City failing to correct anti-poverty funding flaws
Despite HUD criticism, cash-flow snags persist
Mayor Byron W. Brown's administration, seven months after federal officials ripped City Hall's inept handling of anti-poverty funds, has failed to overhaul its management of the program, and numerous housing and human service agencies that assist the poor are suffering as a result.
More than 50 agencies have been cut off from funding for months because contracts that are supposed to be in place by May are only now being approved, and the delay is causing cash-flow problems for some agencies and making it harder for them to provide services.
The agencies that find themselves under the gun operate food pantries, provide transportation for senior citizens in need of medical care and operate after-school tutoring and recreational programs for children. They work with homeowners trying to avoid foreclosure, help the homeless find shelter and assist crime victims.
"The people we serve are hurting, they're hurting bad, and they need help," said Marlies A. Wesolowski, executive director of the Lt. Matt Urban Human Services Center, one of 14 agencies still awaiting approval of their contract.
"I had two people in here last week threatening to commit suicide because they were so desperate," Wesolowski said. "It's very, very hard to turn people away who are that desperate. If we turn them away, it's liable to push them over the edge."
In addition, the city is not considering contracts for some key services provided in the past. And in a development that some observers see as an ominous parallel to a similar demand made of the Olmsted Parks Conservancy, the Brown administration has demanded that some agencies disclose the racial composition of their staffs.
Many agencies are having a hard time, said Staci A. Turner, executive director of C.R.U.C.I.A.L. Human Services and Buffalo Community Center Collaborative, which includes 11 of the city's largest human service agencies.
"This situation has been problematic for many agencies," she said.
The problems are partly the byproduct of the city's well-documented failure to manage its block grant program, funded by the federal government to combat poverty and blight. The program, in turn, helps fund housing and human service agencies.
In March, the U.S. Department of Housing and Urban Development issued a report that found 19 serious problems with the city's management of block grants. The problems were rooted in poor management practices and a failure to give the public a voice in how those anti-poverty funds are spent.
Those problems persist, despite months of talks between federal and city officials.
The slowness of city officials approving service contracts "is a concern to us," said Adam Glantz, a HUD spokesman.
"We are going to meet with them next week on this specific issue," he said,
As for City Hall's failure to correct management deficiencies, Glantz said, HUD has focused in weekly meetings with the city on easier-to-resolve problems.
"I think we are moving forward; we are building a relationship," he said, adding that HUD hopes to reach agreement with the city on management issues in about six months.
Brown said he gave Janet E. Penksa, the city's commissioner of administration and finance, the responsibility of addressing the problems that HUD identified. Both she and the mayor declined requests for interviews and refused to provide documents requested by The Buffalo News.
Buffalo ranks as the nation's third-poorest city, and growing poverty over the last three decades prompted the federal government to provide the city with more than $600 million in Community Development Block Grants. This year, the city's block grant budget is about $16 million.
An investigation by The News in 2003 found that Buffalo received more block grant money per capita than all but one city in the nation. But City Hall had squandered much of the funding through parochial politics and bureaucratic ineptitude, The News found.
A HUD review of the block grant program released last March showed that problems persist. The HUD report found 19 serious problems, among them too much spending on administrative personnel, questionable financing for upscale housing developments and sloppy fiscal management.
An overarching theme of the report was that City Hall poorly manages the block grant program.
"An overall management system did not exist to carry out the .‚.‚. program," the HUD report concluded.
Management still poor
HUD and city officials began meeting in the spring to address problems identified in the report, but the latest progress report shows that the most significant problems, beginning with poor management, remain unresolved.
The agencies that the city helps with block grant funds work on a fiscal year that begins May 1. Agencies work with city monitors to develop budgets and action plans that are the basis of contracts that are then submitted to the Buffalo Urban Renewal Agency for approval. Once those contracts are in place, the agencies can submit their bills to the city for reimbursement.
Contracts usually are not in place at the start of the fiscal year, but the necessary approvals and signing of paperwork are usually concluded no later than the middle of June.
The process was unfolding as usual this year, with city monitors checking off on spending plans in early May.
But the contracts never made their way to the Buffalo Urban Renewal Agency for approval, for a couple of reasons:
•First, there was a standoff between the mayor and the Common Council about the block grant budget. As a result, the city was late in submitting its application to HUD for the funding used to help pay the contracts.
•Then, in early May, HUD rejected the application because it failed to meet requirements aimed at ensuring public input into the block grant program.
How anemic was the public-participation process?
Only two residents attended a hearing seeking public comment on the $23.8 million spending plan.
The numerous problems prompted a review by city officials of some of the agency contract proposals. Carla A. Kosmerl, director of administration and finance for the Buffalo Urban Renewal Agency, determined that the agencies needed to redo their budgets to better account for their spending to avoid potential enforcement problems with HUD.
However, that decision was not made until late August, when agencies were already four months into their contract year and piling up expenses. What's more, some agency directors said city officials changed their minds several times about what budgeting methods would be acceptable.
Some attribute the cqeleventh-hour changes to paranoia on the part of city officials who were stung by HUD's critical report. Others say that Kosmerl had taken on too much of a workload and that decisions weren't being make in a timely fashion.
To some observers, Kosmerl had taken on the role of the Dutch boy plugging holes in the dike because of systemic problems within the Buffalo Urban Renewal Agency, which is responsible for managing block grant funds.
Historically, the director of the city's Office of Strategic Planning is responsible for the day-to-day management of the agency, with the mayor serving as chairman. That job has sat vacant since Timothy E. Wanamaker left in early 2008.
Brian A. Reilly was hired to assume many of Wanamaker's duties, and the task of overseeing the Buffalo Urban Renewal Agency fell to him. But Reilly, like Kosmerl, had several assignments and was preoccupied with his economic-development duties. He then fell out of favor with the mayor and now has diminished stature within the administration.
Kosmerl, meanwhile, was fired by Brown two weeks ago for reasons that the mayor won't discuss.
The logjam began to clear in early September. HUD approved the city's application for block grant funding, Kosmerl — who was still on board then — met with agencies to explain what the city wanted, and the Buffalo Urban Renewal Agency began approving contracts Sept. 24.
However, 14 agencies are still awaiting contract approvals.
Mayor alters plans
There are other problems, as well.
Agencies are at a loss to understand why, for the first time in recent memory, some are required to disclose the racial compositions of their staffs. Some agency heads expressed the same concern that was raised when the Brown administration made a similar request of the Olmsted Parks Conservancy last month — that it was a possible precursor for mayoral interference in hiring and promotional practices.
There also are concerns about the mayor's office revising staff recommendations about which agencies receive funding for housing and homeless programs.
For the first time in recent memory, the mayor's office modified the recommendations of an advisory panel that deals with the homeless before sending the matter to the Buffalo Urban Renewal Agency.
Two agencies not recommended by the advisory panel — Saving Grace Ministries and the Community Action Organization of Erie County — were submitted to the Buffalo Urban Renewal Agency and approved Sept 24. The Community Action Organization is regarded as a stronghold for Grassroots, the political organization with close ties to the mayor.
Meanwhile, two agencies that have had long-standing contracts to provide housing services are not among the organizations approved by the Buffalo Urban Renewal Agency. Three of the four agencies that received contract approvals are located in Council districts represented by members aligned with the mayor.
But the Urban Center, located in the Broadway-Fillmore neighborhood, has lost out on both homeless and housing dollars distributed by the Buffalo Urban Renewal Agency.
The center has consistently received high grades in evaluations from the city and the state, noted Common Council President David A. Franczyk, whose district includes the Matt Urban Center.
And a city evaluation of the agency's administration of housing programs last year said the center "continues to rate as one of our top housing groups and deserves credit for a very productive year."
"If their performance was high, why would you take their money away?" Franczyk asked. "The only thing I can think of is politics."
Meanwhile, the Buffalo Urban Renewal Agency won't even consider a new contract for HomeFront to provide the bulk of its services, including homeowner education and counseling and construction management services for other housing agencies. Like the Urban Center, HomeFront has received positive evaluations from the city.
Executive Director Bryan M. Cacciotti said he was told in the spring that HomeFront's main contract would not be renewed, but rather the city would issue requests for proposals for the services. The city has failed to issue those requests, however, and thus far has refused to extend HomeFront's contract.
"It's frustrating to see that our contractual issues have not been resolved," Cacciotti said.
"In the final analysis, it's not we — HomeFront — who end up hurt by this process, but the residents we provide services to."
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