Philly controller report rips Mayor Kenney’s plans for federal recovery dollars

Updated: 11:15 a.m.

Philadelphia City Controller Rebecca Rhynhart has critiqued Mayor Jim Kenney’s plans to spend billions of federal relief funds in a new report calling for more transparency and an alternative set of budget priorities.

The city is slated to receive some $1.4 billion in the American Rescue Plan, the latest round of COVID-19 recovery funds from President Joe Biden’s administration, in two installments over the coming year. In a still-pending budget proposal, the Kenney administration has sought to use these dollars to patch a projected $450 million revenue shortfall linked to the pandemic and boost spending in several areas over the coming years.

But Rhynhart describes the infusion of funds as a rare opportunity for a city beset by poverty, gun violence, and an opioid epidemic, and in the new report proposed a slate of $554 million in alternative investments.

While the report is framed as offering recommendations for American Rescue Plan spending, in a Thursday interview Rhynhart was broadly critical of Kenney’s track record on spending.

“I think that concern is compounded by the fact that under the Kenney administration, city spending increased by $1 billion in the four years, prior to the pandemic,” she said. “At the same time, according to the city’s own residents survey, the public satisfaction with city services actually declined during that period.”

She said the mayor’s proposed budget mingled the federal relief dollars with general spending, which would make it difficult to gauge the impact of recovery funds.

“Putting it into the general fund without really tracking the money is problematic just by itself,” Rhynhart said. “Without that accountability, the taxpayers don’t know and, honestly, the government doesn’t know if what it’s putting the money towards is actually working.”

The city controller instead proposed tracking use of the dollars to measure impact with tools similar to those employed by New York City post-Hurricane Sandy, while shifting more spending to programs proven successful in other cities.

The report also calls for the city to fully restore pandemic funding cuts to services such as parks and libraries and “back office” units like the Office of Fleet Management. It also calls for an increase to funding proposed for anti-violence programs to $181 million, particularly to expand an “intervention” model that had shown promise in other cities.

The report also emphasized the need to increase spending some $101 million for business relief, but also for food and housing relief for impoverished city residents. Along with $117 million in anti-poverty spending like eviction prevention and housing repair funds, the report suggests using $18 million to institutionalize a basic income model similar to the city’s Worker Relief Fund — which delivered a one-time $800 direct cash payment to some 2,000 families.

The Kenney administration said Thursday that it was blindsided by the release of the report, but spokesperson Deana Gamble said the spending proposals took a rosy view of the city’s long-term fiscal outlook, with revenues still recovering from the pandemic.

“At first glance, it would appear that the Controller has taken a much more optimistic view of the City’s revenue outlook than the administration or our outside experts. This skews the numbers and her ability to recommend certain investments,” Gamble said.

However, the controller argued that the report is not solely a spending plan.

Rhynhart said Kenney had failed to make “strategic” cuts, while allowing costs like overtime to increase even as the number of city employees rose.

“That shouldn’t happen at the same time. And we estimate that the city could save $73 million per year just on overtime savings,” she said.

The school district is set to receive another $1.1 billion in American Rescue Plan funds, which Rhynhart said the report had not analyzed.

The release of the report was also paired with an op-ed in The Philadelphia Inquirer critical of Kenney. Rhynhart’s office, which is independently elected, is charged with fiscal oversight of the city. But she and Kenney have publicly clashed over prior reports criticizing, for example, the mayor’s handling of protests last summer. But Rhynhart is also talked up by political observers as a likely 2023 mayoral contender, socking away hundreds of thousands of dollars despite running for reelection with no opponent in the Democratic primary this year.

But on Thursday, the Kenney administration took a diplomatic tack.

“We look forward to working with our partners in City Council to finalize the … budget over the next month and make the crucial investments we recommended and know the city needs,” Gamble wrote.