001Good evening. >> How are you? >> I'm Steve Marquee, superintendent of schools for RSU 57. I want to welcome those of you in attendance here this evening as well as any individuals that might be watching from home. uh the process I'm going to share. I'm going to speak very very briefly um a high level uh overview and then I'm going to actually pass it off to our director of finance and operations Colin Walsh to to really get into um a deep dive on this information that you're going to receive tonight related to the 2627 budget review. I want to start off by saying a special thank you to the finance committee under the leadership of Wes Finny, Mark Cardazano, Eric Garrison, Judith Facel, Jen Mayo, and Suzanne Bower. Also want to give special appreciation to
002uh board chair Lane and the collective of the school board for their stewardship, their guidance, their passion and energy for our school system. Um, this process is a is a arduous one. We've been working on it for quite some time. Uh, tonight you'll be hearing about the impact, the drivers that uh impact our budget. I believe we're presenting to the general public a budget that seeks to balance the needs of our students in alignment with the strategic plan as well as the impact on our taxpayers. We've been sharing at numerous meetings and all of our meetings are publicly noticed and uh are also online. We welcome our constituents to attend our Tuesday night finance meetings and our regularly scheduled board meetings uh on Wednesday evenings every other week. Through these meetings, we've talked about the
003impact on um the escalation in property valuation. The way Maine funds schools is split 50% on student enrollment, 50% on valuation. And as towns experience drastic u escalations in valuation, there's typically a a flip of that and the state reduces subsidy. In our district, we've experienced upwards of a 94% increase in valuation over the past five years, while our enrollment has remained relatively flat. As such, the state has um reduced our essential programs and services subsidy that provides funding for local municipalities based on enrollment and ability to pay through taxation. When I first arrived, our subsidy percentage was approximately 43% of EPS, essential programs and services. This coming year it will decline from 41 from last year to 37%. That differential has a significant impact on our ability to to pay. Much of this is
004really um again driven by valuation. We're working diligently across the state to um gain support so that our legislature rethinks and refocuses the EPS formula um with current legislation that's going to be brought forward to the floor in Augusta, which is LD 2226, which is all about adjusting some of the subsidy formula over the next few weeks. We're continuing to welcome feedback from our constituents as we seek to balance the budget. I can say with complete confidence, our budget is lean. Uh we are going into a budget process where nine member districts of southern Maine, York County that are roughly the size of us or or actually slightly less have seen drastic escalations in expenditure while ours has remained essentially flat year-over-year. That doesn't mean taxation is going to be flat. and that's based on
005the reality that the state says local municipalities need to pay more. Um, I really look forward to engaging our constituents in this conversation. I do believe we're bringing in the most fiscally responsible budget of any school district in southern Maine and likely one of the most um throughout the entire state of of Maine where our pupil per pupil costs are significantly below the state average and the regional average and our budget as we head into uh the next stage is essentially a 3% year-over-year expenditure, which is unheard of as folks explore other districts in southern Maine and beyond. Without further ado, I want to have Colin Walsh, our director of finance and operation, come forward. He's going to walk us through this information. And we could not be more fortunate as a district to have
006someone of his knowledge, expertise, and genuine passion for this work and for our students uh leading the charge with budget development. So, Colin Walsh, >> thank you, Steve. Um, thank you to the board and the finance committee. Also, thank you for those who are watching tonight or might be watching in the future as this is recorded and going to be posted on our website. The handout tonight, the PowerPoint presentation will also be on our website um within the next few days as well. So, um, I welcome all of you, whether in person or attending remotely or watching in the future, um, to this presentation. I would ask for those in attendance tonight here, if you could write down your questions, keep them to the end, um, because some of your questions may be answered during
007the presentation, and then I will leave plenty of time at the end um, in order to answer those questions that you may have or input that you may have. I want to start with this which is the strategic plan for 2024 through 2028. Um it is an in-depth document. It is on the website and encourage you all to read it. This is really um the document that drives what we do throughout the budget process and throughout the year. and it has four key areas in preparing students for success in an everchanging world. So, um I present this so that you have a base of information that this is kind of our northstar of where we look at this document and um encourage people to read it and to become familiar with it. The next two
008slides I'm going to go over briefly. This is the budget development process and it highlights the process that we utilize and that the finance committee had developed over the fall. It is similar to prior years. Um there is a presentation of the budget process at a presentation done December 17th and that is also online. The PowerPoint slides from that. The finance committee is intrically involved in what the process is and developed what the process um involves or doesn't involve in order to develop this budget for the 2627 fiscal year. It really starts um with developing a budget that meets the needs throughout the strategic plan in order to align the goals for the district and those of administrators in order to achieve the balance between taxation and providing adequate funding for our school district for
009both students and staff. I'm not going to go through this a lot because a lot of the budget process is in that other presentation. You can read these slides yourself, but it really goes through and the finance committee is intricatally involved in that process in hearing from administrators, hearing from the superintendent and myself and then charging us as an administration to go back provide answers, information and resource in order to develop the budget. Just so you know, the finance committee continues its work. They will be proposing a budget soon to the school board. The school board will then vote on the budget. And so that there's a clear understanding of this process. Once the school board approves a budget, it will then go to the public for a public budget meeting in May. And then
010the second step in the process is the validation referendum in June at polling places in each town. I get asked frequently, well, if you have a budget meeting in May, then in June when you vote, why aren't we voting on each individual article? That's what the budget meeting is. That's what the legislature set up in the process. So, the the validation referendum question is either yes or no. in June, do you approve the budget that was most recently approved at the budget meeting, which would be the May meeting? So, both of those are important areas in which the public has an opportunity to be heard, to provide input, and then to vote on the warrant articles and then the overall budget. We use a baseline budget and I have some bullet points here. Again, I
011won't spend a lot of time on this, but this is the process that the finance committee has utilized for a long time and it is a baseline budget process in which you establish a baseline budget and then you adjust it for current year expenditures, needs and items that the district or staff need to meet um either contractual obligations or programming needs. Um, so there are different budget process methodologies and this is the one that the district uses and has used for many years. I'll just mention briefly that this process has really worked well for the district and I think a test of any process in this case a budget process is does it stand the test of time. Does a process work well not just today but many years ago and also for our future.
012And I believe this process does. On the next two pages, I'm going to talk about challenges within the budget. And there are many, hence why it's taking two pages. The challenges become more real as the years go on. The first one here is about what Steve was talking about is state funding. state funding has gone down and you're going to see a graph in a little bit for our district relative to the amount that costs have increased. There may be slight increases or flat funding from the state, but when you consider the cost of salaries, benefits, health insurance, and just operating costs such as utilities, supplies, the subsidy formula does not keep up. I did a presentation about a month ago. That presentation is online. The PowerPoint is online and the video is online. I
013encourage folks to watch that. That is about the state subsidy formula. How it works, what it includes and what it does not include. More importantly, you see here that in fiscal 2007, which is what FY stands for, the fiscal year 2007, 47% of our general fund revenue came from the state, just shy of half. Since that time, in 18 years to 2025, 33% of our overall general fund revenue comes from the state. And we anticipate in the coming year and years under the current formula, and we'll talk about LD226 in a minute, that that percentage is going to keep going lower and lower and put more strain on local taxation. The main reason for that formula not keeping up for our district is because valuations have gone up and enrollment has remained relatively flat. and
014the subsidy formula. Those are the two main ingredients in determining subsidy. There are a whole bunch of calculations that go into the formula, but at the end of the day, valuation is a key one, as is enrollment. We'll talk about 2226 in a minute, and I'm going to defer that to another slide, but I'm just going to hit a couple of highlights. increased educational and non-educational mandates as laws change either at the state or federal level. Costs are associated with those changes. Not saying that those changes aren't necessarily good for kids or for staff, but there's no funding mechanism in a lot of those mandates and laws, which means it's born by local taxpayers for the most part. at the top of this page. Attracting and retaining qualified staff is increasingly more difficult. I think
015for those of you who are in companies or own a small business, you see it every single day. You see the challenge in attracting or retaining your staff. Um we are the same. It is a very difficult task in order to attract new staff but also retain qualified staff. And that is a key ingredient in the strategic plan. the current economy. I think all of us see that every single day and the school district is no different. Whether it's fuel costs, whether it's food costs to feed children, whether it's supplies, those costs are escalating and the subsidy formula does not keep up with that. Aging buildings, I love old houses. I just love them. They have character, but they cost money to maintain. And I think for anyone who has an older house, you can
016relate to that. I think schools are no different. Schools as they age require more maintenance, more upkeep, and in order to be proactive with that to ensure you're not deferring costs to the future where there's more and more escalation of those costs. So, we've done a good job in keeping up with that, but that is costly to maintain. We have one of the lowest per pupil costs in York or Cumberland County. Steve mentioned that a little bit earlier. We are a frugal district. We'll talk about that in a minute. And the geographic nature of our district. We are very spread out district. I dare say we're probably in probably the top five in the state as far as bus miles. I don't know that for a fact, but we're somewhere in that top five. I'm
017pretty confident in that. Spread out district with multiple buildings. Transportation costs cost money. If there are two areas that we have more costs than the average throughout the state in the 11 warrant articles that are voted on at the budget meeting is transportation and operations. And it's not because we're spending a lot. is because we have a lot of facilities and a lot of transportation that requires that maintenance and upkeep. This slide is about cost containment and we've done a lot of things in areas to try to contain costs. Reallocating staff as much as possible to meet enrollment numbers at various schools. That's a key ingredient to being as efficient as we can. looking at different grade level structures, trying to be efficient with that. Um, when there's multiple schools over multiple areas or multiple
018buildings, it's not just the operational cost, it's the staffing costs in order to meet those needs of students in the classroom. and really looking at special education. Special education for all schools, not just us and not just me, has been and continues to be a cost escalator or a cost driver um in order to meet the needs of those students. And those needs become increasingly more significant over time and more costly. We're going to get into the financial section. That was kind of an overview of the budget process. Some cost items that are important for folks to keep in the back of their mind as to the challenges the district faces being as costeffective as we are. I want to start with LD 2226. I believe this is one of the most significant changes to
019educational finance in the state of Maine in a long, long time. For those of you who have been around a while, you've heard me talk for years about how our subsidy formula needs revision, needs revamping, and an overhaul. It does not meet the needs of just RSU 57. It doesn't meet the needs of a lot of school districts in the state of Maine. LD226. There are roughly 260 or so school districts in the state. Approximately 200 or more would benefit from this legislation. There will be some who do not benefit financially. However, the legislature is really considering a hold harmless provision for those districts that would potentially lose money that under this revision that came out of the Educational and Cultural Affairs Committee that they would stay flat and not be harmed while other school
020districts such as ours would see significant benefit. If you watched my video and presentation that I did, you know the subsidy formula is a lot enrollment and a lot of valuation. Does not talk about economically disadvantaged students. It doesn't talk about districts that have higher needs in economically disadvantaged students or special education. Those are areas that this law helps and it's a good first step is what I've put here. For me, this is a significant significant legislation that should pass our state house and senate in order to benefit children in main schools. Under this formula, projections are that our district, not for the 2627 year, which is the budget we're talking about, but for 2728, the year after this coming year, we would see approximately a $1.2 $2 million increase in state subsidy. That is
021significant as you'll see in a minute. I encourage folks to read about this, really look at how this benefits schools in the state, but specifically how it benefits RSU 57 and our students and our staff, how it relieves some of the tax burden that local taxpayers have been feeling and seeing. Two key areas in this are the salary and regional index percentage. We for a long time have been grouped in an area which has been disadvantageous to us as a district. The other is what's considered a town's ability to contribute i.e. local taxation. Historically that has been really identified to valuation. As Steve said, valuation, as you'll see in a minute, has gone up dramatically, and that has caused the subsidy to decrease or remain flat as costs have escalated significantly. LD226 would change that
022so that 90% is valuation and 10% is economically disadvantaged. and it would change on page five of the state subsidy report the final calculation to determine the mill rate expectation of what towns should pay and what the state will pay towards RSU57's state subsidy. There are a few other areas in transportation model and special education. This came out of the Education and Cultural Affairs Committee last Thursday with a unanimous. It should pass. It will now go to the legislature and the legislative body. I encourage folks either in the room or watching to reach out to your representatives and senators and really encourage them to support 2226. This is the most significant financial impact to schools in many many years and is long long overdue. Talk about enrollment and valuation. This is RSU 57's enrollment. You
023can see fiscal 21. I don't know if any of you remember, but there was something called CO in fiscal 21. uh it went around and that's why you see that blip. So if you take that blip out in fiscal 21 and kind of continue that line, you see a downward trend and then some stabilization in 23 and 24, a little bit down in 25 and then some evening out again in fiscal 26. These numbers come straight from the ED279. This is attending enrollment um for our district. And you can see that trend. And for folks who have been in our district a long time, um you know that back in the early 2000s, this chart only goes back to fiscal uh 2008, there were a lot more students than there are today. Having said that,
024you also see that the decline is somewhat gradual over that time. It doesn't mean that all students from one school. In fact, we have some schools right now where we have increasing enrollment where we haven't for many years. Chappley is one of them. There are other schools where we are seeing lower enrollment than we have in many years. Alfred's an example of that. Um, so it does fluctuate over time, but enrollment is a key factor in the subsidy calculation as well. This is a chart that was in my last presentation on state subsidy. And this in the blue line at the bottom is the annual increase percentage in valuation. And this comes right from the ED279 report. Valuation for subsidy purposes is determined by the main revenue service with input from each of the communities.
025And the reason for that is different communities may be at different spots in their revaluation process. And what Main Revenue Service does is tries to even out that process so that a town that's at 100% valuation versus a town that's at 80% that there's a level playing field and you're comparing apples and apples. The orange line is the cumulative increase. And that just pictorially should jump out at you. That is a significant increase percentage-wise in how values have adjusted or significantly risen since 201718 to today. That's important because that is a key factor in how towns assess taxation, but it's also a key factor in how the state allocates subsidy to school districts. You say, well, percentages are great. Yeah. Okay. It's a huge percentage. I can see that. This is a bar chart that
026if you take a $250,000 home in 201718 with those percentages, what would that home be valued at today in fiscal 2627? And that would be just shy of a 100% increase. That $250,000 home would be just shy of $500,000. That's dramatic and that has a significant impact on how local taxes are assessed but also on how the state subsidy calculation um really then decreases because that ability to pay factor that I talked about or contribute factor state formula is designed such that if a town has increased valuation over another town they have a better ability to pay or contribute than the town will lower valuation. It's just how the formula works. It's the design of the formula from 21 years ago. You take the enrollment in the valuation and we start to look at historical
027state education funding. And you can see in fiscal 21 2011, excuse me, um just over $13 million. And for 27 fiscal year, it's going to be up around 15.6 billion. I'll look at the number in just a second, but I believe it's up in that range. Um, so say, well, that's an increase. It is, but costs have escalated a lot more than what that increase is over that 16-year period, and we'll see that in a second. So, you see areas where it's risen. You see kind of two-year spurts now and again. Why is that? In a lot of cases, remember state budget is done bianually every two years. And then you see areas where fiscal 16 to fiscal 19 is pretty darn flat. Um so there's an enrollment and valuation component, but there is also
028how is the state funding education. We'll talk about that in a second because we talk about enrollment and valuation. We say it's not currently including economically disadvantaged or other costs. I think it's important to understand and I say this in the presentation on state subsidy. You will hear that the state subsidizes 55% of education in the state of Maine. Going to be very specific here for a second because details matter. The state is funding 55% of essential programs and services. And what essential programs and services is is a detailed calculation of what the state considers essential to meet the main learning results. That formula in my opinion is significantly broken. And that's what LD 2226 in starts to fix. 55% of essential programs and services. Many years ago, the school's budget, very lean budget historically
029in RSU57 was 93% of essential programs and services. Today, it's about 75%. And that aligns with the state average as well. That essential programs and services is only 75% of what school budgets are throughout the state of Maine. What does that mean in English? Means 25% of a school's budget on average, including our district, is all on the local taxpayers. It's not even considered in the formula. Why is that? Because the formula has not kept up with the cost to operate schools. Say, well, we'll see in a second that this is not true. Well, schools just keep spending money. Costs go up, but we are one of the most efficient schools in York and Cumberland County. And I'll show you that data in a second. The other part is how much of our subsidy comes
030from the state. And I keep saying that goes down every single year. So, think about your home. Your home may have two people living in your home who earn an income. And if one of those keeps decreasing and decreasing and decreasing, let's call that person state subsidy, then it makes it much more costly for that other part of the income coming in. 93% of what we get in either comes from state subsidy or local taxation. And you can only cut costs so much and reduce costs so much. And being where we are, we're going to see how efficient we are in keeping our costs low. This is a real challenge, which is why 2226 is really important. Let's talk for a second about capital reserve fund. Capital reserve fund is a fund that's been set
031up for many many years in our district for schools and for us at RSU57. We are a very buildingoriented capital inensive entity. We have a lot of facilities. We have a lot of equipment. We have a lot of buses. Those things require maintenance. Jake just spoilers that he school buildings. We have five elementary schools, high school west, high school east, middle school. There's a lot of buildings and a lot of costs associated with that. So capital reserve fund is intended to help set a reserve fund so that when major projects are needed that there's some mechanism to help fund those so that they're not going through the annual budget. The reason for that is otherwise you would see huge spikes in taxation in order to do that. So it helps balance out those things that
032need to be replaced, repaired and fixed. So what the state says is on average there should be a minimum of 2% a lot recommend 3 to 4% of value of an entity such as ours which is well over $200 million should be put aside annually in the capital reserve fund or some other vehicle in order to help keep pace with those costs. No, that's ideal. Realistically, our district does not have the resources to be able to do that. And many districts do not. I would dare say almost every district in the state does not have those resources. But this is why the capital reserve fund is so important. So, the finance committee is still evaluating right now whether to put money in the capital reserve fund for 2627 fiscal year and if so, how much.
033Um the finance committee has done a lot of work this past year on capital planning. For those of you who follow the meetings, you'll see almost every agenda or item um every agenda has a capital planning and it will for the foreseeable future. It is part and parcel of the fourth prong of the district strategic plan is operations, resources, and facilities. It is that critical. Finance Committee's done a lot of work in developing what we call a tier one priority or the major most important priority tier 2 priorities and then we'll start working on lower priorities at level three four and beyond just in the tier one which are the most critical to health safety and maintaining our infrastructure in a responsible way right now is right around $5 million. So, the finance committee is
034going to have some work to do this spring into the fall to really prioritize those even further with the resources that we have in order to decide how do we prioritize them and what projects do we do with the limited resources we have. But I think it's really important to be very transparent about capital planning. Schools are very capital intensive entities. There are two things that are very intensive for schools. It's labor, which is about 75 to 77% of our budget, and facilities. With facilities, I'm including not just buildings, but transportation. This is what folks want to know. They want to know where where's the money going and where's it coming from and what's taxation going to do, right? That's that's what everyone wants to know. Let's just get to it. Finance committee has two
035versions in front of it right now that it is pondering through and working through. There are two versions. You're going to see version one and you're going to see a version two. Version one right now has an increase as you see on the screen of 69%. I want to be very clear. 69 less than 1% increase in expenditures. >> That is a very very low increase. That is not one that will be foreseeable for future years. I can tell you that there are a lot of things that come into play with that, but we've been very fortunate in this particular 2627 budget to be able to be at that level. Finance Committee has also explored this slide which shows version number two which is at a 34% increase. The difference between those two is approximately
036$190,000 less in version two than version one. Committee asked some questions and asked Dr. Mar, myself, Dr. oil to go back and see what areas we might be able to even reduce a little bit further. I am going to tell you that this is very lean in either version one or version two. These are very lean budgets. By lean, I mean very fiscally conservative and very tight. Why? Because there's that balance between tax impact to local taxpayers with a decreasing state subsidy and meeting the needs of students and staff throughout the district. This is the balance that the finance committee is working through for tonight's presentation. Finance committee made it very clear to me they want what wherever we are in the process to be presented to the public. And this is what we have.
037We have two versions in front of us. There are areas which have gone down a little bit, some that have gone up. And you can see that the areas that have gone up, not surprisingly, relate to transportation and facilities for the most part. Um, throughout this whole budget, remember 75 to 77% of the budget is staffing, salaries, and benefits. That's not uncommon in schools. We're not an outlier in that gives an indication pictorially of a pie chart. And the reason this one is really important is because this is trend analysis and you're seeing one year here um in which we look at and many industries do how much are we spending on regular instruction? How many much are we spending on special education? How much are we spending on facilities? If you compare these percentages
038to the state averages, we're going to be below in almost every category. If you've heard me at prior presentations or this one, it's going to be no surprise which ones were a little bit above the state average. And I already told you transportation in operations. Why? Because we transport more than almost anyone else. And we have more facilities than a large number of school districts in the state of Maine, even those that are our size. It's just how we are geographically. That is something that for future years the finance committee and the school board is well aware of and that will be a challenge for not just the short term but also the long term in order to evaluate what does that look like and how sustainable is that. These percentages have not changed much
039from year to year. Um, but they are important to our overall view of how the money that is available is spent and in which areas it's spent. We talked a lot about maintenance and operations and facilities. I'm not going to go through each of these, but I'm just going to highlight a few of these. When I first got here many years ago, there was a feeling that the district wasn't taking care of its facilities. And I hope for anyone who was here 13 years ago and still here today or are new to our community and you look around that you see much better facilities, facilities that are wellmaintained. Not saying they're new. Let's be clear. their older facilities but are maintained as best as we can for their age. Remember from an educational perspective, a
040lot of old facilities don't really meet the needs of students in today's environment of learning. But we're doing the best we can. Whether it's technology, infrastructure, how classrooms are laid out. We can't change the physical nature of our buildings, but we can do the best we can with what they are. Are they ideal for students of today? No. And I firmly believe that. Not on an elementary level, not at a middle school level, and not at a high school level. But they are what we have and it's important to maintain them in a proactive manner and to do the very best we can to make them as enjoyable learning spaces as we can for our students and for our staff. We've done a lot of analysis. We have analyzed a lot of things and they're
041listed here. Whether it's masonry or leech fields, things people don't think about. roofs. Who thinks about analyzing leech fields and when they're going to fall apart and need to be replaced? We do. There are things we haven't really done a good analysis on yet that we're in the process of. I'm not going to be shy about that. We haven't done it all. Exterior doors, we're in the middle of that analysis over the past year or so. Our electrical systems and our facilities are safe. We know that, but we haven't done an in-depth analysis about capacity, about expansion, about meeting needs. And if you have an old home, you probably can relate to that. You've maintained them. You've done a good job. They're safe. But what if you want to add something? What if you need
042to add something? Do you have the capacity to do it? We don't want to be surprised down the road that we can't do that. Energy conservation project was done in 2021. That was a major major project and really helped the district in many many ways. The annual roof replacements, those have been ongoing for years and years and years. And with a number of facilities, we have a rotation. We know the condition of every roof. They're audited on a regular basis. We fix and repair the ones that get damaged by either storms, tree branches, whatever it may be. But we also have a replacement cycle so that we even out the cost of repairing and improving those roofs. The next one will be Alfred Elementary School. Alfred Elementary, we have been approved by the state of
043Maine and the Department of Education's revolving renovation fund project for approximately 41% of the cost of that roof the state would pay for and the other 59% would be paid for at a 0% interest rate loan through the main department of education over a 10-year period. This program is really, really important. Out of the 90 plus applications that were received, Alfred Elementary's roof finished number one in their ranking system. That will come before the school board for approval. It will also come before voters if the school board approves it because the voters would need to approve it. This roof needs a lot of structural upgrades to meet current code and it needs to be replaced. And in order to do that, we need to make building code. This is a great opportunity to do a
044project that is essential to being replaced and having the state pick up 41% of the costs and be able to pay the rest of it over time with no interest. I talked about septic and Leechfield. We have done a lot. The last year we did Leechfield improvements at Chaffley Memorial School. Um there are a few schools left that we haven't upgraded. Um those schools including Lyman Line um in Lyman still need replacement and they are originals. And we know from audits and analysis and camera work and other things, we know the condition of those and we know they're going to need work in the next three to five years. I do want to mention COVID money. I want to mention the main school revolving renovation fund and I want to mention ESER. These were funds
045either through state revolving renovation or federal funds with COVID or SR in which we were well poised to do projects with federal money that needed to be done and met the requirements of federal grant. And I want to thank the finance committee and the board because without their stewardship, without their leadership, and without their capital planning, we would not have been in a position to be able to respond as quickly as we needed to when these grant funds were available during CO and to be able to get these important projects done that met the requirements, but also save taxpayers money from the federal government paying for them instead of it being a local tax burden. So, I want to thank them because that work and that planning um you probably sit there and go, "Well,
046what why all the planning?" And this was a perfect example of having our ducks in a row and being able to respond in a responsible and fiscally prudent manner when the time was called. I told you before I would get to this slide. It may be hard to see on the screen. It is in the handout. This is the amount that the school district is beow the state average in per pupil costs. Every industry has standards. If you work in manufacturing, there are standards. There are standards you meet in order to put that widget out the door to make sure it meets tolerance. In a hospital, there are bed counts. Every industry has a standard. And in schools, that standard is what are our costs per pupil? And we know our costs per pupil are
047probably going to be high for transportation and operations. We've talked about that. But when you look at these percentages and you go back to fiscal 20134 at 10% under the state, then we became less under the state average. Still under but less. And in the past 5 years we've become again more under the state average by 11%. 13.9% 12 a.5% and for fiscal 2425 these are actual numbers audited numbers we're 10.1% under the state average these come directly from state website which tracks per pupil expenditures for every school district in the state and you can see it by category warrant article for as many years as you can get off the state website but you see it here and you say Well, okay. So, you're under the state average. I can tell you that we
048are well under the York and Cumberland County average because southern Maine is much more expensive to operate our staffing or operational costs than a lot of other areas throughout the state. So, statewide we're well under the average, but York and Cumberland were even more under the average. So even if we use the state average here that we're 10% under and if you subtract those two columns for fiscal 2425 you'll get a number of $1999 per pupil. If you multiply that by the number of students we are approximately $5.6 million under spended versus the state average. And I would dare say in York and Cumberland County that increases to probably double or triple that amount or more depending on the school district. We are a lean and frugal district and these are the numbers and the
049data and they are not just one-year numbers. This is historical. It's a double-edged sword. Great to be frugal. It's great to be lean. It's great to be under. And we're not spending a lot. But keep in mind, how sustainable is that in the long term? In what areas, if 75 plus% of our costs are labor and we're a spread out district, does that affect our ability to go back to the strategic plan, attract and retain staff? We are very, very blessed in this district to have dedicated employees, hardworking employees, and very passionate employees. And that has been the case in this district for many, many years. But keep in mind, as in your own homes, in your own communities, folks want to get paid. They want to get paid a reasonable amount, and they want
050to be happy where they work. And we're trying to meet those needs as much as we can. So when you think about this, think about where do we want to be costwise when we compare annually and you see it in the mailer that goes out to every home in this district and probably the next several weeks, probably middle end of April, you will see that out of those 30 some odd districts that we compare to, they are the same districts that my predecessor compared to and have kept the same districts. I have not changed it. You can go back to every one of them and we have always been near the bottom and cost per pupil. So, this is important. It's important to keep in mind not just how do we keep cost low and
051reasonable, but is there a point where they're too low and we're not able to compete as we should? Dr. Marque, Dr. Doyle will tell you there are a lot of programs that our students are not able to experience because we don't have the resources to offer them. And that is part of the concern, not the whole concern. That's one piece of many concerns in how we balance taxation and impact to students. And keep in mind as we talked about 2226 that could have a significant impact as well as potential future changes to the subsidy formulation for both students and their learning and the programs they were offered but also to local taxation general fund revenues. I'm going to talk about two key areas of this that I feel are really important. We talked a lot
052about the subsidy formula already. I've talked about the 93%. The state I told you is 55% of essential programs and services which is 75% of the cost of throughout the state. If you multiply 55% by 75% you get roughly 41% statewide. If you multiply the 37.5% that we're going to get in fiscal 27 and multiply that by the 75% that essential programs and services is means the state's going to fund approximately 28% of our costs actual costs not some calculated number for a very lean district a very frugal district. If I need to say any more about the importance of 2226, I think you've heard it. I I don't know if there's much I can say that would make it much clearer than that of how impactful that is for our district and our students.
053This is the pi. And look at the gray area. Huh? Isn't that odd? I carried it out to two decimal places because 28.19%. Well, that kind of jives with what I just told you at 37.5% multiplied by the 75%. This is how much money comes into the district and where's it come from? 65% comes from local taxpayers and 28% comes from the state. And those numbers, if you look at this graph over the past, this pie chart over the past 5 years, 10 years, 15 years, that gray area keeps getting less. And the kind of burgundy area for local taxation keeps getting more without a change in the subsidy formula. It will continue in that manner. So this is version one. This is where the revenue comes from. This is the approved budget for 2526
054and the version one working budget for 2627. And in this you see that local tax assessments would go up 1.7 million for the general fund at 4.9%. And you see the decrease in the state subsidy which is made up of two components. the middle school bond being paid off. So, we got less money from the state next year, but also a decrease in the formula itself for what we're receiving to pay annual costs. So, there's two factors there that made that decrease as significant as it is. This is version two. Version two again made some reductions in version two and it gets local tax assessments to 4.36 for the general fund. This is the balance that the finance committee is balancing and discussing and working through. We want to balance the tax impact, but you
055also have to make sure that we're providing enough funding to provide students the services they need for the programming they need and to satisfy all the operational costs of the district. This is adult education. The reason this is here is because adult education, just like the general fund, even though the dollars are much less, requires a pound tax assessment, has a state subsidy component, has tuition revenue from services that are provided through the adult education programs, whether that's enrichment, CDL driver course, um whether it's class C driver's ed, and then use the fund balance just like the general same exact characteristics. So when you add those two together, the general fund and the adult education fund, you have the impact to the local taxation under version one, which would be an overall increase to taxation
056of 4.89%. And you see that on the bottom right total of that right hand colum. Now you're going to say, well, why isn't every town that amount? Remember, once the overall tax assessment for the school district, at this case, it would be 36,618,000, it's allocated between the six towns based upon 50% enrollment and 50% valuation. That is not me. That is not Dr. Marquee. That is not the school board. That's in legislative statute for RSU57. That's how the total tax assessment for the district is allocated amongst the six towns. In a given year, some towns go up, some towns go down. I've been with this district a long time, and I cannot tell you why, but historically, if a town goes up a year or two, it will go down in the next year. And
057Alfred's a good example of that. Alfred has taken a larger hit than the other towns the past two years. They've been near or at the top. This year they're the lowest. Why? Because as their valuation changes and their enrollment changes in relationship to the overall enrollment of the district or the overall valuation of the district. It goes up or down. has been that way and has been that cyclical for as long as I've been with this district. And it does it trends goes up and down. And I think anyone who's been on this board or finance committee for a long time will tell you the exact same thing. This is version two. In version two, the overall increase is 4.34%. And you see the percentages there for range 10. This is the overall assessment. This
058is everything. General fund, health, education. This is how the numbers look. You take public questions and input. But I just want to say first and foremost, thank you to Dr. Marque, Dr. Doyle. I want to thank the school board and the finance committees. You're a very, very passionate and committed group of individuals who've been elected to serve. And you do that and you make my job that much easier to be able to have these discussions to build a budget and to really be able to put together what is best for students but also the community. And I mean that wholeheartedly. And I want to thank the community for their support because this community is a very passionate one. And I believe every person in this community has done their best to support students in education
059in our six towns. And I really hope that the public really sees the value in education and what it means to support students and staff in our six towns to educate the students. >> Thank you, Colin. Uh before we answer any questions, I wanted to add a couple other super quick things. I apologize when I my notes. I failed to uh also thank our administrative team also staff that have been really critically involved and those who attend like Vicky Lynn Anderson and also Dr. Doyle that was on my notes and I uh rushed to get off so Colin could speak. There's one additional thing that I want to draw attention to because I've talked about it for years and now I think it's the perfect time to um to maybe share slightly more about why
060I think my thinking is correct. Um, I've often said when schools do really well, they offer programs for kids, that then result in more kids coming and values go up, but the costs are spread out based on more kids. And um and I've also shared since I've arrived here, if schools are not supported, you ultimately impact taxation in a negative way. And I want to show you a real clear example of how I think it does impact this district. If you went back 20 years, this district had an enrollment of nearly 3,600 kids. 3,600 kids is quite a bit when you also consider that prek was not universal and K was not universal and that in itself would have resulted in in most estimates an additional 300 students. So we would have been close to
0613,900 students. And when the state calculates half of the cost related to per pupil enrollment, as a result, our subsidy declines. In the same vein, if younger families or families in general with children want to move to a community, they typically do so for the quality of the education that their children will receive. I often talk about a move for the programs at the high school in most cases but not in all cases. So we have often seen a gradual decline in enrollment as kids work through our system because they may their families may move outside to move to other districts where I think the challenge that we want to be mindful of 5 years down the road or 10 years down the road people are still going to move move to these communities because
062they're beautiful. The nature is beautiful. We have lakes. We have mountains. We have recreational areas. There's a reason why the values are so high. But in the same turn, people may not move here with kids, but the price is still going to escalate as folks move to the countryside, to the recreational areas, and they'll do so without kids. So my fear is if we don't take care of our schools, enrollment will still decline. Property values are still going to escalate. And taken in partnership, state subsidy will continue to decline. So that's why it's critical that we are providing an education that people would want to move to a municipality for. I don't share this to be gloom and doom. I've often shared particular towns where it's most notable. And you look at throughout the state
063of Maine, there are regional areas where the quality of education drastically improved. As a result, property taxes improved, student enrollment improved, and it equalized taxation in those areas. In southern Maine, the place that I've often referred to would be say Marshwood. Marshwood has a growing enrollment or it had for a long time. Now it's pretty static. If you were to move um upstate, you'd be looking at places like Hollowell. If you were to move up even further, you'd look at places like Hamden, which provides um a real high quality education. They have blue ribbon schools of excellence. But when I was a student, Hampton was not necessarily looked at as a leader, but now it's probably uh the best one of the best districts say in u obscot county for example. So I don't think
064it's a time to panic, but as we cut and reduce opportunities for kids, I firmly believe and I've said often that kids shouldn't be defined by the zip code in which they live. We want to prepare kids for success in ever in an everchanging world. And as we remove in a haste to always think solely about taxation, we then impact our ability to attract and retain families with children because why wouldn't they want to have the opportunity? There are many schools with similar demographics as ours that have far more opportunities for their students. And I would encourage folks to even look at Noble has far more opportunities and they are just as challenged with budgets and property taxation as we are. So, I want us to think about those sorts of things so that we
065don't ultimately create far greater taxation in the future because there are some places in the state of Maine that have really catastrophic taxation and poor schools because they don't have many kids, but you still have to operate schools and uh it becomes far more expensive. Um there's a there's a some value of economy of scale. We do have some unique things within our district that make it really challenging. But in the same vein, I I'd like to think that we're making some nice strides. We have kids that are going off to tremendous schools or to trade schools or to industry. We have kids that are performing well in co-curricular and athletic offerings. Our level of student engagement has increased. But I also don't want us to essentially whittle away ourselves by cutting to the point
066where there's no return. Think about those young families and when they have choices. Will they have more opportunities for their kids to participate in AP courses, advanced courses, um courses within their own schools, so they don't actually have to go out to other places or complete dual enrollment or go to USM. Like we need to be far more competitive with places like Sanford and Bonnie Eagle and Noble and Marshwood. And I and I fear that we're going to fall behind and ultimately the test of time will say, "Wow, we really step back." Now is the time. Hopefully LD 2226 passes. But regardless, our median income is actually quite quite solid um in our district and our property values are high. Our kids just don't have the same opportunities. And this budget reflects a few additional
067reductions. But reducing the way we have over the last few year years is not sustainable. And given the enrollment data that Colin shared, we're down 22%. to actually get back to the numbers we were before, not including preK and K, which pad our numbers quite a bit, would actually have to see a 28% increase in enrollment. That is not going to happen anytime soon. But it would be really critical that we stay above 2,800 or we stay really strive for 3,000. Three calendar years ago on May 9, uh March 9th, our high school had 97 students. Today it is a 814. That's a pretty drastic reduction, 10%. Not sustainable. Obviously, there'll be a point at which our enrollment doesn't decline any further. Enrollments are declining all over the state. In 1975, I often talk about
068enrollment in the state was over 250,000 students in 1975 with drastically lower overall population. But that 250,000 students did not include kindergarten and preK. So we would have been more like 280,000 students. And today we're under 170,000 students in the state of Maine. and that's why consolidation happens and those sorts of things. We're one of the largest districts in the state of Maine. We have number nine in enrollment currently. It was higher in the past. Um we'll likely be maybe 13th in enrollment within the next year or two. Uh when I first arrived, I think our enrollment was number seven. Okay. Um, I don't believe it's because of me, but I think uh um it's happened while I've been here. So, we do applaud and appreciate your support. I do think that any district our
069size is seeing a a budget that's going up no less than $3.5 million. Ours is going up a couple hundred,000. That shouldn't be lost on anyone. It's hard to sustain that. And uh now we can answer any questions you might have. the really tough ones will go to Dr. Doyle. Um so that uh Colin and I don't talk and talk and talk. So thanks questions. Yes. I noticed on version one and version two the big difference in dollar is staffing. So in version one and version two, what what's the difference in reduction in force? >> It would be the equivalent of primarily the bulk of it is two teachers um in the district. One would be through a um a reduction and one would be a a potential transfer in assignment due to a retirement.
070And uh so it's primarily two teachers. We believe that we can support that. Um if in a perfect world, I would say not reduce it, but reduce the two positions and then next year start really thinking about how can we broaden and expand programs. I think it's too late in the budget process to think of those things. And I would suggest placing the money more into a capital reserve or into the undesated fund balance to help out with future taxation because I believe our state subsidy is going to continue to decline um from 37% to uh maybe 35% in the next couple years. So, we were just trying to be really mindful of the impact on taxpayers and um and uh the two positions really are based out of the high school and they're spoken
071for with respect to a a decline in in within enrollment as well as some reconstructure restructuring at the high school that Mr. Thurlo is doing. >> So, I noticed and I I'm kind of flipped that page. one of them is like $100,000. So if you tell me that's two people that makes sense. And then another version is like $400,000. >> Um he can speak to that. So the when you think about um two teachers can be vastly different in cost, >> right? >> So you could have 400,000. No, no, but I think the change from the last two versions, we're looking at uh >> 190,000 >> which actually could be two teachers because if if I am say I have a doctorate or a master's and 30 years of experience >> with full family and
072call in say a first year teacher on his parents health insurance that likely would be $70,000 difference in our salaries and benefits. >> So the difference between uh page 16 and page 17 which is version one and version two >> is roughly 190,000 and that's all in article one. So if you look at those two pages the difference is right around 190,000 and that's all in article one. So wind lost staff probably or whatever and >> correct. Yep. >> Creative movement. >> Correct. >> Basically lose a body probably. >> No, but if if um someone might say no, I really would rather not do that. That would be some some options for anyone. Last year we actually had significant reductions and everyone was held whole. One individual decided they actually didn't want to even work
073in education any longer. But everyone that wanted to continue working still had a position. We just reduced um and we reduced in areas that we thought we could reduce. We didn't just base it on someone retiring or those sorts of things. We're really looking at um the like the two changes at the high school. If someone's retiring, we're still going to fill that position because we find that it's really critical for the importance of the position. But specific to that 190,000, I think one of the things the board really needs to consider is do they reduce that 190,000 or well reduce it but not for taxation, put it into say a capital reserve or the undesated fund balance because you we want to equalize or balance um annual tax burden and there are districts that
074are seeing such drastic swings that all it does is create anxiety really on instructional programming on staff not knowing what their future will be on people and their taxation. Right now there are uh towns nearby that are looking at um I think they'll reduce it some but there are uh several that are over 10% on taxation. um we don't want to be in a position the hard part is when Colin says some years there are winners and losers that's really based on the valuation change and the enrollment change. So Alfred, for example, of our six towns in the current uh state subsidy formula that just came out, the ED279, Alpert showed the greatest decline in enrollment and it showed the least gain in property valuation. So their taxes are lower. And then other places like
075Limmerch over the last several years, Limmerch and Chappley have been impacted more significantly because their valuations are going up and their enrollment is going up and we really need to think about that. So this summer we're going to be working a lot about whittling down about a dozen ideas into maybe three or four that the board will charge us to dig deeper at around balancing enrollment because Shaffley as it currently structured is going to grow where Alfred has continued to cl to decline and um that makes it really hard with shifting of populations and such. So, how do you balance enrollment? >> Well, that's what we'll talk a lot about. We talked about it at a board meeting. I don't remember the exact date. >> It was in January. We could balance enrollment by one
076of the big ones is essentially you don't go to the school simply in the town in which you reside. You could go to the school in which you live closest to. So, >> hard and feathered. Um, well, it's either that or or are you or you're going to have taxation >> issues. That that's been a conversation for 21 years. I recall >> probably I don't know how many years ago because I get old really fast, but um close shapely that was a big push for a long time. And yet now had we done that, had somebody not had the foresight to say, "Whoa, we ain't going to do that." >> Well, but our scenarios will include the potential evaluate and really look at it more closely closing one school or two schools >> really. >>
077I mean, but that that can be ruled out pretty quickly or it could not be ruled out quickly. I don't know. But I do know that um our enrollment is far lower than when there were conversations about school closure, >> right? We were well over 3,000, probably 3,200 at that time, and now we're at uh next year will be 28 20 maybe. >> I think that and this has always been just a simple belief of mine, but the people in the town of say Albert are very married to a school. They live in Alfred. They call it Alfred. So renaming them would make it far more palatable to move kids around. So it would be to need 57 central, 57 East, 57 West. >> Thank you. No. And that was it was a conversation honest
078to God 21 years ago. >> Yes, it was. and people like Phoenix. Nope. Nope. Can't do that. That's my school. I love it. Hey, call it my town. >> What are you doing? But but people can love their school. >> So So the way it works, so you could always be part of a a subcommittee later. Um >> don't make those. >> So So uh hey, you might be invited in. Um, one of the one of the challenges though is as a district the district the board doesn't represent a particular town. >> So if the board were to say, "Hey, we really need to think about conlo closing line school." I'm just throwing out a name because I figured I'd mix it up. Um so the board has to act in in collective and then
079if say line were up for potential closure then the municip there are some certain laws. So you can't close a school without voter approval of that municipality. But if a voter if the municipality wants to keep it open, there are laws that would say they would pay the incremental cost differential >> really >> to the community to keep it open. >> Yeah. So, so it can't um one particular town to keep a school open can't strongarm other towns to to pay ex uh extraordinary cost to maintain a school. So, you have to look at all those elements and it's in statute. >> You think that the general population of 57 is aware that Ross Corner is the geographic center of the district. Are >> you suggesting building a big school there? >> Oh god, no.
080like all I know >> I just >> but it just if you consider that to be the geographic center >> then the movement of students becomes logical in that >> well I'm in Alfred >> well so so you could have kids in every particular town that might be shifted if you were to close a school >> because actually if you start shifting kids. Um there's plenty of capacity if you were to say, "Okay, some certain kids from linemen are going to go to Xtown or Xtown." You can do that. So, it's it's really um that's one of the things our software can do. It's not going to be ideal for everyone, but you have to think about the global picture and economy of scale and what it costs to operate schools. I'm not suggesting that
081a small school is bad. I would say all sorts of reasons why it's good. I also would say all sorts of reasons why a large school is good and what the challenges and benefits are of each. And then the board would would issue a kind of a a a directive for us to provide specific information for whatever scenarios because we can't simply keep reducing. We need to actually strengthen our programs while being fiscally responsive. Nobody wants to pay more taxes. The challenge is if you don't pay taxes, your taxes will ultimately I believe and I think I'm correct in this. I think you'll ultimately it's public policy 101 and I will brag here that's what I got my doctorate in. I think um the public policies should be about how do you maintain good schools
082and if you do that taxation typically takes care of itself. I really believe that. Hopefully I'm not wrong. Other questions for Colin? Because I just talked that deaf dog off a meat truck. I do want to thank all of you in attendance tonight. I want to thank those who attended remotely and those who may watch later. Um I very much appreciate you coming. I hope you have a safe um ride home and see you again soon. Thank you. Thank you all very much.