Battling, Bungling Bureaucrats

With $26 million on the line, the City of Miami didn't want to take any chances. So before requesting a generous grant from the U.S. Department of Housing and Urban Development, the city spent months of time and more than $10,000 training employees to fill out the complicated grant application. Failure to complete the form properly would jeopardize the millions of dollars HUD awards Miami annually.

The city failed. As of this past week, the application -- originally due in March -- has not yet been approved by HUD. Money that nearly 50 different social-service agencies depend on to feed the elderly, train the jobless, transport the disabled, and provide basic health care to the city's poor is not yet available. "This is a disaster," says a city official familiar with the application. "We still don't have [the grant] and the word is that we are not going to get it."

Officials at Miami's Department of Community Development -- a department dedicated solely to acquiring and distributing the annual grant -- pass the blame for the withheld funds to the bureaucrats at HUD's regional offices in Jacksonville. Those supposed red-tape artists up north are rejecting the application just because a couple of ts are not crossed, they say. Besides, the grant-application process is just so much busywork. "We believe this plan is an exercise in virtual reality," scoffs Jose Cerdan, coordinator of the Department of Community Development. "For us this is a distraction. All they tell us is that we forgot to put an address on line 25 of paragraph C of page 130. They don't tell us if the plan is good or bad overall. It is nonsense."

HUD has been awarding -- and Miami has been receiving -- community development block grants since 1974. Cities with more than 50,000 residents receive an amount of money determined by a national formula. Miami's 1995 grant-in-waiting totals more than $26 million, with most of that money distributed in low-interest loans to poor families and in direct payments to developers of low-income housing.

Historically, about 15 percent of the city's annual grant money supports 45 different social-service programs. Some of the money pays for 312 meals served daily to the elderly at First United Methodist Church at 400 Biscayne Blvd. The money also provides day care for 457 children from low- and moderate-income families at Notre Dame Day Care in Little Haiti. A cut of the grant money is also awarded to programs operated by JESCA, the YMCA, Miami Jewish Family Services, and others.

This year, for the first time, HUD combined the block-grant application with the application for three other existing programs: general housing, emergency shelter of the homeless, and housing for AIDS patients. The four grants were combined into one large "consolidated plan." The city began preparing for the new application late last year, when four city accountants and planners attended seminars in Louisville and Washington, D.C. Two computers were purchased to assist the collection of data. Total cost of the trips and the computers, including software and training, is estimated at more than $10,000.

Miami's application was due March 21 so it could be approved before the start of the city's fiscal year, June 1. Miami officials turned in the application on time, assuming it was correct and that it would be accepted, says Jose Cerdan. Then the city got the letter.

On May 26, Miami City Manager Cesar Odio received a missive from regional HUD director Jim Nichol in Jacksonville. "We have completed our review of the subject plan submitted by the City of Miami," Nichol wrote. "Based on our review, we have no choice but to delay approval of the plan along with the funding of the four entitlement programs included in the plan, totaling $26,147,000. This delay is due to your plan's omission of several significant statutorily required items."

Three detailed pages of mistakes were attached. Some of the errors were Cerdan's uncrossed ts and missing addresses, but the main problem was of far greater scope. According to Cerdan and other city officials, Miami's planning, building, and zoning department had not assembled key information missing from the application, principally an explanation of how the city intended to address social ills over the next five years.

The missing information was a key component of the two-part application. The second part, called the "action plan," describes how much money is needed for the upcoming year and specifically how it is going to be spent. The first -- and incomplete -- section is called the "strategic plan," a long-term view of the city's social problems. Its compilation was the planning department's responsibility. Most of the information the department needed, Cerdan says, was floating around city hall in previously published documents and studies, but because of staff turnover, the department could not gather the data in time. "It has been a problem," Cerdan admits.

However, another city official, who declined to be named, has a much harsher assessment of the department's failure. "If you don't have a strategic plan, then you don't know where are your needs. You have to, pardon the expression, bullshit your way. I say that whoever goofed should be fired."

Economic planner Robert Schwarzreich says turnover wasn't the reason his department failed to create a strategic plan. Some top planning officials have recently retired or taken jobs in other cities, he says, but they were still working for Miami when the application was first due. Instead he seconds Cerdan's assertion that the true problem was HUD's nitpicking. "The reviewer in Jacksonville was looking at [the application] from a very narrow perspective, almost as if it were a checklist," Schwarzreich opines. "For what HUD really wanted, you needed a lot of resources to do a really fine job, and we have only so many people available to us. I'm not saying the [strategic plan] was perfect. It wasn't. It's just that it was pretty good."

The planning department ceded control of the application to Cerdan as he tried several times to get it in order. Most recently, a HUD bureaucrat flew down to Miami to talk with him and other city workers. When the HUD official returned to Jacksonville in late July, the application still was not acceptable.

The bulk of the withheld grant money targeted for housing is not yet a problem because the processing of last year's requests hasn't been completed yet. Social services, however, are another story. All social-service money from last year has been used. The city advanced money to local agencies to cover their expenses for June and July, the first two months of the fiscal year. But because the city is so close to bankruptcy, it cannot afford to continue such advances. If the HUD money isn't made available immediately, the agencies may have to cut back services or even shut down.

"If all the city funding was halted? Oh my goodness!" exclaims Alice Abreu, director of the child-care division of Catholic Community Services, an agency that runs six day-care centers and serves 1500 children daily. "We would have to take drastic steps to see in what ways we could trim the budget and how many services we need to discontinue. Some of the children and families would be affected."

Some city officials worry that the problem is even more serious A that the grant money may be permanently lost. "I am aware of the delay [in the HUD grant] and I am concerned," says Commissioner Miller Dawkins. "Each day this situation is not addressed may eventually lead to denial and to longer delay." Indeed, because the grant application is still unacceptable, HUD can legally take the money targeted for Miami and distribute it among other cities, though Cerdan insists such action is extremely unlikely: "If they don't give us the money, it will be seen as a failure on their part. They are supposed to be our partner, not our bosses. It will look bad for them if they don't give us this money."

Jim Nichol, HUD's regional director in Jacksonville, does not believe his agency is responsible for the delay. "The city has to hustle, that's all," he says. On the other hand, he is not inclined to blame the city, either. The consolidated plan application is new to both Miami and to HUD, he notes. It's to be expected that some problems will crop up and some delays will occur. "It's not their fault," Nichol asserts, referring to the city. "It's not our fault. I don't think it's anybody's fault. It's just a transition year."

Nichol and Cerdan spoke several times last week as Cerdan polished another draft of the application, which was sent to Jacksonville Thursday night. But even if the latest draft is finally acceptable, as Nichol and Cerdan expect it to be, at least two more weeks will pass before the money is released. In addition, there is still a chance more problems will be discovered and the money will remain locked up.

All of which keeps Cerdan on edge: "If we don't get the money, we're going to have all the [social service] agencies call up HUD and ask, 'Why?' We're going to have them call up [HUD Secretary] Henry Cisneros and ask, 'Why?'


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