Detroit Free Press (Michigan) - by Steve Neavling

An empty house in the Brightmoor neighborhood. Detroit receives about $33 million in CDBG money each year.

Detroit Mayor Dave Bing is paying workers extra to embark on a spending spree of sorts.

That's because Detroit is in danger of losing more federal grant money -- this time more than $20 million -- because city officials are more than two years behind in spending Community Development Block Grants (CDBG), which can be used to demolish abandoned houses, revitalize neighborhoods and create new jobs, the Free Press has found.

"This is the third year in a row they haven't spent enough money," Lana Vacha, field director of the U.S. Department of Housing and Urban Development's Detroit office, told the Free Press on Monday. "It is a serious issue if they aren't timely again."

Every year, Detroit receives about $33 million in CDBG money. But because the city has failed to spend it, the money has accumulated to nearly $70 million. If the city continues to lag, it could lose more money and future grants, Vacha said.

With a deadline to spend more than $20 million by May 2, Bing's administration is requiring employees of the city's Planning and Development Department to work on furlough days -- Mondays -- to decide how to use the money. The city will use some of the CDBG money to pay employees for the extra work, which is allowable under the law as an administrative fee.

"We must specialize in the impossible to make a difference for the citizens that rely on us," Robert Anderson, director of the Planning and Development Department, told employees in an e-mail obtained Monday by the Free Press. "I ask that each of you continue to ask yourself if there are ways for you to make a greater contribution to our challenges."

Bing's administration said the city is behind because it inherited antiquated technology and a mismanaged grant program that needed to be restructured.

"You spend a lot of time cleaning up 17 years of bad contracts," Karla Henderson, group executive for planning and facilities, said Monday. "We came into office a couple of years ago and realized there were over 2,000 CDBG contracts still in effect, dating back to 1994."

City Council members expressed outrage and said they may launch an investigation as early as today.

"It's unconscionable that this money isn't being spent," said Council President Pro Tem Gary Brown, who has been calling for the city to demolish abandoned houses that attract crime, rodents and blight. "We could use it to create jobs and tear down houses."

HUD officials said they are working closely with the city and are optimistic the money will be spent on time.

"We are really happy to be working with Mayor Bing because the city really needs this money," said Yolanda Chavez, deputy assistant secretary for Grant Programs in HUD's Office of Community Planning and Development. "It's a very challenging process."

The news is another embarrassment for a city that has been accused recently of mismanaging other grant money. Over the last year, for example, the city was forced to return $9.2 million in funding for the weatherization of homes because the money wasn't spent on time. During the same period, the city broke the law by misusing $3 million in grants intended for poor people, the state's Department of Human Services announced last week.

In addition, the federal government required the city to return nearly $10 million for failing to spend money on the early childhood education program, Head Start, since 2005.

The failure to spend the CDBG money "is yet another instance of structural deficiencies in management," said Greg Murray, vice president of the Senior Accountants, Analysts and Appraisers Association, which represents planning department employees. "They should have gotten this squared away by now."

Lamonte Ridley, 47, whose house on the east side is surrounded by abandoned, crumbling houses, said he has lost faith in city leaders.

"Unbelievable. I've about had it," Ridley said. "I pay my taxes and get nothing for it."

Bing's administration and HUD officials pledged to cooperate to create an effective CDBG program that targets strategic areas for development.

"We are doing a comprehensive rehab (of the Community Development Block Grant program), instead of doing it piecemeal," Henderson said. "We are not losing this money."