HUD cuts money for needy in Miami, after city fails spending requirements

The city of Miami will see its annual federal allocation for the needy cut by 12 percent because over the past three years, it has failed to spend millions of dollars that could have gone toward feeding programs for the elderly or affordable housing.

A three-page letter from Housing and Urban Development Deputy Assistant Secretary Yolanda Chávez said HUD was cutting the allocation because the city had not spent its yearly allocation in a timely manner. It said despite an earlier warning and attempts by the city to fix the problem, HUD had decided “that the untimely performance was not beyond the city’s reasonable control.”

In fact, Chavez wrote in a letter received Friday, “During the past program year the city’s expenditure performance has gotten worse, not better.”

In total, Miami will be sanctioned $607,083 this year in money that could be spent on social services for the poor and on seniors, pressing types of needs that the city dips into its general fund to beef up each year. This year the city will receive $4.3 million from HUD to pay for those services; it would have received $4.9 million. City Manager Johnny Martinez is scheduled to meet with George Mensah, the city’s community development director, Tuesday to discuss the city’s next move. Late Monday Martinez said he hadn’t read the letter.

The HUD cuts threaten to become an election issue as Commissioner Francis Suarez, who is running for mayor in November, blamed the lack of oversight on instability in the administration, which has suffered tremendous turnover in key financial posts the past few years.

“It’s definitely tied to the turnover rate of having four [capital improvement program] directors in the past 3 ½ years,’’ Suarez said. “When confronted with these issues, the mayor says the turnover doesn’t matter, that not having a financial director doesn’t impact people. But these things do impact people.”

But Miami Mayor Tomás Regalado put the onus on the city commission.

“It is the commission which allocates the money and decides on the projects and how to spend the money,” the mayor said. “They’re sitting on it, and they blame the administration.”

In February the city was notified by HUD that it was facing a possible cut because it had failed to spend $13.3 million in Community Development Block Grants over the past three years. In the past three months Mensah said he thought the city had spent enough of the HUD money to satisfy the agency’s concerns.

Under HUD guidelines, grant recipients can keep 1.5 times the amount of their annual allocation in reserve. But as funding gets cut as it has for the past three years, it means more money must be spent in order to keep reserves at that level. Chavez, the HUD deputy assistant secretary, noted her agency was aware the city faced some setbacks, including a fire in a building that was to be rehabilitated with redevelopment dollars. Still, HUD felt not enough was being done.

“Although the city encountered factors that may have delayed the expenditure of funds, the department believes that Miami could have pursued a more aggressive position in the management of the CDBG program and execution of CDBG-assisted activities,” she wrote.

Typically in Miami, HUD money is divvied up for commissioners to spend in their districts. It’s the administration’s job to make sure money gets spent properly.

City Manager Martinez laid some of the blame on the fire. Still, he said, “We’re trying to do a better job of allocating funds to projects that we know are going to get completed.”

Mensah, the community redevelopment director, said the blame lies with both parties: commissioners need to spend the money and the administration needs to push them if they don’t. At press time he couldn’t say which commissioners hadn’t spent their allotments.

“The city has problems, but it’s on both sides,” he said.

He also said he hopes to cover the $607,000 with interest on other HUD-related funding.

“I need a plan to make sure no agency gets affected,” he said.

El Nuevo Herald reporter Melissa Sanchez contributed to this report.

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