School Board Says ‘No’ To Helping Town With $600,000 Shortfall

At the School Board meeting on April 3, members of the Board voted to not help town with tax shortfall citing it was a town made error. The School Board felt they should not contribute money since the school district does not collect taxes, the town does. The town then distributes the funds to cover the approved budgets of the other town services – the school being the largest.

Although there was one opposition, the motioned passed 4-1 that School Board would not partake in fixing the $600,000 deficit. The problem originally came from a miscalculation for the town-collected taxes for municipal, school and county services. The Town Council and School Board have been battling for months to get this straightened out.  In their joint meeting in December, John Farrell asked them to make an offer to show the school district had “skin in the game.” On April 3, Vice Chairman for the School Board, Nancy Hendricks, said she felt the school district “has plenty of skin in the game.” She felt that the town was responsible for the shortfall and therefore should be the one to handle the issue. “When you make a mistake, you should take care of your mistake and you should fess up to your mistake,” she said. “I’m not really willing to put any money on the table.”

School Board member Dan Lekas also expressed how he felt the town should be the one to pay the deficit. “Part of the argument is that the school is the largest bill, so they feel the school should give up the mother lode of the discrepancy.” Lekas continued to say the town should be the one to take responsibility. “You can’t just short everybody else and then say they (the school) got the most money, so they should have to pay most of it.”

What Lekas was referring to was the town’s undesignated fund balance of $8,889,074 of which $3,273,900 has been committed to funding warrant articles.  According to the Town’s Policy on the undesignated fund balance, the maximum allowed to be used in a calendar year $3,705,887.   However, the town has an estimated growth of $0-$1.2 million at year’s end.  The school district, which has only been permitted by the state to have a undesignated fund balance for four years, has a current fund balance of $402,810 with the estimated end of year balance of $300,000.      

Board member Steve Young was the only opposed vote to the Vice Chairman’s motion to not contribute any money to the shortfall.  His reasoning came from a concern of depleting the school district’s $402,000 reserve fund balance, which Young described as “still in its infancy.”  Instead, Young said he hoped to look into other alternatives so the school district could contribute to the shortfall. “I’m not interested in getting into an argument or discussion,” Young said. “The town is not a customer of mine, and the town is in the same pair of pants we’re in.”

Member Dan Lekas replied to this by saying he was correct that the money comes out of the same pocket.  “So if I went to the ATM to withdraw $150.00 and had $100.00 in my checking and $1000.00 in my savings, why would I withdraw from my checking account and risk a deficit?”

The shortfall issue was discovered in December of 2017.  With that discovery, town officials were forced to find a reasonable solution to make up for the shortfall.  This included reaching out to school officials for help.

Tuesday night’s meeting was the first time the School Board had addressed the shortfall since the March election.

Town Council Chairman John Farrell announced at the Town Council meeting on April 2, that the School Board would be addressing the issue on the April 3, but made no comment on what they (the School Board) would be announcing about the deficit. “We’ll see where their discussion goes and then we’ll bring it back to the council to see where we go from there.” Farrell said.    

Ultimately, the school district’s portion of the shortfall was $440,000.  The Town Manager hoped to reduce that amount by asking for $225,000 from the district. Although the shortfall may worry the public, there will not be a tax increase to resolve it according to Town Manager Kevin Smith.

During a follow up interview with the Times, School Board Chair, Jenn Ganem, said “I agree with Steve Young in as much as the taxpayers have already paid into the savings account – the undesignated fund balance – for the town.  I just felt, like the other members, that it was the town’s error to resolve.”  She added, “I also don’t believe the taxpayers would want the school district to be in the red.”

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