SAD 75 budget squeeze looms
TOPSHAM — Superintendent Brad Smith informed the School Administrative District 75 board of directors Thursday that the district will have to cut an estimated $600,000 from the 2012-13 budget to hold the line on local spending.
Smith gave a slide presentation laying out the overall budget forecast during the meeting at Woodside School. He noted that 2012- 13 will mark the fourth year in a row of decreases in total revenue and student enrollment. It also will likely be the fourth straight year that the district will reduce teaching and support staff, which means programs and services.
SAD 75 also has experienced a decrease in the number of students being identified with special education needs. The district is seeing “an increase in the complexity in the needs of those students,” Smith said.
Administrators will aim to keep the total contributions from Bowdoin, Bowdoinham, Harpswell and Topsham flat.
The administration anticipates the fiscal year 2012 budget of $ 34.2 million to be reduced to $33.6 million in the coming year, based on expected revenues as of now, for a total difference of $600,000.
The preliminary budget projections reflect a local contribution of $ 18.7 million spread across the four towns. Under this scenario, the amount of money coming from the four towns would be the same this year, as it was the last three years.
“We can’t keep doing that and have the kind of programs we want to have,” Smith said. “ We’re at the point where we really have to recognize the impact of that. Nevertheless, we also recognize the other factors, and the board will ultimately have to decide whether to keep that local contribution (equal to the current year’s figure) or not, but we’re planning on it. ... Doing that means three towns ( Bowdoin, Bowdoinham and Harpswell) would actually see an increase in their tax rate,” and based upon valuation, Topsham’s tax rate for local education would decrease.
Projected general purpose aid funding from the state to SAD 75 is estimated to increase by $304,000. Despite that increase, “we’re seeing decreases in other areas, so overall our revenues will be down,” Smith said.
At the conclusion of the current fiscal year in June, the district will lose $409,423 in federal job stimulus funds, as well as about $30,000 in federal impact aid the district received from the federal government for educating students of military families, now that the Brunswick Naval Air Station has been decommissioned.
The school district has been increasingly dipping into its fund balance to offset local cost increases, a trend that must be reversed, Smith said. Additionally, the district must reduce its dependency on the fund balance by at least $200,000, he said.
“Eighty percent of the funds that we have in this district are directly tied to personnel costs,” Smith said. “So when there are significant financial impacts, you can turn off lights, and you should; you can turn down heat, and you should; and you can conserve paper, and you should; but you cannot address significant financial impact by those things alone. We cannot stand here and say that we can present a budget that isn’t going to impact personnel, programs and services. It is. It simply is.”
The district had negotiated salary increases for teachers that would add $293,000 to the budget. Negotiated salary hikes for support staff would add an additional $60,000. The budget for compensation to administrators has yet to be determined.
Health care costs are “staggering,” Smith said. District officials do not yet know what the health insurance bill for fiscal year 2013 will be, but health insurance costs rose 6.5 percent in fiscal year 2012 after it was flat a couple years.
Business Manager Steve Dyer said the district this year is paying almost $500,000 a month for health insurance costs — a huge portion of the salary and benefit package and significant part of the total district budget. Smith said staff have been aggressively searching for cost savings.
The district represents four communities with a total of 8,260 households, in which only 20.5 percent of those homes have school-age children younger than 18 years old, according to Smith. Many residents of the four towns live on fixed incomes.
Smith said populations rose in Bowdoin and Bowdoinham but dropped in Harpswell and Topsham, for a total decrease in district population of about 200 people. The district now has about 350 fewer students than it did five years ago.
This year, 36.3 percent of SAD 75’s student population qualifies for free or reduced cost meals based on federal income guidelines, a steep increase from 2007, when 21.7 percent of SAD 75 students met the eligibility criteria.
There are now three schools in three towns where the percentage of students in school on free and reduced cost lunch, exceeds 40 percent, "and there are associated factors beyond just what the economic income is of that family,” Smith said.
The SAD 75 administrative team continues to review every program in the district, looking to find reductions where they can, according to Smith.
“Everything we do is going to affect everything else,” he said. “There isn’t the kind of discretionary money that minimizes that impact.”
Smith said he and Dyer met with school principals to talk about possible reductions. They plan to meet with staff to discuss the budget process and challenges school officials face “because they’re significant,” Smith said.
The superintendent also encouraged public participation in the budget process. “We invite parents, we invite students and staff, to share their concerns with their school leaders, and, of course, they can always share their thoughts and concerns with school board members or with us at the district office.”
Smith concluded his presentation by saying, “It won’t be easy, but we have great staff and we’ll figure it out.”
The school board applauded.
A draft “maintenance of effort” budget that reflects what it would cost in 2012-13 to fund all SAD 75 programs as they currently operate, will be presented to the finance committee on Feb. 7.