SDC Commissioner Calls For Ouster of Board Chair, Interim CEO
Walter Lanier believes its time for Jorge Franco to step down.
Jorge Franco (from left), Walter Lanier, Jackie Q. Carter, Pam Fendt and Spencer Coggs discuss the Social Development Commission’s board policies on March 20 at the SDC main office, 1730 W. North Ave. (Photo by Meredith Melland)
As the Social Development Commission works to reel in funding and restart anti-poverty services, it’s also dealing with board conflict.
On Sept. 25, Commissioner Walter Lanier sent a memo to the SDC board requesting the board vote on removing the current board chair, Jorge Franco, from board leadership and from his position as interim CEO. He also requested a governance review to eliminate any conflict of interest between the chair and executive functions.
Franco said multiple attorneys have reviewed the possibility of a conflict in holding both positions and found that it does not apply because he is not an employee and is not being paid.
The memo, shared by Lanier with NNS, includes other requests to be added to the board’s next meeting agenda.
Concerns raised about governance
Lanier said he has repeatedly tried to bring governance and other items before the board under Franco’s leadership and has been ignored.
He said the board is not accomplishing basic responsibilities, like approving meeting minutes, and is failing to elect representatives of the community to the board.
“I have a fiduciary obligation as a board member to raise concerns and to get information sufficient for me to make good decisions,” Lanier said. “So if I don’t raise the issues, I’m failing to do my job.”
The anti-poverty agency is trying to get back on its feet after it halted its normal operations in April 2024, lost a stream of government funding and became the subject of several state audits.
The organization has provided a range of services for low-income residents such as emergency furnace installation, tax support, career advancement, senior companionship and rent assistance.
Lanier has previously raised concerns about the board’s practices. Commissioner Pam Fendt, at a previous meeting in public comment, also mentioned she was concerned that the board had limited opportunities to have input on budget or funding decisions.
Franco said commissioners are provided with financial information and other reports regularly before meetings.
Franco says he’s open to input
He said he is open to input from board members and has placed items on the agenda even if they are unpopular, such as an item to voluntarily de-designate SDC as a community action agency, which did not move forward.
Without community action agency status, SDC would no longer be eligible for millions in block grant funding that could support the agency’s programs and help it secure other funding.
“I’ll always consider any and every item so long as the item(s) are in the best interest of our SDC commissioners’ fiduciary duty to SDC, including SDC’s constituents and employees still owed back pay from previous work, many of whom have now fallen into becoming antipoverty constituents of SDC,” Franco said.
Lanier also requested a motion to vote to retain independent legal counsel with expertise in “nonprofit board governance and liability.”
He said that he thinks William Sulton, SDC’s attorney, has a strong reputation as a litigator, which is valuable, but the board also needs counsel with expertise in the areas of nonprofits and government.
Sulton said he would welcome additional legal help or having someone take it over if that is reflective of the whole board’s opinions.
Allegations of ‘mudslinging’
Sulton said that Lanier is “mudslinging,” violating the agency’s bylaws and could face a vote of removal from the board.
“I think he’s damaging the organization’s reputation, and I think he’s doing so at a particularly precarious time,” Sulton said.
Franco agrees.
“We’re at a point now where, with Mr. Lanier, SDC must practice tough love because he’s now placing SDC at risk of alienating its funding sources, including the funding sources at the table right now,” Franco said.
Sulton said Lanier is not active between board meetings, while Franco has given SDC a significant amount of time, resources and personal capital.
“Without his efforts, I don’t think that we’d even be talking about SDC anymore,” Sulton said. “. . . I don’t see anyone else on the commission being able or willing to run the day-to-day operations of SDC.”
Other updates
Wings Credit Union issued a letter of intent to provide a credit facility of up to $15 million to SDC, which Sulton shared in a news release on Wednesday, Oct. 1.
A credit facility is a type of loan that allows a business to borrow money over an extended period of time instead of taking out individual loans.
Franco said that in addition to increasing SDC’s budget capacity and allowing SDC to advance money for programs that are funded on reimbursements from the government, a credit facility would impose accountability standards.
“It adds the accountability that’s needed in order for an agency like this to function properly,” Franco said.
While the letter of intent from Wings Credit Union states it is not a legally binding agreement, it says the credit union is willing to work with SDC to determine the structure for a revolving line of credit to be used solely for government-funded programs managed by SDC.
The letter stated that assurances are needed on how advances to support programs will be repaid by the “government entity providing such funding.”
“This would not have happened without all the hard work and long hours by Jorge Franco, Diane Robinson and the team of volunteers with financial expertise and banking relationships,” Sulton wrote in the release.
Wings Credit Union did not respond to a request for comment by the time of publication.
Weatherization vendors win judgment
On Sept. 24, Milwaukee County Circuit Court Deputy Chief Judge William Pocan ruled that three weatherization vendors had valid contracts with SDC and granted a judgment in their favor for a total amount of $186,517.03 plus statutory costs and accrued interest.
The three vendors, Affordable Heating and Air Conditioning Inc., Insulation Technologies and DMJ Services LLC, which is doing business under the name Action Heating & Cooling, filed the money judgment lawsuit against SDC to collect reimbursements for weatherization work completed for the agency.
Foreclosure lawsuit moving forward
At 11 a.m. on Monday, Oct. 6, there will be a summary judgment hearing in the mortgage foreclosure case between Forward Community Investments, Inc. and SD Properties, Inc., which owns SDC’s buildings, in Room 414 of the Milwaukee County Courthouse, 901 N. 9th St.
Board meeting postponed
The SDC board was scheduled to meet on Thursday, Oct. 2, but Sulton said the meeting has been moved to the end of the month.
The meeting is rescheduled for Thursday, Oct. 30, according to SDC’s website.
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.
Jonathan Aguilar is a visual journalist at Milwaukee Neighborhood News Service who is supported through a partnership between CatchLight Local and Report for America.
This article first appeared on Milwaukee Neighborhood News Service and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
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Has the SDC board established vision, mission, and values? What are its strategic goals 1-year, and 5-years. From this article, it appears the board under the leadership of Jorge Franco seems to be lost in the weeds. Without a strong governance structure, SDC will be right back to where they were in 2024.
I have worked with Pastor Lanier on a number of committees and initiatives. What he is pushing the board to do is set up a governance structure so that SDC does not repeat the disaster mistakes of the past. Board of directors are responsible for the big picture. The first action this board needs to take is a deep dive into what happened, what changes need to be made to the governance structure. Once that governance structure is in place, develop a timeline, strategic goals, and a plan to achieve those goals. This is an essential first step to put SDC back serving Milwaukee residents. The Federal Government will require just such a strategic plan. What’s more, all major funders require that be in place.
As for Franco, being the board president and CEO may not be illegal but is not in the best interests of SDC. Boards generally are responsible for the big picture setting strategic goals, monitoring progress towards those goals, as well as general oversight of the organization. This is one of the core functions of a Board. The CEO is responsible for the day-to-day management within the framework of the governance system the board establishes. It is very rare that one person is skilled in both strategic and tactical thinking. Combining the 2 roles too often leads to a focus on the day-to-day while ignoring the big picture. This is Non-profit management 101.