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City Cleans House On Community Grant Program


We'll examine the red tape that's been holding millions of dollars of federal block grants in limbo here in San Diego.

The city of San Diego's recent effort to reform its use of block grant money is the kind of issue that people often point to when they say there's fat in government. It seems that some money the federal government gave the city for improvements to parks and schools, never got spent for as long as 20 years. But, the city says a variety of rules and regulations attached to the funds made them difficult to spend, and until quite recently, no-one in the federal government seemed very much concerned.


KPBS Reporter Joanne Faryon

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This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

MAUREEN CAVANAUGH: I'm Maureen Cavanaugh, you're listening to These Days on KPBS. The City of San Diego's recent effort to reform its use of block grant money is the kind of issue people often point to, when they say there's waste in government, it seamless that some money the federal government gave the city for improvements to parks and schools never got spent for as long in some cases as 20 years. But the [CHECK] made them difficult to spend, and until quite recently, no one in the federal government seemed very much concerned. Of joining us to talk about the complicated issue of the $30 million nobody spent, is my guest, KPBS reporter Joanne Faryon. Good morning, Joanne.

FARYON: Good morning, Maureen.


FARYON: This is it a very complicated issue. The furthermore government under the department of housing and urban development gives cities across the country different pots of money. [CHECK] it gives our city and or [CHECK] and it gives us another pot of money to basically help fix up for lack of a better term poor end moderate income neighborhoods. Back years ago, the federal government sort of pinpointed [CHECK] it can be used to fix infrastructure, and a very small portion can us be used for programming. So every year, under this preliminary, HUD gives us money. Last year we got $16 million, so HUD gave the City of San Diego $16 million, and the city [CHECK] various nonprofit organizations although --band even city departments can then apply to this program and then a city department decides, yes, okay, we're gonna approve that or wee gonna not approve it.

MAUREEN CAVANAUGH: Now, people who heard your feature this morning, Joanne, know that you introduces this subject in terms of a school park that has been waiting for some grass, right?

FARYON: Right. So this is just one example of a project that can apply for this money. This is really a joint use project, which means during the day, there's a playground at the language academy that write now is gravel. The parents would leak that to be turf, artificial turf. It's been gravel since that school was built in the 1940s. [CHECK] got the money, nearly a million dollars of this money, to put artificial turf in. And the school could get the money because at night, the community can then use this facility. Hence the term joint use facility.


FARYON: So they got the money thee years ago, so what's the delay, right? That's the big question. So it's really not just about this playground, the story's really about this money. And what I learned on following up on this, is that a couple years ago, 2 and 3 years ago issue there were a couple different federal investigations into how this money was being spent. One was your sort of run of the mill, federal over sight probes that comes in, and says okay, let's look at this program, and then this was a follow-up audit done by the federal government, [CHECK] and loans that it is city is making using this money. So as a result, this was an over haul of the program. And I spent some time to Friday with two women, two city employees who really were brought in 2008 to fix this program, and it's so complicated, so they had a lot of patients with me. And they got a tough job, so City Council did say we've gotta change this, they put more staff in, new staff in, and they took some time to sprain why the money wasn't being spent, and what was going wrong. [CHECK] hired in 2008, and she describes why this money wasn't being spent fast enough, it wasn't being spent efficiently, and it really stems from the way that it was divided. So misdemeanor $16 million coming to the city, and eight council members each giving a fraction of that money, and then trying to give it out to their constituents. So here's Angela Nazarino trying to strain how that worked.

ANGELA NAZARINO: [CHECK] that was based on the number of low to moderate census tracks word process their district, the problem came when the agencies would ally and usual he exceeded the amount of money that was available for them to happened out, and unfortunately, they would it fund about 20 to 30 percent of when the request was, so you had lots of agencies not getting fully funded and forcing them to at some time or either come back and compete [CHECK].

FARYON: In effect F-- they'd ask for money and maybe 33 would get one fifth of this. So every year, they would keep asking for money. They never spent the original allocation, and every year, they would ask for money, until they had enough to say, oh, maybe we can do this project now. [CHECK] five years before they had the money, and the city could release it and say, okay, go do your project now.

MAUREEN CAVANAUGH: And one of the [CHECK] nonprofits groups who wanted to complete a project, and they were supposed to get the other money from somewhere else, and that other money never materialized so the original seed money that they got from the block grant just sorta sat there.

FARYON: Exact flee. And it's changed now. So what happened after these can audits, and these over sight other committees looked at this is, the [CHECK] and I think it's a fair compare sop, I spoke with average well Nazarino and Beth Murray of the [CHECK] this used to be similar to the county supervisors, we've all heard about their discretionary funds. Right now, they have a million dollars, it used to be $2 million, to go and distribute among their constituents as well of it was very similar to that program.

CAVANAUGH: And so what is the city in the process of doing to fix this now?

FARYON: Well, they've brought in new rules. So first of all, you now have to fund projects over certain amount, so they're not giving out this [CHECK] but Angela again, Angela, Nazarino, now describes some of the new rules that council's brought in rise [CHECK].

NEW SPEAKER: 18 months for all capital improvement projects so they have from the date of allocation to the deaf completion 18 months.

MAUREEN CAVANAUGH: So that's a huge difference between 20 years, and 18 months, is 18 months really enough time to get these projects offer the grouped.

FARYON: Well, the city thinks it is. This is really -- now let me introduce Beth Murray. Soap Beth Murray heads up this department along with Angela Nazarino. Of course I asked her that question. They're really in a tough spot. [CHECK] then it may be subject to various permits and zoning issues, all kinds of things that the whole sort of bureaucratic red tape that we know happens. So how are they going to determine that this money gets spent, because again, if they don't spend the money, they'll be in violation. [CHECK] they department have enough staff to really follow the money, to keep track of these projects. So now they've got more staff, they are going to try and follow it through to make sure it navigates the system. But here's Beth Murray, I asked her exactly this question, can this get continue, and here is her response.

BETH MURRAY: It can get done. If an agency knows that a project can be fully funded, it can get going on the contracts and get under construction quite quickly. The delay was because they department have the funding. So -- also as part of the council reforms, we say fund the whole project ownership not at all. Just not partial funding. And so that gives the agency some certainty too, that they can get thirds requirement project gonna within 18 months.

MAUREEN CAVANAUGH: Now, the City Council, San Diego City Council, [CHECK].

FARYON: It is. They're calmed said section ten a lot loans, and I asked this question, and I also asked Beth Murray and Angela Nazarino. [CHECK] the types of projects that this program is really supposed to fund. In the long run, it frees up more of that grant money to fully be doing current programs. I will tell you though, that they're not gonna loan money anymore of so that's another new rule. The other thing that the CDGB program was doing, it was loaning money to the city's redevelopment agencies, these are the arms of government that the governor has suggested we shouldn't have anymore. Because they actually take a portion of our property tax funds. So some of in community development money, well, some of it, a helped and $40 million of it, was loaned to these redevelopment agencies Chicago basically resolution and cancel saying pay us back when you can. But no payments were ever made, no interest was ever incurred. So also as a result of the HUD audit, [CHECK] without interest.

MAUREEN CAVANAUGH: Now, okay, when these block grants are given for a specific project, that's approved by the City Council and so forth, it's not a loan, it's a grant.

FARYON: That's right. It's a grant.

MAUREEN CAVANAUGH: But when it's used to pay off debts like the City Council thought did, or if it's used to be forwarded to another agency like a redevelopment agency, then it's a loan and it has to be paid back?

FARYON: It gets so confusing here. They're grants, but the city request ruse this money and loan it to redevelopment agencies. The problem was, they department follow the rules when they loaned the money. On the city side [CHECK] but on the redevelopment side of the books they mark them as loans, and that's sort of where the problem occurred, so they're could have done one or the other. They could have granted the money for projects or they could have loaned the money to the redevelopment agencies, but they had to account for them the same way, and they had to have repayment terms. So that was kind of the problem.

CAVANAUGH: The way you're talking about it, it sounds like it's an honest mistake, but is there the potential that anybody's gonna get in trouble for this.

FARYON: I don't know. I don't know why it happened that way. [CHECK] they don't want do that anymore either. They're not loaning redevelopment agencies money anymore as a result of this.

CAVANAUGH: Well, let me ask you finally, let's go backing to this playground at the language academy. Where do we find that story moving?

FARYON: So they were on the list, sort of the purge list of these four helped prohibit accident that had been sitting on the books, and they were gonna lose their money P. [CHECK] did contact everyone, the problem was thirds requirement point of contact was a city employee. A city manager.

MAUREEN CAVANAUGH: Let me stop you there. So as the City Council was wiping amount of these projects off the list, and using that money to pay off debt, one of those practicals of this poor language academy waiting for its turf.

FARYON: Exactly. They were on the list, they were on the books as being funded a few years ago. Said yes, okay, take them off the list. The school, the parents other than the foundation didn't know. They actually found out from South American that they happened to be on this list. They appealed to their council member, Marty Emerald, [CHECK] and they even said let's get this done quickly. We know you guys have been waiting a long time. I spoke with a parent who's actively involved with the foundation, and he knows how city hall works because he's an architect as well. And he was saying so now we're going through this process, this long kind of permitting process etc, so [CHECK] and in fact the new rules say, you've gotta have your project done in 18 months or we'll take back your money so much they're just hopeful that now they can navigate all of the hurdles to get this turf in before this deadline happens.

CAVANAUGH: Wow. Okay. Upon so the reforms that the City Council has enacted are actually in effect right now?

FARYON: They are. And actually to their credit, this has been going on for two and a half three years where they have been going through the books trying to get rid of these old programs, and in front of me, actually, Angela Nazarino had printed off from her database the more than 800 projects that they were trying to deal with, and some -- how far it goes back, a lot of these are 1997, projects weren't completed until 2009. So they had to go through all [CHECK] as far as she can tell, since the City Council made this action of sort of purging these projects, no one else has come back [CHECK].

MAUREEN CAVANAUGH: Joanne, complicated but as always, you manage to break it down so well. Thank you.

FARYON: Thanks Maureen.

MAUREEN CAVANAUGH: I've been speaking with KPBS reporter Joanne Faryon, if you would like to comment, please go on line, Days. Coming up, how healthy are the Padres as they head toward spring training. We'll check in with the team's head doctor. That's as These Days continues here on KPBS.


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