What would you do with $46 million? That’s the question Portland officials are asking city residents as they look to invest an influx of federal funding stemming from the pandemic.
Portland is one of five entitlement Maine communities to receive a direct allocation from the American Rescue Plan Act, which is intended to replace lost revenues and cover other costs associated with responding to the pandemic. It’s already received $23.1 million and expects to receive a similar amount no sooner than next May. The state and counties are also receiving rescue plan funding.
So far, the City Council has only allocated $8.5 million, leaving about $14.6 million of the first round of funding. The allocation in this year’s budget replaces about a third of the estimated $25 million in lost city revenue related to the pandemic.
City staff have recommended future budget allocations for some of the money, but the bulk remains unallocated. And the city is looking to residents for ideas, which will be reviewed by the City Council when allocating the remaining funds.
“I look forward to working with the community, city staff, and my colleagues on the council to determine the best use of funds in this first tranche,” Mayor Kate Snyder said in a written statement. “ARPA funds offer a wonderful opportunity to invest in community needs created by the pandemic, and to consider generational investments in public infrastructure.”
Officials have launched an online survey for residents interested in weighing in about how the additional funding should be used. However, the federal funding is not a blank check – it’s uses are limited.
Eligible uses include responding to the COVID-19 disease or its negative economic impacts, including assistance to households, small businesses and nonprofits; and aid to affected industries such as tourism, travel and hospitality. It can also be used for premium pay for work performed by state, local or tribal government workers during the public health emergency; replacing government revenue lost because of the pandemic, and to make necessary investments in water, sewer or broadband infrastructure.
The funds cannot generally be used to offset pension costs, to meet local matching requirements for federally funded programs, to pay off debt or legal settlements, or for rainy day funds.
The city’s survey offers suggestions, while also allowing people to offer their own ideas. Some of the options include replacing lost municipal revenue, public health, community recreation facilities, homeless services, affordable housing services, childcare assistance, small business assistance and road/streetscape improvements.
It then asks people to rank their preferences in order of importance. It allows people to offer other ideas and sign up for notifications related to the rescue plan or any city projects.
City Hall Spokesperson Jessica Grondin said the survey will be open until Sept. 17 and the City Council is planning on holding a workshop to receive additional community input on Sept. 13. The city is preparing a separate survey for local businesses, she said.
City Manager Jon Jennings and Finance Director Brendan O’Connell have proposed using some of the remaining funds to wean the city off the federal funding over the next few fiscal years. They proposed using $5 million to $6 million in fiscal year 2023 and $2 million to $3 million in fiscal year 2024. That would leave roughly $30 million to $32 million in unallocated funds.
The funding must be obligated by the end of 2024 and must be spent by the end of 2026.
Through the previous fiscal year, O’Connell estimated, the city has lost $25 million to $27 million in revenues it would have otherwise collected were it not for COVID-19. The revenue losses were in areas such as parking, excise taxes, cruise ship revenues, parks and recreation programming, concerts and events, and concessions. But he said it’s unclear how much of that revenue can be replaced with rescue plan funding.
“Once the final methodology is released we’ll have a better idea of what the revenue loss figures per ARPA guidance would look like,” O’Connell said.
Councilor Nicholas Mavodones, who chairs of the council’s Finance Committee, said in a written statement that the funding is an opportunity for the city to recover from the pandemic and make investments in the city’s future.
“I’m thankful the city was able to receive these funds as it will greatly allow us to recover and grow from the impacts created by the pandemic,” Mavodones said. “As the mayor said, I look forward to working with all interested parties to gather ideas within the eligible uses for how these funds are invested in our community as we have the opportunity to make significant investments in our future.”
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