SOUTH PORTLAND — Schools are facing a budget gap of more than $1 million in fiscal 2013, the superintendent of schools said Monday at the first in a series of budget talks with the City Council.
“As of right now, if we are to open the doors next year exactly like this year, we’d have a projected budget gap of $1.2 million,” Superintendent Suzanne Godin said.
Godin told councilors the gap is the result of a reduction of more than $1.5 million in federal funding, uncertainty over how much the schools will receive in state subsidy and a recent history of having to dip into surplus funds.
She said the surplus now totals $3 million.
Godin also said the schools would likely have to dip into the surplus before the end of this year, making 2011-2012 the second year in a row the department will eat away at its savings.
Godin said she fears that if the schools have to use $1.2 million of its surplus to cover budget gaps in fiscal 2013, reducing the surplus to only about $600,000, the schools could be perilously close to running out of money.
The surplus is an ongoing source of contention for frequent School Board critic Albert DiMillo Jr., a retired corporate accountant, who said at the workshop that the district is lying when it says it has only $3 million in surplus.
The real number is closer to $7 million, he said.
“They’ve budgeted wrong for seven years,” DiMillo shouted. “South Portland has tons and tons of surplus because of budgeting errors.”
The board often leaves DiMillo’s questions unanswered, but Councilor Tom Coward asked the board to address his concerns and explain the situation.
“This isn’t quantum physics, it’s accounting,” he said. “There’s supposed to be an explanation.”
The district’s business manager, Rafe Forland, said the discrepancy in accounting comes from what’s being counted as “surplus.”
Reserve accounts – money stashed away to be used at a later date on projects such as new school buses and technology upgrades – are at $2.7 million, he said.
The unassigned surplus, he said, is $3 million.
Other accounts include a maintenance fund and a special education fund, which the district hopes will offset the gap created by a growing demand for special education.
“We’re trying to create a little bit of a cushion, so we try to be aggressive in budgeting so that if the worst occurs, we have someplace to go,” he said.
DiMillo said it is disingenuous accounting. He said if the schools must buy buses or computers, the department could write those expenses into each budget as line items, rather than carrying over the savings in designated funds every year.
He also accused the department of holding more surplus than the 3 percent allowed by the state. But Godin said stimulus money from the federal government, starting in 2008, brought with it a waiver on the 3 percent limit, allowing the schools to save more money.
“They waived the standard knowing there would be a year when all that federal funding is gone,” she said.
Last year, South Portland residents voted by a 2-1 margin in support of the department’s $42.8 million budget.
Other than a pledge by the board to develop a “need-based” budget, no plans resulted from Monday’s meeting.
Mayor Patti Smith set the stage for more budget work ahead of the March 12 deadline for a first draft of the city’s budget.
“This is early, but we can tell it will be a difficult season,” she said. “This is a good starting point, and it’s good to set the table about what you’re thinking about.”