LTC 181-2002 CITY OF MIAMI BEACH
Office of the City Manager
Letter to Commission No.
To:
From:
Subject:
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalez ~ ~
City Manager
SECTION 108 LOAN- Response to Mike Thompson Inquiry
Date: July 26, 2002
In reference to the July 19, 2002 correspondence that was sent to you via email from Mike
Thompson, I have asked staff to research and provide replies to Mr. Thompson's inquires.
1- How much money was provided by the North Beach section 108 loan? (In
total with any grants attached).
On September 27, 2000, the Mayor and City Commission approved the Mayor and City
Clerk to execute a grant agreement with the United States Department of Housing and
Urban Development (HUD) for a $4,000,000 Section 108 Loan. (See Reso # 2000-24084)
The amount of the loan was for $4,000,000 to be repaid over a ten-year period with future
CDBG allocations for neighborhood streetscapes within the eligible community
development target areas.
On April 28, 1999, the Mayor and City Commission adopted Resolution # 99-23147,
authorizing the City Manager to submit an application to HUD for a $4,000,000 Section 108
Loan for projects that included streetscape improvements in the North Beach area and the
completion of the North Shore Youth Center.
2- Where did the money get allocated or spent? Be Specific!
The four million dollars loan was allocated, and will be spent, as follows:
$1,000,000 for the completion of the North Shore Youth Center;
$1,000,000 for the completion of the Marseille Drive Streetscape Project;
$1,000,000 for eligible streets* in the target areas of Normandy Isle;
$1,000,000 for eligible streets* in the target areas of North Shore.
$4,000,000 Total in Section 108 loan funds
*These streets may include, depending on amount of funds available and the scope of
work for each streetscape: Bay Drive west of Trouville Esplanade to 71st Street; Bay Drive
east of Rue Notre Dame; Biarritz Drive west of Trouville Esplanade to 71st Street; Biarritz
Drive east of Rue Notre Dame to Rue Vendome; Rue Granville from Bay Drive to Calais
Drive; Rue Notre Dame from Bay Drive through Marseille Drive; Marseille Drive from
Letter to Commission
Page 2
Mike Thompson - Section 108 Loan
Trouville Esplanade to Rue Verdun; Tatum Waterway; Marseille Drive; Bay Drive; Biarritz;
Rue Granville; Verdun; and Notre Dame; and other North Beach improvements.
3- How much (if any) is left?
All four million has been obligated as outlined above. To date, $41,357 has been
expended from the Section 108 Loan. [See Resolution #2001-24505]
II.
1 - In the past, CDBG was set aside for Marseille Drive. It is my understanding
that this money went elsewhere. Where was it allocated or spent?
In Fiscal Year 1997/98 Marseille Drive was awarded $76,650 in CDBG funds under the
North Beach Street Improvements project [Resolution # 97-22453]. A total of $263,650
was allocated to the North Beach Street Improvements project. The project scope and
budgets for the streetscapes were allocated as follows: $76,650 for Marseille Drive and
$187,00 for 77th Street.
In the following year, FY 1998/99, Marseille Ddve was awarded another $200,000 in CDBG
funds under the North Beach Development Corporation North Beach Streetscape
Improvements project [Resolution # 98-22814]. In addition, the North Beach Street
Improvements project (which at the time consisted Marseille Drive and 77~ Street) received
$149,707 through a reallocation of funds from the North Beach Development Corp (NBDC)
Facade program bringing the total in CDBG funds to $613,357 for North Beach Street
Improvements project. [Resolution #99-23094].
Therefore, there was a total of $426,357 available in CDBG funding for Marseille Drive,
prior to the submission of the Section 108 Loan.
2 - Who authorized the movement to another location?
On March 15, 2000, Commission approved the reallocation of CDBG funds in the amount
of $100,000 to the North Beach Development Corporation (NBDC) Fa(;ade Program from
the FY 97/98 CMB North Beach Street Improvements. [See Resolution #2000-23838].
This left $326,357 in CDBG funds available for Marseille Drive,
At or around this time, the City was formally notified that the Section 108 Loan had been
approved. Since the CDBG funding for the Marseille Drive component was insufficient, the
project was redefined to reflect the increased project costs, CDBG funds were substituted
and replaced with Section 108 funds and the project was allocated $1,000,000. The
remaining CDBG funds were used to complete the 77t~ Street component of the North
Beach Street Improvements project. The use of CDBG funds for the 77~ Street project
was not inconsistent with the odginal CDBG allocation awarded to the North Beach Streets
Improvements. Upon the completion of the 77~" Street project, the balance of those CDBG
funds ($164,209) were used for budget shortfalls on the North Shore Park and Youth
Letter to Commission
Page 3
Mike Thompson - Section 108 Loan
Center. [See Resolution # 2001-246881.
3 - What CDBG or Section 108 money is being used to rehab Marseille Drive from
East Bay Drive to Rue Notre Dame as presently planned?
There is a total of $1,000,000 in Section 108 funds to improve Marseille Drive from East
Bay Drive to Rue Notre Dame.
III.
Please provide the name of the Washington office director of "investigation
and/or fraud division" regarding the misuse of Federal Community Funding,
that person's or division's current phone numbers, fax numbers and mailing
addresses.
The City of Miami Beach firmly attests that there has not been any fraud conducted in
relation to the Section 108 Loan nor with its CDBG program. However, in response to Mr.
Thompson's request, HUD handles complaints in one of four ways: via email
www.hud.gov/complaints/fraud waste.cfm; by phone: 1-800-347-3735; by fax: 202-708-
2451; and by mail: Department of Housing and Urban Development, Office of Inspector
General Hotline, Assistant Inspector General for Investigations, 451 7~ Street, SW, Room
8270, Washington, DC 20410
In addition to this Letter to Commission, additional historical background is contained in the
Commission Memorandum for July 31, 2002, requesting Commission approval to amend
the Economic Development Initiative (EDI) grant, which is a grant that may only be
awarded with an approved Section 108 loan. Initially, at the time of the approval of the
Section 108 Loan, HUD also approved a $1,000,000 EDI grant that will be used as part of
the debt service on the $4M Section 108 Loan.
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C:
Michael Thompson
Robert Parcher, City Clerk
Christina M. Cuervo, Assistant City Manager
Robert C. Middaugh, Assistant City Manager
Vivian Guzman, Director, Neighborhood Services Department
Joanna Revelo, Director, Community Services Division
Lisa Bustamante, HUD, Community Planning & Development- Flodda State Office
July 19, 2002
City of Miami Beach
1700 Convention Way
Miami Beach, Fl. 33
Sent via Fax 305-673-725a
Michael Thompson
2140 Calais Drive
Miami Bcach, Florida 33141
Attention: City Clerk, Robert Parcher
Dear Mi'. Percher:
Please provide to me (a Miami Beach citizen) as spelled out in the State of Florida laws
more specifically "The Sunshine Act", the following irfformafion.
I request of you to provide ti'om The Comnmnity Development Department the below:
l- How much money was provided by the North Beach section 108
loan? (In total with any ~'ams attached)
2- Where did the money get allotted or spent? Be specific!
3- How much (if any) is left?
Il. 1- In the past, CDBG money was set aside for Marseille Drive. h is my understanding
that this money went elsewhere. Where was it allocated or spent?
2- Who authorized the movement to another location?
3- What CDBG or Section 108 money is being used to rehab Marseille
Drive from East Bay Drive to Rue Notre Dame as presently planned?
Ill. Please provide the name of the Washington office director of "investigation and/or
fraud division" regarding the misuse of Federal Community Funding, that persons or
divisions currant phone numbers, fax numbers and mailing addresses
Thank
Michael Thompson
c- via e-mail, to the Mayor and to all Commissioners
to the City Manager
via fax to Joanna Revelo-Community Development Director