PORTLAND, Maine – Municipal and school departments ended their last budget year with a $2.2 million surplus, which city and school officials say could be used to reduce taxes.
They attributed the savings in the fiscal year that ended June 30 to a mild winter, the refinancing of school debt, open positions and a profitable school food service program, among other things.
“Despite a difficult year in a tough economy, we made sure the budget closed in the positive,” said City Manager Joe Gray.
The city’s auditors are expected to deliver a final report within days, but Finance Director Ellen Sanborn has issued a draft report.
The latest surplus puts the city’s fund balance at $29.8 million, which is available for emergency expenditures outside the $289 million budget for 2010-11. The city also maintains a fund balance to ensure its credit rating with investors.
Superintendent Jim Morse said he hopes to use some of the school district’s $1.1 million surplus to help offset an expected $6 million reduction in federal funding in the fiscal year that starts July 1.
Morse has reserved about $1.8 million of the $2.6 million that Portland schools received from this year’s federal jobs bill, which can be spent in the coming school year. However, that means the district still faces a budget reduction of about $4 million in 2011-12 and the potential loss of as many as 80 jobs.
Steven Scharf, a resident who watches city budgets closely, said he’s glad that municipal and school officials saved money last year. But he warned against making a habit of using surpluses to fund future budgets.
“If you do it one year, you have to figure out where you’re going to get the money the next year,” Scharf said. “You’re masking the true taxpayer burden. Overall, it’s bad fiscal management.”
Overexpenditures in 2009-10 included $1.8 million on general assistance, $900,000 on health insurance for city employees, and an emergency purchase of an e-mail system for the finance department, which exceeded its budget by nearly $98,000, according to Sanborn’s report.
The surplus came from a variety of cost savings and higher-than-projected revenue, including $900,000 that wasn’t spent on snow plowing and other winter expenses, and $750,000 that was saved on school debt payments.
Unexpected revenue included $111,000 in additional parking fees, $170,000 in additional emergency medical service fees, $495,000 from a jetport expansion building permit, $250,000 in additional seaport revenue, and $249,000 in school food service revenue.
The city’s schools contributed a total of $1.1 million to the surplus, demonstrating how far the district has come since a budget crisis in 2007 led its superintendent and business manager to resign.
“It shows what we can do as a district when we focus on the issues that we’re facing,” said Jaimey Caron, the school board’s finance chairman. “It’s the result of the board’s desire to turn things around and hard work by staff.”
Since 2007, when budgeting and accounting problems led to a $2 million deficit, the district has instituted various programs to ensure accuracy, including multi-year budget planning. The district will make software and reporting upgrades in the coming year to better track employee payroll and benefits.
“There are a lot more improvements we can make,” Caron said. “I’m looking forward to where we can be five years from now.”
Copyright (c) 2010, Portland Press Herald, Maine
Distributed by McClatchy-Tribune Information Services.