Workers in masks gathered at Hancock Playground in Kensington last week, reviewing a $1.2 million plan to replace playground equipment and repair fencing.
Construction at the site, part of Mayor Jim Kenney’s Rebuild initiative to improve parks, recreation centers, and libraries with funding from the 1.5 cent-per-ounce tax on soda and sweetened beverages, had been set to begin earlier this spring.
But work was delayed by the coronavirus shutdown. Now, work has resumed at six Rebuild sites as construction restarts citywide.
As Kenney looks to fill a $649 million budget hole caused by the pandemic by reducing services, laying off employees, and raising taxes, he is not proposing cuts to Rebuild. Kenney’s signature pre-K and community schools programs, also funded by the beverage tax, do not face cuts, either; the budget proposal calls for funding those programs at their current levels but holding off on their expansion.
Kenney has defended that decision, saying his budget proposal is based on preserving money for health, public safety, and education. The three programs funded by the controversial beverage tax, passed in 2016, are important for the city’s children, he said.
“The tax was passed for the purpose of those three agenda items, and that’s what I intend to do with them,” Kenney said this week.
“We need to create a balance, and it can’t just be about protecting certain programs and slashing others,” said City Controller Rebecca Rhynhart, who released her own alternative plan that she said would not include tax hikes.
But Kenney’s signature beverage tax programs are likely to remain intact through budget negotiations. Councilmember Isaiah Thomas, who had suggested some of the beverage tax revenue could be redirected to other city programs, acknowledged this week that his proposal did not gain much support.
The economic impact of the pandemic will still affect the pace of the Rebuild program — which was already off to a slow start and set to be smaller than initially promised when Council passed the beverage tax. Because of the coronavirus shutdown, work has only been able to begin on projects that had construction permits prior to March 20.
Rebuild was initially billed as a $500 million transformation of parks, recreation centers, and libraries that would refresh forgotten and dilapidated facilities across the city. Kenney pitched it to sell the beverage tax, which is funding much of the work. More than three years after the tax took effect, construction has yet to begin on many Rebuild projects. And because the beverage tax raised less revenue than anticipated, the overall budget has been downsized to $425 million.
The pandemic is also impacting revenue from the sweetened beverage tax; it is projected to decrease 14.4% in the current fiscal year compared with the previous year, bringing in $65.7 million, according to Kenney’s proposed budget. The anticipated decline in revenue is due to the shutdown of bars, restaurants, and entertainment venues. But officials expect it to increase again in the fiscal year that starts in July, and project it will raise $72.6 million next year.
Some of that revenue is already dedicated to paying off a bond for the Rebuild program. The first $86.5 million bond for Rebuild projects was issued in 2018, and to date $10.46 million has been spent. The bond requires the city to spend $73.5 million of that money by November 2021.
“We’re hoping to still stay on a pretty accelerated timeline, recognizing that we’re going to learn as we go through the construction regulations,” said Kira Strong, Rebuild’s executive director.
Strong said construction projects that had been set to begin in March or April are now starting in May or June, and she acknowledged that projects could take longer to complete because of COVID-19 precautions.
A second bond issuance for Rebuild could also be delayed a few months, Finance Director Rob Dubow said at a City Council budget hearing this month.
During the construction shutdown, Strong said, her staff continued working on site plans and fund-raising, held its workforce development program virtually, and awarded grants to nonprofits to complete three Rebuild projects.
Kenney’s budget proposal includes cutting hours and programming at rec centers and libraries, but Strong said the administration did not consider scaling back or reducing the budget for Rebuild.