HUD threatens city's subsidy $22 million in block grants at center of supervisory dispute.


The U.S. Department of Housing and Urban Development is once again threatening to reduce Baltimore's annual $22 million Community Development Block Grant because of alleged misuse of federal funds.

The city and HUD have been battling for the last two years over Baltimore's oversight of the money, which is used to pay for a myriad of housing rehabilitation and anti-poverty programs.

HUD has accused the city of inadequately overseeing the funds, while the city has charged HUD with making unreasonable demands that aren't placed on other cities.

HUD sent a letter to Mayor Kurt L. Schmoke on Dec. 13, threatening to reduce the city's block grant by an unspecified amount. HUD contends the city has not adequately documented how 300 city employees, who are paid with the federal funds, spend their time.

In addition, HUD has criticized Baltimore for using federal funds for its housing code enforcement program in neighborhoods that do not fit federal guidelines. The city is supposed to limit the use of federal money to deteriorating neighborhoods where the city has a comprehensive plan to reverse the community's decline. HUD has not yet approved those comprehensive plans required before the city can use HUD money to enforce the code, say HUD officials.

The city filed an appeal of HUD's decision in a letter on Dec. 24 from Schmoke to HUD's Washington office.

An administrative hearing officer will hear the appeal on a date that has not yet been set.

Harold R. Perry, the city's deputy housing commissioner, says HUD "is being grossly unfair" in its latest threat to reduce the city's housing grant.

In October, Baltimore dropped a lawsuit it had filed in federal court after HUD threatened to stop funding the salaries of the 300 workers because time sheets documenting their work were inadequate, according to HUD officials.

Baltimore dropped its lawsuit after HUD officials said they were not cutting off the salary funds and would work with city housing officials to make sure the records were up to HUD's standards to prove the money is being spent to eliminate urban decay.

Perry says, "We continued to work with [HUD] to show them that we had in place a very good time distribution system and had worked diligently to shore up that system."

Perry says he also wonders why HUD has threatened to reduce funds over the issue of housing code enforcement, since the city stopped using federal block grant money for that purpose last July 1.

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