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Dismal financial outlook kills June bond referendum on South Portland High School renovations

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Dismal financial outlook kills June bond referendum on South Portland High School renovations

SOUTH PORTLAND — The School Board on Tuesday dropped plans to put a high school renovation bond before voters in June after receiving bad financial news from the superintendent of schools.

In light of current and expected budget cuts, Superintendent Suzanne Godin said, the city would not be able to make the initial payments on the bond.

The news, delivered during an emergency workshop at Memorial Middle School, prompted the School Board to cancel a joint meeting with the City Council that was planned for Thursday, Jan. 28, and delay putting the borrowing plan to voters in June.

Although the bond could go to voters in November, board members indicated the project could be delayed by at least a year. Although no vote was taken, the board reached a consensus that the bond question should be indefinitely postponed.

"We're not taking the project off the table," Board Chairman Richard Carter said. "It's the timing of the project."

Godin said if the district pursues, and voters approve, a renovation bond in June, the city would have to make a nearly $3 million payment in 2013.

After years of cuts to programs, Godin said there would be no money to make that payment.

"We're not going to have enough to bring that $3 million into that budget," Godin said. "We'd be decimating an already decimated school system."

When residents voted by a 3-1 margin against a $56 million renovation proposal in 2007, officials presented the annual cost in terms of its effect on property tax bills. Some compared the cost to one $2.50 cup of coffee a day.

That rhetoric, however, proved misleading.

Godin on Tuesday said the district cannot simply add the project costs onto property tax bills. Instead, the district needs to budget annual payments in its operating budget, which will not have the capacity to support a renovation payment.

Godin said the district would have to increase its budget by 2 to 3 percent a year to create that capacity.

Instead, the district has been reducing its budget, and must cut $1.2 million to meet an anticipated curtailment in state education funds this year.

For the next fiscal year, which starts on July 1, Godin said her administration is planning for a $2.4 million cut in state aid, which could translate into the loss of 30 jobs, reductions in extra-curricular activities and perhaps closing a school.

In fiscal 2012, Godin said the reduction in state education aid could exceed $2.4 million.

"The biggest issue is we're decreasing our budget," Godin said. "We're cutting our ability to pay for this (renovation)."

Carter said it would be irresponsible for the district to ask residents to support a school budget with significant cuts in May, and then ask them to support a $42.1 million high school project. 

"I'm not sure that passes the straight-face test," Carter said. "I can't even think of a positive spin on that scenario."

Even if the School Department goes ahead with the high school project, Carter said a state law limiting the amount a municipal budget can grow in a given year would not allow the schools to increase the budget enough to make the first payment in 2013.

Godin's announcement took board members by surprise. Many struggled to reconcile the need for substantial renovations to the high school, which could lose its accreditation, against budget concerns.

When board member Sarah Goldberg asked why this issue had not been flagged sooner, Godin and Carter said the district tried to "compartmentalize" the annual budget from planning for a new high school.

"I started looking at that budget side and, honestly, in the middle of last week, the two sides collided," Godin said. "I couldn't compartmentalize them any longer."

Board member Ralph Baxter Jr., who serves on the Secondary Schools Facility Committee, said he was frustrated by the news, because the committee had worked hard to reduce the scope and cost of the high school renovation from $56 million to $42.1 million. 

Baxter said the district has the right plan and construction costs are low, because of the economy. Meanwhile, low interests rates and a good municipal credit rating would allow the district to borrow money at a low cost.

"The pieces are all lined up except this one key stumbling block," Baxter said. "I feel sad and frustrated by the whole process."

Board member James Gilboy said delaying the high school project would send the wrong message to residents, especially since the school's accreditation is at risk.

The district must submit a report to the New England Association of Colleges and Schools in the fall of 2013, stating that the recommendations in its report have been addressed.

"My thought is we move forward in June and let the chips fall where they may," Gilboy said.

Even if the voters approved the plan in June, Carter said carving out payments for the project would come at the expense of programs.

"We could end up with a gem of a high school and gut the school system," he said.

Carter said the board will meet on Feb. 8 to hear a presentation on the high school renovation plan and could still vote to accept it without a funding mechanism. He said he hopes accepting that plan will be enough to keep the school's accreditation.

Randy Billings can be reached at 781-3661 ext. 100 or rbillings@theforecaster.net