Atlanta officials are in a desperate scramble the next five months to spend $37 million in federal aid earmarked for the city’s poorest residents. If they fail, as much as $30 million will have to be returned to the feds after Dec. 31.

“We are going to look for the most expedient way to spend the money,” said Peggy Harper, chairwoman of the board overseeing the city’s $53 million Renewal Community. “The goal of the board is to not send any money back.”

But angry community activists and some members of the Atlanta City Council scoffed at that notion July 28 during a four-plus-hour meeting at City Hall.

The Renewal Community has spent an average of $1.3 million a year on programming since its creation in 2003. So about $37 million remains to be spent by Dec. 31.

Six years into the program, the Renewal Community has used about $7 million for administration and $7.5 million for services, and officials expect to be able to spend at least $8 million before year’s end. That leaves as much as $30 million to return to the federal government if the city can’t find agencies to spend it by Dec. 31. This comes during a period when the city is reducing funding for programs and staffing and applying to the federal government for stimulus funds to cope with the bad economy.

City Council members scheduled a work session for Aug. 18 to examine whether there is a way to get the federal government to extend the deadline or find agencies to spend the money.

Harper noted the program has been tied up in red tape for much of its existence. She stressed Tuesday the problem is not finding programs or obligating money. Of the $45 million set aside for programming, $42 million has been earmarked. The problem is most of the work hasn’t been completed and won’t be by Dec. 31. Officials also said that because of the red tape required to prioritize and spend the money, it’s too late to make major changes even if new agencies come forward to spend it. All money is provided through reimbursement. So many small agencies complain they can’t afford the upfront investment.

Andy Schneggenburger with the Atlanta Housing Association of Neighborhood-Based Developers said it can take six months or more for requests for reimbursement to wind through various agencies, and city and state departments. “When you are operating on a very tight budget, that can make it debilitating,” he said.

Doug Dean, a former state representative and community activist, said it will be “borderline criminal” if Atlanta sends back Renewal Community money it should have invested in communities in need.

— John Schaffner