City opts to keep reinvestment program after community outcry
What is a city to do with an extra $1.2 million?
That was the question at the core of Allentown’s City Council meeting Wednesday, as members debated allocating remaining American Rescue Plan dollars toward either a community reinvestment fund, the city’s housing needs or infrastructure projects.
The city in its 2024 city budget allocated $1.2 million toward a community recovery fund, which would award grants to local nonprofits addressing community needs like poverty and homelessness.
But a resolution, sponsored by council members Candida Affa, Ed Zucal and Daryl Hendricks, would have advised the city to take that $1.2 million and instead put the money in its general fund to pay for infrastructure projects and offset a future tax increase.
None of the $1.2 million has been spent, according to city officials, and the city has yet to open an application process for the funding.
Council members at a committee meeting last week said they thought re-allocating the money would be prudent because money associated with the American Rescue Plan has strict deadlines and arduous restrictions, and council members would like to avoid a major property tax increase in 2025. Allentown Mayor Matt Tuerk has said the city is likely to need a tax increase next year in order to keep up with necessary expenses.
Cities are required to allocate all American Rescue Plan dollars by the end of 2024 and spend the money by the end of 2026. Allentown received $57 million through the federal spending package in 2021.
“My main concern at this point is the deadlines,” council vice president Santo Napoli said last week. “I don’t know if we can get a process to the finish line, once we get the process out, get applications in, scored, reviewed, which ones get the funds, and then I just don’t know at this point where we are.”
But council backtracked Wednesday night, as members of the public said scrapping plans for a reinvestment program was breaking down trust between the city and grassroots nonprofits that provide direct aid to residents in poverty.
“We cannot continue to be an afterthought of the city,” said Jessica Lee Ortiz, director of the nonprofit Ortiz Ark Foundation.
Council member Ce-Ce Gerlach had introduced an amendment which would have allocated the $1.2 million toward housing initiatives. She said her resolution was a “Plan B” because she was alarmed by the initial amendment to scrap the community reinvestment program.
City Council initially approved Gerlach’s amendment to re-allocate the funding toward city housing needs, but then overturned it after criticism during the public comment period.
Council ultimately and unanimously agreed to maintain the $1.2 million community reinvestment program for all local nonprofits to apply to.
Council did, however, recommend some transfers of the cash that will remove arduous American Rescue Plan requirements.
The final resolution recommended moving the $1.2 million in American Rescue Plan dollars into the general fund to be used toward revenue replacement, which is an approved use of ARPA funds. The city would then take that same amount of money from the general fund and put it into the city’s community and economic development department’s budget to create the reinvestment program. Transferring the dollars would allow the city to skirt strict federal guidelines that regulate ARPA spending.
Council will have to officially transfer the funds via an ordinance — Wednesday’s agenda item was a non-legally binding resolution — to allow the money to be spent. They plan to hold a vote at a May 1 council meeting.
Community and economic development director Vicki Kistler said the city could open applications for a community recovery fund shortly after the money is moved.
Neighboring Bethlehem established a similar recovery program via ARPA funds, and announced the first round of awards through the program last October.