Maine municipalities, counties gear up to spend federal relief funding

Maine municipalities and counties are making plans to spend $502 million in American Rescue Plan Act funding on everything from bonuses for front-line employees who worked during the COVID-19 pandemic, to infrastructure projects that would improve water, sewer and broadband internet service.

City officials in Lewiston have already appropriated its $21 million allocation, but the process is going more slowly for many other local leaders. Spending guidelines that were unclear from the start continue to evolve, and precautions are being taken to ensure the money is used appropriately and that programs meet community needs.

“We’re all incredibly lucky that this federal money is available,” said Portland City Councilor Nicholas Mavodones, the finance committee chairman helping to oversee a $46.3 million ARPA allocation. “It will make a significant difference with all that we’ve been going through the last year and a half.”

Maine’s 16 counties are divvying up a total of $261 million allocated directly from the U.S. Treasury Department, and the state’s six largest cities are doing the same with a total of $121.6 million, including Portland, Lewiston, South Portland and Biddeford. Each county and city received about half of its allocation in May and is expected to receive the other half after April of next year.

The Mills administration got a second 30-day extension from the Treasury Department, allowing it to delay until September the distribution of $119 million in ARPA funds among 479 smaller cities and towns. Those still waiting for their share include Sanford, Cape Elizabeth and Falmouth, which held a public hearing to get guidance on how to use its $1.3 million allocation.

The state was supposed to disburse the money within 30 days of receiving it on June 3. The Maine Department of Administrative and Financial Services attributed the delay to late guidance from federal officials on reporting requirements and the need to establish a web portal to administer the funds in a secure and efficient way.

“It is our goal to distribute these funds quickly and we expect Maine communities to have them in hand in short order,” said Kelsey Goldsmith, department spokesperson.

The ARPA money can be used only for certain expenditures, although guidelines seem to offer great leeway. Allowed expenses include public health measures, hazard pay for public and private front-line workers, business grants, affordable housing, child care and other costs resulting from revenue losses or budget shortfalls. The money cannot be used expressly to pay down debt, cover pension obligations, finance rainy day funds, reduce taxes or provide matching funds for federal grants.

Municipalities and counties have some time to figure out how to use the money, but it must be committed by the end of 2024 and spent by the end of 2026. Some are seeking guidance from residents and others through public hearings and online surveys.

Portland plans to hold a public hearing on Sept. 13 and it already has received hundreds of responses to an online survey that’s open through Sept. 17. So far, Maine’s largest city has appropriated $8.5 million to help cover as much as $27 million in revenue losses attributed to the COVID-19 pandemic.

“We’re sincerely interested in what the community says,” Mavodones said. “There are things that could be done with that money that we may never think of, and if it’s eligible, we’ll consider it.”

BONUSES FOR FRONT-LINE STAFF

South Portland, the fourth-largest city, has targeted about $3 million of its $10.5 million allocation, including $525,000 for hazard bonuses or “premium pay” for certain essential city workers. They include police officers who continued to answer emergency calls and city clerks who continued to provide counter service during the pandemic, said Mayor Misha Pride.

“I think it’s a worthwhile expenditure,” said Pride, who heads the City Council. “Our front-line staff in the city had to go to work every day and encounter the public regardless of the risk while many of us stayed home.”

South Portland also budgeted $1.4 million in ARPA money to make up for a pandemic-related revenue shortfall; $350,000 to partially fund a broadband project; and $739,000 for allowed expenditures such as an addiction recovery program, a new social services position and a public health study. City Manager Scott Morelli has recommended “taking a few months to come up with a process for how to allocate” the remaining $7.5 million of South Portland’s allocation.

Lewiston, the second-largest city, also considered its employees when it appropriated its entire ARPA allocation last month. Back in June, Mayor Mark Cayer and the City Council agreed to spend $220,000 on hazard pay bonuses – one-time payments to all employees recognizing “the efforts that everyone made during the COVID-19 pandemic.”

Front-line emergency responders will receive a payment equal to 32 regular hours of work based on added risks associated with specific jobs, said City Administrator Heather Hunter. All other full-time city employees will receive a payment equal to 16 regular hours of work.

“The City Council recognizes that Lewiston city staff led among other municipalities in the maintenance of services for their citizens, safety and providing relief to struggling businesses,” Hunter said in an email. “They also recognize that we all had personal challenges we needed to deal with outside of work, but we made it all work.”

Lewiston officials also agreed to spend $9.8 million on a combined-sewer overflow storage tank for the Lewiston-Auburn Water Pollution Control Authority; $9.8 million on a redundant water transmission main; $1.2 million to improve ventilation in public city buildings; and $65,000 on computer software to improve the city’s code enforcement and licensing response.

In neighboring Auburn, the City Council has earmarked $250,000 to provide energy efficiency incentives to homeowners and city officials are organizing a regional summit in September to discuss greater collaboration using other ARPA funds, said City Manager Phil Crowell.

Biddeford also decided to spend some of its $9.8 million allocation on city employees, said City Manager Jim Bennett. From an appropriation of $568,000, all employees will get $125 for each month worked from February 2020 through July 2021, when the city lifted its state of emergency. The amount is being negotiated with municipal unions and will be prorated for part-time employees.

Biddeford councilors also agreed to use $535,000 on equipment for the wastewater treatment plant, where the city lost $1.5 million to $2.5 million in revenue because of reduced flow from businesses that weren’t operating. The council decided to hold off borrowing $5 million of $10 million approved by voters for wastewater projects and will use $5 million in ARPA funds. Discussions on what to do with the remaining $2 million to $3 million will happen early next year.

Bangor, which has been allocated $20.5 million in ARPA funding, didn’t respond to a reporter’s inquiry.

SMALLER CITIES AND TOWNS

Among the 479 smaller cities and towns that are sharing $119 million in ARPA funds, many are looking forward to getting their share.

After a two-month delay, the state is expected to have a web portal up and collecting information from those communities by Sept. 3. The state was finalizing contract negotiations last week with a website developer that’s doing the work, according to the Maine Municipal Association.

Some municipalities aren’t talking seriously about spending the money before it’s disbursed.

“We haven’t committed to spending anything until we have the money in hand,” said Matthew Sturgis, Cape Elizabeth’s town manager.

Cape Elizabeth will receive about $980,000 in ARPA funds, which councilors likely will use to offset about $300,000 in lost parking revenue in 2020 at Fort Williams Park, as well as for storm water management projects and other infrastructure improvements, Sturgis said.

In Sanford, councilors have had preliminary discussions about potential uses for a $2.1 million allocation, said City Manager Steven Buck. Like Cape Elizabeth, those conversations will get real when the funds are disbursed, Buck said.

The same goes for Cumberland, said Town Manager Bill Shane. Councilors likely will use the town’s $850,000 allocation to offset $450,000 in recreation revenue lost during the pandemic and $900,000 that was cut from the fiscal 2021 budget last year, including delayed capital projects and four full-time positions that were left unfilled.

“We do not plan to pay out hazard pay,” Shane said in an email. “All wages were frozen, but no one lost their jobs. I think the Town Council’s very conservative budget strategy was the correct course of action given all the uncertainties of these past 18 months.”

Yarmouth officials have discussed how to spend the town’s $860,000 allocation but not acted on it, said Town Manager Nat Tupper. They’re also considering reimbursements for pandemic-related expenses and revenue losses, as well as retroactive hazard pay for first responders, infrastructure improvements and pooling resources with other towns for regional projects.

Falmouth residents were invited to a virtual public hearing to provide the Town Council with suggestions on how to spend a $1.3 million allocation. Falmouth hasn’t experienced municipal revenue losses during the pandemic, based on the federal formula used for ARPA funding, said Finance Director Peter McHugh. However, the town’s schools lost nearly $600,000 in revenue, largely because the lunch program took a hit when students were learning remotely.

Scarborough officials also mostly held off discussing how to spend the town’s $2.2 million allocation, but they decided to appropriate some of the funds to provide “premium pay” for police, fire and dispatch workers, said Town Manager Tom Hall. The payments will be based on hours worked from March 2020 to June 30, 2021, and vary depending on the level of hazard experienced during the pandemic.

“We very purposely and consciously avoided the temptation to involve these funds in the (fiscal 2022) budget discussion and have chosen to take a very deliberate approach as to the ultimate use of these funds,” Hall said. “As our society experiences a resurgence of COVID-19, particularly the delta variant, we may well be forced to use some of the funds for pandemic response again, so we are in no hurry to spend the funds.”

COUNTIES TO SHARE FUNDING

Based on population, Cumberland County’s $57.3 million allocation is the largest among Maine’s 16 counties. As a result, its reporting and performance standards are much higher than other counties, said spokesman Travis Kennedy.

“Because our population is over 250,000, we’re required to develop a performance plan that establishes goals and benchmarks for use of the funds,” Kennedy said in an email. Cumberland County has 295,000 residents.

ARPA fund distribution also requires more oversight, so the county will be adding staff to work on public outreach to identify best uses and community needs, and to ensure compliance with federal grant guidelines, Kennedy said.

“We’re also waiting for final rules from the (Treasury Department) that will hopefully give more clear guidance on what, exactly, we can spend funds on,” Kennedy said. “The majority of our funds will be invested outside of county government and in the community, which is more complicated. So we’re getting all of our ducks in a row, and hope to start making some decisions on regional investments by early fall.”

Other county allocations are: Androscoggin, $21 million; Aroostook, $13 million; Franklin, $5.9 million; Hancock, $10.7 million; Kennebec, $23.7 million; Knox, $7.7 million; Lincoln, $6.7 million; Oxford, $11.3 million; Penobscot, $29.5 million; Piscataquis, $3.3 million; Sagadahoc, $7 million; Somerset, $9.8 million; Waldo, $7.7 million; Washington, $6 million; and York, $40.3 million.

Some counties, including Cumberland, York and Hancock, have posted comprehensive information about ARPA funding on their websites and are seeking public comment, spending recommendations and grant applications from community groups. Other counties, including Androscoggin, Kennebec and Penobscot, have no ARPA information apparent on their websites.

York County has posted dozens of funding applications it has received already, including from the Biddeford Food Pantry, $26,629, for solar panels; North Berwick Water District, $347,500, for a water main and pump station; and Vera Institute of Justice, $4.5 million, for its End Girls Incarceration initiative.

While most spending decisions have yet to be made, Cumberland County commissioners have decided to spend some ARPA money on pay raises for corrections officers at the county jail, Kennedy said. It would increase base pay by $2.75 per hour, which would result in varying hourly rates depending on staffing levels and hours worked.

“Like many employers, the jail is struggling to find employees,” Kennedy said. “We’re down to about half of the budgeted staff right now, and increased salary is identified as one of several identified tools to improve staffing levels.”

Staff Writer Gillian Graham contributed to this report.


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