South Portland budget knocked off rails

The South Portland City Council on Monday postponed the final adoption of next year’s budget after it was learned that school spending may have been incorrectly listed on the ballots for last week’s referendum.

After conferring with attorneys Tuesday, City Manager Jim Gailey said city and school officials feel the spending, related to the high school renovation bond, was listed correctly. The council will now vote to adopt the budget June 6.

The debate began when Al DiMillo, a frequent critic of school administrators, during Monday’s public comment period handed out copies of state law regarding the school budget validation vote, held May 10.

“Unlike most people, I actually read the ballot,” he said, noting that the full budget must be posted at all polling places.

DiMillo, who argued last fall against the ultimately successful high school renovation bond, noted that $1.05 million to be raised via taxes – as eventual payment on the $41.5 million bond package approved by voters last November – was not listed on any posted notice as part of the $41.8 million school budget. 

It also was not included in a superintendent’s letter summarizing the budget published in a local newspaper. Absentee ballots failed to note the bond payment, as did the school department website, he said, describing his “thrill” at the discovery.

“The approved budget does not include one dime of that $1,050,000,” said DiMillo. “Therefore, the voters voted not to have that in the budget. Whether you like it or not, what the voters passed on Tuesday was to fund only Part 1 and Part 2 of the budget and not the $1,050,000, which I’ve been saying all along we shouldn’t fund anyway, because they (the school department) has a $4 million surplus.”

The night’s agenda included final adoption of the city’s $69.3 million budget for FY 2012, which prominently featured the $1.05 million reserve deposit.

“Unless you intend to violate state law, that $1,050,000 will not be in the budget, which includes zero, not one penny, for the high school renovation reserve (fund),” said DiMillo.

To underscore his point, DiMillo pointed out that $506,623 raised last year for the same reserve fund was listed on documents presented to voters in advance of the budget validation vote.

“(School administrators have) tried to hide the real cost of this budget,” said DiMillo. “They never intended to have the voting public know what they were passing.”

DiMillo’s accusations sent a clear ripple through the audience, which included a number of school board members and administrators. While city councilors plowed on with their meeting, school officials popped in and out of council chambers, meeting in the hall in twos and threes, sometimes joined by City Manager James Gailey and/or city attorney Sally Daggett.

When, after several other agenda items, it came time for councilors to take up the budget, Gailey threw in the towel.

“While we’ve been in this meeting, we’ve had school officials and staff from the city side pow-wowing to determine whether the point that Mr. DiMillo made is a valid one,” he said.

“We need time to further explore it,” said Gailey. “I think the intent of the council of the was to have that million dollars be outside of the school department’s budget, and we have shown that in my budget message before you tonight. However, there was a resolve before you on May 2 that had that on the school side.  So, we need some time to flesh this out.”

“It’s better to be cautious, so we don’t have to unwind a bunch of things if we move forward now,” said Gailey.

On that recommendation, the council voted unanimously to postpone final adoption of South Portland’s budget.

“I think that’s a good idea,” said DiMillo.  “Get it right this time. The idea of putting out a budget that clearly, clearly never included that $1,050,000 – that tried to hide it as much as possible – has clearly come back to hurt the school.

“They get what they deserve,” said DiMillo.

That final comment drew a sharp retort from Superintendent Suzanne Godin.

“I’d like to make it very clear, publicly, that it was never the intent of the school department to hide $1 million,” she said. “We’ve been very clear, up front, for almost a year now, about the financing of this high school project.

“There will be a reserve (fund) set up outside of the regular school budget,” said Godin, noting that the money raised by taxation now is being set aside for eventual payments on the bond, to lessen the impact on the municipal tax rate in future years.

“We’ve been very clear about that,” she said. “I take offense to the suggestion that we would be trying to hide anything.”

On Tuesday afternoon, Gailey said meetings that day appeared to have resolved the issue.

“We’ve met with attorneys for both the city and the school and they’ve told us we can go ahead,” he said.

Gailey said it as determined that reserve fund deposit should not have been included in the school budget vote last year, as it is not one of 11 reportable categories recognized by the Department of Education.

“We actually did it right this year,” said Gailey, adding that minor tweaks before the June 6 council vote will make it clear that the reserve fund, while still impacting the overall mill rate, is “not part of the school budget or the municipal budget.”

“It’s just sort of out there on its own,” said Gailey.