Federal Fund Expenditures by the Redevelopment Agency, San Bernardino, California

GAO reviewed the expenditure of Federal funds by the Redevelopment Agency of the City of San Bernardino, California, under the Department of Housing and Urban Development's (HUD) Urban Renewal Program. Information was gathered concerning: (1) redevelopment activities of the agency, including its authority, Federal assistance for projects, and the sources of funding; (2) the ability of the agency to repay all Federal or federally guaranteed loans outstanding when due; (3) the agency's refinancing of its debts and the propriety of the involvement of the agency's former chairman, Mr. Warner W. Hodgdon, in this refinancing; (4) whether the activities of Mr. Hodgdon or other agency officials with regard to the acquisition of land were in violation of conflict of interest provisions in the contract between HUD and the agency; (5) the amount and sources of funds the agency spent for publications publicizing its redevelopment activities; and (6) the results of audits of the Central City Project No. 1 by HUD, GAO, and Independent auditors.

Findings indicate the following: (1) the agency had substantially complied with HUD land disposal requirements in the sale of land to the Central City Company; (2) Mr. Hodgdon had personal dealings with Mr. Curci while Mr. Hodgdon was a member of the agency, however, HUD ruled that these dealings were not a conflict of interest on the part of Mr. Hodgdon; and (3) the agency had established acquisition prices substantially in accordance with HUD regulations, but it is believed there were instances in which the agency or HUD should have required an additional appraisal due to wide variances between appraised values in the two initial appraisals.