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PlAynR AND CITY COUNCIL <br />PAGE TWO <br />MAY 1, 1986 <br />Community Development Block Grant funds applied for by the <br />City of Mounds View. At this time City Staff is evaluating <br />their proposal to determine the viability of the project and <br />the ability of this organization to administer it under the <br />rather voluminous guidelines established by HUD. At the <br />present time, there appears to be only two risks that the <br />City of Mounds View would be facing should this project be <br />funded. The first of these is that the City of Mounds View <br />would come under the single compliance audit guidelines of <br />the Federal Government which requires an annual audit of all <br />federal funding to any single municipality should that <br />funding exceed $100,000 in any one year. As we have never <br />exceeded the $100,000 limitation, the City has only had to <br />comply with the audit guidelines established for the various <br />individual programs form which we have received federal <br />funding. Also, should the Energy Resource Center not <br />fulfill all of the requirements of federal guidelines <br />for the Community Development Block Grant Program the City <br />could become liable for any penalties established by HUD for <br />any administrative indiscretion as we would be the <br />acknowledged recipient of the grant. In both cases, I will <br />be discussinq with the City Attorney and City Auditors the <br />risks we might be taking by participating in such a program <br />and any methods we can implement to limit or eliminate those <br />risks. <br />Staff would request an indication from the City Council an <br />to your willingness to give consideration to the proposal of <br />the Energy Resource Center should Staff be able to determine <br />that such a project can be undertaken with minimal or no <br />risks on the part of the City of Mounds View. <br />DFP/mjs <br />Enclosure: <br />