More than 300 city employees could lose their jobs under an order from the U.S. Department of Housing and Urban Development that bars Baltimore from spending $7 million to $8 million in block grant money on salaries and fringe benefits.
The city responded to yesterday's order by filing suit in U.S. District Court in Baltimore, asking the court to nullify the ban on spending the Community Development Block Grant money.
HUD officials say the order was issued because the city has failed to implement a time-keeping system that adequately jTC monitors the hours worked by employees who are paid with the grant money. HUD requires the records to ensure that the money is spent for programs that help low-to moderate-income residents.
For the past two years, HUD has accused the city of failing to properly monitor block grant money that is used for a number of housing and anti-poverty programs.
Clint Coleman, Mayor Kurt L. Schmoke's spokesman, said yesterday, "The mayor authorized the suit because he believes very strongly that we have been in compliance with the law and that HUD is making unreasonable demands on the city.
"The mayor feels that we have been meeting the needs of working-class and poor people using this program for the past 3 1/2 to four years. . . . It is outrageous that there would now be an attempt to shut down the program over the issue of how we keep our time sheets."
The battle between the city Department of Housing and Community Development and HUD climaxed Monday when Maxine S. Saunders, manager of HUD's Baltimore office, sent Schmoke a letter ordering the city to stop spending the money by Oct. 1.
Baltimore uses the grants to pay employees working at HCD, the Urban Services Agency and the Commission for Historic and Architectural Preservation.
Harold Perry, deputy housing commissioner, said the employees are in jeopardy of losing their jobs in about 30 days, if the suit is not successful.
The suit contends that Baltimore has fully complied with federal regulations and accuses HUD of placing strict standards on Baltimore that have not been imposed on other cities.
"The city has jumped through innumerable hoops since July 1990 to accommodate HUD," said Perry.
HUD officials, however, deny they are being too harsh with Baltimore and say their regulations are the same all over the country.
"The principle is very simple. They have to be able to account for how they're spending the funds," said Joe O'Connor, program manager in HUD's Baltimore office.