC’s status as a community action agency, it does not have the authority to rescind that status, the Milwaukee County Executive Press Office’s email said.

Jeff Fleming, a spokesperson for Mayor Cavalier Johnson, said the city’s responsibility in the potential de-designation of SDC as a community action agency has been a topic of discussion.

“The first impression from the city side is that it was the county that ‘granted the approval,’” Fleming said in an email, referring to SDC’s status as a community action agency.

NNS also reached out to Milwaukee City Attorney Evan Goyke for comment on the issue, but he hasn’t responded.

The Department of Children and Families was also questioned about which legislative body granted SDC approval to be a community action agency.

“This is the first time the Department of Children and Families has sought to de-designate a community action agency,” said Gina Paige, communications director for DCF.  “As such, we are working closely with the federal Office of Community Services and Milwaukee County to determine what the process would need to be should we move forward with de-designating SDC.”

According to Franco, the state operates under a federal mandate to provide the types of anti-poverty services that SDC had provided for decades.

He said without SDC, those services could be delayed by several years.

“The bottom line point is that infrastructure is there. It must be activated immediately,” Franco said.

Money, Franco said, is needed to help the agency climb out of debt and, more importantly, relaunch vital services to low-income residents in the county.

“SDC intends to pay every dollar it owes. First things first. Get anti-poverty services ready to go through SDC, which is ready to go today and that should not be delayed any further,” Franco said.

Some elected officials weigh in. Most stay silent.

State Sen. LaTonya Johnson said that she’d like to see SDC rebound from its troubles.

“SDC has been in the community for many years providing pivotal services for the community and this community can’t afford to lose those services,” she said.

Still, she said, given the significant mismanagement of funds at SDC, she understands that the Department of Children and Families will make a decision it feels is in the best interests of residents.

“Whatever decision they make, I’ll have to back it just like other elected officials will because we have to believe that they’re making the choice that’s best for taxpayers,” she said. “I’m hoping that the state will have a way to make sure that services will be provided, whether it’s SDC or not.”

Ald. Sharlen P. Moore also hopes to see SDC survive.

“They provide a critical need to our community and so what I would hope is that they would find the necessary help or support that they need in order to get back on track,” Moore said. “It’s such a huge void.”

Like Johnson, she also acknowledges the challenges of providing funding to an organization with an uncertain future.

“It’s hard giving someone money without knowing how they are going to move forward,” she said.

Rep. Gwen Moore said it is important to center the people who have been majorly affected, like residents who lost services and former employees who are still owed pay.

“The serious concerns raised by the State must be addressed, and I hope the result of this process moves us closer to resuming these vital services to my constituents,” she said.

NNS reached out to more than 20 elected officials from the city, county and state government for comment on SDC’s future, including Common Council President José G. Pérez and Milwaukee County Board Chairwoman Marcelia Nicholson. Only three elected officials chose to speak.

What’s next?

Despite the current challenges, Franco said he is confident SDC will bounce back, and that the history of the organization is proof of its effectiveness in fighting poverty.

“SDC has a legacy of generations of people who’ve been helped by SDC and they still live in the community,” he said. “Whatever its issues were in recent times, the longstanding legacy and the number of people who have been helped must not be forgotten.”

Milwaukee County appears ready to find replacement for SDC was originally published by Milwaukee Neighborhood News Service.