2015-29016 Reso RESOLUTION NO. 2015-29016
A RESOLUTION OF THE MAYOR AND THE CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE CITY MANAGER
TO RECAPTURE THE FOLLOWING FUNDS: 1) $21,329 IN COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) FUNDS FROM FY 2012/13 AWARDED
TO UNIDAD OF MIAMI BEACH (UNIDAD) FOR THE RENOVATION OF THE
CORAL ROCK HOUSE; AND 2) $23,920.13 IN CDBG FUNDS FROM FY 2011/2012
AWARDED TO UNIDAD FOR THE NORTH SHORE SENIOR CENTER; FURTHER
AMENDING THE FY 2011/2012, AND FY 2012/13 ACTION PLANS; AND THE FY
2013 THROUGH 2017 CONSOLIDATED PLAN TO REALLOCATE THE
AFORESAID CDBG FUNDS, TOTALLING $45,249.13, FOR THE LONDON HOUSE
APARTMENTS REHABILITATION PROJECT; AND ALLOCATING CITY FUNDS TO
UNIDAD, IN THE AMOUNT OF $23,920.13, IN CONNECTION WITH THE
CONSTRUCTION CLOSE OUT OF THE NORTH SHORE SENIOR CENTER.
WHEREAS, the City is the recipient of Community Development Block Grant (CDBG)
funds from the U.S. Department of Housing and Urban Development (HUD); and
WHEREAS, the City subsequently awards these funds to a variety of community-based
organizations to provide needed Public Services, renovate public facilities and create affordable
housing; and
WHEREAS, the City awarded the following CDBG and CDBG-R funds to Unidad of
Miami Beach (UNIDAD) for the construction of the North Shore Senior Center:
i. $75,000 in FY 2002/2003;
ii. $75,000 in FY 2003/2004;
iii. $150,000 in FY 2004/2005;
iv. $250,000 in FY 2005/2006;
v. $300,000 in FY 2006/2007;
vi. $135,000 in FY 2007/2008;
vii. $261,364 in FY 2008/2009;
viii. $254,463 in FY 2009/2010;
ix. $80,000 in FY 2010/2011;
x. $391,107 in FY 2009/2010; and
WHEREAS, the CDBG-R funds had an expenditure deadline of September 30, 2012,
and an obligation to meet a National Objective by that same date; and
WHEREAS, the last of CDBG funding agreements between the City and UNIDAD for the
construction of the North Shore Senior Center expired on September 30, 2012, preventing the
release of $23,920.13 remaining in the CDBG FY 2011/2012 agreement (Senior Center CDBG
Retainage); and
WHEREAS, the City also awarded Unidad of Miami Beach $21,329 in FY 2012/2013
CDBG funds for the rehabilitation of the Coral Rock House property located at 1701 Normandy
Drive; and
WHEREAS, Unidad has yet to renovate the Coral Rock House as planned, resulting in
this activity being flagged as troubled by HUD; and
WHEREAS, the City is obligated to ensure that CDBG funds are expended in a timely
and compliant manner with federal rules and regulations; and
WHEREAS, the City recommends re-capturing a total amount of $45,249.13 from the
aforestated projects; and
WHEREAS, the City has a funding gap in the rehabilitation of the London House
Apartments, an affordable housing project owned by the City; and
WHEREAS, the reallocation of these funds to the London House Apartments project will
reduce the funding gap; and
WHEREAS, the re-capture and re-allocation of these funds will require the subsequent
amendment to, respectively, the City's Action Plans (for Fiscal Years 2011/2012 and
2012/2013) and the City's FY 2013 through 2017 Consolidated Plan; and
WHEREAS, in connection with the close out of the construction and opening of the
North Shore Senior Center, the Administration had committed to UNIDAD the Senior Center
CDBG Retainage, in the total sum of $23,920.13, which payment UNIDAD is required to pay its
contractor, KM/Plaza, as set forth in the Second Amendment to Construction Agreement dated
January 23, 2015 between KM/Plaza, UNIDAD, and the City (Second Amendment); and
WHEREAS, the Administration is recommending that the City allocate alternate City
funds to replace said Senior Center CDBG Retainage and pay same to UNIDAD, as required
under the Second Amendment.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby approve
and authorize the City Manager to re-capture the following funds: 1) $21,329 in Community
Development Block Grant (CDBG) funds from FY 2012/2013 awarded to Unidad of Miami
Beach (UNIDAD) for the renovation of the Coral Rock House; and 2) $23,920.13 in CDBG funds
from FY 2011/2012 awarded to Unidad for the North Shore Senior Center; authorize the
amendment to the FY 2011/2012 and FY 2012/1203 Action Plans; and the FY 2013 through
2017 Consolidated Plan, to re-allocate the aforesaid amount of CDBG funds, totaling
$45,249.13, for the London House Apartments rehabilitation project; and approve and authorize
the allocation of City funds to UNIDAD, in the amount of $23,920.13, in connection with the
construction close out of the North Shore Senior Center.
PASSED AND ADOPTED this day of tiM 2015.
ATTEST:
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COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution approving the recapture of $48,249.13 from three Unidad of Miami Beach projects that
have been flagged by HUD and the subsequent reallocation of these funds to the London House
Apartments
Key Intended Outcome Supported:
N/A
Supporting Data: Community Satisfaction Survey: N/A
Item Summary/Recommendation:
Unidad of Miami Beach has been a long-time recipient of Community Development Block Grant(CDBG)
funds. The City has used federal funds to support Unidad's construction of the North Beach Senior
Center, rehabilitation of the Coral Rock House property and the operation of its Project LINK program.
Combined, the City has awarded Unidad $1,971,934 (including a balance $23,920.13 in FY 2011/12
funds) for the construction of the Senior Center inclusive of CDBG-R (federal stimulus) funds which
required expenditure and the achievement of a National Objective by September 30, 2012.
Unfortunately, City staff at the time erroneously notified HUD that the Senior Center was complete and
operational on September 29, 2012. In reality, the program did not achieve its National Objective of
serving as a senior/community center until March 2, 2015, as confirmed by a HUD monitoring that took
place in March 2015.
In FY 2012/13, the City awarded Unidad $21,329 for rehabilitation of the Coral Rock House property. To
date, none of these funds have been drawn and the project was identified by HUD as a troubled activity
in FY 2013/14. Finally, the City awarded Unidad $3,000 in FY 2014/15 funds for the operation of Project
LINK. To date, Unidad has failed to provide a budget to account for how these funds will be expended
despite repeated requests.
The Administration recommends reallocating those funds recaptured from the projects above (a
combined total of $48,249.13) to the London House Apartments, a City-owned affordable housing
project currently under renovation. These funds would be applied to the financing gap created by the
delay of surtax funds awarded to the project by Miami-Dade County but not yet processed.
Financial Information:
Source # Grant Name/Project Approx. Approximate
of Award Match
Funds Amount Amount/
Source
Financial Impact Summary: N/A
City Clerk's Office Legislative Tracking:
Maria L. Ruiz, Department Director, Office of Housing and Community Services, Extension 6491
Sign-Offs:
Department Director Assistant City anager City Manager
04(\
MIAMIBEACH AGENDA ITEM R7
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DATE S 6 I
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MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMIS ON MEMORANDUM
TO: Mayor Philip Levine and Members I the Cit Y (ommission
FROM: Jimmy L. Morales, City Manager —
DATE: May 6, 2015
SUBJECT: A RESOLUTION OF THE MAYOR ND THE CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPR• ING AND AUTHORIZING THE CITY MANAGER
TO RECAPTURE $21,329 IN COMMUNITY DEVELOPMENT BLOCK GRANT
(CDBG) FUNDS FROM FY 2012/13 ORIGINALLY AWARDED TO UNIDAD OF
MIAMI BEACH (UNIDAD) FOR THE RENOVATION OF THE CORAL ROCK HOUSE;
APPROVING AND AUTHORIZING THE CITY MANAGER TO RECAPTURE $3,000
IN CDBG FUNDS FROM FY 2014/2015 ORIGINALLY AWARDED TO UNIDAD FOR
PROJECT LINK; APPROVING AND AUTHORIZING THE CITY MANAGER TO
RECAPTURE $23,920.13 IN CDBG FUNDS FROM FY 2011/2012 ORIGINALLY
AWARDED TO UNIDAD FOR THE NORTH SHORE SENIOR CENTER; AMEND THE
FY 2011/2012, FY 2012/13 AND FY 2014/2015 ACTION PLANS; AMEND THE FY
2013 THROUGH 2017 CONSOLIDATED PLAN; AND REALLOCATE THE
AFORESAID AMOUNT OF CDBG FUNDS FOR THE LONDON HOUSE
APARTMENTS REHABILITATION.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND -
Unidad of Miami Beach (Unidad) has been a long-time recipient of Community Development
Block Grant (CDBG) funds, US Department of Housing and Urban Development (HUD) funds
awarded to the City. The City has used federal funds to support Unidad's construction of the
North Beach Senior Center, rehabilitation of the Coral Rock House property and the operation of
its Project LINK program which provides referral information to low- and moderate-income
persons.
Combined, the City has awarded Unidad $1,971,934 in federal funds for the construction of the
Senior Center. In addition to CDBG funds, the City provided CDBG-R (federal stimulus) funds
for the construction of the North Beach Senior Center (Senior Center). The CDBG-R funds
required expenditure and the achievement of a National Objective by September 30, 2012.
Unfortunately, City staff at the time erroneously notified HUD that the Senior Center was
complete and operational on September 29, 2012. In reality, the program did not achieve its
National Objective of serving as a senior/community center until March 2, 2015, as confirmed by
a HUD monitoring that took place in March 2015.
In FY 2012/13, the City awarded Unidad $21,329 for rehabilitation of the Coral Rock House
property. To date, none of these funds have been drawn and was identified by HUD as a
troubled activity in FY 2013/14. Finally, the City awarded Unidad $3,000 in FY 2014/15 funds for
Commission Memorandum—Recapture& Reallocation of CDBG Funds
May 6, 2015
Page 2 of 3
the operation of Project LINK. To date, Unidad has failed to provide a budget to account for how
these funds will be expended despite repeated requests.
ANALYSIS
n ite monitoring of the City's CDBG activities. Two of Unidad's
HUD has just completed an o s
J p 9 Y
activities have been flagged by HUD for non-compliance: the rehabilitation of the Coral Rock
House property and the Senior Center. The third activity addressed in this memo, FY 2014/15
funding for Project LINK has yet to obtain a contract because Unidad has not submitted a
revised budget as originally requested in January 2015. Since there has been no action taken
on moving this Public Services Activity along to ensure timeliness compliance, the
Administration is recommending recapture. The amount being sought for recapture from Project
LINK is $3,000.
The Coral Rock House was funded in FY 2012/13 and has yet to make any progress. It has not
made any compliant draws and has had no measurable progress since the contract was
executed on December 20, 2012. The contract originally terminated on September 30, 2014.
HUD flagged the activity last year for inactivity that could jeopardize the City's timeliness
requirements. As a result of inactivity, the Administration is recommending recapture of these
funds. The amount being sought for recapture from this activity is $21,329.
The Senior Center has several troubling issues. The most troubling is associated with the City's
erroneous report to HUD that the Senior Center became operational on September 29, 2012
even though it had not. At the time, it appeared that City staff felt compelled to report the
completion of the project because of a timeliness provision associated with CDBG-R funds
requiring that stimulus funds be fully expended and a National Objective met no later than
September 30, 2012. If the deadline were not met, HUD would then recapture the $391,107 in
CDBG-R funds.
However, in deeming the project as completed in 2012, City staff, in essence, deemed all other
federally-funded contracts awarded to this project as closed since they reported the construction
as completed, the Certificate of Occupancy issued and the commencement of services as a
senior/community center. Please note that the Senior Center did not officially begin offering
eligible-services until March 2, 2015. As a result of erroneously reporting the North Shore Senior
Center as completed and providing services in September 2012, the following CDBG funds
were placed at risk for recapture:
CDBG Funds by Awarded
Fiscal Year Amount
2002/2003 $75,000
2003/2004 $75,000
2004/2005 $150,000
2005/2006 $250,000
2006/2007 $300,000
2007/2008 $135,000
2008/2009 $261,364
2009/2010 $254,463
2010/2011 $80,000
Further, since the activity was presumably closed, all of the funding agreements for the Senior
Center expired on or before September 30, 2012. The sole remaining balance, $23,920.13,
Commission Memorandum—Recapture& Reallocation of CDBG Funds
May 6, 2015
Page 3 of 3
pending in FY 2010/11, cannot be released because the funding contract has expired.
Therefore, we are seeking to recapture these funds and reallocate them to a viable project as a
means of safeguarding the funds and ensuring that CDBG timeliness goals are met.
The Administration recommends reallocating those funds recaptured from the projects above, a
total of $48,249.13, to the London House Apartments, a City-owned affordable housing project
currently being renovated. These funds would be applied to the financing gap created by the
delay of surtax funds awarded to the project by Miami-Dade County but not yet processed.
CONCLUSION
As recipients of federal funds, the City is responsible for ensuring compliance with CDBG
program rules including the timeliness of expenditures. In all three cases noted herein, the
recapture of these funds is in the City's best interests to ensure that timeliness deadlines are
met. In addition, the recaptured funds will reduce the funding gap in a City-owned project. For
these reasons, the Administration is recommending the recapture of the delineated funds
originally awarded to Unidad of Miami Beach and the subsequently reallocation of these funds
to the London House Apartments.
JLM/K= /MLR
T:\AGENDA\2015\May\HOUSING&COMMUNITY SERVICES\Funds Recapture and Reallocation to London House 05062015.docx