HUD figures released late yesterday show that Pontiac will receive almost $700,000 more per year than if Emergency Manager's original contract was put into place

Pontiac, MI – Late yesterday, new figures were released by the Department of Housing and Urban Development (HUD) which showed that Pontiac will receive $1.4 million in Community Development Block Grant (CDBG) funding in FY12 - $691,946 more in FY12 than if the Emergency Manager's original contract was implemented.

"I'm glad that I was able to get involved and prevent Pontiac from missing out on millions of dollars in federal economic development funding because of a bad decision by the emergency manager," said U.S. Rep. Gary Peters. "Because we were able to catch this bad decision and get involved, Pontiac will receive almost $700,000 more per year than if the Emergency Manager's contract was implemented. While this situation has ended well, I think it underscores the issues that arise when you replace elected officials with unelected managers that focus on short term problems rather than the long term growth of a city."

Last Wednesday, U.S. Rep. Gary Peters announced that he was successful in his efforts to force HUD, Oakland County and Pontiac's Emergency Manager to reexamine a contract that the Emergency Manager signed which would turn over Pontiac's FY12, 13 and 14 CDBG funding to Oakland County with no strings attached. In addition to lacking a legal obligation for Oakland County to spend the funds in Pontiac, we also now know that the contract would have caused Pontiac to miss out on more than $690,000 per year for three years had Peters not intervened and forced a renegotiation. This recent announcement proves that Peters' efforts were successful.

According to the original contract the Emergency Manager signed, these funds, which normally would have gone directly to Pontiac, would have been directed to Oakland County to be calculated as part of the “Urban County” formula for fund allocation. Because they would no longer be calculated under the “Entitlement City” formula previously used, Pontiac would have missed out on over $690,000 per year. When U.S. Rep. Peters realized that the Emergency Manager made this bad decision, he got involved and helped the Emergency Manager, Oakland County and HUD work out a deal to have the funds delivered to Pontiac but administered by Oakland County. Yesterday’s figures show that this was the arrangement that has now been worked out.

On December 8, 2011, HUD provided to Members of Congress CDBG funding in advance of the scheduled public announcement the following day. This notice indicated Pontiac would go from receiving $1.4 million in FY11 to $0 in FY12 and Oakland County would go from receiving $3.5 million in FY11 to $4.3 million. Realizing the losses to Pontiac exceeded the increased funding to Oakland County, U.S. Rep. Peters called upon HUD to investigate alternative situations. Successfully unwinding the Emergency Manager's decision, yesterday’s funding announcement indicates Pontiac will receive $1,424,999 and Oakland County will receive $3,525,192, for a total of $4,950,191. The difference between the amounts in the December 8 notice and yesterday’s announcement reflects an aggregate funding increase of $691,946.

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