Cape figuring out budget issue (Dec. 26, 2008)
By Nate Jones
Staff Writer
Cape Elizabeth Superintendent Alan Hawkins said he hopes the town can pull $200,000 from its undesignated surplus account to cover a potential $421,000 loss in general purpose aid state funding for the school district announced by the department of education in November. Hawkins said the $200,000 combined with a two-year overdue $100,000 Medicaid payment and some prudent planning by school administrators could get Cape Elizabeth schools through the current school year.
“If that doesn’t happen, I’m going to have to take further action by looking at [cutting] programs,” he told members of a joint meeting between the chairman and finance chairman of the town council and school board last week.
Town Manager Michael McGovern said some residents suggested the town has a financial responsibility to fill the entire $421,000 gap, a concept school board Vice Chairman Patricia Brigham said “would be great.”
“Some lawyers might argue [the town] has to [provide the $421,000],” McGovern said.
When it comes to the reallocation, school Board chairman Katharine Ray said school board “had not had that conversation.”
“We are really early in this whole process,” she said. “Nobody has a crystal ball.
Town Council Finance Chairman Anne Swift-Kayatta said the town has traditionally kept more than 8 percent of the town’s entire operating budget – enough to keep the town running for a single month – in the “undesignated surplus” account. She said the funds are typically used for various “operating expenses” and transferring them to the school budget would require “a complicated discussion” by the council.
“If you ask me, this is why we have an undesignated surplus account,” Brigham said.
“The voters voted for the full budget, not $421,000 less.
Council Chairman Jim Rowe said he wasn’t sure how voters would react to the reallocation.
“Voters also considered the tax increase,” he said. “A lot of people went to the polls wondering ‘How does this affect me?’”
Unlike the school budget, McGovern said this year’s municipal budget had not been frozen, as there were still too many variables, but all town departments “had gotten the message” to stay as frugal as possible. He said the town saved money by combining the assistant town manager position with that of the town clerk and funds used during some storms, such as the ice storm earlier this month, could be reimbursed by the state before summer.
“We’re hoping for a mild winter,” he said.
McGovern said he was already working on a “flat,” or zero percent increased municipal budget for the next fiscal year even though he expected a recent decline in town revenues to continue.
“I wanted to show the council what a flat budget would look like so they would know,” he said.
Although the council has yet to make a recommendation for next year’s school budget, Ray said the school board had already instructed Hawkins to prepare a 2 percent increase budget. Rowe said a joint meeting between the entire town council and the school board could provide Hawkins with further guidance and prevent confusion felt by both groups last year when the school board considered a 13 percent increase in the school budget.
“Last year we all walked away agreeing we had to work together,” he said. “What we ended up with was something that blew up in our faces.”
Brigham said the board had considered the 13 percent increase during “an internal process in a public setting” and that the discussion was important for the board to have.
“I just wanted to show people what we should have to maintain the level of education people are saying they wanted,” Hawkins said. “Some of them probably think ‘That crazy superintendent,’ but it wasn’t an act of craziness.”
This year all agreed to schedule a Jan. 21 budget public forum to be followed by a Jan. 28 joint meeting between the town council and the school board.
“It has to be on even footing, it can’t be the town council inviting the school board or the other way around,” Brigham said. “In the past there has been some ‘We’re in charge, no we’re in charge’ mentality.”
According to a preliminary schedule by McGovern, a final school budget could be presented on May 12 and featured in an April referendum.
“This will be our second time through the process and I think everyone wants it to go smoothly,” Kayatta said. “Hopefully we’ll only have one vote if the citizens have faith we’ve put a good number out there.”
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