SOUTH PORTLAND — City councilors have requested more detailed financial reports from the School Department ahead of the Jan. 5 start of fiscal 2012 budget deliberations.
The schools, meanwhile, will begin their budget discussions later than usual, so more accurate state subsidies can be used.
Councilors have told the School Department to deliver two years worth of reports that compare actual expenses to the amount that has been budgeted.
School officials must also provide a list and explanations of line items that have either run over or under budget during that period. If surpluses were incurred, the department must explain where the excess funds went.
The request was made by Councilor Jim Hughes, who received the support of fellow councilors at a workshop on Monday night.
Hughes said he sought the changes because historically the council would meet with the School Board and city manager at the same time to review large amounts of budget information and deliver guidance about how large a tax increase they would support.
“Over the last few years, our process wasn’t the best,” Hughes said. “We just didn’t have the information early enough to make a good decision.”
The council sets the bottom line for school spending, which accounts for about two thirds of all city spending.
The weakness of the traditional budget process was apparent last year, when after a two-hour session, councilors and board members left with different impressions of the budget guidance.
While most agreed the council called for no tax increase, others claimed the majority of the council would support a modest increase; they simply couldn’t agree on an actual number.
“The results of last year’s discussion paved the way for this,” City Manager Jim Gailey said. “Budgets aren’t easy anymore.”
Superintendent of Schools Suzanne Godin said the district is working to provide the city with the requested list of line items that were over or under budget by $5,000 or more. She estimated that fulfilling that request could produce nearly 100 pages of documents.
“That gets really deep into the budget,” she said. “We’re not sure we have the capacity to provide that, but we’re working on it.”
Godin said she appreciates the council seeking more information so it can better understand the school budget, which is presented in a new state chart of accounts that doesn’t lend itself to detailed presentations like the municipal budget.
“Our budget is not as transparent as we would all like it to be,” she said.
Albert Dimillo, a retired corporate accountant, has frequently criticized the school district’s accounting practices for being based on budgeted, not actual, expenses. That practice has lead to annual surpluses of more than $1 million in recent years, he said.
Dimillo, however, was skeptical that the new budget process would produce a more accurate school budget. True savings would be found through consolidating city and school finance and human resource departments, he said.
“I don’t know if this is a bluff to make it look like they’re doing something,” said Dimillo, who ran unsuccessfully this year for an at-large council seat. “The guidance should be: budget correctly and justify what you spend.”
After the schools receive budget guidance from the city in January, Godin will have until March to present her recommendations, which is typically when the final budget is presented.
The extra time will allow the board to conduct budget workshops over the course of several weeks, rather than only one week. A final budget will be presented to the board on April 11 and to the city on April 25, she said.
“That should allow us to be more responsive to questions,” Godin said.
The new schedule will also allow the district to use more accurate estimates of state subsidies, she said.
Both Godin and Gailey said they are expecting another difficult budget year.
While the district still has $1.2 million in federal jobs money to use next year, Godin said she anticipates the district will lose $2.2 million in state and federal subsidies. She expects to reduce that deficit by using $1.2 million of the district’s $2.8 million surplus.
Although city revenues are making a modest gains, Gailey said fixed operating costs continue to increase, including an anticipated 8.5 percent jump in insurance costs.
“On the municipal side, I’m so thin that if I have to cut, I’m going to be cutting services,” he said. “A lot of the times, that means cutting people.”
Randy Billings can be reached at 781-3661 ext. 100 or firstname.lastname@example.org