Notice to the Public

Community Development Block Grant (CDBG) Program
Opportunities and Resources, Inc. fka
Opportunities for the Retarded, Inc.
Loan Conversions

Notice is hereby given that the City and County of Honolulu (the “City”) converted the following loans (including interest on such loans, the “ORI Loans”), originally funded through the CDBG program, to grants:

Helemano Village Residential Training Center
Conversion Date October 15, 2010 July 26, 2010
Loan Amount $315,629.45 $812,718.50
Accrued Interest $159,193.48 $462,099.27
to June 30, 2013
Total $474,822.93 $1,274,817.77

By letter dated June 3, 2013, the U.S. Department of Housing and Urban Development (HUD) advised the City that, while CDBG regulations do not prevent the City from converting CDBG loans to grants, the City is required to follow grants management, citizen participation, and conflict of interest requirements, and the City failed to follow such requirements in connection with the conversion of the ORI Loans. To address these requirements, the City has elected to undertake the following remedial measures.

Grants Management. Recently, the City has distributed its CDBG Loan Conversion Policy and Procedures to all sub-recipients with CDBG loans outstanding as of July 31, 2013. The City’s Loan Conversion Policy and Procedures is available on line at http://www1.honolulu.gov/budget/cdbg.htm, or at the City Department of Budget and Fiscal Services, Honolulu Hale, 530 South King Street, Room 208, Honolulu, Hawaii, or at the City Department of Community Services, 715 South King Street, Suite 311, Honolulu, Hawaii.

Citizen Participation. The City has reinstated the ORI Loans on the City’s books pending the publication of this notice and receipt of any public comment during the 30 day period described below.

Conflict of Interest. HUD has stated that, during the period in which the City converted the ORI Loans, City employees, running for elected office and receiving campaign contributions from ORI representatives, were directly involved in approving, developing, or recommending the ORI Loan conversion. HUD concluded that the receipt of campaign contributions by those employees created a CDBG conflict-of-interest situation. The City disagrees with HUD’s conclusion that the receipt of campaign contributions, without evidence that a direct benefit was received (for example, where a City employee who participates in CDBG decision making is also an employee or officer of a CDBG sub-recipient), is a CDBG conflict-of-interest. However, the City hereby notifies the public of the potential for the conflict-of-interest.

Persons wishing to provide comments on any of the above matters are invited to submit their written comments by September 16, 2013 to:

Department of Budget and Fiscal Services, Federal Grants Unit, 530 South King Street, Room 208, Honolulu, Hawaii 96813.

NELSON H. KOYANAGI, JR., Director
Department of Budget and Fiscal Services

PAMELA WITTY-OAKLAND, Director
Department of Community Services

By order of:
KIRK CALDWELL, Mayor
City and County of Honolulu
(SA550129 8/17/13)~