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Philly accused of misusing opioid settlement funds for revitalization projects

The City of Philadelphia has been accused of inappropriately spending settlement money that has been allocated to combat the opioid crisis

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The city of Philadelphia is accused of misusing some of the money it’s been allocated to combat the opioid crisis. NBC10 investigative reporter Claudia Vargas has more on the decision and what comes next. 

Philadelphia's Kensington neighborhood has recently seen some beauty upgrades that include cleaned-up parks, newly planted trees, revamped playgrounds and schools that have new fencing. Some homes in the area have even gotten some minor repairs like new roofs. These projects have been funded through opioid settlement money that the city has received.

The city gave $7.5 million to several non-profits to support Kensington residents in a variety of ways. On Thursday, Oct. 3, a state board said some of that money shouldn’t have been used that way. 

“This isn’t always like this,” Tumar Alexander, a member of the Opioid Trust board, appointed by Mayor Cherelle Parker said. “This didn’t happen by happenstance. This is something that the drugmakers knew they were doing and it ravaged this community and I believe this proposal is trying to turn the tide on that.”

The Pennsylvania Opioid Misuse and Addiction Abatement Trust is made up of 13 people who are mostly elected officials. They’re appointed by varying state and local leaders. Their role includes overseeing the more than $1 billion coming to the commonwealth through opioid settlement funding. Philadelphia, alone, is set to get $200 million. 

The money has been allocated to a number of different programs. Some of the allowable uses, laid out in what is referred to as Exhibit E, include treating and preventing opioid use disorder, supporting people in treatment and recovery and connecting people with help. 

In June, the board ruled a prevention initiative for $7.5 million called the “Kensington Resident Support Program” wasn’t compliant with how the money was supposed to be spent. 

The city appealed and on Thursday, the dispute committee gave a split decision. In the end, they rejected the city’s appeal for two of the subprograms that included helping residents with home repairs or supporting small businesses. Those funds totaled $3 million. 

“There’s a correlation between the neighborhood effects but I struggle with the interpretation that the settlement funds are a community development program or anti-poverty program,” Robert Postal, one of the board members, explained. 

The city had several presenters at the dispute meeting including Keli McLoyd, the director of the Opioid Response Unit, and Dr. Gina South, a Penn physician who researches environmental impacts on substance use disorder. 

The city argued the entire initiative should be funded and considered an allowable use under Exhibit E. They presented evidence relating to social determinants of health, arguing that all residents in Kensington, especially children, are at higher risk of opioid use disorder due to the environment they’re around every day.

Upper Kensington ranks last in health outcomes in the city, data shows

The chair of the board, Tom VanKirk, challenged the city by cutting off their presentation to question how it falls under the section of preventing misuse of opioids.

“The exhibit is designed to be permissive,” Ryan Smith, a representative for the city from the law department, said. “And if this – preventing fatal overdoses – is not permitted by the exhibit, frankly I don't know what we’re doing. That's the bottom line here. We're saving lives with the funding.” 

One out of every four people who died from an overdose in Pennsylvania last year died in Philadelphia, new data out this week shows.

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