2016-08-26 / Front Page

No changes to funding plan for RSU 21

Wm. Duke Harrington Staff Writer

KENNEBUNK — Despite cries from some quarters in recent years that the cost-sharing formula for RSU 21 is unfair, a special committee voted last week to leave the arrangement unchanged.

A 2013 contract between the three towns that make up the school district — Kennebunk, Kennebunkport and Arundel — was unanimously endorsed Aug. 17 by the nine-member committee, which included one school board member and two residents from each town, chosen by selectmen.

According to Superintendent Katie Hawes, following this year’s scheduled check-in, subsequent renegotiations are to take place “within six months after each decennial census results become available.”

That means the way in which the RSU 21 bill gets divided will remain as is until as least 2021.

But even then the odds of a re-calculation might seem a longshot at best. The deal crafted when RSU 21 was formed calls on approval of a two-thirds super majority of voters across the entire district in order to enact any changes recommended by an ad hoc cost-sharing committee.

Voters approved the current tax model in March 2013. It requires the annual school budget be divided based primarily on “the fiscal capacity of each member municipality.” That means 90 percent of the budget it divvied up based on municipal property values, as measured by the state — a recording that generally runs two years behind actual real estate transactions.

For the current 2017 budget, the school used an average of values from 2013-2015. Also, assessed values in tax increment financing (TIF) districts, usually held in abeyance from state property value calculations, are rolled into municipal totals for purposes of dividing the school budget.

The remaining 10 percent of the budget is split according to student enrollment. However, any long-term debt accrued by RSU 21 not funded by the state — which includes the $56.5 million renovation bond for work now taking place at three district schools — is divided based solely on municipal property values.

The most recent property tax assessment list, compiled by the Maine Revenue Service in January, sets the assessed value of Kennebunk at $2.24 billion, Kennebunkport at $1.93 billion, and Arundel at $438 million. Meanwhile, Kennebunk has 1,581 students attending RSU 21 schools, compared to 570 from Arundel and 397 from Kennebunkport.

The cost sharing formula does not apply to the minimum mil rate the Maine Department of Education requires of towns in order to receive the state’s share of the school budget. That subsidy is calculated using the “Essential Programs and Services” (EPS) funding model — an amount the department of education predicts each school district should expend, based on comparisons to certain so-called “highly efficient” districts in the state. That formula calls on towns to each pay at least $8.30 per $1,000 of assessed value as a “local share” in order to receive its state subsidy.

Under RSU 21’s current $43 million operating budget, its three towns are paying a combined $25.8 million as part of the “local share” using the department of education mil rate. Of that, Kennebunk taxpayers will foot the bill for 68 percent, or $17.5 million. Kennebunkport is paying 18.6 percent ($4.8 million), and Arundel 13.4 percent ($3.4 million).

The cost-sharing plan agreed to last week kicks in the $7.6 million RSU 21 spends above EPS.

Based on the 90 percent property value/ 10 percent enrollment split, Kennebunk owes 50.5 percent of that over-EPS spending, or $3.8 million. Kennebunkport is responsible for 38.8 percent ($2.9 million), while Arundel must cover 10.7 percent ($812,538).

“This is not a perfect document, but I think it’s worked pretty well,” committee member Richard Smith, of Kennebunk, said of the cost-sharing formula. “I think when you look at approximately 77 percent of the budget being state-mandated, and it is very heavily weighted toward student population, this rendition we crafted the last time has at least addressed some of that issue.”

When the local cost sharing formula was first adopted in March 2013, the total school budget was $35.8 million and the amount raised above the EPS allocations $5.28 million. At that time, cost sharing was based on 60 percent state valuation and 40 percent pupil count. The formula change shifted the scales decidedly against Kennebunkport, boosting its share of non-EPS spending for the 2013- 2014 school year up more than $400,000, to $2.1 million, while reducing Kennebunk and Arundel’s share by about $200,000, each — to $2.6 million and $571,000, respectively.

Kennebunkport residents rejected the change while the other two towns approved it. The formula has been a sore spot for Kennebunkport taxpayers ever since. In 2015, in conjunction with the school renovation bond, the town help a referendum vote on pulling out of RSU 21. Although all five Kennebunkport selectmen supported putting the question to local voters, the initiative ultimately failed.

Kennebunkport’s share of school spending in excess of EPS funding is up 38 percent since the start of the new agreement, while its student population has contracted 5 percent. Over that same timeframe, Kennebunk’s slice of the local share has grown 46 percent while its enrollment has shrunk 3.5 percent. Meanwhile, Arundel has experienced a 42 percent cost increase on 36 percent enrollment growth.

Kennebunkport is slated to pay $1.1 million in new debt, versus $1.3 million by Kennebunk residents and $250,819 by Arundel.

At the time of the renovation bond vote in June 2015, the school district put out numbers showing it would cost Kennebunkport about 32 percent of the total expenditure. Some, including Sheila Matthews-Bull, then chairman of the Kennebunkport Board of Selectmen, said that was “out of whack” with the town’s share of student enroll- ment, roughly 13 percent. The sentiment helped fuel a drive to withdraw Kennebunkport from the school district, although that effort ultimately fizzled at the polls.

In the end, committee members from Kennebunkport raised hands last week to keep the current split for school spending.

“In a perfect world you may enjoy a smaller bill, but I think that the reality is that where we are right now has come about from much effort, and I don’t know that there is going to be a better solution in the offing by casting a vote again. My gut tells me not to mess with it,” said Kennebunkport’s current selectboard chairman, Stuart Barwise.

“It’s an agreement that has been born from much discussion and while it is indeed not perfect — Kennebunk would like to see more valuation taken into consideration, we’d like to see more pupil count taken into consideration — I think there has been a good deal of give and take,” he said.

The two-session negotiating series was moderated by Gerald “Jake” Clockedile of Old Orchard, a former school superintendent and business manager who is one of only five department of education “approved facilitators” in Maine for cost-sharing talks.

He said options on the table in addition to tweaking current percentages might have been to factor additional elements into the calculations, such as the number of students living in the district. That might have created a big swing for Arundel, where a large percentage of middle schoolers and high school students, attend Thornton Academy, in Saco.

The Arundel contingent was content to leave the formula unchanged.

“From our town’s standpoint, we wouldn’t look to revisit this; I think it’s working well amongst the communities,” said Arundel committee member Ira Camp.

RSU 21 is currently involved in a lawsuit with Thornton Academy, in which the Saco school is asking a judge to find the agreement it reached with Arundel before the formation of RSU 21 in 2009 will stand in perpetuity.

The RSU 21 Board of Directors, which had previously decided not to renew that contract after it expired June 20, voted earlier this year to allow Arundel middle schoolers in Grades 5-8 to continue attending Thornton Academy

Middle School, if they choose, but that all students in Grades 4 and below would attend Middle School of the Kennebunks, when the time comes.

“Thornton Academy is asking a judge to declare whether or not middle school students in Arundel continue to have a choice. We are saying we have solid legal ground to say they all go to MSK,” Hawes said.

RSU 21 Business Administrator Bruce “Rudy” Rudolph said the first $7,000 of Thornton Academy Middle School tuition is recognized in the EPS formula, with the applicable mil rate. The remaining $1,500 for each student is an “additional local expense” which falls on the cost-sharing formula.

However, Hawes predicted that even if RSU 21 loses in court against Thornton Academy, the long-term result probably will not create a big drain on local school costs. After all, she said, only fewer than half of all fifth graders at Arundel’s Mildred L. Day Elementary School chose to enroll at Thornton Academy Middle School this fall, she said, and that percentage is expected to drop over time.

Staff Writer Duke Harrington can be reached at news@kennebunkpost.com.

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