Millions in aid to go unused?

Why? Community leaders and program officials agree the program has been so mired in red tape due to federal rules that few applicants have been able to qualify for or receive the cash, which is left over from the city's 1994 designation as a $100 million federal Empowerment Zone.

They also agree that giving back $30 million at a time when so many folks are suffering would be tragic.

"This is a story about how government does not work on behalf of the people," said Derrick Boazman, a former City Council member and advocate for the Lakewood area. "What you see is how a bureaucratic regulation has stopped us from spending $50 million to help neighborhoods that still need help today."

William McFarland, executive director of Atlanta Renewal Community Coordinating Responsible Authority, or ACoRA, the nonprofit created by the city to manage the money, said he's disappointed any money might be returned, let alone $30 million.

However, he argued that ACoRA has managed the money well, and that the agency has strictly followed program rules required by the federal government.

"We've been effective getting things done to the extent we can be," McFarland said. "The design of the program only gives the management entity a certain ability to accomplish things without the support of all the levels above it."

Slow progress

The Empowerment Zone money came from a federal program conceived during the Clinton administration to help pump life into ailing inner-city neighborhoods. Atlanta's Empowerment Zone covered 30 neighborhoods, including Vine City, Cabbagetown, Summerhill and the Old Fourth Ward, neighborhoods that for years have battled some of the city's worst crime while fighting high unemployment rates and alarming school dropout and poverty rates.

The program, though, quickly became mired in charges of corruption and mismanagement. The community board created to oversee the program bickered. As a result, the neighborhoods failed to see the sort of transformative impact officials promised.

By 2003, Mayor Shirley Franklin disbanded the Empowerment Zone and created ACoRA to dispose of the remaining $53 million before the program expired Dec. 31, 2009. ACoRA operates with an $845,000 annual budget and a staff of seven provided by Enterprise Community Partners Inc., a local nonprofit.

But over six years, ACoRA has been able to give away only about $7.5 million. Another $8 million has been obligated to various programs and projects that ACoRA officials believe will get spent.

The organization also spent nearly $7 million on administrative fees for ACoRA, Atlanta and the state. McFarland noted that fee, about 12 percent of the total funds, is within federal guidelines. He said similar programs may spend up to 15 percent on their administrative set-asides.

It appears the balance of the funds will have to be returned unspent to the federal government.

By the rules

McFarland noted that responsibility for the program's problems must be shared with the service agencies seeking the funds, who often lacked the technical and financial expertise to both follow the difficult guidelines and complete their tasks.

"We have a fiduciary responsibility. We aren't here to implement the programs. We helped where we could," McFarland said.

The corruption problems that dogged the Empowerment Zone program are not an issue, all involved agree. The major issue, they say, is red tape.

McFarland acknowledged that it can take an inordinate amount of time to get contracts and payments processed through ACoRA, two city departments and then the state, as required by the rules that govern the agency. Even minor alterations to contracts have to go through the entire process.

Groups seeking funds can't simply come up with an idea and ask ACoRA for a grant. Any idea submitted to and accepted by ACoRA has to be turned into an request for proposals by ACoRA staff, then bid out to any agency that might wish to provide the service.

After that, a contract must be drawn up and agreed to, and that document must pass muster with lawyers at ACoRA, the city and the state Department of Community Affairs.

Finally, the program only reimburses applicants for expenses, meaning cash-strapped community groups have to come up with project funds from another source and then wait, often for months, to be repaid. In the current economic climate, finding up-front cash is difficult, if not impossible, many say.

Extension possible

It's a process so frustrating that neighborhood activists say it discourages them from seeking money they desperately need.

"The one thing we don't hear about this administration is we have corruption going on," said Janis Ware, executive director for SUMMECH, a community development corporation in Mechanicsville. "Unfortunately, they haven't been able to get out the money."

Ware said SUMMECH has waited as long as six months to receive reimbursement payments. The inability to spend the money, she said, means folks who need help aren't getting it.

"For the most part, you don't see what you should have seen from this program," Ware said.

For example, Boazman said his community has been trying for years to get ACoRA to buy an empty, trash-strewn apartment complex in Lakewood. The buildings, he said, are an eyesore and magnet for crime.

But even though the buildings are empty and for sale, his group has been unable to successfully navigate the funding process. He said ACoRA needs to be more helpful when neighborhood groups don't have the lawyers and accountants needed to deal with the complex process.

"That's why we have ACoRA," Boazman said. "The community folk don't understand the federal guidelines or city contracting codes."

The final results from the community renewal program are likely to be as disappointing as the accomplishments of the Empowerment Zone, said Young Hughley Jr., head of Reynoldstown Revitalization Corp. He said he's dumbfounded and distressed that the program appears headed for such a disappointing conclusion.

"If I had $30 million, I'd find partners to help get it spent," Hughley said. "I am truly saddened we could end up like this."

McFarland maintains some hope of an extension. He said other communities face similar issues. Atlanta officials are tracking two bills in Washington that could give the Renewal Community another year to distribute the money.

"I look at life as the glass is half-full," McFarland said. "I want to look at the good things this program has done. I don't want to put on an attachment about what has not been spent."

Cover Story | Federal funds