Flint’s Problems Didn’t Start with Water

Industry Update
February 13, 2016

A third of the property in the city of Flint is vacant.

That’s according to the Genesee County Land Bank, the organization charged with pushing back against the encroaching wave of blight that touches nearly every neighborhood in this struggling city — of 56,000 parcels in Flint, about 20,000 are empty or blighted.

And it’s going to get worse.

How much worse, no one can say. But there’s little doubt in the minds of Doug Weiland, executive director of the land bank, and Genesee County Treasurer Deb Cherry, that because of Flint’s ongoing water crisis, more people will stop paying their property taxes in the years ahead.

“It’s hard to know the impact, because we’ve never been through anything like this,” Cherry said.

In the long-term, it likely means more homes will be foreclosed, and almost certainly become vacant or blighted. In the short-term, the city will lose revenue, leaving Flint with less money to pay for police officers and firefighters, for garbage pickup and schools — or for repairs to or investment in its infrastructure, like the water system.

Flint’s water crisis exacerbates a cycle that has been taking place for decades in cities across Michigan: places like Flint or Detroit or Saginaw or Benton Harbor.

In Flint, it’s linked to the city’s economic travails — the departure of General Motors dealt a devastating blow to the city from which it has not recovered. And now, to its water, still not safe to drink, nearly five months after the State of Michigan admitted that the city’s water supply had been compromised.

People leave, thus tax revenue drops. The city has less money with which to provide basic services, so more folks move out — meaning there’s even less money. So more people leave.

Flint spent four years under a succession of state-appointed emergency managers, brought in to balance the city’s budget — along the way, endorsing or making a series of disastrous decisions that left the city’s water undrinkable.

Nor was the emergency managers’ basic charge — balancing the budget — successful. In the last fiscal year, the city’s deficit was about $7 million.

Even after Flint’s water is safe to drink, the city’s long-term problems, those made worse by the crisis, will remain. And that’s a reality neither Gov. Rick Snyder nor the Michigan Legislature have begun to publicly entertain.

“What kind of increase (in foreclosures) that will correlate to, I don’t know, but I would guess that it’s going to be pretty significant,” said Alex Alsup, chief product officer at Detroit-based data firm Loveland Technologies, which has worked extensively to chronicle Detroit’s blight and cycle of foreclosures. “The thing that needs to happen is, if the state is thinking about water bill reductions or paying off water bills, they need to be thinking about property taxes the same way.”

Facing the crisis

For nearly two years, water contaminated by coliform bacteria, a hodgepodge of ill-chosen chemicals, and finally, lead, has flowed through Flint’s pipes, into homes and businesses, exposing the nearly 100,000 residents of this town to terrible health risks. Slow to acknowledge the problem, and glacial in response once it had, the State of Michigan has finally begun to treat Flint’s water crisis as the public health catastrophe that it is.

Snyder’s budget proposal, released last week, envisions $195 million plowed into the city for emergency relief, infrastructure repair, services for children, who are most vulnerable to the serious, lifelong effects of lead poisoning, and $30 million for residents’ water bills — about half what Flint Mayor Karen Weaver says is required to keep the system intact.

All of this, and more, is necessary.

But none of it addresses the problem of Flint’s value, or the city’s long fight against blight.

Last year, Flint collected about $19 million in property taxes; that’s about 23% of the city’s $81-million general fund budget. The taxable value of all property in the city is about $750 million, according to the land bank. Collections have declined since 2004, when about 89% of Flint residents paid their property taxes promptly, the Free Press reported earlier this month. Now, it’s about 64%. And even after five years of emergency management, the city’s running a deficit — about $7 million last year.

Before the water crisis, Flint’s rate of foreclosure had stabilized, Cherry said, hitting consistent numbers each year. That was progress.

The land bank’s Weiland says the city’s high rate of poverty means some residents can’t afford to relocate. But even if folks don’t walk away, the prospect of reduced property assessments — granted when the value of a property is negatively impacted (by something like undrinkable water) — means tax revenue would shrink. Appraisers and real estate attorneys told the Free Press earlier this month that it is inevitable that many such assessment reductions would be requested, and granted.

Foreclosure law issues

Michigan’s foreclosure law, updated in 1999, shortens the span of time between a property’s first tax delinquency and foreclosure, and allows county treasurers some leeway in exercising foreclosure. If a city can’t collect property taxes, the delinquent bill is sent to the county, which attempts to collect for two years. At the third year, the property is foreclosed on, and put up for sale in the county’s tax auction. The whole idea is to get property into the hands of folks who’ll pay the taxes.

In places like Flint, it doesn’t work.

About 2,500 properties in Genesee County were put up for sale in last year’s tax foreclosure auction — including about 1,700 properties in Flint. Just 271 properties in the county-wide inventory were sold; 2,112 were transferred to the land bank. The land bank’s job is to keep such properties well-maintained, and out of the hands of speculators, preparing for the day when those parcels will again have value.

“The abandoned property we have, there’s very little market,” Weiland said. “I expect we’re going to be holding these properties for a long time” — but, he says, the land bank is still doing business, even after the water crisis.

Yet a land bank is palliative care, a way to deal with the problem of blight and abandonment after it has been created.

“As we’ve seen in Detroit, there are a lot of conditions and symptoms that are damaging to the city and its people, but it’s really the property taxes and this super-efficient foreclosure law that seems to have the greatest impact in displacing people from their property. It’s perpetuating cycles, expansion of vacancy and blight, so I would expect that if there’s not any kind of intervention, that’s going to be a pretty serious problem for the city,” Alsup says. “The whole country’s built on real estate values, property taxes and (losing that is) really what is toxic to the organism of the city.”

Cherry is near-militant about Flint’s plight. When the city hands its tax-delinquent properties to the county later this year, Cherry says, she’ll refuse to foreclose on homes considered tax-delinquent because of unpaid water bills attached as liens to property taxes.

“My attorney says I have the right to do that because they’re fraudulent water bills,” she said. “Unless something changes, that’s what our plan is.”

And it’s difficult to imagine any local or state official leading the charge to force Cherry to foreclose on homeowners with undrinkable water. And she says her office is often able to work with property owners to avoid foreclosures.

But again, Cherry’s best efforts can only stanch the bleeding.

The state’s response thus far to the Flint crisis has focused on the water. That’s important. But we’re just beginning to understand the span and depth of its reverberations — and what must be done to mitigate the harm.

Source: Detroit Free Press



Alan Jaffa

Alan Jaffa is the chief executive officer for Safeguard, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to chief operating officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur of the Year® finalist in 2013.


Chief Operating Officer

Michael Greenbaum

Michael Greenbaum is the chief operating officer for Safeguard. Mike has been instrumental in aligning operations to become more efficient, effective, and compliant with our ever-changing industry requirements. Mike has a proven track record of excellence, partnership and collaboration at Safeguard. Under Mike’s leadership, all operational departments of Safeguard have reviewed, updated and enhanced their business processes to maximize efficiency and improve quality control.

Mike joined Safeguard in July 2010 as vice president of REO and has continued to take on additional duties and responsibilities within the organization, including the role of vice president of operations in 2013 and then COO in 2015.

Mike built his business career in supply-chain management, operations, finance and marketing. He has held senior management and executive positions with Erico, a manufacturing company in Solon, Ohio; Accel, Inc., a packaging company in Lewis Center, Ohio; and McMaster-Carr, an industrial supply company in Aurora, Ohio.

Before entering the business world, Mike served in the U.S. Army, Ordinance Branch, and specialized in supply chain management. He is a distinguished graduate of West Point (U.S. Military Academy), where he majored in quantitative economics.



Sean Reddington

Sean Reddington is the new Chief Information Officer for Safeguard Properties LLC. Sean has over 15+ years of experience in Information Services Management with a strong focus on Product and Application Management. Sean is responsible for Safeguard’s technological direction, including planning, implementation and maintaining all operational systems

Sean has a proven record of accomplishment for increasing operational efficiencies, improving customer service levels, and implementing and maintaining IT initiatives to support successful business processes.  He has provided the vision and dedicated leadership for key technologies for Fortune 100 companies, and nationally recognized consulting firms including enterprise system architecture, security, desktop and database management systems. Sean possesses strong functional and system knowledge of information security, systems and software, contracts management, budgeting, human resources and legal and related regulatory compliance.

Sean joined Safeguard Properties LLC from RenPSG Inc. which is a nationally leading Philintropic Software Platform in the Fintech space. He oversaw the organization’s technological direction including planning, implementing and maintaining the best practices that align with all corporate functions. He also provided day-to-day technology operations, enterprise security, information risk and vulnerability management, audit and compliance, security awareness and training.

Prior to RenPSG, Sean worked for DMI Consulting as a Client Success Director where he guided the delivery in a multibillion-dollar Fortune 500 enterprise client account. He was responsible for all project deliveries in terms of quality, budget and timeliness and led the team to coordinate development and definition of project scope and limitations. Sean also worked for KPMG Consulting in their Microsoft Practice and Technicolor’s Ebusiness Division where he had responsibility for application development, maintenance, and support.

Sean is a graduate of Rutgers University with a Bachelor of Arts and received his Masters in International Business from Central Michigan University. He was also a commissioned officer in the United States Air Force prior to his career in the business world.


General Counsel and Executive Vice President

Linda Erkkila, Esq.

Linda Erkkila is the general counsel and executive vice president for Safeguard and oversees the legal, human resources, training, and compliance departments. Linda’s responsibilities cover regulatory issues that impact Safeguard’s operations, risk mitigation, enterprise strategic planning, human resources and training initiatives, compliance, litigation and claims management, and mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. Her practice spans over 20 years, and Linda’s experience covers regulatory disclosure, corporate governance compliance, risk assessment, executive compensation, litigation management, and merger and acquisition activity. Her experience at a former Fortune 500 financial institution during the subprime crisis helped develop Linda’s pro-active approach to change management during periods of heightened regulatory scrutiny.

Linda previously served as vice president and attorney for National City Corporation, as securities and corporate governance counsel for Agilysys Inc., and as an associate at Thompson Hine LLP. She earned her JD at Cleveland-Marshall College of Law. Linda holds a degree in economics from Miami University and an MBA. In 2017, Linda was named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.


Chief Financial Officer

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard. Joe is responsible for the Control, Quality Assurance, Business Development, Accounting & Information Security departments, and is a Managing Director of SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Joe has been in a wide variety of roles in finance, supply chain management, information systems development, and sales and marketing. His career includes senior positions with McMaster-Carr Supply Company, Newell/Rubbermaid, and Procter and Gamble.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.


AVP, High Risk and Investor Compliance

Steve Meyer

Steve Meyer is the assistant vice president of high risk and investor compliance for Safeguard. In this role, Steve is responsible for managing our clients’ conveyance processes, Safeguard’s investor compliance team and developing our working relationships with cities and municipalities around the country. He also works directly with our clients in our many outreach efforts and he represents Safeguard at a number of industry conferences each year.

Steve joined Safeguard in 1998 as manager over the hazard claims team. He was instrumental in the development and creation of policies, procedures and operating protocol. Under Steve’s leadership, the department became one of the largest within Safeguard. In 2002, he assumed responsibility for the newly-formed high risk department, once again building its success. Steve was promoted to director over these two areas in 2007, and he was promoted to assistant vice president in 2012.

Prior to joining Safeguard, Steve spent 10 years within the insurance industry, holding a number of positions including multi-line property adjuster, branch claims supervisor, and multi-line and subrogation/litigation supervisor. Steve is a graduate of Grove City College.


AVP, Operations

Jennifer Jozity

Jennifer Jozity is the assistant vice president of operations, overseeing inspections, REO and property preservation for Safeguard. Jen ensures quality work is performed in the field and internally, to meet and exceed our clients’ expectations. Jen has demonstrated the ability to deliver consistent results in order audit and order management.  She will build upon these strengths in order to deliver this level of excellence in both REO and property preservation operations.

Jen joined Safeguard in 1997 and was promoted to director of inspections operations in 2009 and assistant vice president of inspections operations in 2012.

She graduated from Cleveland State University with a degree in business.


AVP, Finance

Jennifer Anspach

Jennifer Anspach is the assistant vice president of finance for Safeguard. She is responsible for the company’s national workforce of approximately 1,000 employees. She manages recruitment strategies, employee relations, training, personnel policies, retention, payroll and benefits programs. Additionally, Jennifer has oversight of the accounts receivable and loss functions formerly within the accounting department.

Jennifer joined the company in April 2009 as a manager of accounting and finance and a year later was promoted to director. She was named AVP of human capital in 2014. Prior to joining Safeguard, she held several management positions at OfficeMax and InkStop in both operations and finance.

Jennifer is a graduate of Youngstown State University. She was named a Crain’s Cleveland Business Archer Award finalist for HR Executive of the Year in 2017.


AVP, Application Architecture

Rick Moran

Rick Moran is the assistant vice president of application architecture for Safeguard. Rick is responsible for evolving the Safeguard IT systems. He leads the design of Safeguard’s enterprise application architecture. This includes Safeguard’s real-time integration with other systems, vendors and clients; the future upgrade roadmap for systems; and standards designed to meet availability, security, performance and goals.

Rick has been with Safeguard since 2011. During that time, he has led the system upgrades necessary to support Safeguard’s growth. In addition, Rick’s team has designed and implemented several innovative systems.

Prior to joining Safeguard, Rick was director of enterprise architecture at Revol Wireless, a privately held CDMA Wireless provider in Ohio and Indiana, and operated his own consulting firm providing services to the manufacturing, telecommunications, and energy sectors.


AVP, Technology Infrastructure and Cloud Services

Steve Machovina

Steve Machovina is the assistant vice president of technology infrastructure and cloud services for Safeguard. He is responsible for the overall management and design of Safeguard’s hybrid cloud infrastructure. He manages all technology engineering staff who support data centers, telecommunications, network, servers, storage, service monitoring, and disaster recovery.

Steve joined Safeguard in November 2013 as director of information technology operations.

Prior to joining Safeguard, Steve was vice president of information technology at Revol Wireless, a privately held wireless provider in Ohio and Indiana. He also held management positions with Northcoast PCS and Corecomm Communications, and spent nine years as a Coast Guard officer and pilot.

Steve holds a BBA in management information systems from Kent State University in Ohio and an MBA from Wayne State University in Michigan.


Assistant Vice president of Application Development

Steve Goberish

Steve Goberish, is the assistant vice president of application development for Safeguard. He is responsible for the maintenance and evolution of Safeguard’s vendor systems ensuring high-availability, security and scalability while advancing the vendor products’ capabilities and enhancing the vendor experience.

Prior to joining Safeguard, Steve was a senior technical architect and development manager at First American Title Insurance, a publicly held title insurance provider based in southern California, in addition to managing and developing applications in multiple sectors from insurance to VOIP.

Steve has a bachelor’s degree from Kent State University in Ohio.