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AG Denn, Community Leaders, Issue Renewed Call For Use Of Bank Settlement Funds To Address Issues In Delaware’s Hardest Hit Neighborhoods

Date Posted: Wednesday, December 30th, 2015
Categories:  Department of Justice DOJ Press Releases

Proposal for Joint Finance Committee to consider when it meets in January. 

Attorney General Matt Denn outlines a revised proposal using the remaining $29-million from financial settlements with Bank of America and Citigroup, designed to address housing, crime, recidivism, substance abuse and education in some of Delaware’s most economically distressed and crime-stricken communities.

Attorney General Matt Denn outlines a revised proposal using the remaining $29-million from financial settlements with Bank of America and Citigroup, designed to address housing, crime, recidivism, substance abuse and education in some of Delaware’s most economically distressed and crime-stricken communities.

Backed by community leaders and advocates for economically hard hit communities, Attorney General Matt Denn has renewed and revised his proposal to utilize funds from financial crisis settlement to be used for crime prevention, housing, substance abuse treatment, after school and summer school programs, prisoner reentry and education in those areas.

The proposal is a renewal of the Attorney General’s “Lifting Up Delaware’s Communities” program, announced in January 2015,  for using settlement funds that Delaware had received from Bank of America and Citigroup to resolve allegations of market misconduct by financial institutions that contributed to the national financial crash.

The amount of funds now available is approximately $29 million, rather than the original $36 million available a year ago. $5 million was used by the General Assembly in June 2015 to balance the state budget, and another $2 million was set aside in December by agreement between the legislature’s Joint Finance Committee and the Department of Justice to expand policing in high-crime areas of Dover and Wilmington. JFC is expected to deliberate over additional uses of the funds in January.

“Our proposal in January, and our proposal today, is that these funds be used to help lift up our state’s hardest hit communities.  That is what is called for by the settlement agreement, and speaking for a moment as an elected official whose top priority is fighting violent crime, investing in these communities is also what we should be doing if we really want to bring down the rate of violent crime,” Attorney General Denn said. “

The renewed Lifting Up Delaware’s Communities is similar to that unveiled in January, with some dollar amounts reduced to reflect the smaller amount of funds available, and with two changes to reflect valuable input that was received from the community and legislators after the initial proposal was made.

The proposal was backed at Wednesday’s event by representatives of atTAcK Addiction, Stop The Violence Prayer Chain, the Wilmington HOPE Commission, New Castle County Police, Red Clay Education Association, Safe United Neighborhoods, the Wilmington Education Improvement Commission, Boys & Girls Clubs of Delaware, and New Castle County Councilman Jea Street.

“This funding would mean the world to students,” said Monique Taylor-Gibbs, a teacher in Wilmington’s Warner Elementary School. “These funds would mean after school programs, it would mean more adequate bodies in the classroom, it would allow us to have smaller class sizes, it would allow the students to be able to stay in school until 6:00 p.m. and then just go home and do homework and go to bed.”

The Lifting Up Delaware’s Communities proposal now consists of :

Investing in People and Neighborhoods ($10.7 Million)

  • Substance Abuse Treatment.  $3 million over three years should be spent on providing drug treatment opportunities for inmates with substance abuse disorder who are either nearing release from prison or have just been released from prison.
  • Prison Re-Entry Programs.  $3 million over three years should be spent on competitive grants to non-profit organizations that assist inmates being released from correctional facilities to avoid new criminal offenses.
  • Community Policing and Community Support.  $4.7 million should be allocated to the state’s Neighborhood Building Blocks Fund, which can make grants for a broad array of government and non-profit efforts to support economically impacted neighborhoods.

Providing Affordable Housing and Development in Economically Impacted Areas ($10.5 million)

  • Foreclosure Prevention.  $1.5 million should be directed to the Delaware Mortgage Assistance Program to help Delaware homeowners prevent foreclosures on their primary properties.
  • Home Purchase Opportunities for Foreclosure Victims.  $4 million should go to the Downtown Development Districts program, to be used for the purpose of providing down payment assistance to homeowners willing to purchase homes in Downtown Development Districts.  Down payment grants should be means-tested, and first priority would be given to persons and families who lost their homes to foreclosure between 2008 and the present.
  • Affordable Housing.  $5 million should go to the Delaware State Housing Authority’s Strong Neighborhoods Revolving Housing Fund, which is dedicated to the creation of affordable housing in economically impacted areas.

Providing Help to Low-Income Children ($7.8 million)

  • Support for High Poverty Elementary Schools. We are proposing to dedicate $4.8 million to providing $100,000 per year for three years to each of the state’s 16 highest-poverty elementary schools, to allow them to hire additional teachers or paraprofessionals to work with the students from low-income areas who attend school there every day.
  • After School and Summer Programs.  $3 million over three years should be spent on after-school and summer programs targeted at students who live in low-income areas of the state.

“When it comes to sentencing those who have broken the law, we have to ask, do we wish to punish, or do we wish to rehabilitate,” said David Hume of atTAcK Addiction. “It is estimated, the costs of $36,000 to incarcerate, while the cost of treatment is $6,000. To rehabilitate and prevent recidivism, we need the $3-million that the Attorney General has earmarked for drug treatment opportunities for those currently incarcerated, as well as programs to insure those about to be released have a plan to move forward in their lives.”

Colonel Elmer Setting, Chief of the New Castle County Police Department, echoed the sentiments of atTAcK Addiction, and said arresting users isn’t the answer, suggesting if we educate and rehabilitate, we will be a better country, a better state, and a better city.

The Citi and BOA settlement funds are held by the Attorney General’s Office and can be spent by agreement of the Attorney General and the Joint Finance Committee if the JFC indicates it does not intend to take the funds from the settlement account and allocate them as part of the budget process. Attorney General Denn continues to believe the settlement funds should not be used by the legislature to plug budget holes.

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