SOUTH PORTLAND — City officials are trying to secure an additional $16 million in federal pandemic aid they say South Portland is missing out on because of an administrative technicality in how the city receives Community Development Block Grant funding.

Maine’s congressional delegation sought help this week from U.S. Treasury Secretary Janet Yellen, asking her to fix a funding glitch that threatens to disadvantage dozens of similar municipalities across the country, from California to Michigan to Pennsylvania.

The loss of American Rescue Plan funding comes at a critical time for Maine’s fourth-largest city, which is going through a long-delayed property revaluation during a pandemic-fueled real estate boom that promises to raise some homeowners’ tax bills 10 to 30 percent or more.

South Portland expects to get $2.5 million in pandemic recovery aid through Cumberland County’s CDBG program. Other Maine cities that are designated CDBG entitlement communities will get much more directly from the Treasury Department: Portland, $48.2 million; Lewiston, $22.8 million; Bangor, $21 million; Auburn, $14.2 million; and Biddeford, $11.7 million.

South Portland relinquished its entitlement status in 2006 to ensure that Cumberland County qualified to establish a CDBG program. If it were still an entitlement community, it would be getting $14 million to $18.6 million from the Coronavirus Local Fiscal Recovery Fund, Mayor Misha Pride said in a letter to the delegation.

“Our community has suffered just as much, if not more, than these other communities during the COVID pandemic,” Pride said. “We should (not be) punished for how we administratively chose to receive our CDBG funding over 15 years ago.”

Cities must meet certain federal poverty and population measures to qualify as CDBG entitlement communities and receive funding directly from the U.S. Department of Housing and Urban Development for housing, infrastructure and anti-poverty programs. Other cities and towns receive CDBG funding through state or county administrators.

South Portland became a CDBG entitlement community in 2004, then gave up that status two years later so Cumberland County would have enough population among 25 communities outside Portland to establish a county CDBG program. In return, South Portland got a 2 percent increase in CDBG funding it now receives through the county. The city now gets about $435,000 annually.

Sens. Angus King, an independent, and Susan Collins, a Republican, and Rep. Chellie Pingree, D-1st District, sent a letter to Yellen on Monday.

“We are concerned that this relinquishment may lead to the city of South Portland (receiving) significantly less funding per capita than other Maine cities with equal or less population,” the letter states.

The delegation asked Yellen to intervene and ensure that equitable recovery funding be provided to South Portland and “numerous other municipalities across the country” that are eligible for entitlement status.

“One of our state’s largest cities should not lose out on critical relief because of a technicality,” said Pingree, who along with King voted in favor of the Biden administration’s $1.9 trillion COVID-19 relief bill.

Yellen’s office didn’t respond Wednesday to a request for information about the secretary’s response to the funding problem.

With a population just over 25,000, South Portland is the only city in Maine that qualifies as a CDBG entitlement community but has relinquished its status.

Of $130.2 billion in ARP funding that’s allocated to local governments, $45.6 billion is going to metropolitan cities using the CDBG program formula, including Portland and Maine’s other CDBG entitlement communities; $19.5 billion is going to non-entitlement communities to be distributed through states; and $65.1 billion is going to counties, including Cumberland County, that will distribute funds to their members.

Pride said additional federal funding could help the City Council avoid budget cuts and lower tax bills as it reviews a proposed $96 million spending plan for fiscal 2022 that starts July 1. However, state and local governments are awaiting clarification on spending restrictions on COVID-19 relief funds.

“I’m hoping this can be resolved very quickly through Treasury regulation that can make up for this inequitable result,” Pride said. “Right now we’re looking at this as if we’re just getting $2.5 million. We’ll make changes if change comes.”


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