Philly appeals rejection of Kensington opioid settlement spending

A state committee ruled last summer that Philadelphia shouldn’t have spent opioid settlement funds on a revitalization program that repaired homes, schools, and parks in Kensington, the beleaguered neighborhood at the heart of the city’s opioid crisis.

The city has appealed that decision, arguing that evidence shows such initiatives would help combat a cycle of addiction and overdose deaths by addressing the trauma the neighborhood has long faced. Next week, the Pennsylvania Opioid Trust will meet again to reconsider its decision in the dispute.

The trust was set up to oversee how local governments spend hundreds of millions in funds allocated to them from lawsuits against the pharmaceutical companies that manufactured, marketed, and sold the opioid painkillers widely blamed for fueling an ongoing overdose crisis. Philadelphia is set to receive about $200 million from the settlement, paid in $20 million increments over 18 years.

In June, the trust rejected $7.5 million spent by Philadelphia city officials on the “Kensington Plan.” The plan aimed to aid residents of the neighborhood, long home to one of the nation’s largest open-air drug markets. The members of the state committee ruled such spending did not fall under the approved uses of the funds as outlined in the settlement.

The trust can reduce or withhold future opioid settlement payments if it determines that a county is spending funds outside the settlement’s purview. Counties can appeal those decisions. If the decision stands, municipalities have three months to “cure the misspending” before the trust would reduce or withhold funds.

In Philadelphia’s appeal, obtained by The Inquirer on Tuesday, city officials argued that the projects funded in Kensington were designed to alleviate trauma among residents that can leave them at higher risk for overdoses, citing studies showing links between drug addiction and having witnessed crime, violence, and disorder in a neighborhood.

“Put simply, an entire body of research and recommendations from leaders in the field indicate that community-focused interventions are one of our most effective tools at preventing [substance use disorder and overdose],” Keli McLoyd, the acting director of the city’s Opioid Response Unit, wrote in the appeal.

For example, the city wrote, settlement money funded an initiative that gave Kensington residents up to $5,000 per household to pay rent for housing in an effort to prevent homelessness, which can lead to substance use disorder. Another initiative to support small businesses was aimed at reducing vacant lots in the neighborhood. City officials said that studies link vacant properties to an increased risk of crime and violence.

The city argued that the opioid settlement’s “Exhibit E,” which lays out how communities can spend settlement dollars, encourages them to take a broad approach to funding programs to prevent drug use.

The exhibit includes a list of 12 types of evidence-based prevention programs that communities can fund, but also notes that communities are “not limited to” those uses, the city said in its appeal.

It’s unclear how the trust will vote at its meeting on the appeal, set for Oct. 3.

Trust member State Sen. Christine Tartaglione, a Democrat whose district includes Kensington — and who voted against approving Philadelphia’s spending on the “Kensington Plan” — did not immediately return a call for comment.

On Friday, Tartaglione and another trust member, State Sen. Greg Rothman (R., Perry), toured Kensington. The Kensington Voice reported that Rothman said he didn’t realize how the opioid crisis had affected the neighborhood and “felt differently” about his vote against the “Kensington Plan” spending after seeing the area.

“If you had asked me this morning how many kids live in Kensington, I would’ve said, ‘There are no kids in Kensington,’” he told the Voice. “I just saw [a school] a half a block from where we were walking.”

In its appeal, the city also criticized the trust’s lack of transparency. A working group made up of five members of the trust’s board deliberated Philadelphia’s spending in a session that was closed to the public, the city noted.

The trust has been criticized for its use of private working groups. Transparency advocates and attorneys also have raised concerns that it’s not appropriate to hold such meetings in private, Spotlight PA and WESA have reported.

And in March, Rothman wrote a letter to the trust’s chair saying that he was not sure the working groups could “legitimately meet in private” under state transparency laws.

Board members also “expressed a subjective preference for programs that target individuals or include ‘just-say-no’ type strategies,” McLoyd wrote in the appeal.

Trust committee members also discussed how Philadelphia has other lawsuits pending against opioid manufacturers and may receive funds beyond those controlled by the trust, the city said. That is outside the board’s purview, the city said.

“Rather than determining whether [the ‘Kensington Plan’] funded evidence-based or evidence-informed practices to prevent opioid misuse and addiction in compliance with the Court’s Order, the working group members imposed their own views of appropriate expenditures,” McLoyd wrote.