On December 16, 2022 I received a response from the on two outstanding questions I had:
- What is the documented process the Bangor City Council has been following that Chairman Rick Fournier has been referencing when he responded to ARPA criticism with “we’re following a process”?
- How much interest has the city earned on ARPA funds to date?
- How are the ARPA funds currently being kept?
Starting with the documentation
I was only offered what was already on the website. Which means: there was no plan. The best they had was the meeting packet from July 11, 2022 with some suggestions for City Council members to take up. On November 1 the city made an updated memo available, but still no firm process as was suggested by the Chairman previously. Neither of those memos mention the myriad of excuses made by the Chairman in his email to me. The response from the Assistant City Manager confirms what I suspected: Bangor City Council has been totally winging this ARPA allocation process.
Not a “gotcha”. Just a “do better.”
The U.S. Treasury gave SLFRF recipients over 3 years to plan out how to spend the money. This was never supposed to be a fast process. Bangor on the other hand, already frittered away the first year and a half of it with nothing to show for it. Now it’s a two-year scramble, with the City only now doing the sort of lightweight preliminary tire kicking they should have been doing back in the summer of 2021.
I keep hammering the fact that the Bangor City Council has no documented ARPA plan to highlight the fact that having no such plan hasn’t worked out thus far. The end goal isn’t making people look bad for the sake of it. The hope is that Bangor City Council will recognize having no documented plan has been to their detriment and change course. They need start getting aggressive with the remaining two years they have for allocating funds. Future meetings should have laser focus. Create that plan. Set deadlines. Assemble more workgroups for every major issue this city faces. Especially houselessness and affordable housing. Those workgroups will present solutions to City Council, and Council should spend their time reviewing and approving plans instead of trying to mill lumber by hand before there’s even a blueprint.
Planning, or not planning 2023?
2023 is looking to be business as usual for ARPA in Bangor, Maine. To date there is still not a scheduled list of all future ARPA meetings. I understand this goes against the typical operating procedure for Bangor City Government. Agendas are always published for the following weeks meetings on the Friday before. The only meetings scheduled in advance are those that are standing committee and council meetings. But ARPA is unlike anything the city of Bangor has undertaken before. There is a firm deadline to get $20.48 million allocated before December 31, 2024. That may seem like a far way off, but if you have paid any attention to the 3 meetings they’ve had so far on ARPA, they’re not on pace to meet that deadline. Perhaps they’re waiting until November 2024 to give the city a live-action remake of Brewster’s Millions. Anything’s possible the way ARPA allocation planning has unfolded in this city so far.
Bangor City Council needs some deadlines
- What’s the deadline for narrowing down which categories Bangor will be focusing on?
- What’s the deadline for setting hard goals for those priorities?
- What’s the deadline for collecting all the data needed to make smart project selections within those priorities?
- What’s the deadline for identifying and selecting those projects?
- What’s the city’s deadline for having everything allocated? (Occurs before the Federal deadline as you want to give yourself time before then to make final adjustments before that Q4 2024 report.)
This may be of interest to you
Back on December 1st I asked the city of Bangor, Maine how much money in interest they’ve earned to date. I got the answer back on December 16th. City coffers vacuumed up an additional $335,707.95 in interest from unspent ARPA funds. Bangor’s $20.48 million in ARPA funds just became a purse worth $20.82 million.
The City of Bangor is earning interest at a fixed rate of 1.79%. That means that if 2023 ends up being another year with $0 in ARPA expenditures, they’ll ring in the start of 2024 with $21.2 million.
In any other scenario finding a way to leverage funds to create even more funds would be seen simply as good fiscal sense. However, it came at the expense of doing nothing to improve our desperate housing situation. That is unconscionable. Winter is already here, so there is no way the city could move fast enough with that interest money to have an impact before the spring. But what was the state of the interest at the beginning of the fall? What could that money have done to prepare for the harshness of winter for those folks stuck outside? Why was nobody at City Hall publicly talking about this? The citizens of Bangor were kept in the dark about the interest being earned until I started to pry about it.
Does the City really understand our frustration?
In her response below, the City Manager said, “I understand there are folks that are frustrated.”
I believe she understands the fact that there are people who are frustrated. But I do not believe she understands why people are frustrated.
Citizens like me are frustrated because:
- There has been no documented plan for identifying our greatest areas of need.
- There has been no documented plan for identifying projects in our greatest areas of need.
- There still is no documented plan for either of these things.
- There are no deadlines other than the final deadlines set by the U.S. Treasury.
- The current direction resembles pigeon walking
- Our largest problem, housing, hasn’t been addressed at all
- Everything with the ARPA funding feels like a secret citizens have to pull teeth to learn about
- Feedback from the residents has been dismissed
- There has been no leadership for this crucial funding, only excuses
The next ARPA meeting will be Wednesday, December 22, 2022. It is a marked improvement that we have had ARPA meetings two weeks in a row. Bangor City Council will be talking about all of organizations that applied for ARPA funds at the county level that have been identified as possible partnerships the city could undertake.
The only question remains is, will it be another beauty pageant with arbitrary awards given out like Penobscot County did? Or will City Council make a real plan to tackle the houselessness crisis in this city? If so, will the city work to fully support these partner organizations in their work as part of that plan? Stay tuned, we’re about to find out this week.
Response from Bangor, Maine City Manager Debbie Laurie on December 16, 2022
Good Morning,
1. The ARPA funds are being held in a municipal Now Checking Account. All of the City’s accounts are fully collateralized. This is accomplished with a Letter of Credit via the Federal Home Loan Bank of Boston. Other deposits held in ICS accounts are fully collateralized via the FDIC coverage within the IntraFi network (sorry for the banking terms). The collateralization of our accounts is disclosed in our Annual Comprehensive Financial Report (FY21_City_of_Bangor,_Maine_ACFR.pdf (bangormaine.gov)) on page 41.
2. Through November 30, 2022, interest earned on this account is $335,707.95.
3. Yes. I’d like to provide context to this comment. There is no requirement to segregate these funds, however, the City felt it was prudent to place these funds in a separate bank account due the balance, the length of time the funds would be available, to ensure the funds could be individual tracked, identified, etc. This is a strategy we employ for other purposes as well; including the segregation of bond proceeds, sinking fund deposits etc. It is very unusual, for the City to receive any state or federal funding in advance. The vast majority of “grant” funds the City receives are on a reimbursement basis.
a. The funds were transferred from the account they were deposited into to the newly established State and Local Fiscal Recovery Funding Municipal NOW checking account on June 8th. There was a delay in the internal entry within our accounting records to record the initial receipt and transfers within our accounts, was why this comment was included.
4. Yes, the City reports the ARPA funds as a separate Governmental Fund on Exhibit 3 of our audited financial statements (see page II-21).
5. The City’s interest rates under our current banking arrangement do not vary (excluding those funds invested in mutual funds, bonds, treasuries, corporate bonds and stocks – the majority of which are enterprise fund deposits – all of which are in compliance with the City’s investment policy) (page II-41 of our audited financial statements) it is fixed at 1.79%.
The words I used were perhaps not the best choice as it appears they may have been perceived as flippant and that was truly not my intent. While I could not recall the exact interest rate at the moment, I was not far off, my intent was to share that the City earns a fixed rate of 1.79% on its cash deposits. This is a function of our banking contract and for the last few years has been significantly higher than other short term, fully insured deposit rates. Further, that with the recent actions by the Federal Reserve bank as it relates to the fed funds rate, this rates isn’t keeping pace.
There is absolutely no intent to divert the interest in any way. The interest earned has remained in the dedicated account and the balances are untouched. I understand there are folks that are frustrated. The City Council is advancing this priority. Next week, the Council will have the opportunity to discuss and make a recommendation on a number of the applications that were submitted to Penobscot County that Commissioners identified as potential partnership opportunities.
Debbie
Response from Bangor Assistant City Manager Courtney O’Donnell on December 16, 2022
Good Afternoon Michael – Based on your email, there was one requested item that fell under FOAA. After looking through our files, documentation created regarding the process under which projects will be funded with ARPA dollars have been created for Council workshops and/or committees and are publicly available on our website calendar at www.bangormaine.gov.
Thank you,
-Courtney
