PORTLAND, Maine – The recent decision by a federal agency to move sought-after grant funding from one Portland clinic to another has touched off a dispute over which institution is better able to treat the city’s growing homeless population.

After having received the annual allocation for more than two decades, the city-run Health Care for the Homeless Clinic lost out in a competitive application process for this year’s grant of nearly $680,000 to the nonprofit Portland Community Health Center on Park Avenue.

Now, city officials say the loss of federal funding may force them to close their clinic. They also argue that the health center doesn’t have the capacity to absorb all of the clinic’s homeless patients.

Mark Swann, executive director of the Portland-based shelter and soup kitchen operator Preble Street, called the U.S. Health Resource and Services Administration decision to move the grant money "terrible."

"[Preble Street] is very disappointed at this decision coming from bureaucrats in Washington that clearly have no idea what is working so well on the streets of Portland – and has been working so well for over 20 years," Swann told the Bangor Daily News. "We asked the [Portland Community Health Center] to not compete against the city, but they did so anyway.

"By [the center’s] own admission – as stated in their grant application – they will only serve 1,000 people, whereas the city is currently serving 2,300," he continued. "So 1,300 will lose critically needed medical services. This makes no sense at all."

But Leslie Clark Brancato, executive director of the Portland Community Health Center, pointed out that the center was a municipal operation before striking out on its own as an independent nonprofit two years ago, and that the center’s board also oversaw the Health Care for the Homeless Clinic before the split.

She added that federal officials conducted site visits to the grant applicants before awarding the funding. As a result, Brancato said, the center’s leadership is well-versed in what has worked well for the clinic, and the federal agents behind the grant award made an informed decision about where to distribute the money.

"Portland Community Health Center’s board of directors deliberated carefully and spoke with multiple community leaders before deciding unanimously to apply for the grant, keeping the needs of patients and mission to serve vulnerable people first and foremost in their decision making," Brancato told the Bangor Daily News. "We received support from many health and social service organizations and community leaders for our grant application."

She also said her organization only applied for the grant after HRSA denied Health Care for the Homeless’ initial, uncontested submission in August and reopened the application process for competition in October.

"Portland Community Health Center decided to apply for the grant after the city’s application was rejected, to assure that this critical health care funding for homeless people was not at risk to be lost to the community," Brancato said.

Douglas Gardner – head of the city’s Department of Health and Human Services, which oversees the city’s clinic on Portland Street – acknowledged that his staff transposed two numbers on its original application, causing the bid to be thrown out and triggering the subsequent competition.

Gardner said the staff member who filled out the form put the number of patients currently served by the clinic in the space reserved for the number of patients to be served after the grant award, and vice versa. As a result, he said, the application read as though the clinic was planning to serve fewer patients after receiving the grant money than before.

"Seven percent of all of the applications had that same error," Gardner said. "Yes it was an error on our part, but it wasn’t an uncommon error. There were several other applicants in our area who made the same error."

Gardner said city officials also urged center leaders not to compete for the grant after the competition reopened. He said the Health Care for the Homeless Clinic has an annual budget of between $1.8 million and $1.9 million, and the loss of nearly $680,000 could be enough to shut the place down.

"We’re still evaluating that internally. My initial response would be that HRSA has awarded the Portland Community Health Center the responsibility of providing health care to the homeless population," he said. "So [by staying open] we really would be setting up a structure that would not require Portland Community Health Center to live up to that obligation. It would be a challenging communication for our staff and patients. We’re evaluating what the Health Care for the Homeless Clinic looks like when we cease to receive funding.

"The question is, why would [HRSA] choose to provide funding to an organization that can’t meet the needs of the existing population, and I don’t have an answer for that," Gardner continued. "We’ve asked that very question."

In its announcement of the grant award, the center stated that it had seen an 800 percent increase in homeless patients in 18 months, going from 71 in March 2012 to 626 in September of last year.

"HRSA has provided a time period for Portland Community Health Center to build its services," Brancato said. "People have been asking us, ‘if the grant makes up less than half of the city’s clinic’s funding, why can’t they use their additional $1 million in funding to cover the first year’s gap?’ Everyone needs to work together to find solutions and keep the focus on the patients. If the city decides to close the clinic, we will work with all our community partners to help find solutions that meet the needs of the patients."