Agenda 04/08/2014 Item #16D114/8/2014 16. D.11.
EXECUTIVE SUMMARY
Recommendation to approve a substantial amendment recognizing a reduction in U.S.
Department of Housing and Urban Development (HUD) Community Development Block Grant
(CDBG) funding by $158,862 to 51,933,445 for the FY2013 -2014 funding year and approve a
budget amendment in the same amount.
OBJECTIVE: To maintain the accuracy of federal funding documents and related County
accounts.
CONSIDERATIONS: The U.S. Department of Housing and Urban Development (HUD) Community
Development Block Grant (CDBG) program funds locally- defined needs for programming and
infrastructure. Collier County's CDBG FY2013 -2014 Annual Action Plan was approved at the August
13, 2013 In Absentia meeting and ratified at the regular Board meeting of September 10, 2013. The Board
approved the FY2013 -2014 CDBG budget during the September 10, 2013 meeting (Item # 16.D.10).
HUD regulations (24 CFR570.902) require that an entitlement grantee is considered to be carrying out its
CDBG program in a timely manner if, sixty (60) days prior to the end of its program year, the grantee has
a balance in its line of credit no greater than one and one -half times (1.5) its annual grant. The County's
60 -day ratios were measured on August 2, 2012 and 2013 were 2.06 and 2.65. respectively. HUD
contacted Collier County Housing, Human and Veteran Services (HHVS) staff in October 2013 to review
the County's CDBG funded activities being carried out in a timely fashion. In response, HHVS prepared
a summary of issues, plans, and progress and presented that both in a letter and in a conference call with
HUD officials. On December 20, 2013 HUD notified the County that since we did not meet our
"timeliness" requirement two (2) years in a row, they would be reducing our FY2013 -2014 CDBG
funding amount by $158,862. The amended CDBG funding amount for FY2013 -2014 is now $1,933,445.
Staff has been working for two years to work out of a prior spending backlog. In fact, despite the
reduction, the letter from HUD congratulated staff on the apparent turnaround and encouraged
continuation of in- progress plans. From October 2013 until to today, HHVS has drawn down from HUD,
a total of $2,019.682. To put this in context, the amount of one annual allocation was drawn within a five
month period, demonstrating the accelerated pace with which the funds are now being spent. HHVS
continues its focus on this matter and has a plan in place concerning timeliness going forward.
The reduction of funds will not impact subrecipient projects.
FISCAL IMPACT: The cost associated with the reduction of the grant funding was made in
administration and staffing. The reduction balance was from an unfunded project that a subrecipient had
indicated would not be moving forward. The reduction in CDBG will have no additional effect on ad
valorem or general fund dollars over the current FYI budget. The funding source is the Community
Development Block Grant (CDBG). The revised grant award is $1,933,445. A budget amendment is
necessary within the Housing Grant Fund (705) for Project No. 33289 (CDBG Grant) to reduce funding
by $158.862.
GROWTH MANAGEMENT IMPACT: The reduction of funding will have no effect on the Housing
Element of the Collier County Growth Management Plan. Staff will continue to provide support to the
goals, objectives and policies identified in the Plan.
Packet Page -1532-
4/8/2014 1.6. D.11.
LEGAL CONSIDERATIONS: This item is approved as to form and legality and requires a majority
vote for approval. - JAB
RECOMMENDATION: That the Board of County Commissioners approves a substantial
amendment to the Community Development Block Grant FY 2013 -2014 Annual Action Plan
recognizing a $158.862 reduction in funding and approves a budget amendment in the same
amount.
PREPARED BY: Elly Soto McKuen, Operations Analyst; Housing, Human and Veteran Services
Packet Page -1533-
4/8/2014 16. D.11.
COLLIER COUNTY
Board of County Commissioners
Item Number: 16.16. D. 16. D. 11.
Item Summary: Recommendation to approve a substantial amendment recognizing a
reduction in U.S. Department of Housing and Urban Development (HUD) Community
Development Block Grant (CDBG) funding by $158,862 to $1,933,445 for FY2013 -2014 funding
year and approve a budget amendment in the same amount.
Meeting Date: 4/8/2014
Prepared By
Name: McKuenElly
Title: Grant Support Specialist, Housing, Human & Veteran
3/13/2014 2:34:27 PM
Submitted by
Title: Grant Support Specialist, Housing, Human & Veteran
Name: McKuenElly
3/13/2014 2:34:27 PM
Approved By
Name: GrantKimberley
Title: Director - Housing, Human and Veteran S, Housing, Human & Veteran Services
Date: 3/19/2014 3:47:06 PM
Name: TownsendAmanda
Title: Director - Operations Support, Public Services Division
Date: 3/20/2014 12:17:23 PM
Name: Bendisa Marku
Title: Supervisor - Accounting. Housing, Human & Veteran Services
Date: 3/20/2014 2:40:10 PM
Packet Page -1534-
4/8/2014 16. D.11.
Name: SonntagKristi
Title: Manager - Federal /State Grants Operation, Housing, Human & Veteran Services
Date: 3/20/2014 3:28:35 PM
Name: MesaNancv
Title: Accountant, Housing, Human & Veteran Services
Date: 3/21/2014 7:46:37 AM
Name: AlonsoHailey
Title: Operations Analyst, Public Services Division
Date: 3/27/2014 10:44:23 AM
Name: CarnellSteve
Title: Administrator - Public Services, Public Services Division
Date: 3/27/2014 11:09:59 AM
Name: RobinsonErica
Title: Accountant, Senior, Grants Management Office
Date: 3/27/2014 11:32:54 AM
Name: BelpedioJennifer
Title: Assistant County Attorney, CAO General Services
Date: 3/28/2014 1:42:43 PM
Name: KlatzkowJeff
Title: County Attorney,
Date: 3/31/2014 8:14:14 AM
Name: StanleyTherese
Title: Management/Budget Analyst, Senior, Grants Management Office
Date: 3/31/2014 1:56:45 PM
Name: FinnEd
Title: Management/Budget Analyst, Senior, Transportation Engineering & Construction Management
Date: 3/31/2014 5:28:41 PM
Name: KlatzkowJeff
Title: County Attorney,
Date: 4/1/2014 8:40:28 AM
Name: OchsLeo
Title: County Manager, County Managers Office
Date: 4/1/2014 9:56:08 AM
Packet Page -1535-
THE CDBG SUBSTANTIAL AMENDMENT
TO THE
FY2013 -2014 HUD ACTION PLAN
FUNDING REDUCTION TO CDBG ALLOCATION
Jurisdiction(s): Collier County, Naples
Lead Agency: Collier County
Jurisdiction Web Address: www,collieraov.net
(URL where CDBG Substantial Amendment
materials are posted)
CDBG Contact Person: Elly Soto McKuen
Address: 3339 E. Tamiami Trail, Suite 211,
Naples, FL 34112
Telephone: (239):1-521-2664
Fax: (239) 252 -2664
Email: ellvmckuenn.collieraov.net
4/8/2014 10. D.11.
The FY2013 -2014 HUD Action Plan, approved by the Board of County Commissioners (BCC) on August 13, 2013 at an
absentia meeting and ratified on September 10, 2013 meeting is hereby amended as follows:
Words Steel' Thfauo are deleted; Words Underlined are added:
AMEND NARRATIVE RESPONSES, GENERAL SECTION, EXECUTIVE SUMMARY, BACKGROUND (Page 1):
The main priorities in utilizing the limited federal, state and local funds include public facilities, public services and
affordable housing opportunities for the community's low and moderate income residents. Collier County has
administered HUD entitlement funding since 2001 and has usually achieved HUD's timeliness ratio. Collier County
zontinues to expend approximately 100% of its federal funding on low and moderate income beneficiaries.
During the 2013 -2014 program year, Collier County will receive the following entitlement grant funds:
Community Development Block Grant (CDBG) $2,""�T'S1 933.445
HOME Investment Partnership (HOME) $ 474,031
Emergency Solutions Grant (ESG) $ 132.640
TOTAL FEDERAL FUNDS:
Sz,699,9U $2,540.116
1 CDBG funds are comprised of $2,^140 $1,852,986 for Collier County and $80,459 for the City of Naples. Total CDBG funds
available - $2,^°�T $2,540,116.
1
Packet Page -1536-
Y
4/8/2014 16. D.11.
", IUENpr,
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON. DC 20410 -7000
a6�N DE VF��e
OFFICE OF COMMUNITY PLANNING DEC fi ��
AND DEVELOPMENT U
The Honorable Georgia A. Hiller
Chair, Collier County Board of Commissioners
3299 Tamiami Trail East, Suite 203
Naples, FL 34112 -5746
Dear Chairwoman Hiller:
SUBJECT: Failure to Comply with Timely Expenditure Requirement
Community Development Block Grant (CDBG) Program
I would like to thank your staff for taking the time to participate in an informal consultation
held on October 29, 2013, with members of my team to discuss the reasons for Collier County's
failure to comply with the timely expenditure requirement at 24 CFR 570.902, Review to determine
if CDBG funded activities are being carried out in a timely manner. Pursuant to this regulation, an
entitlement grantee is considered to be carrying out its CDBG program in a timely manner if, 60
days prior to the end of its program year, the grantee has a balance in its line of credit no greater
than one and one -half (1.5) times its annual grant. Collier County's 60 -day ratios as measured on
August 2 in 2012 and 2013 were 2.06 and 2.65. respectively.
In the Department's letter of November 20, 2001, CDBG entitlement grantees were advised
that failure to meet the 1.5 standard might result in a reduction of a future grant equal to the amount
in the line -of- credit in excess of 1.5. Based on the county's new drawdown ratio of 2.65, the
amount of this reduction is calculated to be $2,305,170. There is one possible exception to this
reduction policy: HUD determines that the untimeliness resulted from factors beyond the county's
reasonable control. HUD has determined, however, that the untimely performance was not beyond
the county's reasonable control.
Under the provisions of 24 CFR 570.911, Reduction, withdrawal, or adjustment of a grant
or other appropriate action, Collier County officials attended, via teleconference, an informal
consultation at HUD headquarters on October 29, 2013, to present the reasons why the county
contended it qualified for an exception to the timeliness policy. The county presented the following
primary reasons for its failure to meet the timeliness standard:
Project Delays
o Eagle Lakes Voluntary Pre - Kindergarten (VPK) Activity, $775,000 - The project
was not located in a low- moderate income area. Obtaining the beneficiary
information needed to meet a CDBG national objective proved to be an excessive
burden.
www.hud.gov espanol.hud.gov
Packet Page -1537-
4/8/2014 16. D. 11.
o David Lawrence Center Crosswalk Expansion Activity, $208,000 - The subrecipient
was not able to provide a cost allocation plan to meet Federal requirements for
allocating staff time.
o CRA CRA Crosswalk Activity, $140,000 — The lengthy procurement process
extended the projected timeframe for completion of the activity to an unacceptable
time period.
c Youth Haven Rehabilitation Activity, $735,000 —It was determined that the
rehabilitation was insufficient for the intended use of the structure and the building
would have to be demolished. The developer did not have sufficient funds to
proceed with new construction.
It is important to point out that the county has reprogrammed the funds allocated to the
above projects to other activities.
Repayment for an activity that failed to meet a CDBG national objective: The county had to
repay $500,000 because the Habitat Kaicasa activity did not meet a national objective.
Reprogramming of CDBG Funds: Collier County reprogrammed a significant amount of
funds as a result of activities coming under budget and for cancelled activities. The county's
written response indicates over $3 million was scheduled to be reprogrammed. In May and
July of 2013, reprogrammed funds of over $2 million were re- awarded to various projects.
According to the county, the reprogramming and re -award process took four -six months,
thereby delaying expending those funds.
In addition to assessing the merits of the county's presentation, the Department reviewed the
county's letter of October 24, 2013, which provided an explanation for the county's failure to
comply with 24 CFR 570.902. While the Department recognizes the challenges Collier County has
faced, the written material and information presented during the informal consultation do not
address how the county's lack of timeliness was due to factors completely beyond the county's
reasonable control.
Therefore, I have authorized the reduction of the county's FY2013 grant by $158,862. The
Department based its decision to reduce the FY2013 grant by $158,862 because the county had
drawn down a substantial amount of funds between the August 2, 2013, 60 -day test date, and the
October 29, 2013, informal consultation, and in consideration of the Eagle Lakes Park VPK
activity's national objective documentation issues and the protracted procurement process for the
CRA Crosswalk activity. The reduction to the county's FY201 3 grant is computed as shown below:
Amount over 1.5
$2.305.170
Less: Draws After August
- 1,231,308
Eagle Lakes Park VPK
775,000
CRA Crosswalk
140.000
Total Offsets
- 2.146.308
Financial Sanction
$ 158.862
Packet Page -1538-
4/8/2014 16. D.11.
This grant reduction will require Collier County to amend its FY2013 action plan. It is
expected that the county will complete the process to amend its action plan to account for this grant
reduction within the next few months. You may be assured that the HUD South Florida Office is
available to assist you in any way possible to meet the timeliness standard and to help with the
necessary revisions to your action plan.
It is unfortunate that the county was not able to meet the 1.5 performance standard at the 60-
day test date and that this reduction had to be taken. I must caution you that failure to meet the 1.5
standard at the county s next 60 -day test in August, 2014 may result in a reduction of the FY2014
grant. However, I wish you success in meeting the CDBG timely performance requirements by
next August. The Department compliments you and your staff for the positive actions taken to
improve program delivery. Collier County has a relatively new management team in place, and,
with the assistance of the HUD South Florida Field Office, has implemented changes to its
programs, including enhanced project oversight, reprogramming of funds, reorganized business
practices and a revised application process. The grantee is also receiving technical assistance
through OneCPD.
Please contact Steve Johnson, Director, Entitlement Communities Division, at (202)
708 -1577, if you have questions regarding the contents of this letter. Please direct all other
questions you may have to Ann Chavis, CPD Division Director, in the HUD South Florida Field
Office. Ms. Chavis can be reached at (305) 520 -5010.
Sincerely,
All
Yolanda Chdvez
Deputy Assistant Secretary
for Grant Programs
Packet Page -1539-