LTC 200-2013 U.S. HUD HOME Program Funds De-Obligation m MIAMI BEACH
. �
F.`< < � 4
OFFICE OF THE CITY MANAGER
NO. LTC# 200"2013 2013 Alt-ftO �dtOMMISSION
TY CL� I r;' Or I= ICE
TO: Mayor mattrherrera Bower and M bers ofthe ity Commission
FROM: Jimmy L. Morales, City Manager -
DATE: June 7, 2013
SUBJECT: U.S. HUD HOME Program Funds e-Obligation
This Letter to Commission is to inform you of the United States Department of Housing
and Urban Development's (HUD) de-obligation of certain funds from the City's HOME
Program.
On February 13, 2013, the City was notified by HUD of its intent to de-obligate $576,805
in HOME funds for what it deemed as the City's noncompliance with entitlement funds
commitment requirements. Since notification of de-obligation, City staff has diligently
sought to remedy outstanding issues in hopes of preempting the de-obligation. While
these efforts have yet to succeed and are continuing, a timeline of events is relevant and
will provide a greater understanding of the difficulties in addressing this issue.
On September 11, 2012, HUD's Miami Field Office transmitted a letter to Anna Parekh,
the City's then Director of Real Estate, Housing and Community Development, advising
that the City had not complied with the requirement to properly commit its FY 2010/2011
entitlement funds and had until October 31, 2012 to do so. If the City failed to meet the
deadline, HUD's letter warned that the funds would be de-obligated.
Ms. Parekh did not notify the Administration of the commitment deadline until after the
deadline had passed preventing the City from mounting an effective, timely effort to
resolve the issue without risking funds. The first written notification to a member of the
Administration occurred in February 2013, long after the de-obligation took effect.
Since that time, several City staffers have worked in tangent to painstakingly reconstruct
the City's allocations and corresponding resolutions, contracts and disbursements dating
back to the 2000/01 fiscal year. In addition, we have sought guidance from HUD as to
the specific funds remaining uncommitted and requested Technical Assistance with
HUD's Integrated Disbursement & Information System (the online fiscal and project
management system for HOME funds).
The reconciliation by City staff revealed that there is indeed a shortfall of committed
entitlement funds dating back as long as 13 years. Because HUD tracks funds through a
cumulative formula that does not distinguish individual fiscal years within the system, we
are unable to pinpoint the years in which funds were uncommitted or the exact amounts.
LTC #
Page 2
HUD determined that a total of $576,805 is subject to de-obligation. These funds, which
cannot be aligned with any specific fiscal year, will be recaptured from the two most
recent years, FY 2011/2012 and FY 2012/2013 in the amounts of $208,453 and
$368,352, respectively. Miami Beach Community Development Corporation is the sole
recipient of HOME funds during these years.
As part of its effort to verify the amount and mount a challenge to the de-obligation, staff
located $503,045 in the City's Line of Credit System (LOCS) with HUD that had been
uncommitted and amassed over a period of years dating back to FY 2000/01. The City
can now commit these funds to Miami Beach Community Development Corporation to
substantially fill the funding gap created by de-obligated HOME funds. The remaining
$73,670 will be committed to Miami Beach Development Corporation via the City's FY
2013/14 Community Development Block Grant entitlement. Combined, these two actions
will restore the City's funding commitments impacted by the de-obligation.
On June 5"', the City formally submitted a request for Technical Assistance to appeal the
decision to de-obligate HOME funds in the amount of $576,805 and will continue to
pursue the restoration of these funds.
If you have any additional questions, please feel free to contact me.
JLM/KGB/MLR/ARB