Community Development – Part 4
March 29, 2009 at 10:42 pm
The continuing series on Lorain’s Community Development Dept. by Mark Teleha-Updates by Loraine Ritchey
Part One – COMMUNITY
Part Two – APPROVED BY COUNCIL
Part Three-THE DEPARTMENTS
SEPARATION OF ACCOUNTING
Even our secretarial support is enormously important because they’ve become accustomed to, how to type…,(the legislation ) I mean, these guys do their own legislation. The other division, which is not really a city department, is our contract with the Lorain Development Corporation.
The reason why we have a contract with them, we don’t have city staff doing that, is that he (Doug Rangel) has a ward of accountants, bankers, attorneys and business people.
They, for no fee, and volunteer time, meet with Doug, and any small business request for financing, all the way up to $1.3 million on the Duane Building, all the way up to a $6 million undertaking of the Industrial Park, he and his Board, but primarily him, will structure the financing, monitor the financing.
The Industrial Park had $2+ million for the loan, a loan from the State. A $2+ million loan from the Federal Government, a $2 million grant from the State, and a $2 million grant from the EDA (Economic Development Association).
What happens in these programs is, you get the Federal money to spend first, so you get reimbursed once the State sees you’ve spent the Federal money. So you send all of your construction plans into HUD, then you have to send that to the State. Because the State has loaned us money, they’ll reimburse us about 40% of that. Then you send that to the Federal Government to EDA, and they’ll reimburse us for the grants.
It’s a layered group of funds, and this is the guy (Doug), along with Larry Mitoff, who basically maintain an array of financing.
We get audited by the Department of Commerce, because they’ve put money in here; the Department of HUD, they’ve put money in here. The State Auditor puts money in here, and then the City Auditor monitors us. So we’re audited to death.
So everything has to be very very carefully accounted for, because if you don’t and you mess up utilizing the money, and not illegally but inappropriately, you, then, have to make it good. So, that’s the substance of maintaining an Accounting Division.
The City has a single-entry accounting system. They lock everything into one big pot of funds. Federal money, you’re not allowed to do that, you have to keep it separate. State loan money, you can’t do that, you have to keep it separate.
So that accounts for, what, seemingly from the public’s perception, is a duplication of services between the Auditor’s office and our Department because this is a balancing act.
For example, HUD funds, you’re not allowed to keep more money on hand than you can use for 3 days, but it takes you 7 days to draw it down.
If I tried to do this with the Auditor, he would have to hire the staff, but the question we answer every time we have a new Mayor come in is “Why doesn’t the Auditor keep your books?” and we’ve said, ‘Because…’.
THAT ACCOUNTS FOR IT -1799 caricature by Isaac Cruikshank
“There’s also this thing with the Federal money that it can not be used toward general city business. So it has to be clearly limited, and when I say Federal money, I’m talking about our Block Grant and Home funds. It can’t be intermingled with general City services.
It can’t go towards paying for the Police, it cannot even be used for the Accounting for the Police Department. And that’s why it’s so very important that we maintain a separate department, a section that is working just on the Federal funds.”
Don (Romancak) –
“From a basic standpoint, one of the core functions of Community Development has always been responsibility for the consolidated plan operating the Block Grant program from HUD and Home.
So that is one thing that hasn’t mattered to the Administration, that is what we do.
ED NOTE: this article first appeared March 11th 2008http://www.locophotogblog.com/?p=92
So Jan (Mackert) has been the primary worker on this since she came on board, preparing the consolidated plan, which is a good 3-month process of hard time, and then you have to put a year in just preparing and tracking.
And then that tells HUD how much money you anticipate getting, what we plan on doing with it, and how it works with some of the other agencies, such as LMHA.
And once you complete that, and we’re on a calendar year, which ends in December, so 3 months after that, which we’re fast approaching, we have to report to HUD,
‘This is what we told you we were going to do, this is what we actually did.’
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