2017-08-25 / Front Page

Changes to budget process coming?

By Michael Kelley Staff Writer

Town council members are hoping voters pass a school budget as soon as possible so they can get started on improving the way the town goes about the budget process for fiscal year 2019, which starts July 1, 2018.

As this year’s budget process has drawn on the council has increasingly been hearing from members of the public who want the town to change the process, beginning with a formation of a budget review committee.

Councilor Katy Foley made a motion last week to form an ad hoc budget advisory committee, a group that would “advise the town manager and town council on strategies to promote better community understanding of budget process” and “propose improvements to the budget process and … identify additional communication and outreach opportunities” as well as “establish a baseline of facts regarding the costs associated with delivery of current and historic levels by benchmarking Scarborough’s costs to those in other communities.”

The group, at this point, is proposed to be made up of two town councilors (representing the finance and communications committees), a school board member from the finance committee, four community members, as well as a representative from the SMARTaxes group and Save Scarborough Schools group.

“I thought it prudent to demonstrate to the public, it is not just lip service. We are hearing people and are willing to make changes in how we do business,” Foley said at the Aug. 16 meeting.

The committee, if formed, would be required to “recommend and report their identified goals and agreed upon deliverables” by the Dec. 6 town council meeting and once those recommendations are accepted by the council “shift its focus to meeting the goals and deliverables” until a school budget is passed.

Susan Hamill, a resident of Bay Street and a member of the SMARTaxes group, said she was pleased to see the council discussing the formation of the committee.

“The town manager and council can talk about changing the process, but un- til they really listen to the public and make changes needed, we will stay stuck where we are,” she said earlier in the meeting.

Forming the committee was something Foley’s fellow councilors seemed to support, but one that was after some debate, tabled until a workshop session before the Wednesday, Sept. 20 meeting.

Councilor Chris Caiazzo said he understood Foley’s intent, but didn’t think forming the committee was the right idea. Much of the committee’s charges, he said are tasks that the town council’s finance or communication committees already do. Furthermore, there are public comment periods at the town council and finance committee meeting and town councilors are always available via email or phone.

He said he also didn’t think wise to include select groups in the committee’s formation. Caiazzo, the chairman of the council’s appointments and negotiations committee, couldn’t recall an instance of specifying a group, other than a representative from an official town committee or department, except for the Firing Range Committee, which names specific organizations needed to be represented due to safety reasons.

“It gets us in the right direction,” he said, “but this is not the right mechanism.”

Councilor Peter Hayes said he supports sending the topic to the Sept. 20 workshop as a starting point to “explore the concept.”

Councilors Kate St. Clair and Bill Donovan also supported the extra vetting. St. Clair said it needs more fine-tuning and tweaking and Donovan said it “needs to be evaluated much more deeply.”

Council chairman Shawn Babine said he would like to see the ad hoc group include more school board representation.

While the decision of forming the budget advisory committee was delayed until late September, the council voted last week to not delay the issuance of property tax bills even if the school budget vote fails for the third time Tuesday, Sept. 5. The bills will go out Sept. 15 – due back Oct. 15 – and be based on the $62.6 million overall town net budget that the council passed at the Aug. 16 meeting.

Town Manager Tom Hall said if the budget doesn’t pass Sept. 5, it “begins to present a challenge in terms of cash flow.”

The town would have two options: issue bills based on taxes on the last budget the council adopted per state statute or wait until a budget passes and borrow money in the meantime.

Hayes said the town borrowing money to pay its bills could have negative consequences to the town’s bond rating, something that could be problematic with the potential of the town bonding $19 million for a new public safety building. According to a letter Shana Cook Mueller, one of the town’s attorneys, wrote to Hall, (Scarborough Finance Director) “Ruth Porter calculated that interest costs would total between $60,000 and $100,000, plus transaction costs and the temporary note or line of credit would have to be sold to multiple banks because the town requires such a large amount of cash that no single bank is likely to obtain quick enough approval to facilitate the time-sensitive transaction.”

The first option, Caiazzo said, is the financially responsible thing for the town to do, others agreed, passing an order regarding how taxes would be committed with no approved school budget in place.

“We all hope for the best, but need to plan for the worst and I think this puts the town in the best position,” he said.

In the event too much money is raised in property taxes because a subsequent school budget that is approved is less than the one the tax bills are based on, the extra money would be placed in a reserve account and used to offset property tax bills the following fiscal year.

Babine said if that is the case, town staff and council members will have to be prepared to hear from taxpayers who are upset they overpaid and looking for some sort of remediation.

Councilor Will Rowan wondered if the council could wordsmith the order to take into account if the opposite occurred and the budget that voters end up passing is larger than the one the taxes are based on.

Hall said there is no precedent as to how that would be handled.

“This is uncharted territory. I am not aware of any community in Maine has found themselves in this position,” Hall said.

Staff Writer Michael Kelley can be reached at news@scarboroughleader.com.

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