PORTLAND — While continuing strong rebuttals to state accusations of mismanagement in its General Assistance program, the city is preparing for possible administrative and financial changes to it.
Members of two City Council committees discussed responses last week to a state Department of Health and Human Services audit that centered largely on the Oxford Street Shelter, and how to cope with potential changes to the state reimbursement formula for General Assistance aid.
The fiscal outlook is grim. Finance Director Brendan O’Donnell said the city has yet to receive $1.9 million in DHHS reimbursement for General Assistance vouchers granted through November 2014, and has spent a total of $7.6 million on the program since the fiscal year began last July.
O’Donnell said reimbursement forms for General Assistance spending from December 2014 through February have not been submitted, but the city is expecting at least another $1.9 million to be paid back.
The anticipated reimbursement excludes about $1.8 million for aid given to undocumented immigrants, which DHHS Commissioner Mary Mayhew said the state will no longer pay.
That decision was made in June 2014. The department was then sued in Cumberland County Superior Court by the Maine Municipal Association, joined by the city and Westbrook as co-plaintiffs.
“We are taking this into account for our next budget,” acting City Manager Sheila Hill-Christian said March 12 of current reimbursement shortfalls that may only be settled through litigation or changes in Gov. Paul LePage’s biennial budget.
Hill-Christian was speaking to the council Finance Committee, after O’Donnell told councilors the city could absorb the current financial hit of unreimbursed General Assistance aid through available surplus funds.
“We would take a hit to our fund balance, which we have built up on above and beyond our policy,” O’Donnell said. The city keeps an undesignated fund balance of at least 8 percent of the operating budget and as high as 12.5 percent.
Dipping once into reserves would not take the city below the 8 percent threshold or endanger the municipal credit rating, he added.
“Even taking the hit for GA would not put us into the danger zone,” he said.
Future scenarios are full of variables and cloud the fiscal year 2016 budgeting process. The municipal operating budget is expected to be presented to the full City Council on April 6, when it will be forwarded to the Finance Committee, chaired by Councilor Nick Mavodones Jr.
“We are planning around worst case,” Hill-Christian said. The worst case would include the court ruling in favor of the state regarding reimbursement for undocumented immigrants, and passage of a new formula that would provide 90 percent of assistance reimbursed initially and then 10 percent after a threshold is reached.
The current formula reimburses municipalities at 50 percent until a threshold is reached; reimbursement then can increase to 90 percent.
“Flipping this reimbursement rate on its head would encourage Maine’s larger cities to manage their GA programs in a cost-effective manner,” Mayhew said in a Feb. 27 press release.
O’Donnell said the formula change, along with a court decision in favor of the state, could cost the city as much as $5 million in state aid in the next fiscal year
In lieu of state reimbursements for aid given to citizens which has not arrived, Councilor Jill Duson suggested the city may want to take a less passive approach in the lawsuit and seek an injunction to get money it is owed.
City Corporation Counsel had a Monday deadline to file an action plan in regard to violations listed in an audit conducted by DHHS field inspectors at the Oxford Street Shelter.
On March 10, the council’s Public Safety, Health & Human Services Committee, chaired by Councilor Ed Suslovic, discussed responses to violations cited in the audit, including flawed record-keeping and improper billing of the state for expenses.
“They are overturning 20 years of past practice and past agreements,” Suslovic said March 11.
Audit findings determined 13 of 30 “top stayers” were allowed to remain in the shelter despite each having assets of $20,000 or more in bank accounts, while the city improperly billed the DHHS for shelter operating expenses.
“The presumptive eligibility provisions set forth (in state law) are being incorrectly applied by the city to improperly permit eligibility beyond an initial night at the shelter,” the audit found.
Suslovic said the audit found the program was being run properly and legally in terms of providing vouchers for food, personal care items and rent, aside from the disputed question of whether undocumented immigrants are eligible.
He said more monthly verifications will be made to determine eligibility or whether shelter residents should be made to repay expenses, and to bill the state for the nightly expense for people staying there, as opposed to overall operating costs.
Suslovic also said the city is not mismanaging programs, but is providing aid for people directed to Portland from other Maine towns or who have arrived as immigrants.
“If there is any kind of mismanagement I want to jump on it and expose it,” Suslovic said. “I can’t find evidence of what they are saying; it is very cynical on their part in playing this game.”