Portland’s city manager is pushing back the timeline for presenting the budget this spring, citing the challenges of large numbers of homeless and asylum seekers coming to the city and the increased difficulty of finding them emergency shelter.

“While we are proud to be a welcoming city, take our general assistance obligation seriously, and understand the value and benefits of having new residents in Maine, we are in a dire situation,” Interim City Manager Danielle West wrote in a memo to the City Council on Friday. “Our staff is stretched extremely thin and cannot adequately provide the required resources to the hundreds of new arrivals, our shelters are beyond their capacity, and it is increasingly harder to find enough hotels to provide overflow accommodations.”

West had been expected to present her proposed 2022-23 budget to the council Monday, but said she now plans to do so at the next council meeting, on April 25. She warned that an expected loss of federal reimbursement money for emergency housing at the end of June could force the city to raise taxes by as much as 15 percent or find about $13 million in cuts.

The current general fund budget is $212.2 million, about $91 million of which comes from taxes, and the combined school and city tax rate is $12.99. The school board has approved a $133.1 million budget that includes a 4.1 percent, or 28 cent, increase in the school side of the tax rate, but it must still be approved by the council and voters.

“In an effort to not have to increase the property tax rate or make significant cuts to city services, the mayor, myself, and other members of city staff have been diligently working with our State and Federal delegations, as well as the Governor’s Office, to find solutions and alternative sources of funding for increased (general assistance) reimbursement, temporary housing of asylum seekers, and resettlement coordination,” West wrote in her memo.

“We continue to stress to all of these parties that the city cannot continue to do this alone – that we need regional and state assistance to facilitate emergency shelter and resettlement efforts given the current situation we’re experiencing.”

The city is currently seeing its highest ever nightly averages of people in need of emergency shelter: about 1,500 people per night. In March, it saw the highest number of  newly arriving families seeking asylum, with 92 families, or 323 individuals arriving last month, according to a separate memo to the mayor and council from Director of Health and Human Services Kristen Dow.

Dow said the city is now using 12 hotels in six communities to shelter people and is also seeing record numbers of single people in need of emergency shelter. The city currently is providing emergency shelter to 484 individuals and is faced with the added challenge that two South Portland hotels have said they will no longer allow Portland to house homeless individuals after May 31.

“This is a total of approximately 280 individuals that we need to find alternative shelter for,” Dow wrote. “HHS staff are working with the Governor’s office, state DHHS staff, and our community partners to identify a suitable alternative space for these individuals.”

West projected that the annual cost of overflow hotel rooms to accommodate the number of people the city is seeing will exceed $44 million next year, which would more than double the city’s Department of Health and Human Services budget. That number does not account for future arrivals, and the city has been seeing nearly 100 people arriving each week, West said.

The state is currently reimbursing the city for 70 percent of its General Assistance costs while the federal government, with pandemic aid, is covering the remaining 30 percent of the emergency housing costs. It’s that federal aid, from the Federal Emergency Management Agency, that is set to expire at the end of June.

Jessica Grondin, a spokesperson for the city, said in an email Friday that the city is waiting for responses to various requests for aid and to see if the Legislature funds a bill sponsored by Rep. Michael Brennan, D-Portland, that would increase General Assistance reimbursement from the state up to 90 percent in communities that reach a set threshold of spending.

“If the state ups our reimbursement rate from 70 percent to 90 percent (or even 100 percent), that will greatly impact the budget picture,” Grondin said.

Mayor Kate Snyder also said that in another two weeks the city will likely have a clearer picture of what kind of assistance the state will be able to provide.

“To have an expense line potentially jump so significantly while we’re in an environment of increased general inflation and reduced revenues means the manager wants to be really prudent when presenting a budget to the council and to the community,” Snyder said. “I think she made the right decision. I think waiting to know more concretely is the right thing to do given the significance of this one expense line.”

Last month West and Snyder wrote to the chairs of the Legislature’s Joint Standing Committee on Appropriations and Financial Affairs, asking them to consider the costs Portland is facing as they work on a supplemental budget proposal. The mayor and city manager asked Sen. Cathy Breen, D-Falmouth, and Rep. Teresa Pierce, D -Falmouth, to consider an increase to the state’s General Assistance reimbursement, funding for a coordinated resettlement effort to be led by Catholic Charities or another community partner, and funding for MaineHousing to acquire and operate a temporary housing facility, with the help of community partners, to help the city move away from hotel rooms.

“The Appropriations and Financial Affairs Committee Chairs receive letters and testimony about important issues from municipalities, organizations and individuals all over the state,” Pierce said in a statement Friday. “We read and consider all the communications, recently including hundreds of pieces of testimony that were submitted for the public hearings on the supplemental budget.”

A spokesperson for Breen confirmed that the senator has received Portland’s letter and is going to look into the requests. The Legislature is scheduled to adjourn April 20.

Gov. Janet Mills, as part of her recent change package to the supplemental budget, is proposing to spend $22 million to create an emergency housing relief fund at MaineHousing to address homelessness, which would include providing rental assistance or appropriate housing to those who are staying in hotels. Her supplemental budget proposal also includes $750,000 in grant funding through the Maine Department of Health and Human Services to help community organizations deliver wraparound services, a spokesperson, Lindsay Crete, said in an email Friday.

Crete said the governor has directed Greg Payne, her senior housing adviser, and the Maine Department of Health and Human Services to work closely with MaineHousing, Portland city officials and other municipalities to ensure that existing resources are maximized and that services are coordinated.

“The administration will remain engaged with the City of Portland, the Legislature and Maine’s Congressional delegation moving forward,” Crete said.

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