Sides differ as to whether spending played role in grant rejection

When you ask for an extra large slice of pie and then eat just a little, your mom is going to remember. The same holds true with the federal government.

When four Southern Nevada governments coordinated their efforts and asked for $367 million from U.S. Housing and Urban Development to fund Neighborhood Stabilization programs, HUD noticed that the locals hadn't spent much of the first $64 million federal grant.

After HUD rejected the coordinated request on Jan. 14, Rep. Shelley Berkley said, "I went ballistic, thinking what haven't we done on the federal level. Should I have done more?"

She said HUD Secretary Shaun Donovan told her the consortium needed to spend the first grant and was asking for too much in the second.

City and county officials insist the lack of spending from the first grant didn't play a role in HUD's rejection. But why didn't local governments do more to spend that money?

The HUD money is meant for a worthy cause.

The Neighborhood Stabilization Program would help place families into empty homes owned by banks due to foreclosure.

Local governments would buy homes in neighborhoods flooded with foreclosures, refurbish them, and either sell or rent them.

Clark County Commissioner Rory Reid believed he was showing leadership by advocating a coordinated effort and often cites that as one reason voters should make him governor.

HUD saw it differently. HUD saw it as a greedy effort by four urban governments asking for one-fifth of all the money available in a $4 billion grant.

Clark County, Las Vegas, North Las Vegas and Henderson asked for $367 million and got bupkis.

Reno asked for $21 million ... and got it.

Las Vegas Mayor Oscar Goodman spoke without knowing the facts, as he is wont to do. "Only a moron wouldn't know how much we needed the money. It's inexcusable. It makes me sick.

"It seems like every other city in the country got money except us."

One local guy in the know says HUD was right to reject the grant application. Doug Bell, now retired, used to handle HUD grants for Clark County as manager of the Community Resources Management Division. In an opinion piece published in the Las Vegas Sun, he said a more modest request of $30 million probably would have been approved. But more than 10 times that was not realistic, especially when the first grant's progress has been "very modest."

How modest?

In the first grant, the city of Las Vegas received $21 million and has spent $4 million on 32 homes.

The county received $30 million and has spent $8.3 million to obtain and rehabilitate 55 homes.

Henderson received $4 million and has spent about $700,000 on seven homes.

North Las Vegas didn't respond.

Bell realized HUD "will face a firestorm of criticism by those who somehow think this community is entitled to this federal largess, even though it is unlikely that we could spend these additional funds in a timely manner."

Nobody disputes the need. Foreclosure notices have been filed against one out of every 10 homes in Nevada.

HUD will explain all its reasons for rejecting the grant in a month, Reid said. He's confident the coordinated effort was the best approach.

"This isn't over. This is a setback in a long journey," he said.

Funds must be committed by September 2010, and spent by June 30, 2013, or be returned to the federal government, so there will be a push to spend, spend, spend.

The lesson seems simple. Don't be greedy and once you get federal dollars, don't dilly-dally. Getting federal dollars means little without spending them.

Jane Ann Morrison's column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call (702) 383-0275. She also blogs at lvrj.com/blogs/morrison.