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Miami Herald - 12/09/04 -

Miami rushing to allocate excess funds

Miami has eight months to spend nearly $16 million in federal grant money if it wants to avoid having to repay the funds.


Miami's Community Development Department has accumulated so much unused federal grant money that the city is now forcing itself to go on what amounts to a $470,000-a-week spending spree -- or risk losing millions of dollars for years to come.

City leaders, well-aware Miami only recently stopped being the nation's poorest city, dread the prospect of forfeiting large sums of federal aid simply because it was allowed to sit around longer than federal rules allow. City Commission Chairman Joe Sanchez vows it won't happen.

''That is a big no-no,'' Sanchez said. ``We were -- and still are -- a needy municipality.''

Money provided by Washington in the form of Community Development Block Grants can go a long way toward filling those needs -- creating jobs, fixing up streets, or rehabbing homes.

Miami receives nearly $10 million in grant money annually. Miami can spend the funds itself or pass them along to outside agencies, but the city is ultimately responsible for making sure the money gets used.

At the same time, the U.S. Department of Housing and Urban Development, which administers the grants, prohibits Miami from having more than $14.9 million in unused grant money in its redevelopment checkbook at the time of HUD's annual review.

Miami's current total: $30.8 million.

Earlier this year, HUD examined Miami's books and realized the city had too much cash on hand.


HUD gave Miami until August 2005 to get down to the $14.9 million threshold. Otherwise, any money over that amount would have to be returned.

To make matters worse, HUD would then reduce the amount of federal funds given to Miami every year by that amount as well.

For example, if Miami is $1 million dollars over the limit, it would have to give HUD that million dollars, then receive a million dollars less from HUD every year after that.

Barbara Gomez-Rodriguez, director of the city's community development department, attributes the money build-up to several factors: Miami provided money to outside agencies that were unable to follow through on planned projects; several large-scale redevelopment efforts spearheaded by the city have run into delays; and the city has had more luck recouping grant money it loaned to outside agencies who then became delinquent.

Ironically, Gomez-Rodriguez said, that last reason -- Miami doing better at collecting debts -- is in fact a good thing, but all that collected money goes back into the city's grant checkbook.

Gomez-Rodriguez is trying to solve the spending dilemma by moving money from small projects the city says are bogged down to big-ticket items that will make progress before HUD's August deadline.

At today's City Commission meeting, she will ask for permission to shift $3 million to pay for a parking garage in Allapattah, and another $3 million to go toward a shopping center in Model City.


Some outside agencies that are losing money to pay for these large projects will likely show up at today's meeting to protest.

Ringo Cayard, CEO of Haitian American Foundation Inc., won't be among them, even though the city is taking back more than $10,000 in grant money Cayard's organization had slated for elderly meals and transportation services.

Cayard is resigned to returning the money, but says the city wasted months after awarding him the grant money before finally coming up with a contract, making it harder to use the funds.

''It's like they're giving it to you with their left hand, and taking it back with their right,'' Cayard said.

Commissioner Tomás Regalado faults what he calls Miami's inefficient bureaucracy for delays and a focus on planning, not results. He said the present situation ``looks really bad.''

''We shouldn't be in this rush . . . it looks like we're trying to throw money away,'' Regalado said. ``There should be a system in place.''