WINTHROP — Town councilors on Monday rejected a proposed $9.9 million school budget after a public hearing drew more than three dozen residents, none of whom offered a comment.

Councilors, citing concerns about inequity between health insurance provided to school and municipal employees, and an auditor’s report that uncovered spending irregularities that have yet to be brought into the light of day, voted 6-1 to reject the budget. Councilor Priscilla Jenkins was the lone vote of dissent.

Councilors did, however, approve the $4.9 million municipal budget. The move clears the way for the town to commit taxes without a finalized school budget, said Town Attorney Lee Bragg. If a school budget for the 2014 fiscal year has not been approved by the time taxes must be committed in September, the council will base the tax rate on the current 2013 school budget, which is within $500 of the new budget councilors rejected.

Gary Rosenthal, superintendent of schools, provided the only comment from the floor during the hearing, which lasted just seven minutes. Rosenthal, urging councilors to accept the budget proposal, argued that the school board’s proposed budget slashed more than $550,000 from this year’s budget.

The budget included no increase in health insurance costs, which Rosenthal said was a rarity for communities or private companies. He said the district has cut more than $130,000 in insurance costs for each of the past two years by outsourcing positions. The district is in contract negotiations with the teacher’s union.

Rosenthal also pointed to the Maine Department of Education’s favorable grades for Winthrop schools after a statewide survey.

“We’re the highest performing school district in central Maine,” Rosenthal said.

Councilors commended the school board’s efforts, but said lingering issues continue to plague the budget. The town has shifted a greater portion of health insurance costs to employees over the past few years while the school continues to offer 100 percent coverage with no copay. Councilor Lawrence Fitzgerald said the school board, in its ongoing negotiations, could cut $150,000 from health insurance and it would more closely mirror town employees’ coverage.

“I appreciate Winthrop schools,” Fitzgerald said. “I appreciate the job you’re doing educating our kids; But we’ve got a number of unsustainable issues here. I’m looking for equity. I’m looking for some sort of shift here.”

Beyond the insurance concerns, councilors are also anxious to hear back from the auditors before sending a budget to the voters. The auditor has flagged problems with the school spending accounts, though officials have declined to say what those problems are or how much money is involved. Town Council Chairman Kevin Cookson said last week that the town might need to seek a legal investigation by the state’s attorney general. Cookson accused school staff of an abuse of power, financial mismanagement and an illegal use of the school’s checking account.

Councilors were more reserved in their assessment during Monday’s meeting, but no less resolved in their goal of addressing the issue before moving forward with the budget process.

“There’s been a lot of confusion about where all the money is going,” said Councilor Sarah Fuller. “Its unfair to put a budget out there that we still have unanswered questions to.”

Bragg said it will likely be October before the auditors have completed their review. Even if the task is finished before that, however the earliest voters could decide on a proposed school budget would be Sept. 10.

Town Manager Jeffrey Woolston said he would likely ask the council to give residents a 30-day grace period under such a scenario.

“Sending tax bills in September is bad premise,” he said.

Craig Crosby — 621-5642
ccrosby@mainetoday.com