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April 26, 2007 | Feds give county ultimatum on housing takeover

The federal government made clear Tuesday that one way or another, it plans to have control of the Miami-Dade Housing Agency within a few weeks.

The U.S. Department of Housing and Urban Development gave county leaders 15 days to voluntarily accept a federal administrator, and perhaps negotiate a role for themselves.

Otherwise, HUD plans to seize control.

"This is the final curtain, " HUD Deputy Secretary Roy Bernardi told The Miami Herald on Tuesday. "Either we work together here or we go forward with the receivership."

In response Tuesday, county commissioners authorized their attorneys to fight any takeover, saying HUD has not taken the required preliminary steps. Mayor Carlos Alvarez and commissioners have argued that a takeover would disrupt their reform efforts, which have included the total replacement of the agency's management.

"You want to try to take us over? Try it, " Alvarez said. "We'll see you in court."

In letters sent late Tuesday, HUD declared the Housing Agency in default of the two contracts that control public housing and rental assistance, which provide most of its $275 million in federal funding.

Bernardi also asked HUD's inspector general to conduct the most thorough audit and investigation yet of the Miami-Dade agency, which he said has extensive problems with its operations and finances. Among other things, he said the agency has failed to account for more than $6 million in federal funds.

"Too many people have been hurt, and too much money is unaccounted for, " Bernardi said. "We need to fix this, and we need to fix it in a hurry."

Under HUD, local leaders who have overseen the agency -- including Alvarez, the commission and County Manager George Burgess -- would be removed from the chain of command, replaced by a single administrator appointed by HUD.

The administrator would oversee the budget, policies, personnel and day-to-day operations.


HUD's move was hardly unexpected; the federal government has been moving toward a takeover since at least February and released a statement late Friday that Miami-Dade residents "have waited long enough" for relief.

Local and federal leaders had been negotiating a compromise -- Alvarez wanted to sign a contract that would obligate the county to meet milestones by specific dates or else agree to a takeover -- but talks broke down last week.

Both sides have since accused the other of bad faith.

"What they've wanted all along is to take over, " Alvarez said.

The default letters, which HUD sent to Alvarez and commission Chairman Bruno Barreiro, provide new details about the chaotic state of the Housing Agency's finances between 2001 and 2006.

HUD said the agency failed to conduct mandatory annual checks of Section 8 recipients to ensure they still qualified for the program, a problem the county had earlier acknowledged and pledged to fix.

The letters also accuse the agency of submitting financial statements that were riddled with "material accounting errors" from 2001 to 2005, as well as violating state law and its HUD contract when it accepted millions of dollars from the county's general fund to supplement the Section 8 rental-assistance program, according to the letters.


Burgess said the county may dispute some of those findings, believing HUD may be "confused" on some of the financial data.

County Attorney Murray Greenberg said the county has grounds for a legal challenge but no guarantee of success. He weighed the chances during an exchange with Commissioner Carlos Gimenez:

"The federal government is a powerful entity -- they have the guns, they have the bullets, but I don't know that that means we should sit back and let them fire, " Greenberg said.

"But are we heading into a gunfight with a knife?"

"I think we have more than a knife."

Two commissioners voted against the legal fight. Gimenez wanted to keep negotiating with an offer to share governance between HUD and the commission -- a proposal Bernardi told The Miami Herald he would have rejected -- and Commissioner Javier Souto said the commission's reputation is too tarnished to justify a fight for control.

"There's a perception out there that there's corruption here, " he said.

Three other commissioners -- Audrey Edmonson, Sally Heyman and Natacha Seijas -- were in South Africa on county business.


Housing has been one of Miami-Dade's top issues since The Miami Herald published House of Lies, its Pulitzer Prize-winning series exposing widespread mismanagement in the Housing Agency, last summer.

Some developers who received millions of dollars to build affordable housing delivered few, if any, results. Persistent delays in the replacement of Liberty City housing projects forced hundreds from their homes for years. Thousands of Miami-Dade residents are still on waiting lists for homes.

Alvarez and Burgess, however, have defended their response to the crisis. In addition to hiring new managers, the county has revamped housing policies, tightened rules on some programs and begun streamlining internal procedures.

Housing activists, who mobilized last summer with high-profile protests, have largely sided with the county. They won significant concessions this winter on the number of units to be built in Liberty City and have lately argued that local politicians would be more responsive to their input than HUD would be.

Nearly half the Housing Agency's $515 million budget comes from local, rather than federal, taxes. Burgess said those programs -- including the in-fill housing project that allows builders to develop county-owned residential plots -- would be transferred to other departments and kept under the county's control.

"This is a major tug of war, " said Commissioner José "Pepe" Diaz. "At the middle of this are citizens who are suffering for lack of housing."