Submitted By
Tammie Grossman, Director Development Customer Services
Reviewed By
AZ
Agenda Item Title
Title
A Motion to Review a Request from the Oak Park Regional Housing Center (OPRHC) to Release $225,000 in Funds Being Withheld Under the Terms of the 2021 Funding Grant Agreement Due to the OPRHC’s Breach of the Agreement and to Amend the Terms of the Agreement to Extend the Due Date for the 2020 Audit
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Overview
Overview
This is a request by the Oak Park Regional Housing Center (OPRHC) to not enforce the 2021 Funding Grant Agreement and release funds under that Agreement that are being withheld. The Agreement was approved by the Village Board on March 1, 2021. The OPRHC was in default for non-compliance with the terms of its 2020 Funding Grant Agreement at that time which resulted in the Village withholding $300,000 in funds from the OPRHC. The OPRHC requested that the Village provide the organization with $75,000 of the 2020 funds immediately and that the remainder would be provided if the OPRHC provided their 2019 audit and 2020 financial statements no later than April 15, 2021, and these terms were included in the 2021 Funding Grant Agreement. The OPRHC did not provide the required documents by the deadline and is now requesting that the Board waive the required submission dates for the 2019 audit and extend the due date for the 2020 audit to November 30, 2021.
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Recommendation
Recommendation
Staff recommends that that Village not provide the $225,000 based on OPRHC’s failure to provide the required 2019 audit by the date requested by the OPRHC and provided for in the 2021 Agreement. Staff does not support OPRHC’s request to delay the submission of the 2020 audit to November 30, 2021.
Fiscal Impact
This Funding Grant Agreement covers monthly general revenue partner agency funding. The CDBG sub-recipient grant agreements are not presented here because the CDBG program year does not align with the Village's fiscal year. The CDBG projects for Program Year 2020, run from October 1, 2020, to September 30, 2021, and were presented to the Village Board in a separate agreement on September 16, 2020. Since the CDBG funding is only awarded through September 30, 2021, for the purposes of the General Revenue funding agreement, staff assumed a flat level of CDBG funding for the fourth quarter of 2021. Fourth-quarter funding will be subject to the Village's future Federal CDBG funding award.
The adopted FY 2021 Budget includes $600,000 in funding for the OPRHC (Account # 1001.46206.240.585652) which includes 2021 budgeted amount of $300,000 for 2021 services and a carry forward of the 2020 allocation of $300,000 of unspent funds. At present, the Village has only paid $75,000 as directed by the Village Board until the deliverables outlined below were met.
Consistent with Village staff, FY 2021 salary and benefit increases were eliminated for partners which receive a majority of funding from the Village (either for the cost of living adjustments or merit tied to performance).
Background
The Village has funded the Housing Center since its creation in the 1970s. Historically, the Village supports OPRHC utilizing both General Revenue Funds and federal Community Development Block Grant (CDBG) funds to pay for specific projects of the Housing Center relating to the Multi-family Housing Incentives Program and also its general administration. Because the Housing Center provides services for CDBG and non-CDBG funded activities, it is necessary for the Village and the Housing Center to have separate agreements for the use of federal CDBG funds and local General Fund revenue. This agreement is for the non-CDBG funded programs. However, the attached funding distribution schedule (Exhibit 1 of the agreement) delineates both CDBG and non-CDBG funding for informational purposes only.
History of the 2020 Funding Grant Agreement (2020 Agreement):
After not receiving any documentation from the OPRHC for the entirety of 2020, on December 17, 2020, a notice of suspension of payments for thirty (30) days was issued to OPRHC. During this thirty (30) day cure period, OPRHC was to submit the following documents as required by the Agreement:
1. FY 20 monthly invoices pursuant to Section 3.1;
2. FY 20 third-quarter report pursuant to Section 4.0;
3. FY 19 audit pursuant to Section 11.1;
4. Profit and loss statement pursuant to Section 10.0; and
5. Program goal deficiencies pursuant to Section 4.0.
In a notice dated February 3, 2021, the Village advised the OPRHC that 2020 payments would be suspended pending further Board direction. OPRHC had not submitted a 2019 audit and an accurate 2020 profit and loss statement. Additionally, the OPRHC did not meet several program goals such as hiring a Development Coordinator, updating their strategic plan, establishing an online registration system and mobile application. The OPRHC also did not hold quarterly fair housing events due to the Covid 19 pandemic. The failure to provide an independent financial audit of 2019 prevented staff from recommending the Village issue any 2020 funding. The requirement for an Independent Audit and the delivery of the Audit to the Village in a timely manner plays a vital role in the public sector to ensure the public of the lawful use of its tax dollars. Without a presentation of the financial audit and profit and loss statements as found in the audit, Village staff would not recommend allocation of tax dollars.
On March 1, 2021, the Village Board approved the 2021 Funding Grant Agreement (2021 Agreement) and authorized the release of $75,000 of the 2020 funding levels upon execution of the 2021 Agreement and conditioned release of the remainder of the 2020 funds in the amount of $225,000 upon the presentation of the 2019 Audit and 2020 Financial Statements by April 15, 2021, a date agreed to by the OPRHC. The OPRHC did not provide complete versions of the requested documents until May 6, 2021.
Further, the 2021 Agreement also includes a 2020 Audit Submission Requirement of July 1, 2021. The Housing Center is requesting that the 2020 Audit Submission be due on November 30, 2021.
The scope of services for 2021, as proposed by the Housing Center, is part of the attached 2021 Agreement. Below is a summary of changes approved by the Board as part of the 2021 Agreement:
1. Completion of a Strategic Plan with formed committees of consultants, staff, and community stakeholders by July 31, 2021 (the 2020 agreement required the completion of a pro-bono strategic plan by June 1, 2020, but this was not completed).
2. $50,000 of the proposed 2021 funding is earmarked for the hiring of a Development Coordinator with the goal of reducing the Housing Center’s reliance on Village funding (the 2020 agreement included a clause, which the Housing Center requested to remove, that required the Village to only reimburse the actual expenses incurred pursuant to this particular staff position, up to $50,000).
3. Register 1,500 individuals for services in 2021 (the 2020 agreement required 2,000 registrants).
4. The Housing Center is proposing to partner with community agencies, such as Housing Forward, to assist clients with finding apartments as well as provide financial literacy for those clients that need financial education support (the 2020 agreement did not require this).
5. The Housing Center is proposing to re-launch its program, Neighbors Knowing Neighbors (NKN), to effectively work with distinct racial groups in Oak Park in an effort to address social unrest and injustices while creating a platform for community racial healing and transformation (the 2020 agreement did not require this).
6. Effectuate 250 affirmative moves in 2021 (the 2020 agreement required 375 affirmative moves).
7. Development of an online client management system by June 30, 2021 (the 2020 agreement required the development of the system by June 30, 2020).
8. Development of a mobile app for renters to access affirmative listings over time, with quarterly report check-ins (the 2020 agreement required the development of the app by September 30, 2020).
Alternatives
Defer action and seek additional information.
Previous Board Action
It should be noted that the OPRHC has, in years past, failed to complete their audit report by the required date. On October 31, 2019, the Village issued a notice informing OPRHC that staff would seek Village Board approval pertaining to the release of the suspended payments prior to receipt of the 2018 audit. The Village Board approved a Motion to Waive the Independent Financial Audit Requirements of Section 11.1 of the 2019 Funding Grant Agreement until November 30, 2019 (original deadline of 06/30). The 2018 audit was submitted to the Village on November 25, 2019.
Citizen Advisory Commission Action
N/A
Anticipated Future Actions/Commitments
N/A
Intergovernmental Cooperation Opportunities
N/A