South Portland city councilors are concerned about how the city is being treated in regard to regional transit funding and want more information and discussion about the issue but stopped short Tuesday night of ending a longstanding membership in a regional planning body.

In a budget memo, City Manager Scott Morelli said the city should stop paying about $46,350 in annual dues to the Greater Portland Council of Governments, amounting to about 1 cent on residents’ tax bill, in reaction to changes in how federal money is distributed across Greater Portland, including a dispute over an $8 million public transportation improvement package.

The regional planning agency houses the Portland Area Comprehensive Transportation System, the agency that oversees how federal transit money is distributed to local providers.

The organization’s “entangled role” as PACTS administrator has led to “unfavorable outcomes for the city of South Portland, specifically our South Portland Bus Service,” Morelli wrote to councilors.

“While we value regional partnerships and prefer working together, it is clear that other community representatives associated with PACTS and GPCOG along with some staff do not have South Portland’s best interests in mind,” Morelli said.

If South Portland pulled out of GPCOG, it would remain a member of PACTS.

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Kristina Egan, GPCOG’s executive director, told city councilors at a workshop that leaving the regional planning group would not fix any of its issues with transit funding. It would harm the city by withdrawing from regional collaboration and discussion on housing, climate change, transportation and other key issues, Egan said.

“I believe your withdrawal will hurt everyone and it won’t solve your issues and it won’t save you money,” she said. Membership in the organization saved the city $35,000 last year in a joint salt purchase, she added.

Morelli told councilors that a funding formula introduced in recent years has reduced the amount of funding South Portland receives and reduced its power in decision making. Officials from PACTS and GPCOG also have threatened to revoke the city’s status as a “designated receiver,” which means it can receive and distribute federal funding and needs to agree to any regional transit spending plans.

The end result could be a takeover of the South Portland Bus Service by Metro, the bus company for Portland, Falmouth, Westbrook and other communities. The South Portland City Council voted in 2018 against consolidating with Metro.

“If things continue on the same path, South Portland taxpayers will have to foot more of the bill than they have and pressure to merge with Metro will intensify,” Morelli said. “This is a threat to the council, at some point if our operations don’t get funded and we have to bear more of our costs for taxpayers, eventually some of you will say it doesn’t make sense but to merge.

“If you want to avoid that we need to see some changes.”

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Officials from GPCOG have said the unusually high number of designated recipients holds the region back from better transit coordination and partnership. In recent weeks it has created friction as four transit agencies withheld required signatures on a “split letter” needed to unlock $8 million dedicated mostly to transit improvements by a PACTS governing board in March.

That “‘nuclear option’ would strip smaller transit agencies like ours of having any meaningful power or voice related to transit funding matters,” Morelli said in a memo to council.

In March, after a monthslong applications process, the PACTS Policy Board narrowly voted in favor of spending about $7 million from the American Rescue Plan Act to fund long-term improvements to bus Routes in Portland, Biddeford and York County, improve passenger information and cut fares in half for nine weeks.

Supporters of the package, including Greater Portland METRO, said transit agencies needed the funding for new and improved services to attract riders lost during the pandemic.

Opponents, including South Portland Bus Service, Casco Bay Lines, the agency that operates Downeaster passenger rail and Biddeford-Saco-Old Orchard Beach Transit wanted more relief money for service subsidies, and raised concern with the committee’s application process. The vast majority of about $60 million federal relief delivered for regional transit agencies since 2020 has been spent on operations to offset fare losses.

Those four agencies are withholding their signatures on a federally required “split letter” to release the funding and have asked for more discussion about the relief package.

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