Atlanta scrambles to spend $30M

Rather than send back more than $30 million in unspent federal aid, Atlanta officials have pushed through more than 50 last-minute deals with service agencies who hope to spend like crazy before the program expires Dec. 31.

James Shelby, city planning director, told the City Council he believes Atlanta is on firm legal footing in how it took over the program this month and plans to administer it over the Renewal Community's final 60 days.

However, Peggy Harper, who chaired the nonprofit which ran the program the past six years, said Atlanta's hurried takeover has  left her with doubts. Before the switch, the city acted only as someone who approved payments; now the city is overseeing the whole program.

Harper told the council's community development committee Tuesday the city had dozens of contracts sitting on the floor of an office at City Hall, delaying their processing. And she said seven contracts approved by her board were never executed.

So those deals now are kaput, and that money won't be spent.

"I'm beginning to question whether the city has the capacity to handle this program," Harper said.

Even if they can administer the program, that doesn't mean the nonprofits will be able to take advantage of the last-ditch effort.

The nonprofit groups that provide services for years have struggled to spend their grants. The program requires the groups to provide the service up front and then wait months for reimbursement. And many of the small groups simply haven't had the finances to do that.

That has kept the money sitting at City Hall when it should have been providing services on the street.

The money in question is part of the city's $53 million Renewal Community, a successor to the federal Empowerment  Zone designation the city was given about 15 years ago. That program was supposed to breathe life into long-neglected urban communities, the kind that suffered from disinvestment, crime, drugs and falling property values.

After six years, Harper's group had used about $7 million for administration and $7.5 million for services, and officials expected to be able to spend at least another $8 million or more before year's end. That left Atlanta looking at the very real possibility of returning as much as $30 million in federal aid before Dec. 31.

City officials began a mad scramble to try to use the money in July after The Atlanta Journal-Constitution detailed the program's shortcomings in a front-page story. Council members and community activists joined the struggle. That ended with the last-minute push to adjust contracts and draw up new ones to get all the money into someone's hands before the deadline.