Portland’s acting city manager is drafting a budget for the fiscal year starting July 1 that assumes some of Gov. Paul LePage’s welfare reforms will take effect.

LePage has proposed eliminating General Assistance for certain types of immigrants and is pressing the city to change the way its emergency shelters are funded.

The governor’s proposal to halt aid to immigrants waiting a final determination of their legal status – in most cases, those who have fled violence in their countries and are seeking asylum in the United States – affects more than 500 families, or 900 individuals, according to a staff memo sent to councilors.

Other people in crisis may be turned away from the city’s emergency shelter.

“We’re planning around the worst-case scenario,” acting City Manager Sheila Hill-Christian told the City Council’s Finance Committee on Thursday. “That will be the tone of the budget you will receive in April.”

Hill-Christian said staff members were directed to submit status quo budgets for next year, and the city is building its General Assistance program around what the state is willing to pay for. “We’re still discussing what that looks like,” she said.

The city could lose up to $5 million next year if LePage’s welfare reforms are enacted by the Legislature, said Portland Finance Director Brendan O’Connell.

Since July 1, Portland has spent $7.6 million on General Assistance, and based on previous years, would have expected to receive upward of $5 million in state reimbursements, O’Connell said.

However, the state has been withholding the city’s reimbursement because it continues to defy LePage by providing assistance to some immigrants.

Even though the LePage administration has indicated it would partially reimburse the city for undisputed General Assistance expenditures, O’Connell said no check has arrived. “We are checking the mail daily,” he said.

AWAITING STATE CHECK, COURT RULING

Portland has joined the Maine Municipal Association in a lawsuit seeking to clarify a dispute between Attorney General Janet Mills and LePage questioning the legality of the new policy of excluding some immigrants from receiving GA, which took effect July 1. Mills issued an opinion that the change is unconstitutional and that the administration didn’t follow the proper rulemaking procedures.

City Attorney Danielle West-Chuhta told the council’s public safety committee Tuesday that she expects a court ruling by late spring.

Councilor Jill Duson, who serves on the Finance Committee, said Tuesday that the council should meet with its attorney soon to discuss seeking a preliminary injunction that would force the state, at a minimum, to reimburse the city for GA payments that are not being disputed.

“We have this airy promise of reimbursement of some amount, but it hasn’t happened yet,” Duson said. “It certainly could be mooted by a check showing up tomorrow.”

The committee did not address a state audit of the city’s shelter program in January, which revealed that several people staying at the shelter had at least $20,000 in the bank and that none of their money was being used to offset the expense of sheltering them.

Costs at the city’s Oxford Street Shelter have increased by 84 percent since fiscal year 2009 – the onset of the Great Recession.

Specifically, the state found that the city was billing the state for shelter operating costs, not checking the financial eligibility of people staying at the shelter and not requiring shelter residents to use their income to meet basic needs.

The state audit reviewed 90 General Assistance case files and found that benefits such as vouchers for rent, food, utilities and medications all were administered correctly. However, auditors in January also asked for additional information regarding the shelters, which led to the critical findings about the shelter operations.

The city has until Monday to respond to the audit’s initial findings.

CITY TO TAP ITS RESERVE FUND

Portland is planning to bring its program into compliance with the administration’s expectations, even though the city’s General Assistance program has been found in compliance for the past 20 years, including two previous audits by the LePage administration.

Complying with the audit is expected to cost at least $820,000, which is primarily the cost of operating the city shelters.

Those changes were a hot topic of discussion Tuesday during a meeting of the council’s Public Safety, Health and Human Services Committee.

O’Connell said the city would be able to cover the potential GA losses in the current budget by tapping the city’s fund balance. The losses could be roughly $2 million if LePage prevails in the GA court case, he said.

O’Connell said credit agencies want the city to have roughly 8 percent of its general fund expenditures in a reserve account. The city currently has in excess of 12.5 percent, he said.

The city’s current expenditures, including school spending, are about $176.2 million.

“Even taking the hit to General Assistance this year it would not put us in the danger zone,” O’Connell said.

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