Arroyo Grande gets new elevator, non-profits get the shaft

February 8, 2011

By KAREN VELIE

Arroyo Grande city officials are looking to take monies granted to local non-profits to cover the city’s miscalculations for the cost of placing an elevator in the new city hall building.

Arroyo Grande officials, utilizing estimates provided by the city engineer and an architectural firm, projected the cost of renovating the new city hall at $456,000. However, a few months later, city staff said the estimates were inaccurate and that it will cost $607,000 to renovate the recent purchase.

In order to make up for a $52,000 miscalculation for the cost of putting an elevator into the two-story building,  staff is requesting the City Council approve the reallocation of $66,000 in Community Development Block Grant funds previously promised to groups such as Transitional Food and Shelter, the Small Business Development Center, Senior Nutrition Program of San Luis Obispo County and the Literacy Council at Tuesday night’s City Council meeting.

Even though the non-profits were awarded the grants, the agencies failed to send the city the proper invoices and city officials allegedly never made it clear that an invoice was required. One group, the YMCA Active Older Adult Program did not implement the grant program.

However, programs such as the county Senior Nutrition Program spent the money and are currently underfunded by 30,000 meals a day.

“They never sent the money we qualified for,” said Elias Nimeh, program director. “We spent the funds. Something weird is going on.”

City officials are reconsidering reallocating the $1,481 granted to the senior nutrition program.

In 2009, the city council voted 3-2 to purchase a building from developer Nick Tompkins at 300 Branch Street for $2.1 million, knowing that several local appraisers said the property was worth less than half of what the city was offering. (previously)

Critics also said the city was underestimating the cost of bringing the building up to code. With renovations, agreements to pay Tompkins rent during the empty building’s escrow and the building purchase price, the building will cost the city almost $3 million.

On Jan. 25,  officials agreed to take the $151,000 in the new city hall renovation shortfalls out of the city’s general fund by a unanimous vote. Even so, new councilmember Tim Brown questioned how an architect hired by the city (city staff said they did not know the name of the architect who estimated the cost of renovation) and members of staff had underestimated the cost of renovation.

A few days later, city officials posted a notice of a public hearing that the council would consider reallocating the unpaid non-profit grants to pay for the city’s new elevator.

There are several rules regarding federal grant funds that make it difficult for cities to pay non-profits after the granted year has passed.

If funds are not paid out during the fiscal year–in this case most of the unpaid grants were for the 2009/2010 period–those funds have to be subtracted from the next year’s funding amount or reallocated to a non-public service, such as a public facility project, said San Luis Obispo County Planner Tony Navarro.

Nevertheless, the entire issue may be moot. Last Thursday HUD warned the county that it needed to spend any remaining grant monies quickly because the federal government may decide to unobligate already approved grants, Navarro said.

“We have to spend now or lose it,” Navarro said. “The funding could be gone in March.”

Navarro is recommending that funding for projects that are not moving along be reallocated to other local projects.

If already granted federal funds are unallocated, several proposed local projects including the Los Osos sewer, the San Miguel Mission Street enhancement, American with Disability street improvements planned for Atascadero and Paso Robles and a proposed new homeless shelter in San Luis Obispo would have to find other sources of funding.