City Council Gives Half Grant to Troubled Developer As Federal Investigation Looms: By MATTHEW ARTZ

Friday November 19, 2004

The City Council Tuesday voted (7-1, Olds, no) to grant one of the city’s biggest nonprofit developers half of an emergency funding request as it struggles to survive a federal investigation. 

Jubilee Restoration Inc. will receive $13,000 of a $26,000 annual grant that the city had previously earmarked for an outreach coordinator at Jubilee’s homeless youth drop-in center. The money will now go to help the organization sustain itself while it answers a Department of Housing and Urban Development (HUD) report that cited Jubilee for nepotism and misallocating federal funds that should have gone to its homeless youth program.  

Berkeley had withheld this year’s grant because Jubilee failed to file reports on time showing how it spent last year’s allocation.  

The city will hold on to the remaining half of the grant to spend on services for homeless youth in 2005. HUD froze payment on a $121,633 annual grant to Jubilee, pending completion of the investigation. The HUD grant had required that the city fund $26,000 towards the program as a local cash match to secure the federal funding.  

Citing the experience of the Berkeley-based Jobs Consortium, which is on the brink of collapse after HUD also froze its funding earlier this year, Housing Director Steve Barton had recommended the council give Jubilee the full $26,000. 

“We’re asking you not to allow HUD’s finding to result in the immediate death of the organization,” said Barton, who added that Jubilee officials told him that the nonprofit was nearly out of cash and would have to lay off staff it needs to deal with the HUD investigation.  

If HUD is ultimately not satisfied with the organization’s response, it could withdraw funding both for Jubilee’s community projects, which also include a home for recent parolees, and its development arm, which is planning to build 110-unit affordable housing complex at 2612 San Pablo Avenue. 

Barton said Jubilee, which has delivered an initial response to HUD’s charges, was already in the process of shelving the homeless youth drop-in center, whose effectiveness has long been questioned.  

Pressed by Councilmember Linda Maio on Jubilee’s performance, Barton replied, “I am aware from reports from our staff that there have been turnover issues and problems with gaps in services.” 

Councilmember Betty Olds, who favored denying Jubilee any city funding, said, “There as been a lot of talk for a long time that their operations have been inefficient.” 

Racing to Jubilee’s defense was Councilmember Margaret Breland, who maintained that the group “deserved a chance to clear its name.” 

In its report released last month, HUD alleged Jubilee of numerous violations including transferring money from HUD accounts to pay for an office luncheon and hiring relatives of board members for paid positions in the organization. The grant was intended to pay for three full-time counselors beginning in 2002, but as of October, 2003, Jubilee records showed only one position had been filled. 

If Jubilee is not exonerated, city officials are hoping they can use the remainder of its grant to leverage HUD money for a different local program that serves homeless youth. 

Also at Tuesday’s session, which was nearly entirely devoted to farewell ceremonies for departing councilmembers Maudelle Shirek, Miriam Hawley and Margaret Breland, the council voted 7-1 (Wozniak, no) to charge Sunday fees at the Oxford Parking Lot starting Dec. 12. Additionally, city firefighters and members of several community groups that opposed new taxes urged the council to restore the ladder truck it closed during evening hours to help balance the budget.