Vassalboro’s auditor is happy enough with the town’s financial position, but not with the school department’s.
Reviewing the audit for the year that ended June 30, 2017, with selectmen at their May 17 meeting, Ron Smith, director and managing partner of RHR Smith & Company, in Buxton, began by pointing out the inequitable distribution of the total Vassalboro budget, about $7.5 million in school funding and about $2.5 million in municipal funding.
Based on annual expenditures and depending on what time frame is used, a municipality with a $10 million budget should have an unassigned fund balance (also known as an unrestricted or undesignated fund balance, formerly called surplus) of at least $800,000 and maybe more than $2 million, Smith said.
Vassalboro was showing a surplus of around $1.2 million at the end of the 2016-17 fiscal year, or about enough to cover 45 or 50 days’ expenditures in the event of some kind of total national financial catastrophe.
But, Smith said, the surplus is masking a deficit in the annual school budget of more than $325,000 – about $70,000 in annual loss in the school lunch program and the rest in teachers’ salaries to be paid over the summer and not funded in the school budget. “You’ve got a healthy fund balance,” Smith assured selectmen, but if school funds were not counted in with municipal funds, the municipal surplus would be a healthier $1.5 million and the school would be visibly in deficit.
From an auditor’s standpoint, there are two ways to deal with the imbalance, Smith said: raise taxes to cover the school deficit, or ask voters to approve transferring town funds to the school budget. Neither can be presented to voters at the June 4 town meeting, since the articles for the meeting are already approved and being printed.
He recommended two prompt actions:
- Town Manager Mary Sabins should call the AOS (Alternative Organizational Structure) #92 office and find out what the school’s current deficit is, and
- Selectmen should meet with school board members.
Board Chairman Lauchlin Titus explained that as of July 1, 2018, the AOS will be dissolved, by the March vote of the member towns, and Vassalboro will have its individual school department. The school board’s plan is to hire a part-time superintendent and to contract with Waterville and Winslow for most of the services now provided by the AOS central office.
Selectmen concluded from listening to Smith that in addition to dealing with school-municipal relations, they need to revise the town’s investment policy, a one-and-one-half page document adopted in 2012. Smith agreed and offered to send Sabins copies of other municipal policies and help her craft one specifically for Vassalboro for selectmen’s review.
In other business, selectmen scheduled a public hearing on the Vassalboro Sanitary District’s application for Tax Increment Finance (TIF) funds to help with the planned sewer connection to Winslow. The hearing will be at 7 p.m. Thursday, May 31, during the selectmen’s meeting that begins at 6:30 the same evening.
Board members approved a liquor license for a wine and beer tasting event, part of the Save the Mill fund-raising series, scheduled for Saturday, July 7. Board Chairman Lauchlin Titus abstained on the vote, because his wife Linda heads the Vassalboro Business Association that is sponsoring the event.
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