Block grant blockage

If City of Detroit leaders don’t soon make some changes, the feds promise to do it for them. And, no, we are not talking about the Detroit Police Department, which is facing an overhaul as a result of a lengthy investigation by the U.S. Department of Justice. News Hits is referring to the city’s bureaucracy-laden Community Development Block Grant program.

Each year the U.S. Department of Housing and Urban Development (HUD) gives Detroit tens of millions of dollars in block grants, which the City Council awards to nonprofit organizations. The community groups use the money to build affordable housing as well as create education, recreation and other programs. This fiscal year HUD awarded Detroit $46.5 million.

In April, HUD issued a report criticizing the city for funding too many groups. The problem is that a significant portion of the money is being spent on administrative costs rather than programming, says Detroit City Council President Maryann Mahaffey.

The city is allowed to spend 20 percent of the $46.5 million in block grants on administrative costs. Mahaffey suspects that Detroit spends closer to 30 percent.

“Not enough money goes to the community and we need to look at that,” she says.

The feds want the city to limit the number of groups receiving money the next fiscal year, which begins July 1, 2004.

In the past, as many as 300 organizations have been funded, making it difficult and costly to monitor progress.

The big question now is how to improve the block grant program. Last week, the council, community groups and the Planning and Development Department met to devise a new plan. Mahaffey fears that P&DD, which is under the direct control of the mayor, may try to take over the funding process since it proposed a strategy that left out council input.

Burney Johnson, director of planning activities for P&DD, says there are no plans to exclude the council. However, P&DD does want to choose which groups receive funding, says Johnson. The department will award groups that meet criteria defined by the council and administration. Once the groups receive a contract, it is then up to the council to approve it.

Councilwoman Sheila Cockrel says changes have to be made, but believes that council and community input are necessary. She also says that last week’s meeting was a great start.

The bottom line, says Cockrel: “The HUD monitoring report made clear that we change how we use block grant dollars or HUD will do it for us.”

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