2012-05-04 / Front Page

City officials come to understanding on budget

By Kristy Wagner
Staff Writer

After nearly a month of in-house negotiating, South Portland Board of Education members worked among themselves and have proposed $136,000 in cuts to the district operating budget.

The board attempted to remain steadfast on its 2.2 percent increase, but was asked by the council a second time to decrease the operating budget. The board revised the original operating budget after city councilors said they thought a 2.2 percent increase was too high.

After meeting for a special workshop on April 25 at Memorial Middle School, board members agreed to approach the council with a 1.78 percent increase to the operating budget.

To come down to an increase of 1.78 percent, board members reduced the beginning balance for the budget from $100,000 down to $50,000, cut a leadership stipend of $15,000, cut $30,000 for professional development, $20,000 in field trip funds and eliminated a $21,000 clerk position.

“The 1.78 percent increase is a little over nine cents total impact for the (school and municipal operating budgets) combined, bringing it up to 55 cents approximately at this point,” said Greg L’Heureux, finance director for the city of South Portland.

L’Heureux added that the combined operating budget increase for the city and the school district included the $525,000 bond interest payment on the high school renovation project.

Difficulties surrounding school budget cuts included whether to consider the $525,000 interest payment in addition to the 2.2 percent operating budget. School board members felt the bond payment should not be included and city council members said they felt the numbers were not accurate unless the $525,000 was accounted for in the budget increase. The original 2.2 percent increase did not account for the bond payment.

“I believe voter-approved projects should sit outside of the operating budget,” said Rick Carter, a member of the board of education.

Carter spoke in response to Councilor Jerry Jalbert, who suggested that the board consider his theory that if the proposed education budget was decreased by $397,769, rather than the $136,000, then the total tax rate increase for the combined school and city operating budgets would only be 2.9 percent. Jalbert’s theory takes into account the city refinanced debt in 2011 that saved $197,769 in interest payments and $200,000 on the principal. According to Jalbert’s theory, if the board of education decreased its budget by a total savings of $397,769, then taxpayers would get to realize the savings from the debt that was refinanced in 2011.

“It’s a great theory, but the problem is that the school budget is changing from year to year,” said board of education member James Gilboy. “We still have long-term needs that have to be addressed and five or 20 years from now we’ll have money sitting in an account for when we bond (a specific project). I think as a whole that will do the city better than trying to peg a savings amount and trying to book a savings forward.”

Gilboy said taxpayers might be able to support having money set aside and already built into the tax rate than to cut a large amount of the school’s operating budget in order to realize savings from a debt that was refinanced in 2011.

The 1.78 percent increase was still a little too high, Jalbert said, but he did not think the board would move much lower.

Both councilors and board members said they understood where each side was coming from and councilors Tom Blake and Tom Coward said they could support the 1.78 percent increase.

Blake said the council and the board needed to communicate better during the next budget season to avoid the budgeting conflicts that occurred throughout the month of April.

“Let’s not wait until January or February to meet,” Blake said. “Let’s get the budget and what we are looking at for a policy decision behind us. These are the bigger issues coming before us tonight.”

Blake added that he would still like to see an increase of less than 1.78 percent, but he was still “marginally” in support of it.

“I agree with Blake that we need to have a longer discussion going forward,” Coward said. “The school board and council barely spoke in the past until they met in May.”

Coward said over time, communication has gotten better between the council and the board, but there is room for improvement.

“I am inclined to say we have given some direction and the school board has responded and pushed back a little,” Coward said. “When I look at the big picture this is a modest tax increase in a time where we had a lot of budget (issues) that were painful over the last few years. Given that, I think I can support (1.78 percent increase) a little more enthusiastically than Councilor Blake.”

Board member Jeff Selser said he supported Blake’s idea of the board and the council starting budget discussions earlier in the year.

“We have had several meetings under a lot of pressure to get done in time for voters and if we sit down sooner and start talking about process, then we can have the process in place before it reaches any sort of flashpoint,” Selser said.

Mayor Patricia Smith said she agreed the council and the board of education should try to meet earlier next year in order to streamline the budget process between the two entities.

“I support what is in front of us this evening,” Smith said. “I think next year the city can put a great budget together, as well as put people (police officers) back on the street and I think we’ll interplay with whatever the school board has going on next year as well.”

Smith went on to tell the school board that she felt they had done the work needed of them and she supported their decisions surrounding the 1.78 percent increase.

Staff Writer Kristy Wagner can be reached at 282-4337, ext. 219.

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