Maine local governments in no rush to spend pandemic relief funds

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Local governments in Maine are expected to receive more than half a billion dollars in federal pandemic relief funds, but most have yet to come up with major plans to invest this unprecedented windfall.

County and municipal governments across the state are entitled to nearly $ 502 million from the American Rescue Plan Act, a coronavirus relief bill passed by Democrats and signed by President Biden in March.

The funding is intended to support urgent responses to the pandemic, replace lost government revenue, provide local economic relief, and be invested in water, sewer and broadband infrastructure. The funding was split into two installments, the first being paid two months after the legislation was passed and the second due to be distributed a year later. Governments have until 2026 to direct funding to eligible expenses.

But the vast majority of cities in Maine have yet to receive funding, and others are considering where to invest and whether to partner with each other and other entities to stretch the money further. .

“I think many communities are still trying to get a handle on the problem and figure out how best to invest this income,” said Kate Dufour, director of state and federal relations for the Maine Municipal Association.

Typically, federal money flows into communities through competitive grants or state transfers, Dufour added. Direct payments of this magnitude are unknown and could be used to make long-term investments instead of subsidizing regular municipal budgets, she said.

“Here is an opportunity to think a little more about investing in broadband or affordable housing,” said Dufour. “We have this disposable income, and that doesn’t take away from other local priorities.”

All 16 counties in Maine and the six “eligible” cities that administer federal grants received the first installment of funding this month. But nearly 500 towns and villages expected to receive $ 119 million as a transfer from the state government may have to wait until August to receive the money.

The state was supposed to distribute the funds 30 days after receiving them from the federal government, but requested a one-month extension to await final rules for the U.S. Treasury program and create an online application portal.

Funding ranges from over $ 2 million each for Sanford, Scarborough, Brunswick and Saco, to just over $ 300 for Glenwood Plantation, a hamlet in Aroostook County that had only three residents at the 2010 census.

“We are trying to keep the disbursement and accounting process as streamlined and as easy as possible for municipalities, which is why we are creating and launching a portal for this purpose,” said Kelsey Goldsmith, Director of Communications for the Administrative Department and financial. Services. “Our goal is to distribute these funds quickly and expect communities in Maine to have them on hand as soon as possible. “

Even cities and counties that have received funding directly aren’t rushing to spend it. Local governments have some flexibility in spending the money, but it cannot be used for whatever purpose they wish.

The money is eligible to pay for public health measures, vaccinations, personal protective equipment and things such as risk premiums for public and private frontline workers, business subsidies, affordable housing, child care and other priorities.

But local governments can’t use the money to pay down debt, cover pension obligations, or fund funds for rainy days. It also cannot be used to reduce taxes or as a matching fund for federal grants. And generally, local governments cannot use the funds to subsidize their budgets or pay for new roads, vehicles or equipment, unless they cover a budget deficit.

However, if cities use the money to replace lost income, it can be used to cover standard municipal expenses. South Portland has already committed about $ 2.4 million of its initial $ 5.3 million installment, according to a city budget memo.

South Portland has allocated nearly $ 1.4 million to cover lost revenue, covering capital improvement projects, part of a new fire truck and a roll of asphalt. Another $ 738,700 was spent on public health and economic impacts, including mental health services, a new position in social services and a health study. The bonus for essential city workers was funded with $ 525,000, and an additional $ 350,000 was spent on broadband Internet infrastructure.

That leaves the city about $ 8 million over the life of the program.

“We will be developing a process over the next few weeks or so to ensure we get good input from the public and direction from City Council so that funds are used in the most meaningful way possible,” City Manager Scott said. . Morelli.

Portland, which is expected to receive around $ 46 million, the highest amount for a municipality, is considering a public engagement process to gather ideas from city council, administration and citizens, said city manager Jon Jennings at a finance committee meeting last week.

“I think it’s really important to have not just a council workshop, but a mechanism for us to hear from the audience in terms of priorities for the community that we don’t think about or maybe don’t recognize,” Jennings said.

This could include collaboration between Portland and neighboring communities, agencies and governments, including Cumberland County, on how to use the funds collectively to the greatest extent, Portland City Councilor Tae Chong said.

“This is a generational investment – it should not be a replacement for the programs we are currently running,” Chong said. “These should be the kind of construction or programs that we can build that give us benefits beyond Year 3 and Year 4 when the money is running out. “

Maine counties received some of the largest bailout disbursements, from around $ 3.2 million for Piscataquis County to over $ 57 million for Cumberland County.

But unlike other parts of the country, particularly the south and west, counties in Maine have minor administrative functions outside of sheriff’s offices, prisons, and courts.

“This is a unique situation in Maine and much of New England,” said Travis Kennedy, director of public affairs for Cumberland County.

Going forward, the county wants to form coalitions with cities, other parties and the state to best use the money regionally, Kennedy added.

“Our hope is that we can find ways to leverage each other’s resources to get more for our money and avoid duplication of effort,” he said. “The last thing we want to do is compete to solve the same problems when we could solve them regionally.”


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