HomeMy WebLinkAboutSubmittal-HUD Letter Dated 02-15-13I I
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OFFICE OF COMMUNITY PLANNING
AND DEVELOPMENT
The Honorable Tomas Regalado
Mayor of Miami
3500 Pan American Drive
Miami, FL 33133-5504
Dear Mayor Regalado:
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, DC 20410.7000
FEB 1 5 2013
SUBJECT: Offer of Informal Consultation
Noncompliance with Timely Expenditure Requirements
Community Development Block Grant (CDBG) Program
Pursuant to a review, HUD has determined that Miami is not carrying out its CDBG program in a
timely manner. A grantee is allowed, under the CDBG regulations at 24 CFR 570.902, Review to
determine if CDBG-funded activities are being carried out in a timely manner, to have a balance no
greater than one and one-half (1.5) times its annual grant remaining in the line -of -credit 60 days prior to
the end of the program year. HUD has a longstanding policy of reducing the future year's grant of a
grantee that continues to be untimely.
The 60-day ratios for Miami, as measured on January 31 in 2011 and 2012, were 1.7 and 1.93,
respectively. The last 60-day test conducted for Miami on January 31, 2013, indicated a balance
remaining in the city's line -of -credit amounting to 2.67 times its Fiscal Year (FY) 2012 grant and,
therefore, the city was again in non-compliance with the 1.5 performance standard. The failure to meet
the 1.5 standard may result in a reduction of the city's FY2013 grant by 100 percent of the amount in its
line -of -credit in excess of 1.5. Based on the new 60-day ratio of 2.67, the amount of this reduction is
$5,810,007, as shown in the enclosure. The city may avoid a sanction if it demonstrates to HUD's
satisfaction that its untimeliness resulted from factors beyond the city's reasonable control.
Under the provisions of 24 CFR 570.911, Reduction, withdrawal, or adjustment of a grant or
other appropriate action, Miami is entitled to an informal consultation prior to the actual reduction of its
FY2013 grant. Therefore, I am inviting you and members of your staff knowledgeable in this issue to
attend a meeting at HUD Headquarters, 451 Seventh Street, SW, Washington, DC, at a date and time
convenient for you and your staff. If you prefer, this meeting may be held by teleconference. The
Department would like for the informal consultation to take place no later than March 5, 2013. Please
contact Ms. Valerie Browne, Community Planning and Development Specialist, Entitlement
Communities Division, with the date and time the city would like the informal consultation to be held.
Ms. Browne can be reached at (202) 708-1577.
The purpose of the consultation is to provide Miami an opportunity to demonstrate that factors
beyond its reasonable control caused delays in program implementation that affected timely performance
or to demonstrate that HUD's finding of noncompliance is incorrect.
www.hud.gov espanol.hud.gov
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Submitted into the public
record in connection yvith ,
items na.5 on 02/203
Todd B. Hannon
City Clerk
2
Please be prepared to address in detail the factors related to the action(s)/activity(ies) that caused the
noncompliance, or, if applicable, the factors that demonstrate compliance. These issues should include:
• The problem, as defined by the specific factor(s) beyond the city's control, why it was beyond
Miami's control, and how it caused untimely performance and/or affected the timeliness of
expenditures for other parts of the city's CDBG program over the affected time period.
The duration of the problem: when it began and when it is expected to end.
The CDBG amount of each activity affected by the problem; explain, if applicable, why these
funds were not reprogrammed after the problem occurred.
Other actions implemented to ameliorate the effects this problem had on project -specific and
program -wide timely performance, when the city undertook them, and what effect they have had
and/or will have on timely performance (including the extent to which CDBG funds on hand have
been obligated for specific activities).
If the "factor(s) beyond the city's control" had not happened and funds were drawn down at the
anticipated rate, would Miami have met the 1.5 standard? Provide the calculation and the
information the city used to reach that conclusion.
Please provide a written response to the factors that you deem relevant to the city's performance,
no later than three business days before the informal consultation date, with a copy to Ann Chavis,
Community Planning and Development Division Director, HUD South Florida Field Office, so HUD will
be in a better position to discuss this matter with you. The response should be emailed to
Valerie.BrowneHUD.gov and Ann.D.ChavisffUD.gov. Following this informal consultation, HUD
will advise you in writing of its decision. Should Miami decline to participate in the informal
consultation, the city's FY2013 CDBG entitlement award will be reduced by $5,810,007 at the time of
grant award. The amount of Miami's FY2013 entitlement award is not known as of the date
of this letter because the U.S. Congress has not completed the appropriations process for the CDBG
program. However, in any event, the potential grant reduction will not be greater than Miami's 2013
CDBG grant award.
Please feel free to contact Ms. Browne or Steve Johnson, Director, Entitlement Communities
Division, at (202) 708-1577, if you have any questions regarding the informal consultation.
Enclosure
Sincerely,
olanda Ch. ve
Deputy Assistant Secretary
for Grant Programs
Submitted into the public
record in connection wit
items fiR.5 on
Todd B. Hannon
City Clerk
3
MIAMI, FLORIDA
COMPLIANCE WITH 1.5 TIMELINESS STANDARD
60-DAY RATIO ON JANUARY 31, 21013
Line of Credit Balance as ofJanuary 31, 2013:
FY 2010 Grant Balance: $ 780,887
FY 2011 Grant Balance $ 7,503,156
FY 2012 Grant Balance: + 4,965,818
Total Grant Balance $13,249,861
New 60-Day Ratio Calculation:
60-Day Ratio = Total Grant Balance = $13,249,861 = 2.67
FY 2012 Grant $4,965,818
Amount Over Timeliness Threshold:
Amount in Excess = (New 60-Day Ratio — 1.5) (FY 2012 Grant)
= (2.67-1.5)($4,965,818) = $5,810,007
FY 2013 Potential Reduction: $5,810,007
Submitted into the public
record in connection with
items na°5 on 0-2/Zdi
Todd B. Hannon
City Clerk