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Municipal Affairs Office Aims To Maximize Impact Of HUD Funds

57 municipalities guaranteed at least $300,000 each annually


July 11, 2002
Copyright © 2002 CARIBBEAN BUSINESS. All Rights Reserved.

The Calderon Administration has effected several changes to the way it administers federal Community Development Block Grant (CDBG) and Home Investment Partnerships Program (HOME) funds to 57 island municipalities with populations of less than 50,000.

The Office of the Commissioner of Municipal Affairs (OCAM by its Spanish acronym) currently distributes almost $58 million in CDGB grants and $15 million in HOME grants annually to the island’s smallest municipalities.

The remaining 21 island municipalities, which have populations of over 50,000, currently receive $78 million in CDGB funding directly from the U.S. Department of Housing and Urban Development (HUD). A total of $15 million in HOME funds (also a HUD program) went to 10 of those municipalities this year.

"The first change we’ve made is to guarantee that each of the 57 municipalities receives at least $300,000 a year in CDBG funds. This will assure at least one project annually and the continuity of the federal affairs offices," OCAM Commissioner Barbara Sanfiorenzo told CARIBBEAN BUSINESS. "In the past, there were years when some municipalities didn’t get any CDBG funds."

This uncertainty created instability in the operations of federal affairs offices in a number of small municipalities, OCAM Deputy Commissioner Angel Castillo pointed out.

The guarantee represents a little over $17 million in CDBG funds for the 57 municipalities, who must compete for the remaining $41 million in available funds. In order to ensure a more equitable distribution of the monies, Sanfiorenzo said none of the 57 municipalities can receive more than $1,485,000 in CDBG funds annually.

OCAM has also eliminated the previous administration’s practice of using CDBG funds for small donations to rehabilitate dilapidated housing. "The problem of the donations was that $500 here and $800 there didn’t solve the problem," Sanfiorenzo said. "Instead of a piecemeal approach, we want to assure permanent, integral rehabilitation of dilapidated housing and communities."

Sanfiorenzo said her agency has also beefed up its monitoring function by requiring municipalities to provide additional follow-up documentation of projects that are funded. Under Sanfiorenzo’s watch, a new four-attorney legal division has also been created. She said that before the office had just one attorney and contracted out most of its legal work.

New economic development component

Another new OCAM initiative with CDBG funds that’s getting underway this year is the creation of a $1 million reserve to subsidize a portion of the interest payments on qualified small-business loans.

"We’re creating this economic development component in partnership with the mayors," said Sanfiorenzo, who indicated that HUD approval of the new initiative is expected as early as next month.

The commissioner explained that the subsidies will be tied to the creation of jobs. For example, a qualified new community enterprise employing up to three people would be eligible for a subsidy of 25% of interest payments on outstanding commercial loans, while a venture employing between three and eight people would be eligible for a 50% subsidy and one that employs more than eight people would be eligible for a 75% subsidy.

Along with the mayors, OCAM plans to involve the Economic Development Bank and the Cooperative Development Administration in the new program. "We’re enthusiastic—and the mayors share our enthusiasm—about the potential of this program to help stimulate the creation of businesses and of jobs," Sanfiorenzo said.

OCAM is also in the process of putting up its Web page. "This is going to be an extremely helpful resource for municipal governments and for legislative assemblies," said Sanfiorenzo.

The website, scheduled to be up and running before the year is out, will include not only relevant information about the HUD funds the agency administers, but also information and guidance regarding the implementation of the OCAM-regulated Municipal Autonomy Law.

This Caribbean Business article appears courtesy of Casiano Communications.
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