Portland City Council weighs options for remaining $11.2 million in COVID relief funds

·4 min read

Sep. 23—New apartments and transitional housing for asylum seekers. Expanded educational programs for children and teens. Dental care for patients without access. An environmentally sustainable taxi service on Peaks Island.

These are some of the ideas the City Council will consider when deciding how to spend Portland's remaining American Rescue Plan Act funding.

The city received more than 50 requests totaling over $33 million this summer, but only has $11.2 million to spend. The funding represents the latest and final round of coronavirus relief aid, which must be allocated by Dec. 2024 and spent by Dec. 2026.

Councilors at a workshop Thursday got a first look at the project proposals and next steps and also provided staff with guidance on how to move ahead on one project proposal that faces time constraints.

That project — a 48-unit affordable housing development in East Deering that would house asylum seekers currently staying in shelters and hotels — calls for the city to contribute $5 million in ARPA funding.

But Interim City Manager Danielle West said the developer, Avesta Housing, also approached the city about trying to secure the funding in order to fulfill a purchase and sale agreement ahead of the timeline for allocating the ARPA funds.

"We've been trying to think creatively about ways we could fund that project and if there are ways to come up with a more timely way to respond to their request since the ARPA process is pretty lengthy," West said.

She and Interim Director of Housing and Economic Development Mary Davis suggested the council use about $2 million in funds from the Jill C. Duson Housing Trust Fund and $1 million from ARPA funds that were previously allocated for housing projects. That wouldn't fund the whole request from Avesta, but West said the city would work with them and state officials to try and fill the gap.

Several councilors Thursday spoke in favor of trying to fund the project ahead of allocating the newest round of ARPA funds.

"I think there are other projects that warrant our attention, but this one rises to the top," said Councilor Mark Dion. "It's available and isn't a project with an extended timeline."

"I do think it certainly hits council goals squarely and also helps asylum seeking families who could benefit from the stability," said Mayor Kate Snyder.

West said the city could look to try and replenish the housing trust fund with the latest ARPA funds up for consideration. "That would be our hope and preference, to use some of the second tranche to replenish what we're taking now," she said. There are still other steps necessary for the city to approve the funding for the Avesta project, and West said staff will be working on it with the guidance provided by the council.

The council's finance committee is expected to meet Oct. 13 to review final applications for the ARPA projects and Oct. 20 to hold a public hearing and vote on funding recommendations. The full council would then hold a first read Nov. 7 and a second read and vote Nov. 21.

More than 1,600 people responded to a community survey the city put out over the summer to gauge priorities for spending the second round of funding. Nearly 39 percent of respondents indicated social services were their highest priority — more than any other category, including public health, public safety, business, environmental programs and the arts.

Within the social services category, most people (nearly 70 percent) said increasing housing options for the unsheltered is their top priority, followed by increasing programs for people living in poverty and more services to address unsheltered peoples' needs.

There are some parameters for how the money can be spent. The federal government has identified eligible expenditure categories, and applicants must be able to show how their projects fit into the categories. Categories include public health, the negative economic impacts of COVID-19 and investments in water, sewer and broadband infrastructure.

The city also said it would only accept applications for requests of $50,000 or more.

The $11.2 million represents about a quarter of the $46 million total in ARPA funds received by the city.

Approximately $14 million of ARPA funds from the first round were used for community and city projects last year. Other funds have been used to replace lost revenue and revenue gaps in the city budget and to provide a vaccination incentive and employee retention payments.

The first round of relief funding used for community projects went to, among other things, new public restrooms, support for mental health programs and grants to small businesses and childcare providers.