SOUTH PORTLAND — The City Council on Monday postponed a vote on the combined city and school budgets to address questions raised during public comments.
But on Wednesday, school and city officials indicated they were ready to proceed with the vote, without budget changes, at the council’s next meeting.
The school budget was approved by voters May 10 by a 2-1 margin, and School Board members were on hand Monday to thank residents during the televised council meeting.
But resident Albert DiMillo Jr. told the council the school budget did not include a $1.05 million set-aside to pay for the high school renovation bond.
“Therefore, the voters approved to not have that $1.05 million in the budget,” he said. “So, unless you intend to violate state law, the $1.05 million will not be in the budget.”
The comment prompted City Manager Jim Gailey to huddle with City Attorney Sally Daggett, while the council’s business meeting continued. Gailey then stepped into the hall with Superintendent of Schools Suzanne Godin.
When the budget items came forward, Mayor Rosemarie De Angelis announced the vote would be postponed until the issued could be sorted out.
However, Godin on Wednesday said the city has been cleared by its attorneys to proceed with the vote. The $1.05 million in school reserve funding can still be raised through taxes, provided it sits outside of the school budget in a municipal capital reserve account, she said.
“The reality is, we didn’t do anything illegal,” she said.
At issue are the school’s efforts to begin building capacity into the local tax rate to soften the blow when taxpayers begin paying for the $41 million bond approved last year to renovate and expand the high school.
For fiscal 2011, the School Department budgeted an additional $500,000 on top of its $41.1 million budget, which was put into a reserve account. That money was included in the figure approved by voters last year.
The district had planned on increasing that contribution over the next few years to prevent taxes from increasing by a significant amount in any single year because of bond payments.
But for fiscal 2012, the district did not add the $1.05 million to its nearly $42.8 million budget.
Throughout the budget talks between the School Board and City Council, which sets the bottom line for school spending, it was determined the funding for the high school bond would be considered outside of the school budget.
DiMillo on Monday accused the School Department of trying to hide the money from taxpayers. He has frequently criticized its position that the budget only increases taxes by 1 percent, when the increase, he claims, is actually more than that when the reserve money is included.
“It’s only fitting, because from day one, they’ve tried to hide the real cost of this budget,” he said.
Godin, however, pushed back against that assertion at Monday’s meeting.
“I do take offense to any suggestion we would be trying to hide any money,” she said.
After the meeting, School Board Chairman Ralph Baxter and Vice Chairman Richard Carter said they hoped the $1.05 million would ultimately be approved by the council.
They pointed out that the board and council publicly voted on budget warrants for the $1.05 million in high school reserve money before sending the budget to voters.
“The intent was obvious,” Baxter said.
Representatives of the state attorney general, secretary of state and Department of Education referred all questions about the budget vote to the city attorney.
Godin on Wednesday said the money was not added to the school budget validation referendum because it was not part of the operating budget. The school budget referendum is designed to show only the next fiscal year’s operating expenses, she said.
“It’s not part of the operating budget,” Godin said. “It may have been a mistake to put it in last year.”
Godin said the $500,000 approved last year was put into an account within the school budget, which gave the district access to the money to pay the costs associated with drafting plans for the high school.
Godin said funding for the high school reserve account will not be included in the budget validation referendum in the future, since it will sit in a municipal capital improvement account.
“It’s going to sit in a capital reserve fund until such time as the city and School Department decide it can be used to offset the cost of the high school,” she said.