ELLSWORTH — The City Council rejected the budget presented by the School Department for fiscal year 2023 Monday night, derailing one of the more complex budget processes and pushing a special election on the budget to July at the earliest.
Due to a unique set of circumstances at the meeting on May 16, it only took one “nay” vote from Councilor Michelle Kaplan to scuttle the $25 million budget and send school officials back to the drawing board.
Interim Superintendent Katrina Kane kicked things off by presenting the latest revised budget numbers. After correcting an earlier omission of a staff position, the final ask was for an additional $155,135.31 in local appropriations, reflecting an increase of 1.36 percent over fiscal year 2022. Kane reminded the council that the biggest drivers of the increase were fluctuating energy costs and staffing, but the department had done its best to offset those costs by putting several key capital projects on the backburner.
Once the budget presentation had concluded, Councilor Steve O’Halloran announced that he would be recusing himself from the ensuing votes because his wife works in the School Department business office and he felt there was a conflict of interest. Council Chairman Dale Hamilton explained that his wife was also employed by the Ellsworth school system but that he did not feel that he needed to recuse himself, as there was no way for him to benefit financially since the council only votes on total appropriations, not line-item spending.
O’Halloran’s recusal brought the total number of councilors available to vote on the budget down to four, as councilors Robert Miller and Gene Lyons were not present at the meeting.
The school budget is voted on as eight separate agenda items as required by state statute. The first item was the total amount that the state requires the school department to raise for essential programs and services in order to receive a subsidy. That item, totaling $7,882,538.34, passed with four votes in the affirmative. The second item, approving an $88,100.50 debt service payment for work done on Ellsworth Elementary-Middle School years ago, also passed with four votes.
The third item, an order raising and appropriating additional local funds for programs and services, totaled $3,558,167.75. School Department officials explained that this figure represents the gap in funding between what the state estimates it takes to run the school system (the $7.8 million figure above) and what it actually costs after things such as special education, technology, transportation, professional development and system administration expenses are factored in.
The figure could have even been higher, officials explained, if the School Department had not decided to apply $2 million from its fund balance, or surplus money that has been carried over from previous years, to lessen the cost.
Councilors Marc Blanchette and Casey Hanson, along with Chairman Hamilton, voted to approve the item, with Councilor Kaplan voting against. The three votes in favor seemingly represented a majority approval, since there were only five councilors present, but that was not the case.
Former City Council chairman Gary Fortier, who was in the audience and scheduled to present to the board as part of Green Ellsworth later on, pointed out that the city charter required four votes in the affirmative for an item to be approved, regardless of the number of council members present.
After a brief recess and discussion, it was determined that, while only five councilors were needed to conduct business, four votes were indeed necessary for any item to be passed and, therefore, the budget was dead in the water.
The council continued to vote on the remaining items, with the total school operating budget failing to pass by the same vote tally. The final item, an order that any additional funds received from the state go directly to the School Department, was voted down 3-1.
Any item that was voted down by the council will now have to be reworked by the School Board and School Department staff and resubmitted to the council for approval before the full budget can be voted on by the public.
“I don’t think we’ll find $3 million in paper and pencils; I can assure you of that,” said Kane before school officials left to dive back into the budget process.
There was little direction from the council at the meeting as to how much or where they wished the School Department to make any cuts.
“I just think that we can do a little bit better on the cost to the taxpayers,” said Kaplan, the lone “no” vote on the budget, when asked to offer feedback. Kaplan further clarified her position when reached for comment the following day.
“I have a few issues with some of the numbers and that each year more and more staff are added,” she explained. “For example, if you add two ed tech positions with grant money now, it’s a long-term cost later when you add in the salaries, insurance and benefits.”
Kaplan also reiterated her concern regarding an element of the budget that she acknowledged neither the city nor the School Department have any control over: the rate of tuition paid by families who are sending their children to Ellsworth schools from out of town. The tuition rate for students from other towns is set by the state.
“This year’s budget comes at a time when everyone in the private sector is tackling the challenges of less disposable income due to higher gas prices, higher food prices and rising inflation across the board. The school budget has added $1.5 million over last year and I just feel that the taxpayers deserve a break. Surely with some creative thinking we can do better and ease the financial burdens of the taxpayers.”
“A 1.6 percent increase, at a time when inflation is at 8 percent, is really a cut,” said School Board Chairwoman Kelly McKenney when reached for comment. “I’m confident this budget would have passed had the full council been present.”
The department cannot present the same budget, however, and any section that it reworks will need to be voted on again. Officials had not come to any decisions on where to make cuts by press time, but it’s possible that an emergency meeting of the School Board could be scheduled sometime this week in order to get a new budget in front of the council at its special meeting scheduled for Monday, May 23.
Chairman Hamilton did confirm that, regardless of whether or not the budget is passed by May 23, the public will not be able to vote on it in June as previously scheduled. A 45-day notice requirement means that the earliest it will most likely be voted on at this point would be July 12.