The city has has settled a dispute with the state over how Belfast was handling its General Assistance program, according to City Manager Joe Slocum.

In a letter to The Republican Journal, Slocum said the city will receive $124,647 in reimbursements from the state Department of Health and Human Services for General Assistance aid paid out by the city from August 2015 to July 2016.

That's a little more than half what the city should have received under statutory terms of the program, under which municipalities provide emergency food, fuel and housing assistance and are reimbursed by the state for 70 percent of the cost.

The docked sum is the result of a legal dispute following a 2016 DHHS audit, in which the department found numerous errors in how the city was processing its General Assistance applications.

These included cases in which the city failed to review how an applicant spent their money prior to applying for General Assistance and whether past applicants had complied with requirements imposed since the last application, misinterpretations of how the statute defines an "emergency," and weak narratives that could have explained why city administrators made the decisions they made.

In previous years, Slocum said the city had been able to address mistakes with a "plan of correction." But last year DHHS surprised city officials by cutting off reimbursements and demanding that the city refile nearly a year's worth of General Assistance reimbursement paperwork, which Slocum called "unduly onerous" and legally questionable.

The city's spending on General Assistance had risen from $35,000 to $325,000 in one year, from 2015 to 2016, and Slocum speculated that it was this, not the clerical errors and procedural lapses noted in the audit, that raised red flags in Augusta.

The nine-fold increase was remarkable, but Slocum said it was misleading for several reasons.

In 2015 city administrators had mistakenly turned away nonresidents of Belfast, where statute requires municipalities to accept homeless applicants, regardless of their previous town of residence.

Perhaps partly as a result of taking those applications, the number of applicants tripled in fiscal year 2016. The problem of increased demand was compounded by a shortage of low-rent housing in Belfast that kept General Assistance recipients in limbo at Admiral's Ocean Inn and other comparatively expensive short-term placements.

The city also decided to be more generous in 2016. After spending dropped to $35,000 the year before, the City Council adopted a policy that gave applicants the benefit of the doubt on matters where the city has the legal authority to decide.

This new policy ran counter to the state's campaign against welfare abuse, under which DHHS tightened eligibility requirements for other safety net programs.

The city manager acknowledged that the balance of General Assistance spending not reimbursed by the state would have to be paid from property taxes.

"Yes this means that this will cost your tax dollars about $100,000," he wrote. "I do know that this upsets you. It seriously upsets me. The only thing I can do is to make sure we don't fall into this pit again."

Ultimately, he reiterated the city's goal of helping those in need rather than turning them away.

The letter concluded with excerpts from the General Assistance statute, including a highlighted passage underscoring the duty of municipalities to give General Assistance to a person "each time that person has need and is found to be otherwise eligible to receive General Assistance."