Parts of Philly’s Kensington revitalization plan were appropriate uses of opioid settlement money, state committee rules

After initially ruling that Philadelphia shouldn’t have used opioid lawsuit settlement funds to pay for a $7.5 million revitalization project in Kensington, the state committee that oversees that spending has partially reversed course, saying that some of the projects funded under the city’s “Kensington Plan” are legitimate uses of the money.

In its Thursday meeting, the dispute resolution committee of the Pennsylvania Opioid Trust did maintain that two programs in the Kensington Plan shouldn’t have been funded with cash from the settlements.

Rejected was a $2 million home repair program that gave Kensington homeowners up to $5,000 to fix roofs, windows, masonry, and other home essentials. The other program rejected by the trust allotted $400,000 to administrative supports for small-business owners in Kensington, like bookkeeping help and financial advice.

The committee voted unanimously to approve $2 million that went toward after-school programs and safety improvements at Kensington public schools such as updated fencing; $600,000 for improvements and programming at local parks; and $1.9 million that gave Kensington residents up to $5,000 each to assist with paying rents, mortgages, and utilities.

All told, the committee approved 68% of the funds spent on the Kensington Plan.

When the trust determines a county is spending funds outside of the approved uses outlined in the opioid settlements, it can reduce or withhold future payments from the settlement. Counties can appeal those decisions, as Philadelphia and several other counties have done. If the decision stands, municipalities have three months to “cure the misspending” before the trust would reduce or withhold funds.

Philadelphia is set to receive $200 million over 18 years from the settlement, finalized in 2021 between hundreds of communities and the companies that manufactured, distributed, and marketed the opioid painkillers that are widely blamed for fueling an ongoing addiction and overdose crisis.

Trust members did not outline their plans for future settlement payments to Philadelphia and did not say whether it would have to “cure the misspending” in the coming months. Thomas VanKirk, the trust’s chair, said that the city could appeal the decision to the Pennsylvania Commonwealth Court.

In a statement, Chief Deputy Mayor Sincere Harris said that the city is pleased with the committee’s decision and will continue to use settlement funds for “direct aid and resources to Kensington.”

“People living in Kensington deserve to live in a clean and safe environment, and the [Mayor Cherelle L.] Parker administration strongly believes that the use of opioid settlement funds to invest in communities hit hardest by the opioid crisis is consistent with the guidelines provided for the use of these funds,” Harris said.

Long home to one of the nation’s largest open-air drug markets, Kensington was devastated by an explosion of overdose deaths in the last decade. City officials cited studies showing links between trauma, poor living conditions, and risks of addiction and overdose, and said the Kensington Plan was aimed at alleviating that trauma by revitalizing the neighborhood.

“Kensington residents have been injured as a result of the opioid epidemic, and prevention efforts like [the Kensington Plan] are most needed and most effective in areas like Kensington,” Keli McLoyd, the director of the city’s opioid response unit, said at Thursday’s meeting.

“To dispute this is to deny [...] the incredibly well-documented relationship between trauma and risk of developing opioid use disorder.”

For example, she said, the settlement-funded rent-assistance program was aimed at preventing homelessness, which can lead to substance use disorder.

The small-business initiative was aimed at reducing vacant lots in the neighborhood. Gina South, an emergency medicine physician at Penn Medicine, testified about recent research on how cleaning blocks and addressing vacant properties can prevent overdose deaths.

Citing early findings from an unpublished study on a previous Kensington revitalization plan, she noted that a program to remediate vacant homes on certain blocks was associated with an 18% drop in fatal overdoses there.

But at times, trust members said they found it hard to draw connections between addiction prevention and initiatives to improve housing or help small businesses in the neighborhood.

VanKirk, who was not a voting member of the dispute resolution committee but frequently weighed in with opinions on the project during Thursday’s hearing, said some of the problems in Kensington are long-standing and should not be fixed with settlement money.

“We all noticed and are very happy that Philadelphia is finally expending money to try to remedy this situation. But let’s be fair, it hasn’t just started two, three, four years ago. This situation in Kensington has existed for 30 years or more, and it’s been allowed to fester,” he said.

Tumar Alexander, a member of the Opioid Trust who was Philadelphia’s managing director when the funds in question were disbursed and now serves as a senior adviser to the mayor, countered that the situation in Kensington is uniquely challenging — and that neighbors there have dedicated their lives to improving it.

“This didn’t happen by happenstance. This was something that the drug makers knew what they were doing, and they ravaged this community,” he said.

VanKirk said he felt that the programs funded did not fall under the purview of Exhibit E, the section of the settlement that outlines how funds can be spent.

Other trust members said they believed that some of the programs funded under the Kensington Plan were important, but that approving them would invite overbroad interpretations of Exhibit E from other communities.

Deputy City Solicitor Ryan Smith responded that the Kensington Plan’s programs are preventative measures to curb overdoses, citing an item in Exhibit E that allows counties to fund “community-based intervention services” for people at risk for opioid use disorder.

“[Exhibit E] is designed to be permissive, and if this preventing of fatal overdoses is not permitted by the exhibit, frankly, I don’t know what we’re doing,” he said. “The bottom line is, we are saving lives with this spending.”

For three of the five projects in the Kensington Plan, a majority of trust members ultimately agreed. Members said they were particularly struck by the evidence the city presented in favor of improving parks and making schoolyards more secure. State Sen. Christine Tartaglione, a Democrat who represents parts of Kensington, had initially voted to reject the spending, but on Thursday voted to approve all of it.

The trust also voted on whether to approve two previously rejected projects in Bucks County on Thursday. Members decided to approve funding for a “crisis stabilization unit” in the county and again rejected funding for a probation officer in the county’s drug courts.