$2M Portland budget shortfall may be offset with ARPA funding

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Portland may make up a $2 million budget shortfall with American Rescue Plan Act funds.

The city has approximately $13.2 million left of the federal funding. Using it to address the revenue shortfall would reduce the balance to just over $11.2 million.

Seal of the city of portlandThe budget gap was exacerbated by the city’s efforts to address its homelessness crisis, and the shortfall could have potentially ended the city’s ability to use hotels as overflow emergency shelter space.

A city spokesperson said the city is still using hotels as shelters. While ARPA funds are being used to cover the gap, Portland is still asking the state for help with resettlement coordination and finding space that isn’t as expensive as the hotels.

The fix is strictly short-term, however, since the city won’t have ARPA funds indefinitely. 

The decision to use ARPA was announced during the City Council Finance Committee’s meeting last week when the panel approved interim City Manager Danielle West’s proposed municipal budget.

The committee also unanimously approved an amendment that would add a third full-time staff member to the city Sustainability Office. The amendment by Councilor Andrew Zarro would add approximately $90,000 for the staffer’s salary, benefits, and a new computer. The salary would be just over $70,000 annually.

City Finance Director Brendan O’Connell said the expense will be made up by raising the monthly parking fees at the Spring and Elm street garages by $10, to $140 a month.

The budget now returns to the council for its approval. Because it already had the first reading by the council before being amended by the committee it will also have to be amended by the council for the new position to be created.

The committee also discussed expanding child care eligibility.

O’Connell said the city has a fund called the Portland Growing Childcare Grant and said his office needed guidance on using the remaining funds. The initial $1 million allotment came from ARPA, and O’Connell said $500,000 has already been earmarked for Youth and Family Outreach, which is undertaking a $32 million project to create housing and a new child care center on Cumberland Avenue.

He said another $229,000 is targeted for other child care initiatives with fewer than 75 students.

Given the shrinking pool of applicants, O’Connell asked for approval to open eligibility to child care groups with more than 75 students; he said the city has so far provided 14 funding awards, and another 16 would qualify if eligibility were increased. The committee unanimously agreed.

O’Connell also said he doubts all the funds will be used because most smaller centers have already applied. If the larger centers are approved, about $100,000 in grant funding would remain.