Philadelphia appeals decision to reject funding for opioid settlement

Last summer, a state commission ruled that Philadelphia should not have spent opioid settlement money on a revitalization program that renovated homes, schools and parks in Kensington, the neighborhood at the heart of the city’s opioid crisis.

The city appealed the decision, arguing that evidence suggests such initiatives will facilitate combat the cycle of addiction and overdose deaths, addressing the trauma the neighborhood has long struggled with. Next week Pennsylvania Opioid Fund will meet again to reconsider its decision in the dispute.

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

In June, the trust rejected $7.5 million spent by Philadelphia city officials on the “Kensington Plan,” a plan intended to facilitate residents of a neighborhood that has long been home to one of the nation’s largest open-air drug markets. State commissioners ruled that such spending was outside the approved purpose of the funds, as outlined in the settlement.

The trust can reduce or withhold future payments from an opioid settlement if it determines that a county is spending funds outside the scope of the settlement. Counties can appeal those decisions. If the decision is upheld, counties have three months to “correct the misappropriation” before the trust reduces or withholds the funds.

Appeal against the foundation’s decision

In Philadelphia’s appeal, obtained by The Inquirer on Tuesday, city officials argued that the Kensington-funded projects were intended to alleviate trauma among residents that can boost the risk of overdose, citing research showing a link between drug addiction and witnessing crime, violence and disorder in the neighborhood.

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

For example, the city wrote, the settlement money was used to fund an initiative that provided Kensington residents with up to $5,000 per household to facilitate pay their rent in an effort to prevent homelessness, which can lead to disorders related to the exploit of psychoactive substances. Another small-business initiative aimed to reduce the number of vacant lots in the area. City officials said research links vacant properties to an increased risk of crime and violence.

The city argued that “Exhibit E” of the opioid settlement, which spells out how communities can spend settlement money, encourages them to take a broad approach to funding programs aimed at preventing drug exploit.

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

It is unclear how the board will vote at its recall meeting scheduled for Oct. 3.

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

On Friday, Tartaglione and another board member, state Sen. Greg Rothman (R., Perry), toured Kensington. As reported by Kensington Voice that Rothman said he was unaware of 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 asked me this morning how many children lived in Kensington, I would have said, ‘There are no children in Kensington,'” he told Voice. “I just saw [a school] half a block from where we were walking.”

Questions about transparency

In its appeal, the city also criticized the trust’s lack of transparency. A working group of five trustees deliberated on Philadelphia’s spending in a closed session, the city noted.

The trust has been criticized for using private working groups. Transparency advocates and lawyers have also raised concerns that it is not appropriate organize such meetings in privacySpotlight PA and WESA reported.

And in March Rothman wrote a letter to the chairman of the board saying he wasn’t sure whether the working groups could “legally meet privately” under state transparency laws.

Board members “also expressed a subjective preference for programs that are targeted to individuals or involve ‘just say no’ strategies,” the appeal reads.

Trust committee members also discussed that Philadelphia has other lawsuits pending against opioid manufacturers and could receive funding beyond what the trust controls, the city said. That falls outside the board’s purview, the city said.

“Instead of determining whether [the ‘Kensington Plan’] “funded evidence-based or evidence-based practices to prevent opioid abuse and addiction pursuant to a court order, the task force members imposed their own views on appropriate spending,” the appeal reads.