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10/24/02 - Miami Today News
Federal agency freezes $30 million in funding to Miami because
of failure to properly conduct environmental reviews
By Paola Iuspa
The US Department of Housing and Urban Development shut down its $30.7 million line
of credit to the City of Miami, freezing funds committed to land acquisition, housing
aid, child care, the homeless and the elderly.
The federal agency said Miami has failed to conduct environmental reviews for some
HUD projects. While the decision stalls funds for about 150 city programs, not all
require such studies. The agency Tuesday began reviewing city files to determine
which programs are exempt. Compliant programs will have funds reinstated, agency
officials said. "I met today with HUD officials and gave them a list of agencies
that need to get paid this week," said Dan Fernandes, community development
department interim director.
"They agreed they would make those files a priority," he said, referring
to programs not needing reviews. He said most social services programs do not require
environmental reviews but still should have documented reasons for exemption.
The environmental reviews are meant to show how any HUD-funded program will affect
a neighborhood or whether needed land is contaminated. In an Oct. 17 letter, Jack
Johnson, HUD director of community planning and development, demanded the city's
files for projects started after January 2000. Federal officials said programs missing
the reviews will not get funds until the paperwork is brought into compliance.
"I am confident that the staff we have now in community development will get
the funds back as soon as possible," City Manager Carlos Gimenez said Tuesday.
"Someone will be accountable for this after I get to the bottom. I just learned
about this today." HUD's investigation into Miami's applications for existing
federal assistance comes a month after Mayor Diaz promised to fight poverty in his
city, ranked the poorest of its size in the US. How quickly the full $30.7 million
will again be accessible to the city is unclear.
"That will be up to the city," a HUD official said Tuesday. He said as
soon as the city provides all proper requirements for each program the credit line
will be reopened.
"We want to start clearing our invoices as soon as possible to avoid any delay"
in providing social services, Mr. Fernandes said.
Normally and until last week, the federal government automatically refunded to the
city expenses incurred by HUD-approved programs. Now, before any money is released
for a new project, the city must present an environmental study.
The city was planning to annually receive $12.8 million in Community Development
grants, $12.2 million in Housing Opportunities for Persons with AIDS, $5.4 million
in Home Investment Partnership Program and $350,000 in Emergency Shelter grants.
Programs also include assisting nonprofit groups building affordable housing and
providing small loans to business owners improving their shops.
Agency officials will restart automatically disbursing funds to the city when Miami
implements a program that guarantees environmental studies for each HUD-assisted
project, according to a letter dated Oct. 17. But for now, "This procedure
will continue until the city demonstrates, to HUD's satisfaction, a proficiency
in conducting environment reviews," officials wrote.
Mr. Fernandes said his department started the reviews right after HUD froze $10
million in June because the city was buying land without following environmental
To recoup that money, his office hired a person last summer to work on those reports.
"Before, we did not have this system in place," he said. "Environmental
reviews were not being done. It was a communication problem because we thought Miami-Dade
County was doing the reviews." He said the county and the city often help finance
the same programs.
Federal officials said they warned Miami of its lack of compliance last December
and while the city made improvements, projects are still missing environmental reviews.