Legislative Matter

Miami-Dade Legislative Item
File Number: 070670

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Clerk's Official Copy

File Number: 070670

File Type: Resolution

Status: Adopted

Version: 0

Reference: R-305-07

Control: County Commission

File Name: URGE HUD TO LEAVE CONTROL OF COUNTY'S HOUSING PROGRAM W/COUN

Introduced: 3/1/2007

Requester: NONE

Cost:

Final Action: 3/6/2007

Agenda Date: 3/6/2007

Agenda Item Number: 11A45

Notes:

Title:

RESOLUTION URGING THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (''HUD'') TO LEAVE CONTROL OF MIAMI-DADE COUNTY’S FEDERALLY ASSISTED HOUSING PROGRAMS WITH MIAMI-DADE COUNTY; AND FURTHER URGING HUD NOT TO PLACE OR SEEK THE PLACEMENT OF MIAMI-DADE HOUSING AGENCY IN RECEIVERSHIP OR REQUIRE THE EXECUTION OF A COOPERATIVE ENDEAVOR AGREEMENT

Indexes:

MDHA

Sponsors:	Audrey M. Edmonson, Prime Sponsor
	Jose "Pepe" Diaz, Co-Sponsor
	Sally A. Heyman, Co-Sponsor
	Barbara J. Jordan, Co-Sponsor
	Dennis C. Moss, Co-Sponsor
	Dorrin Rolle, Co-Sponsor
	Katy Sorenson, Co-Sponsor
	Rebeca Sosa, Co-Sponsor

Sunset Provision: No

Effective Date:

Expiration Date:

Registered Lobbyist:

None Listed

Legislative History
Acting Body	Date	Agenda Item	Action	Sent To	Due Date	Returned	Pass/Fail

Board of County Commissioners	3/6/2007	11A45	Adopted				P
REPORT:	Chairman Barreiro noted the letter that staff was distributing was sent by the US Department of Housing and Urban Development (HUD). He pointed out that the County Commission needed to respond to the HUD letter within 30 days and suggested that the Commission adopt Agenda Item 11A45, declaring that the County Commission disagreed with the proposed HUD takeover, and instruct the County Attorney to prepare a letter for endorsement by the County Commission and Mayor to accomplish this intent. Chairman Barreiro read from Section A-4 on page 2 of the Cooperative Endeavor Agreement (CEA), attached with the HUD letter, the following language: “The County shall, upon execution of the CEA by all parties, immediately transfer possession and control of all Miami-Dade Housing Agency’s assets, projects and programs to HUD. The County Commissioners shall also relinquish all control over the Miami-Dade Housing Agency (MDHA). The Secretary appoints Donald J. LaVoy or his/her designee, to fulfill duties as the Board of MDHA, with the title of Recovery Administrator.” Commissioner Martinez asked Ms. Cynthia Curry, Senior Advisor to the County Manager, if anyone responded to this letter on behalf of the County Commission the day before (3/5). Ms. Curry said the County Manager’s Office did not respond to the letter on March 5, 2007. Commissioner Seijas asked Ms. Curry what outstanding contracts existed in the Miami-Dade Housing (MDH) Development Corporation. Ms. Curry said Cathy Jackson’s, Audit and Management Services, office was reviewing the tax documents to determine the County’s potential for tax liability. She explained that on February 1, 2007, County Manager Burgess sent the MDH Development Corp. a termination and demand letter to remit all property and funds. She noted that in April 2006, the County Manager asked the Audit and Management Services Department to audit the MDH Development Corp., and the results were still pending. She said County Manager Burgess sent another letter yesterday (3/5) indicating that March 31, 2007, was the deadline to remit the property and funds. She noted that the financial ramifications for three MDH Development Corp. projects (Ward Towers, Postmasters, and 13 infield lots) made them difficult to remit. She said that County Manager Burgess requested the MDH Development Corp. Board to voluntarily resign. She said County Manager Burgess wanted to present a final agreement and a plan for consideration on April 24, 2007. Commissioner Seijas asked if the individual members of the County Commission would be liable since the County Commission authorized the creation of the MDH Development Corp. County Attorney Greenberg noted the individual commissioners would not be held liable, in his opinion. Commissioner Seijas asked what could be done to limit commissioners’ liability. Chairman Barreiro expressed concern that the County Manager’s plan for property retrieval and his proposal that the MDH Development Corp. Board voluntarily resign was too harsh. Commissioner Seijas expressed concern about the commissioners being held liable. She said the Mayor should handle this responsibility with his new role as a strong mayor. She said she wanted to know if anyone spoke on behalf of the County and made commitments to HUD during their meeting last week. In response to Commissioner Seijas, Assistant County Attorney Johnson-Stacks explained that the MDH Development Corp. filed as a not-for-profit organization with the State of Florida, but it had not received 501(c)3 designation from the federal government. She noted the County Commission concluded the MDH Development Corp. would be established as a 501(c)3 organization, and the US Internal Revenue System (IRS) had questions when the MDH Development Corp. applied for 501(c)3 status. She noted that a tax accountant was examining MDH Development Corp. tax documents to determine whether or not it owed any more taxes, and the County did not have the authority to dissolve the MDH Development Corp. In response to Commissioner Seijas, Ms. Curry said the County Manager’s plan for MDH Development Corp. was a transition from the current voluntary Board and Executive Director to a new County appointed Board and Executive Director to finish the three pending projects, and then ask that the Board be dissolved. Commissioner Seijas asked when the three projects would be completed. Ms. Curry said that Ward Towers would be completed in two to six months; that Postmasters and the 13 infield lots would be completed in 18 months; and that MDH Development Corp. would not be a partner with the County after the projects were completed. Assistant County Attorney Johnson-Stacks said the commissioners were not liable because the MDH Development Corp. was a separate entity, it had a separate Board and Executive Director, and it did not need the County Commission’s approval to act. Commissioner Seijas asked how the commissioners would avoid liability if they created a new development corp. Assistant County Attorney Johnson-Stacks said MDH Development Corp. would make the decision to resign and would appoint new board members, which would demonstrate that the County did not assume power over the MDH Development Corp. She said that she had not discussed the liability issue with the Federal Government. Commissioner Seijas asked Assistant County Attorney Johnson-Stacks to discuss with the Federal Government the County’s creation of MDH Development Corp. and the County’s position of how it was not responsible for the actions of MDH Development Corp., and to provide her a report of the discussion. Commissioner Seijas asked County Manager Burgess if Mr. Alphonso Jackson, Secretary, HUD, made any commitments regarding federal oversight in their last meeting. County Manager Burgess said neither he nor Mr. Jackson made any commitments. County Manager Burgess recommended the County Commission needed to respond to this letter from HUD with its version of a more appropriate collaborative arrangement with HUD to engage discussion with HUD and come to an agreement. Commissioner Gimenez noted that the HUD letter used the word cooperative, but he thought it was very one sided. He asked if this letter represented the start of negotiations or if it was an opportunity for the County Commission to comment before HUD would impose this CEA. County Manager Burgess said he thought the County could reach an agreement that would allow the County to continue to manage the Housing Agency with some HUD involvement; that the level of HUD involvement in other properties in the country differed. Commissioner Gimenez said HUD used strong language in this letter, and he was not optimistic about a cooperative agreement. Commissioner Gimenez asked Assistant County Attorney Cynthia Johnson-Stacks to research the language contained in initial US Department of Housing and Urban Development proposals for other jurisdictions and research if the language was as harsh as the March 5, 2007, proposal to the County. Ms. Kris Warren, Director, Miami-Dade Housing Agency, said this HUD letter came on the heals of an unexpected HUD inspection the week before. She said she contacted some attorneys in Washington, D.C. with experience in Federal Housing takeovers and discussed the County’s rights in this situation, and used that information to start drafting a potential compromise. Commissioner Gimenez pointed out that HUD only asked the County Commission to response to the letter. Discussion ensued regarding HUD’s intentions and the best way to respond to this letter Commissioner Sosa expressed concern that the bulk of the blame was being placed on the County Commission. She questioned the County Commission’s jurisdiction in overseeing the governance of the Housing Agency. Assistant County Attorney Smith said the Housing Agency was a public housing authority and the County Commission was the governing body for public housing. Commissioner Sosa asked what authority the County had over MDH Development Corp. Assistant County Attorney Johnson-Stacks said MDH Development Corp. was a separate entity and the only authority the County had over them was by virtue of its contracts with them. Referring to Sections B-1, B-4, and B-5 in the CEA, Commissioner Sosa noted the County Commission should use the proper time to discuss their response, with the necessary definitions, to such a serious letter, and that she was not ready to respond today. Commissioner Jordan asked for an explanation about the 13 infield lots that would remain with MDH Development Corp. Ms. Curry explained that MDH Development Corp. had a contract for 56 in field lots; that GSA said MDH Development Corp. already had the building permits for 13 lots and it was better to let MDH Development Corp. build on those 13 lots. Commissioner Jordan expressed concern that the County was setting a precedent by allowing MDH Development Corp. to finish their projects on the 13 infield lots when its status as a not-for-profit organization was undetermined. Ms. Curry said the County awarded the contract to MDH Development Corp. as a State of Florida not-for-profit organization, in lieu of a 501(c)(3) not-for-profit. Assistant County Attorney Johnson-Stacks concurred with Ms. Curry about MDH Development Corp’s not-for-profit status and advised that State law did not require not-for-profit organizations to have 501(c)(3) status to conduct business with a County. She noted that the County understood that MDH Development Corp. would apply for 501(c)(3) status. Commissioner Jordan asked Assistant County Attorney Johnson-Stacks to review the not-for-profit organizations that had received property from the County and to determine whether they were 501(c)(3) organizations. Commissioner Jordan said she was still concerned about setting a precedent if MDH Development Corp. was the first not-for-profit organization that did not have 501(c)(3) status. Following further discussion, Commissioner Jordan noted that Section A-4 of HUD’s letter was a process to start receivership and not a cooperative agreement. She said the County needed to act slowly in this difficult situation. She explained that HUD performed annual reviews and never notified the County Commission of the problem and that the County Commission needed to use this as leverage in negotiating a cooperative agreement. She suggested the County Commission choose its words carefully in developing a response and decide the best way to move forward. Commissioner Heyman asked who had the information from HUD audits over the last 10 years. Ms. Curry pointed out the County Manager’s report submitted in September 2006, included a listing of all audits, inspections, and reviews since the 1990s. She said HUD did not indicate in any of the reviews since 2001 that the Housing Agency was in trouble. She noted that the County always had the opportunity to respond to audit findings. Following further discussion, Commissioner Souto stated his position was to find the missing money and to identify the real problems. Commissioner Sorenson pointed out that the language of the cover letter said: “find a discussion draft.” She said she was hopeful that HUD would discuss this with the County. She suggested the County Commission prepare a counter proposal addressing what the County had accomplished already and how to proceed. She noted the County always fought against independent authorities. She commended Senator Kendrick Meek and his staff for their efforts to obtain signatures for a letter opposing the HUD takeover. Commissioner Sorenson noted that Mr. Bernie Frank, Head of the Housing Committee, supported the County’s position and he criticized HUD. Commissioner Sorenson expressed concern that individuals were trying to make deals on the side with Mr. Orlando Cabrera, HUD Assistant Secretary. She said she was hopeful the Commission would unanimously adopt Commissioner Edmonson’s resolution (Agenda Item 11A45). Commissioner Sorenson said she wanted to defend the County’s integrity and be prepared to enter an agreement to move forward responsibly. Following further discussion, it was moved by Commissioner Edmonson that the Commission this proposed resolution be adopted. This motion was seconded by Commissioner Heyman. Concerning questions raised by Commissioner Diaz, Ms. Lydia Glasgow, Financial Adviser, Housing Agency, said the agency now held $18,795,000, of which $17.6 million was used to repair housing units. She said the Housing Agency used the rest of the money on administrative costs. She explained that the Housing Agency received a $3 million advance of surtax funds in June 2004, and a $9.6 million advance of surtax funds in February 2006; that the Housing Agency had to repay the 2004 advance over five years and the 2006 advance over 10 years. She said the Housing Agency did not have a revenue stream identified for repaying its deficit balance. Commissioner Diaz questioned why the Housing Agency did not have a revenue stream identified for repaying its deficit balance. Ms. Glasgow said that Federal funding for Public Housing Agencies had dropped over the last five years. She noted that the Housing Agency only received 85% of its operating subsidy in 2006 and only 76% for the first quarter of 2007. Commissioner Diaz expressed concern that HUD was cutting the Public Housing Agency subsidies and complaining about the County’s Housing Agency. Ms. Glasgow said pursuant to the reduction in operating subsidy, the Housing Agency had to decide whether to continue providing housing for families or to board up the units and lay off staff. County Manager Burgess said the $9.6 million advance of surtax funds in February 2006, was in lieu of vacating families from public housing. He noted that the County did what was necessary to maintain affordable housing units. Chairman Barreiro pointed out that HUD was criticizing the County because the County was making up the shortfall to compensate for Federal cut backs. County Manager Burgess concurred with Chairman Barreiro. He noted that the Commissioners were reading an audit done for HUD by Deloit, and he thought Deloit mischaracterized its report on surtax funds. He said the County needed to repay about $1.1 million in surtax funds. He said he thought the money to repay the loan should come from revenue and not Federal subsidies. He suggested that this loan was a forgivable loan and the County was not liable. Following further discussion, Commissioner Seijas asked County Manager Burgess to provide her with a report listing each date the MDH Development Corp. applied for 501(c)(3) status and the reasons each application was denied. Commissioner Seijas asked Assistant County Attorney Johnson-Stacks to determine whether or not the Mayor should make the appointments if the County created a new housing board, under the new structure of county government. Commissioner Jordan said the County had a strong argument in its favor by lending money to HUD. She noted that Public Housing Authorities across the Country received very little support from local government. The Commission proceeded to vote. County Manager Burgess requested permission to have dialogue with HUD to develop a draft that the Commission could consider. He said he thought it was wise to use outside support. County Attorney Greenberg said he had no problem with the County using outside support if it was necessary, but noted he could not support the County Manager’s proposal at this time because he did not know very much about the firm. Chairman Barreiro asked County Attorney Greenberg to confer with County Manager Burgess on the issue of contacting outside counsel to help the County respond to HUD, and he asked County Attorney Greenberg to provide the County Commission with a recommendation on March 8, 2007, pursuant to discussing his recommendation with Economic Development and Human Services Committee Chairwoman Edmonson, and to keep her informed throughout the process. Ms. Warren explained that HUD conducted an unfair inspection last week. She said she thought the County needed help from someone in Washington, D.C.

County Manager	3/2/2007		Additions		3/6/2007

County Attorney	3/1/2007		Assigned	Terrence A. Smith

Legislative Text

TITLE
RESOLUTION URGING THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (�HUD�) TO LEAVE CONTROL OF MIAMI-DADE COUNTY�S FEDERALLY ASSISTED HOUSING PROGRAMS WITH MIAMI-DADE COUNTY; AND FURTHER URGING HUD NOT TO PLACE OR SEEK THE PLACEMENT OF MIAMI-DADE HOUSING AGENCY IN RECEIVERSHIP OR REQUIRE THE EXECUTION OF A COOPERATIVE ENDEAVOR AGREEMENT

BODY
WHEREAS, the Miami-Dade Housing Agency (�MDHA�) has been the focus of a series of investigations, which have raised serious concerns regarding that department�s operations and management of the housing programs in Miami-Dade County; and
WHEREAS, the County conducted an independent investigation through this Board�s Affordable Housing Ad Hoc Committee and the Office of the County Manager�s MDHA Management Assistance Team; and
WHEREAS, as a result of these investigations by the County numerous measures have been taken to address and correct the deficiencies in the department which are still on-going; and
WHEREAS, some of these measures include the appointment of a new director and management team to operate the department; the restructuring of the departments archaic database system; the development of a system to expedite the processing of applicants on MDHA�s two waiting lists; and the approval and allocation of additional non-federal funds to expedite the repair and maintenance of public housing units in order to reduce the vacancy rates; and
WHEREAS, on January 29, 2007, the U.S. Department of Housing and Urban Development (�HUD�) released its first audit detailing its findings with respect to the financial management, accounting and record keeping by MDHA; and
WHEREAS, this audit expressed concerns about MDHA�s performance in these areas; and
WHEREAS, following this audit HUD officials have suggested to the County the possibility of a federal HUD Receivership or Cooperative Endeavor Agreement, which effectively wrests control of the County�s federally assisted housing programs and places it with HUD; and
WHEREAS, any takeover by the federal government would not be in the best interest of Miami-Dade County or the residents living in federally assisted housing; and
WHEREAS, the County has demonstrated its commitment and ability to address and correct the financial and operational deficiencies mentioned by HUD�s audit and the County�s independent investigations by taking the actions detailed above; and
WHEREAS, the County remains committed to correcting these deficiencies through all available means, including working in concert with HUD, the residents of its federally assisted programs and their advocates to provide decent, safe and affordable housing to the residents of Miami-Dade County in a fiscally sound manner,
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that this Board:
Section 1. Strongly urges the U.S. Housing and Urban Development to leave control of Miami-Dade County�s federally assisted housing programs with Miami-Dade County; and further urges HUD not to place or seek the placement of MDHA in Receivership or require the execution of a Cooperative Endeavor Agreement.
Section 2. Directs the Clerk of the Board to transmit a certified copy of this resolution to the members of the Miami-Dade County Congressional Delegation and to the Secretary of the U.S. Department of Housing and Urban Development.
Section 3. Directs the County's federal lobbyists to advocate for the Board�s directive set forth in Section 1 above, and directs the Office of Intergovernmental Affairs to include this item in the 2007 Federal Legislative Package.