Judge halts Upper Darby ARPA spending changes

A Delaware County judge on Tuesday halted Upper Darby Township’s efforts to change plans for millions in federal aid.

Common Pleas Judge Barry C. Dozor instructed township officials to pause any new plans for the funds until the next hearing in a pertinent lawsuit happens on August 1. 

Upper Darby got almost $41.8 million through the 2021 American Rescue Plan Act. Most of that has been spent or put on track for disbursement. Last September, the municipality enacted a legislative package to spend the remaining $14.4 million, but a majority of Township Council is now working to put unspent funds into a restricted capital-projects account. 

Supporters of this idea say it’s needed to protect any funds that remain uncommitted at the end of this year from retrieval by the federal government. Opponents argue that the township must merely “obligate” the funds to protect them from repossession by the December 31 deadline.

The federal Interim Final Rule on Obligations defines an obligation as “an order placed for property and services and entry into contracts, sub-awards, and similar transactions that require payment….” Township resident John DeMasi contends that last year’s ARPA appropriations already satisfy this requirement.

DeMasi and other plaintiffs filed a lawsuit on March 15 challenging the township’s move, arguing it is not only legally unsound but likely to jeopardize key improvements in the community. Items approved last year include $4.7 million for community and economic development and $1.2 million for a Drexel Hill Senior Center. 

Upper Darby officials anticipated a Council vote next Wednesday on new ordinances to supersede the allocations passed last year so the funds could be moved into the restricted account. DeMasi welcomed Dozor’s temporary injunction against the repeal-and-replace attempt. 

“I’m thrilled that it seems like now the defense is forced to do what they agreed to…,” DeMasi told Broad + Liberty. “All this does is just put some more teeth [so] they can’t say they’re going to do one thing and then do another.” 

In April, the judge ordered the township administration to devise a “path forward” using either a third-party adviser or a working committee to determine spending of ARPA funds. He also said the administration had to present by May 15 a “work product” outlining the implementation of the September ordinances. According to DeMasi, neither requirement was met.

He said the endeavor by Upper Darby Mayor Ed Brown (D) and a seven-member majority of Council Democrats to change course on ARPA was unlawful from the start. He wants a declaratory judgment that township leaders violated their home-rule charter and their unanimously passed ordinances by failing to confer funds in a timely manner, something for which he said the previous mayor also bears blame. 

“The money was supposed to be disbursed to the various projects, the grantees and then the last administration [headed by Democratic Mayor Barbarann Keffer] didn’t do anything — literally nothing in some cases,” he said. “They created the accounts, they appropriated the money and then that was it.” 

He cites the example of $800,000 that was allotted to the Upper Darby Arts and Education Foundation for a youth-oriented Barclay Square Arts and Education Center. The foundation did not receive it. DeMasi said he objected to the failure to grant the money and to Brown declaring at public meetings that he would decide whether to act on certain ARPA-spending ordinances. 

“The whole time, we were saying ‘What is your authority?’” DeMasi said. “At public meetings, we said, ‘Under what authority are you doing this?’” He said he and likeminded residents never got an answer.

If petitioners get the judgment they’re seeking, the township would be told to follow several of the original ordinances. Those include measures green-lighting the Barclay Square site, first-responder funding, many economic-revitalization projects and renovation of the Watkins Center, a community recreation venue. (Other items the township approved that fall outside the scope of the lawsuit include professional services and open-space preservation.)

A judgment would, however, not constitute an injunction; further litigation, DeMasi said, could be needed even after a judgment is granted. He believes the township has made some incorrect decisions in arguing its case that don’t bode well for it. 

For instance, the repeal-and-replace legislation states that funds addressed by earlier ARPA ordinances are “unencumbered.” For corroboration, the proposal quotes the Governor’s Office of the Budget’s definition of the term. The definition reads: “that portion of an appropriation that represents an expenditure pursuant to a contract, a purchase order, or a known demonstrable bill but where an actual disbursement has not been made.” 

Yet the state’s phrasing defines encumbrance, not the lack thereof.

“They’ve completely used the wrong language,” DeMasi said. “[They] literally said it was one word and then you look at the definition and it’s the complete opposite.” 

Brown and several Council repeal-and-replace backers did not return requests for comment. Council Vice President Andrew Hayman (D-5th District) said he could not comment in-depth on ongoing litigation but expected the Council majority to prevail.

“I’m still confident that Council’s position is extraordinarily strong and I’m more than confident that we’ll be ultimately victorious as will our community,” he said.

Hayman said he views the restricted-account strategy as sound because Upper Darby’s legal counsel has determined that funds allocated outside such an account lapse at year’s end and must be reallocated.

Parties disagree about whether the township’s home-rule charter bolsters that assertion. Plaintiffs point to the “Lapse of Appropriations” section of the charter which says capital spending, as well as other spending that “has not been expended or encumbered,” doesn’t lapse “at the close of the fiscal year.”

Hayman said he voted with all members of Council to approve the September legislation, viewing it as the best option at the time. But he added that some items — the Watkins appropriation, for example — lacked “much of a discussion or, frankly, much of a thought about what those funds would be used for.” 

Asked what he believed caused Council to act in such haste, the councilman recalled “there was a pretty bad relationship between Council and the Keffer administration,” something he said hasn’t persisted under Brown’s mayoralty. 

Hayman blasted the DeMasi lawsuit as unnecessarily frustrating the best use of ARPA money.

“…[T]he frivolous litigation that we’ve had thrown against the Council and the administration this year, which has cost our taxpayers tens of thousands of dollars has ironically done more to jeopardize those funds, I believe…, than anything else that’s been done here on this Council,” he said.

The faction on Council now opposing replacement of last year’s ordinances includes the body’s only two Republicans, Meaghan Wagner (1st District) and Brian Andruszko (3rd District). At-Large Democrat Matt Silva and At-Large former Democrat — now independent — Laura Wentz join them in opposition.

Wentz, emphasizing she was voicing her opinion, said she believes the Brown administration should enforce the policies she and her colleagues passed last autumn. She said the restricted account could enable improper handling of ARPA funds by the township’s Democratic leadership, something she said already happened two years ago.

“I believe that they need to enact the ordinances…,” she told Broad + Liberty. “I don’t trust them from past experiences. Restricted accounts are not safe in their presence.” 

Andruszko commented that a capital-reserve fund would make sense to protect money that is unspent by the end of the year, but insisted moving the money presently is premature.

“In my opinion, we’re performing an action in June that doesn’t need to be done until December,” he said.

DeMasi opined that the township can best serve its future by recommitting to last year’s plans and he hopes his lawsuit can eventuate that recommitment.

“This federal money can reinvigorate a community that’s desperately deserving of some reinvigoration for kids, for seniors, for everyone in between,” DeMasi said. “And then to have a scandal-ridden administration not take action and then a new administration come in and say, ‘Now we’re going to decide what we do,’ when everything was already decided, it’s just more lawlessness, more egocentrism, more elitism. And there’s no way that this community and this township get better when that’s the way business is done — outside of the law.” 

Bradley Vasoli is a writer and media strategist in Pennsylvania.You can follow him on X at @BVasoli.

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