The feds gave us $1 billion, but we have little to show for it. Why?
With all the talk of imposing new taxes and reducing social services, Philadelphia sure could use some extra cash. The federal government promised just that when President Obama signed the American Recovery and Reinvestment Act (colloquially known as the stimulus bill) of 2009 into law on Feb. 17 of that year. The program had a big number attached to it: $787 billion. It was touted as a way to directly breathe life into the wounded U.S. economy and prevent a depression.
About $1 billion of that money was earmarked for Philly, so we should be well on the way to recovery. Except, well, we’re not.
A lot of that funding is going toward SEPTA, PennDOT and the Philadelphia School District. In fact, only about $216 million is actually being administered by the City of Philadelphia. That might not sound like a lot compared with the larger numbers being tossed around, but it’s still something. Right?
Philadelphia, though, has utilized only about $8 million of that money so far. And as of January, only 114 jobs have been created or retained. In a city with an unemployment rate of 9.6 percent—up from 7.8 percent last year (and you can easily tack on several more percentage points for the underemployed and those that have given up on finding work) that just doesn’t seem like enough for people facing unemployment, huge debt and plenty of despair. In two cases this March, residents drowning in debt committed suicide right before they were to be evicted from their homes. Recovery seems very far off, indeed.
The stimulus program was passed in February and Philadelphia applied for grants and received other funding by formula. By the end of 2009 the city an related agencies had been granted 165 million.
So why has the stimulus money taken so long to, well, stimulate us? The short and long answer is bureaucracy.
Take, for instance, the $500,000 for Creative Industry Workforce Grants (CIWG). These grants are part of the money given to Philadelphia as part of the Community Development Block Grant (CDBG), a long-running federal program by the U.S. Department of Housing and Urban Development (HUD) that was given additional funds in the stimulus program. The CIWG money’s is supposed to provide capital for arts nonprofits and creative industry businesses for work and office space.
The money was awarded to the city last August, but the grants were announced just this March 31. The money includes eight grants of $20,000 to $100,000, to places like Crane Old School (to help rehab an old school into studio space) and Vox Populi (to build performance space).
Officials say it took some time to get the money out there for a couple reasons. Since the program was new—not part of existing CDBG grants—guidelines had to be set up and a slew of requirements met. Stimulus-program guidelines and federal regulations had to be followed, as well as stipulations on CDGB money. A Request for Proposals (RFP), asking local groups for projects to use the money on, was issued in November, with 63 applicants. Then, the winners had to be put under contract with the city.
“Frankly, the money has a lot of strings attached,” says Gary Steuer, chief cultural officer to the mayor.
The Transit-Oriented and Livable Communities Commercial Development Fund, another section of the CDBG, got $4,396,629 to help local businesses expand or stabilize, with an eye toward sustainability (that’s the transit and living idea). The money will be dispersed in loans for “projects that are in jeopardy with the collapse of financial markets,” says Brian Flanagan, of the deputy mayor's office of planning and economic development. The projects must create or retain jobs and have some environmental or transit-related focus.
An RFP was issued in February, a date that was pushed back because they “didn’t think a public solicitation around the holidays would get the best response,” says Flanagan. None of the money has been dispersed yet, but one possibility is a $1 million loan to E.G. Emil’s, a deli-meat maker in Kensington. The money would cover rehabbing a contaminated vacant lot and expanding their production facility, creating 10 jobs. The city expects the loans to start going out in the next month.
In a bit of hopeful news, programs that had not moved beyond planning have recently started spending money. Two houses—one in Frankford and one in Mayfair—have been renovated as part of the Neighborhood Stabilization Program, which received $20 million of stimulus money. Construction has started on Presser Senior Housing—another part of the CDBG money—to build affordable housing for seniors. The Community Oriented Policing Services program got $10.9 million to hire 50 more police officers in July of 2009, but only started doing that in February of this year.
Jobs have seen the same slow progress. Most of the 114 jobs created or retained with the stimulus money came from two programs: Byrne JAG Grants and the Homelessness Prevention and Rapid Rehousing program. Jobs numbers for the last few months are expected to be higher but were not available at press time.
The programs that did move quickly appear to be ones that were short term in focus or had existing infrastructure in place. A summer-jobs program that cost about $3 million and temporarily created 200 jobs for youths went off well last year. The Utility Emergency Services Fund (UESF), a nonprofit that helps people in danger of losing their utilities, received $1 million to supplement their work through CDBG. UESF spent $452,000 of the money last fall to help 1,014 households, and expects to use the remaining money quickly this spring.
Still, some projects have not moved forward much at all. The Mayor’s Office of Faith-Based Initiatives was awarded $249,333 at the end of September to provide training for local, nonprofit faith and community groups to help West Philly residents. The participating nonprofits have not been picked yet and the program is not expected to start until May or June.
Stephen Agostini, the mayor’s recovery officer and the city’s budget director, says that the lack of speed in circulating the stimulus funds is due to ungainly and confusing federal rules, beginning with the application process.
“The process is at times cumbersome and not clear at others,” he says. “There is no consistency about requirements across federal agencies.” He adds: “The application process can take anywhere from 3 to 6 weeks to 3 to 6 months, which varies from agency to agency.” Agostini also notes that it is often not clear when the federal government will release funds that are awarded through the program. Finding out about what grants are available has also been a challenge.
“There’s no one place to find information about the money that is available,” says Maari Porter, deputy budget director for recovery. Once a program is identified, it takes more time to find out what the specific requirements are for it and how to apply for it correctly.
Dinner with Luke Palladino