Loading...
HomeMy WebLinkAbout19 - Response to HUD Staff Comments CAPEReWPO CITY OF NEWPORT BEACH COMMUNITY AND ECONOMIC Hearin¢ Date: June 12, 2001 DEVELOPMENT U = PLANNING DEPARTMENT AEenda Item No.: 19 3300 NEWPORT BOULEVARD Staff Person: Daniel R. Trimble NEWPORT BEACH, CA 92658 (949) 644 -3230 949) 644 -3200; FAX 949) 644.3250 REPORT TO THE MAYOR AND CITY COUNCIL SUBJECT: Response to HUD Staff Comments on FY1999 -2000 CAPER. SUMMARY: Staff has reviewed the HUD assessment of the 1999 -2000 CAPER, is making the necessary corrections to our IDIS records, and will submit the corrected end of year reports in order to adequately comply with the CDBG reporting requirements. SUGGETED ACTION: Receive and File Back rg ound In order to receive and spend federal funds under the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant Program (CDBG) the City of Newport Beach is required to prepare and file various planning and reporting documents. The Consolidated Plan is a multi -year planning document, usually covering three to five years, that provides a blueprint for how the CDBG funds will be programmed and how this will assist the segments of the community that the funds are meant to benefit. The One -Year Action Plan is also a planning document that specifically identifies where the CDBG allocation for the upcoming year will be spent and discusses how this will achieve the goals identified in the Consolidated Plan. Finally, the Consolidated Annual Performance and Evaluation Report (CAPER) is a report that evaluates whether the goals and targets set out in the Consolidated Plan and One -Year Action Plan have actually been achieved during the fiscal year being reviewed. These reports are submitted to HUD staff members who review them to ensure they are complete and properly formatted, compliant with all HUD regulatory and statutory requirements, and consistent with City planning documents previously approved by HUD. In the case of the CAPER, the report consists of two distinct parts — the "narrative" and the "reports." The "narrative" portion discusses in detail the accomplishments achieved during the previous year and specifically identifies how CDBG funds were used to achieve those accomplishments. The "reports" portion of the CAPER is for the most part generated through the Integrated Disbursement and Information System (IDIS). The IDIS is a secure computer network used by grantees to track disbursements, report performance progress, and draw down expended grant funds. Access to the complex and somewhat quirky system can only be made through a direct connection to a mainframe in Washington D.C. via the Internet during certain hours of the day. Discussion The April 25, 2001 assessment letter from HUD to the City regarding the 1999 -2000 CAPER stated that the overall performance of the CBDG Administration was in need of improvement. The main reason for this negative assessment was the late submission of the document and the inconsistencies between the summary information and the IDIS reports. Staff has concluded that the main factors that contributed to the report being deficient are: 1) The unforeseen departure of the previous CDBG program manager at the end of the fiscal year. 2) The existing staff was not sufficiently trained in order to quickly assume all necessary program management responsibilities and did not have access to adequate technical support from the HUD field office during this staff transition. 3) The new CDBG program manager was not able to access and maintain IDIS records or prepare end of year reports due to a several month delay to repeated requests to HUD for a system password. Actions Taken to Resolve Deficiencies After the delayed submission of the CAPER it was apparent that the technical assistance that City staff needed to manage the program in the near term would have to be acquired through a consultant rather than relying on HUD support. Staff interviewed three consultants and began working with the selected consultant on the preparation of the 2001 -2002 One -Year Action Plan. This document was completed on time and submitted to HUD prior to the submission deadline. The initial assessment from the HUD field office is that the document is complete and generally consistent with the City's approved Consolidated Plan. A written assessment should be forthcoming. Staff is also working with the same consultant to correct and update the IDIS records. Unfortunately, some of the problem files date as far back as 1996. Each problem file is being researched, documented, and corrected. Staff anticipates that this process should be completed by June 15, 2001. The correction of the IDIS records and the preparation of updated reports for the 1999 -2000 fiscal year should specifically address the concerns identified in the HUD assessment letter. Submitted by: SHARON Z. WOOD Assistant City Manager Prepared by: DANIEL R. TRIMBLE Associate Planner F.I UsersIPLNLShareallCDBGIF }99- 201respanseltrrpt.do Page 2 � M1M1C�EM,a s, �M OEVM1�O April 25, 2001 Honorable Gerold Adams Mayor City of Newport Beach 3300 Newport Boulevard Newport Beach, Ca. 92658 OS. Department of Housing and Orban aeaelaoment OMCO of Cammagity Planning and Oeaelopmem 611 W. Siam Street Salto 1000 LOS 11119eie5. California 90011 hilmi/wwrdad.O" Subject: 1999 Program Year Review Letter HUD Consolidated Plan Programs Dear Mayor Adams: RCCEIVEU 5Y PLANNING D_PART'JENT CITY CF NEli`•1PCR-1 _A0 F1 nl':( J V CILI AM PIM 7181OI1011111I1121314;516 This letter highlights HUD's assessment of the City of Newport Beach performance utilizing HUD Consolidated Plan program funds, more specifically, the Community Development Block Grant (CDBG) program. The attached assessment is based upon the City's 1999 Consolidated Annual Performance and Evaluation Report (CAPER) and reports from the Integrated Disbursement and Information System (IDIS) as well as our review of your 5 -year Consolidated Plan. Our assessment also calls attention to those areas in which the City should concentrate its efforts to improve performance. If you have any comments, please provide your written comments within 30 calendar days from the date of this letter. We will take your comments under careful consideration. If you have no comments we will proceed to make the Program Year assessment letter available to the public. We also encourage each grantee to share this document with its public. A copy.of our assessment should also be provided to your independent public accountant and /or external audit team as required by OMB Circular. A -133. Overall Assessment: Based upon our review of your CAPER, we have determined that overall performance is in need of improvement. During the 1999 program year, the City did not perform in accordance with the Community Development Block Grant program requirements. Also,data provided in CAPER summaries and IDIS report are often inconsistent. The CAPER was provided at a date later than requested by HUD due to the sudden departure of the previous CDBG coordinator. The CAPER was due September 30, 2000, but the City submitted the document to HUD on January 11, 2001. 2 A letter was sent to the City on March 2, 2001 requesting correction to the numerous inconsistencies in the CAPER. The City answered HUD's inquiry on March 16, 2001 stating "once the Action Plan process is completed in early May, the City will devote its resources towards your comments and make corrections to the CAPER document as necessary ". This assessment of the CAPER is based on the CAPER document submitted as of January 11, 2001. A detailed assessment of the City's performance is enclosed. If you have any questions please do not hesitate calling Maria Richardson, your Community Planning and Development Representative at (213) 894 -8000 ext. 3334. Sincerely, Robert G. Ilumin Deputy Director Office of Community Planning and Development cc: Sharon Wood, Assistant City Manager Daniel Trimble, CDBG Coordinator 3 DETAILED ASSESSMENT OF PERFORMANCE We have organized our conclusions about the City's performance in the following categories: Consolidated Plan, Continuum of Care, Decent Housing, Economic Opportunity, Program Requirements and Single Audit Issues. Consolidated Plan In 1995, the City of Newport Beach developed a five year strategic plan. This CAPER covers the fifth and last year of the City's five year plan. The City of Newport Beach reports no activities or accomplishments that relate back to strategies described in its Consolidated Plan. The CAPER is incomplete and does not address any measurable progress in any particular area. CAPER summaries provides vague information regarding accomplishments during the program year. The accomplishments compared to projection is very poor. City's overall performance is in need of improvement. Recommendation: City must improve both performance and in reporting HUD assisted activities. Technical assistance is available upon request. The City should also consider, hiring on an interim basis a consultant with in -depth knowledge of CDBG program requirements that can assist the City in developing appropriate goals. The benefit of hiring a consultant, until such time the CDBG program has been stabilized, are that the cost can be charged to CDBG Planning and Administration. In addition, the consultant can train the new CDBG coordinator. Continuum of Care: Improvement Needed The City of Newport Beach allocated $43,909 for Homeless Services in its Action Plan for program year 1999 -2000. However, none of the allocated funds were used to provide services for the homeless or those at risk of becoming homeless. The CAPER describes the City's participation with non - profit and interest groups but did not provide any information regarding activities related to the continuum of care. Unfortunately, the City also did not provide specific information about its homeless activities. Recommendation: City is encourage to set standards and goals to increase its assistance to the homeless population. The City is also 2 encouraged to participate in the County of Orange Continuum of Care System. Participating cities communicate and develop strategies that jointly addresses homeless issues creating focal points to reduce the homeless population in the County. Decent Housing Improvement Needed The City of Newport Beach did not allocate any funding toward affordable housing. The narrative provides information as reported by non - profit organizations but it is not substantiated by any other source of information since no funds were used for homeless housing activities during program year 1999 -2000. The City reported currently holding $2 Million in non - federal funds available for the development and /or preservation of affordable housing units, which was negotiated by the City as part of major residential development. However, there is no mention about who the City negotiated with and /or if the funding is from redevelopment or other sources. City provided information about Section 8 rental assistance totaling $558,600, but did not provide the number of persons assisted. The only assistance information identified in the CAPER indicates that 90 families were assisted with Section 8 vouchers distributed by the Orange County Housing Authority. The City also reported having no public housing units located within its jurisdiction. Recommendation: The City must be consistent with CAPER narratives and IDIS information. There is no conclusive information about exactly what the City accomplished during program year 1999 -2000 in the area of affordable housing. City must set reasonable goals, set priorities and accomplish them accordingly. Economic Opportunity Improvement Needed e The City projected the use of $246,750 in economic development /neighborhood revitalization in its proposed budget. No money was reported to be expended in its action plan, and no money was expended in any activity related to economic development. The City needs to establish program. In July 1997, the City economic development program for the City's targeted neighborhood a feasible economic development allocated $468,921 toward an public improvements as part of revitalization strategy. The k amount expended so far is $395,006 with unexpended funds of $73,916. No funds were used during program year 1999 -2000. Recommendation: The City is advised to set reasonable goals that can be accomplished. Once more, the City is advised to hire a consultant or request technical assistance to facilitate the accomplishment of the Consolidated Plan projections. City's performance denotes lack of expertise in handling CDBG program requirements. Economic Development is an area requiring a strong commitment and sound planning in order to accomplish projected goals. Program Requirements Improvement Needed The City's CAPER narratives appear to be credible, but again there is no substantial information to create an analysis and measure productivity. It is impossible to provide a rating in this area. Based on data submitted, the City of Newport Beach reported a CDBG expenditure of 4% with no public services, no economic development and no housing accomplishments. The City used 1% for program administration and it is included in the calculated expenditure of 4 %. Based on the limited information provided in IDIS report, the City expenditures of $15,917 (facilities and improvement) toward low- moderate credit is measured at 100°% since there was no other expenditures reported. Program Administration was reported at 1% or $7,083. City timeliness ratio was 1.41 as of April 30, 2000 or 60 days before the reporting date deadline. Recommendation: City is encourage to provide descriptive narratives that allows HUD to measure and compare achievements even if the City encounter some problems with the IDIS system. The lack of information in the City's IDIS reports and CAPER summaries is an indication of deficiencies in the overall administration of the CDBG program. IDIS Reporting Improvement Needed The IDIS reports were incomplete lacking information about national objectives, expenditures, beneficiaries and financial summary. Substantial information is missing from the report. The financial summary report provided expenses totaling $538,152 but there is no data in IDIS reports or in narratives of the CAPER to substantiate the information. 6 Recommendation: City of Newport Beach must provide certified information that addresses the inconsistencies within the financial summary and IDIS reports submitted to HUD. Suitable Living Environment Improvement Needed The City budget proposal presented in the CAPER informs the public of a projected allocation of $43,,909 for homeless services and $30,341 for low income elderly in public services. No money was expended toward those projects considered first and second priority. Other projects allocation of $321,750 for ADA improvements, economic development /neighborhood revitalization and code enforcement were never utilized. City used no funds as proposed in the 1999 -2000 action plan. Recommendation: City will be required to provide detailed narratives, goals and accomplishments and, financial data describing in detail how and where money was allocated and spent. Other HUD Programs The City's 1999 program year fair housing activities and actions taken to address the impediments identified in its fair housing analysis (AI) are being reviewed by the Civil Rights Division. The results of the review will be addressed under separate cover. Single Audit Issues In addition to the typical areas reviewed during the annual single audit, we would highlight the following program areas for audit consideration: Subrecipient Activity /Commercial Contracts. Examine the recipient's system for monitoring subrecipients and commercial'N contracts. Activities /Objectives: Identify eligible activities funded with CDBG funds; test expenditures and related records; for selected activities, review documentation showing how national objectives are met. Twenty percent Planning and Administration Cap. Ascertain the total amount of grant and program income. Review the financial records to determine the amount expended for planning and administration. 7 Environmental Review: Select a sample of projects on which expenditures have been made and determine whether environmental reviews have been performed in conformance with 24 CFR Part 58.34- 35. Acquisition and Relocation: Select a sample of completed projects involving acquisition of real property, with particular interest on existing homeowner and rental property. Determine that property owners and /or tenants were provided with proper notices and compensation under the Uniform Relocation and Real Property Acquisition (URA) Act and Section 104 (d).