The School Board, lead by Finance Chair Philip Saucier, presented the Cape Elizabeth School Department's fiscal 2021-2022 budget to the Town Council Finance Committee on Monday, April 26, 2021 via Zoom videoconference. The presentation was based on the proposed budget unanimously approved by the School Board on April 13, of $29,857,097 and reflects a 4.8 percent expenditure increase. The proposed budget presentation follows a series of five workshops in which the School Board reviewed, refined, and lowered the administrators' original budget requests by $741,344 [Article].
While 84 percent of the budget is made up of salaries and benefits, there are a few large ticket items that are indicative of the COVID-19 pandemic's impact on public education. The first being a school nutrition deficit in the amount of nearly $300,000. The deficit correlates in part with the onset of the pandemic as the usual number of students accessing the school nutrition program dropped significantly. The School Board, informed by the auditors, selected to lower the impact to taxpayers by reducing the nutrition deficit by half, thereby deferring the remaining amount due by one to two fiscal years.
As a result of students losing direct instruction throughout the past year, administrators reported that the need to make up for lost learning was most evident in mathematics. The proposed budget therefore includes three full-time math interventionists -- one for each school. The high school and middle school administrators have requested this support staff for one year; whereas the elementary school administrators believe the math interventionist will be needed longer than one year. The budget also includes one full-time substitute teacher at Pond Cove Elementary. For the current school year this position has been funded using COVID relief funding. In all, new positions included in the proposed budget amount to $475,028.
A contingency fund of $247,000 is another example of the pandemic's impact on the budget. With parents, teachers, and administrators committed to returning to full-time in-person instruction by the start of the 2021-2022 school year, current and expected safety guidelines will require additional staffing and space. Portable units, furniture, improved technology, and extra staff will be needed in order to allow all students to return. While the American Rescue Plan will provide $214,00 in aid, it is lower than anticipated and not fully sufficient. The contingency fund is being included in the school budget in the event that safety requirements remain the same in the fall. Should the requirements change for the better, the expectation would be to fund the nutrition deficit in its entirety.
There are two budget items that are not directly tied to pandemic's impact. First is the contractual services cost associated with the Maine Benefits Trust health insurance. Each year the budget begins with an estimated ten percent increase as the final figure is not released until April. In mid march the state ceiling for health insurance increase was set at 4.2 percent; which decreased expenditures by 5.8 percent and created a savings of approximately $180,000 for the local school budget. On April 5 the school department was informed that the final increase would be set at zero percent. This offered an additional $164,000 in savings to the budget.
Secondly, the original budget request included the cost of a concept design in the amount of $300,000 for the future replacement of the elementary and middle school buildings. A completed concept design is needed in order to more accurately gauge the scope of the project and the size of a future bond. The School Board approved the School Building Committee's recommendation to replace the two school buildings on December 15, 2020, [Article]. Business Manager Marcie Weeks and Finance Director John Quartararo provided the School Board with the option to consider requesting the Town Council to authorize the financing of the concept design through a Bond Order Note. A bond order note would enable the School Board to proceed with the concept design, as well as reduce budget expenditures by $300,000. The School Board chose to pursue reducing expenditures by requesting the Town Council's approval to authorize. The request was placed on the Town Council April 12 agenda and was approved by a vote of 5 to 2, with the understanding that the amount borrowed would be repaid by either the issuance of a bond authorized by the order or by a larger bond that would be authorized by referendum. The school department, through the school budget would be responsible for repaying either the General Fund or the bond debt holder.
Lastly, the School Board decided to increase the amount used from the fund balance in order to further reduce overall budget expenditures. At the start of the budget cycle, the original request budget posed drawing $600,000 from the $1,141,397 unassigned fund balance. State law requires that unassigned fund balances may not exceed 3 percent of a school's overall budget. Auditing standards recommend a target of approximately 2 percent. With this in mind, the School Board increased the amount drawn by an additional $140,000; for a total of $740,00 and a fund balance of 1.33 percent.
At the conclusion of the School Board's presentation, Town Council Chair Jamie Garvin commended the process by saying, "Incrementally, the information gets packaged much better every year and is easier for people to understand." Councilor Penny Jordan also provided praise by saying that, "Each year I look to see if the budget addresses key components: balancing the academic needs of all students; the social emotional needs of all students; and the nutritional needs of the students. I think that you hit this one out of the park and I thank you for it." Councilor Valerie Deveraux, on the other hand, questioned the regular increase in expenditures year after year given the decreased enrollment. Saucier answered by saying, "The School Board strives to keep the budget as slim and as limited as possible, while maintaining the level of excellence this town demands. It is the judgement of this School Board that this budget represents what it takes to maintain this level of excellence."
The Town Council will hold a Public Hearing on the proposed Fiscal Year 2022 General Fund Budgets (municipal and school) during a Special Town Council Meeting Monday, May 3 at 7:00 p.m. The Town Council will vote on the school budget during the May 10 regular council meeting. Agendas and Zoom videoconference links will be posted under the meetings calendar.