2015-04-10 / Front Page

Budget meeting draws scant interest

By Duke Harrington Staff Writer

If there is any concern about the $1.13 million, 2.89 percent increase to the RSU21 school budget for the coming fiscal year, it was not evident at Monday’s public hearing.

Although the hearing was held in the Kennebunk Elementary School gymnasium, most of the chairs set out for the event stood empty. Attendance was sparse, with most audience members on hand to speak during the regular school board meeting held immediately prior to the hearing. Only one person, frequent public commentator Ed Karytko of Kennebunk, spoke during the hearing.

And his comments were neutral, seemingly aimed at collecting information rather than making a declaration of support, or not, for the $40.19 million spending plan.

The proposed budget prepared by interim Superintendent Dr. Kevin Crowley is actually down slightly from the first reading approved by the school board in March.

Since that initial vote, Crowley said he has learned from the Maine Education Association Benefits Trust that the projected increase in health insurance rates for school employees, originally pegged at 10 percent, would only grow 2.31 percent. That resulted in a $314,764 savings. There also were refinements to the funding model out of the Department of Education in Augusta, to both adult education and general purpose aid subsidies, which resulted in a $733 swing to the black.

If Crowley’s budget proposal makes it through the budget process unchanged — the school board will conduct a second reading and final vote at its April 27 meeting — and if it wins a nod from voters, it will affect Arundel residents the most, hiking property tax bills there 3.08 percent, adding $44.62 per $100,000 of assessed property value.

Residents of Kennebunk will see a far smaller tax hike, however, while Kennebunkport residents can actually expect a credit.

That’s because of a one-time $1.2 million credit from the Maine Public Employees Retirement System, due to overpayments made in the 1990s before Arundel joined the school district. The school board had been using interest and investment gains on a fund created with those overpayments — revenue Crowley said amounted to roughly $500,000 over the years, thanks to what school board member Matthew Fadiman termed “inadvertent” investment in highrisk accounts — to make its retirement fund payments.

“We would have paid that out of taxes. So, it’s had a nice return,” said Crowley.

The state however, has cast a dim view on this practice and ordered the $1.2 million account rolled into the school district’s regular budget.

Based on the most current numbers unveiled by Crowley at Monday’s public hearing, Kennebunk tax bills would go up $7.03 per $100,000 of assessed property value, or 0.47 percent. In Kennebunkport, tax bills would fall $14.59 per $100,000 of assessed value, down 1.91 percent.

According to RSU 21 Business Administrator Bruce Rudolph, without the $1.2 million windfall, Kennebunk tax bills would have grown this year not $7.03 per $100,000 of assessed value, but $42.89. Meanwhile, Kennebunkport’s $14.59 credit per $100,000 of valuation would have been a $9.69 increase.

Although Arundel is not due any of the dispersed fund, Karytko noted that the town has benefited from use of the fund over the years, to the tune of $33,722.

“Has any correction been made to the budget so that we basically get that money back from Arundel,” he asked.

Crowley said the school district has sent notice to selectmen in Kennebunk and Kennebunkport of both the $1.2 million addition to this year’s budget on their behalf, and the $33,722 that Arundel technically owes from use of the retirement fund, which slightly lowered its own retirement payments each year since it joined the district in 2009.

“I’ve chosen to put that in their hands,” Crowley said, although he added the school board finance committee was scheduled to take up the issue at its April 10 meeting.

Kennebunkport selectmen were expected to address the issue at their April 9 session.

Although the overall budget is up 2.89 percent, Crowley has repeatedly stressed that the operating budget is up just 0.92 percent when considering only “that major portion of our budget which we have control over.”

There are three factors impacting the budget that are outside the district’s control, Crowley said. These include a new state requirement that local taxpayers cover an increased percentage of teacher and staff retirement plans, up from 2.65 percent to 3.35 percent.

“That may not look like a lot, but is an increase of $120,000 to the budget,” Crowley said.

The district also must now pay its $150,000 share of the retirement plans from the budget, rather than from the $1.2 million fund the state credited back, he said.

The third item Crowley cited was $500,000 added into the budget to cover debt payments in anticipation that the school board’s building bond referendum will pass in June.

Crowley said Monday that if voters reject the proposed $56.5 million bond — money that will be used to fund renovations to Kennebunk High School, Kennebunkport Consolidated School and the Mildred Day Elementary School in Arundel — the $500,000 included in the regular budget for first-year debt payments will remain.

“That money would simply be carried forward as part of the end of the year surplus,” he said.

That money, raised from taxation this year, could be used to mitigate tax bills next year, or, it could be rolled into a reserve account to fund future building upgrades, among other uses.

Factoring out debt service on the proposed bond and mandated retirement payments, plus increases to utilities and other so-called “fixed costs,” the budget may actually hold the line, according to Crowley.

“The administrative team has done a remarkable job … and we are actually looking at a $60,000 decrease in non-labor [spending] due to the prudent work of the team,” he said.

Still, some areas of the budget are on the rise. Transportation will get a $265,705 boost — up 10.57 percent, according to the latest numbers released by the district. Most of that money will be used to buy five new school buses next year, rather than the usual three per year.

“We have an aging fleet,” said Crowley. “We need to replace three buses per year to keep the fleet in good shape, and in the past we have cut this area. We are now paying the price for that. To accomplish this purchase we will use the money which formerly went towards the bus barn debt, $56,000, to offset the cost of the two additional buses.”

Meanwhile, school building administration costs are up $67,956 (4.03 percent), while system-wide administration is up $25,024 (or, 3.06 percent).

The single biggest jump, however, is to “regular instruction,” essentially the cost of teacher and staff salaries. That line item is up 1.97 percent, or $321,000, to $16.58 million.

UPCOMING

Following Monday’s public hearing on RSU 21’s $40.19 million budget for the 2015-2016 school year, voters will have three more chances to weigh in.

Monday, April 27 — Second reading and final vote by the RSU 21 Board of Education, 7 p.m. at Kennebunk Elementary School.

Tuesday, May 12 — RSU 21 District Budget Meeting, at which registered voters from the district’s three towns (Arundel, Kennebunk and Kennebunkport) will decide on the bottom line.

Tuesday, June 9 — Budget Validation Referendum, a public vote on 11 broad line items, at polling places in all three towns.

Return to top