Facing legal questions, County Council votes down Rescue Plan funding for Project RESOLVE

Erie County Council shot down a resolution Tuesday to use COVID-19 relief money toward the development of a manufacturing and battery-testing facility at Penn State Behrend.

In a 4-3 vote, the council's four Democratic members — Mary Rennie, Andre Horton, Terry Scutella and Jim Winarski — voted down the measure, which would have greenlit $5 million in American Rescue Plan funds toward the proposed center at Knowledge Park.

While all four Democrats said they supported the center itself — which Penn State Behrend called its first phase of Project RESOLVE, a 10-year regional strategy to strengthen the competitiveness of local manufacturing — they voiced concerns about the legality of the transaction. Namely, whether the project was eligible for Rescue Plan funding.

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"What is legal and what isn't?" Winarski asked his colleagues. "Can we use the money for this or can't we?"

Winarski, who told the Erie Times-News on Monday he would support the resolution, changed his position Tuesday, insisting he had too many unanswered questions.

Horton and Scutella argued that Rescue Plan funds were intended for communities most negatively impacted by the COVID-19 pandemic. Horton added that Penn State University was already a significant "money-making institution" and didn't need county funds, whereas minority communities, the homeless and at-risk county residents did.

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Rennie, Shank clash over county executive's influence over council

The meeting's most heated exchange involved Rennie and Council Chairman Brian Shank over the role of Erie County Executive Brenton Davis.

Rennie questioned the process by which Davis brought forth the resolution, insisting he pledged the $5 million toward the project — and privately met with certain council members to secure votes — before discussing the matter with the full council body.

"This money was promised before we ever stepped foot in this room," said Rennie, who has argued that Davis often blurs the line between his office and council.

The comment set off Shank, who said Rennie was grandstanding and making false accusations.

The moment can be seen in the below video from Tuesday's meeting, starting at 2:04.18.

"Nobody on this council walks around with votes in their pockets," he said. "Everyone of these (council members was) duly elected by the people and we make decisions on why we vote."

Turning to Rennie, he said, "So for your grandstanding, name-calling that you love to do, it's inappropriate and it will not happen again in this chamber that you say just whatever Mary Rennie wants to say however she wants to say it."

When Rennie said Shank made a "personal attack," followed by Horton stating Shank was out of order, Shank banged his gavel and threatened to "clear the room" if members infringed on his speaking time.

Rennie said she was referring to the Davis administration — not council members — with votes in their pockets.

"I think everyone understands that," she said.

Legal opinions vary on use of Rescue Plan funds

Central to the resolution's failure Tuesday was the question of legality: Was it legal to use Rescue Plan funds for Project RESOLVE?

County Solicitor Bill Speros said it was "absolutely legal," during a recent council meeting. That opinion was shared by Matthew Hanson, a member of Witt O'Brien's, an international crisis and emergency management company that serves as the county's consultant on the Rescue Plan funds.

Hanson on Tuesday said a pathway to eligibility was proving to the U.S. Treasury that a local business or industry impacted by the COVID-19 pandemic could benefit from the proposed center.

He said the Davis administration selected the Wabtec Corp. plant in Lawrence Park Township because it suffered at least an 8% loss in employment during the pandemic and met the job loss threshold stated in the Rescue Plan guidelines.

Councilwoman Ellen Schauerman voiced confidence in the consultant's assessment, saying Tuesday "they are well aware of what is allowed and what isn't allowed in the ARPA guidelines."

However, former County Council Chairman Carl Anderson disagreed.

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Speaking at Tuesday's meeting during the public comment period, Anderson, who helped spearhead the budgeting of the 2022 Rescue Plan budget, read aloud an excerpt from the U.S. Treasury guidelines that stated "large capital projects intended for general economic development or to aid impacted industries" were ineligible for Rescue Plan funds.

He said the Behrend center should be funded through eligible means, like revenue replacement, as opposed to taking money away from the Erie County Gaming Revenue Authority, where the $5 million was originally intended.

County Council Solicitor Tom Talarico similarly pushed back on the county's consultant.

"ARPA monies are not supposed to be used for this purpose — it's completely inappropriate," he said. "There's nothing wrong with using any kind of county money if it's available to satisfy this. But it's a complete violation of the ARPA law to use ARPA money for this particular project."

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The Davis administration sought the $5 million as a local match for a state Redevelopment Assistance Capital Program grant of $8 million.

Prior to any council approval, a RACP grant application for the project was submitted in August by the Erie County General Authority on behalf of the administration and Penn State Behrend. The application indicated an $8 million local match, which included the $5 million.

Speaking during the public comments period Tuesday former County Council Chairman Fiore Leone blasted Davis for committing funds before council approved them.

"I supported that county executive," Leone said of his endorsement of Davis in 2021. "But they do put erasers on pencils when you make mistakes. I'm not saying it's entirely true yet. I'll wait to see what he does in the future."

Davis and Penn State Behrend have denied making any commitments of funds toward Project RESOLVE.

What's next?

Following the meeting, County Information Officer Chris Carroll, who represented the administration at the meeting, said he was disappointed in the outcome.

"We feel that the investment into plastics, the investment into that industrial battery-testing facility, is a one-of-a-kind project," he said. "It's going to be the first of its kind in the nation and we need to start investing in ourselves. We're disappointed in the outcome, but it's not going to deter us. We're going to continue to fight for Project RESOLVE and we'll see what's ahead."

Rennie said the project is "up to Penn State at this point."

"We don't know yet how much or even whether they will get an award from the RACP grant application," she said. "The question of public or private funding matches, I think will be a future conversation and not only one for County Council."

In an e-mail statement Wednesday, Robb Frederick, assistant director of news and information for Penn State Behrend, said the school remains "prepared to match up to $5 million in funding for the center. "

"Penn State Behrend is committed to working with local elected officials, including members of Erie County Council, to advance Project RESOLVE in a manner that supports the entire community and continues Erie County’s tradition of manufacturing excellence," he said.

A.J. Rao can be reached at arao@gannett.com. Follow him on Twitter @ETNRao.

This article originally appeared on Erie Times-News: Erie County Council votes down funds for Project RESOLVE