WINTHROP — Administrators of the Winthrop School District are considering how to eliminate nearly three-quarters of a million dollars from their spending in the 2016-2017 school year after town officials recently discovered a budgeting error made more than a year ago that left the district with about $700,000 less than expected.

Local officials made the error when they were calculating the 2015-2016 school budget and accidentally counted twice a roughly $700,000 revenue item, school Superintendent Gary Rosenthal said this week. The total budget approved by voters that year was $10.82 million. The extra $700,000 was then carried over into the $11.2 million budget that voters approved in June of this year.

But because local officials only discovered the mistake a few weeks ago shortly before they mailed out the town’s tax bills, Rosenthal has agreed to find $700,000 in savings without raising taxes, he told the Town Council earlier this week.

“We’re in the process of implementing a plan to rectify the situation with minimal impact on students, staff and programs, and with absolutely no impact on the taxpayers,” Rosenthal told councilors. “This is not going to cost the taxpayers one dime, because we made the decision that we would step up to the plate and take responsibility.”

While the councilors thanked Rosenthal for his proposals to find savings and praised the school district’s overall performance, several expressed concern about the effects the mistake could have on students and future budgets.

“We’re talking about a lot of money: three-quarters of a million dollars,” Councilor Richard Henry said. “I appreciate the fact that you’re taking the bull by the horns here, I do appreciate that you’re going to have a third party look at the budget closely and I admit that we’re not going to play the blame game here, but you do got to ask how this happened. This is big.”

Among Rosenthal’s proposals for finding those savings are a budget freeze taking effect Oct. 1, the refinancing of a new storage shed on school property and the one-year postponement of a $70,000 debt payment to the town.

Rosenthal made those proposals after a separate meeting with Town Council Chairwoman Sarah Fuller, School Board Chairwoman Virginia Geyer, Town Manager Peter Nielsen, the town’s auditor and other administrators, he told the councilors.

But Rosenthal declined to identify who made the mistake, saying he didn’t want to point fingers and explaining that there were multiple people who didn’t catch the mistake. He’s also waiting for an audit to reveal the precise amount that the school district needs to make up.

Rosenthal has agreed to appear before the councilors regularly to update them on how the proposed fixes are going, and he told councilors that in future years, the school department will pay to have an outside firm review proposed budgets to ensure similar mistakes don’t occur.

Officials did not discover the mistake until late in summer, when an interim tax assessor was preparing the town’s tax bills and suggested that the tax rate needed to be higher than projected, Town Manager Peter Nielsen said this week. This year’s school budget is $11.22 million and the municipal budget is $6.28 million.

Only then did an auditor working for the town take a closer look and confirm the $700,000 discrepancy, Nielsen continued.

Rosenthal traced the error to a form sent by the state to the school department in 2015, which showed how much total state funding the Winthrop School District would receive the next year. The form also included the specific amount of revenue — about $700,000 — the district would receive to pay back a 20-year bond used for the construction of a new high school in 2002.

When drafting the 2015-2016 budget, an administrator accidentally included the $700,000 revenue item twice and the mistake was not caught at several administrative levels, Rosenthal told the Town Council.

“It takes a lot of people to put this budget together,” he noted. “It goes through a lot of different stages. I will tell you that there are a lot of different checkpoints at different places from the school department to the town to the DOE (Department of Education). We submit the budget to DOE. We submit an audit to DOE. There was a breakdown in checkpoints.”

Rosenthal is now looking to find savings in a few different places.

UPDATES NEEDED

The school district owes the town a $70,000 debt repayment, but with a vote of approval from the council on Monday night, will put that payment off for a year. Through the state’s MaineCare program, Rosenthal said, the district could qualify for an additional $100,000 in reimbursements for training special education staff. The district could realize about $75,000 or $100,000 in savings by shuffling existing staff into open positions. The district could realize another $55,000 in savings by refinancing the construction of a storage shed, and it could also put off investments like the replacement of cafeteria tables.

The school district finished last year with a surplus of about $182,000, Rosenthal said, but he is not proposing the district use those funds to pay down the $700,000 shortfall unless the town’s auditor finds the surplus was greater than first thought.

Several councilors said they appreciated the school district’s efforts to find those savings, but wanted to receive updates from Rosenthal on a monthly basis about how the efforts were going.

A few expressed skepticism that it would be so simple to make up for the missing $700,000.

Fuller called Rosenthal’s proposals “back of the envelope calculations” and noted they would still leave the district about $200,000 short, meaning more savings would need to be found. She also mentioned the risk of unanticipated costs, such as a spike in fuel costs or the arrival of new special education students in the system.

Though Henry praised Rosenthal’s work, the ease with which the superintendent found savings in this year’s budget has given him pause about the value of the town’s school system.

“We’re talking $700,000, and they’re talking like this isn’t going to be an issue,” Henry said in an interview Tuesday. “If they can take that much out of the budget and not affect anybody, then how much fat is left on that steak? Being a taxpayer, you’ve got to answer yourself a question, are we being bilked here?”

But Rosenthal pushed back on that assertion, saying there isn’t generally any cushion in the Winthrop school budgets and noting that the district has been paying back debts since he was hired as superintendent.

Rosenthal said that his savings proposals will have minimal effects on students’ educations. Though a budget freeze is going into effect in October, he said teachers are able to buy the supplies they need before then. He pointed out that Winthrop schools use digital textbooks, which don’t need to be replaced.

Should unexpected costs arise this year, Rosenthal said he and the school district’s budget coordinator would try to find ways to absorb them into the current school budget. But he also didn’t rule out carrying some costs over to next year if the district can only pay, for example, $600,000 of the $700,000 shortfall.

“If you carry over $100,000, it’s not going to go away, but it’s not going to hurt you,” Rosenthal said.

Charles Eichacker — 621-5642

[email protected]

Twitter: @ceichacker


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