May 9, 2008

Dear M.S.A.D. No. 75 Resident:

The M.S.A.D No. 75 School Board and Finance Committee have been involved in a year marked with constant changes from Augusta that will affect the way education is delivered throughout the State. Two processes occurred simultaneously and consumed a great deal of the School Board’s time and energy – school system consolidation and a State budget shortfall.

Consolidation efforts with our neighboring Town of Lisbon began in earnest in the fall. All parties came to the table with the hope of finding efficiencies within both systems ultimately leading to a wider range of educational choices for our students coupled with cost savings to both systems. However, as the process developed, it became evident that additional expenses resulting from salary and benefit parity would ultimately offset any savings. This, coupled with the loss of the District’s use of fund balance and the loss of MaineCare revenue, led the M.S.A.D. No. 75 School Board to regretfully reject the concept of consolidation with Lisbon.

The process for budget development began in December with a review of our finances. The District was informed in the fall by the State that consolidation cost savings had already been factored into the subsidy calculation for the upcoming year, even though schools systems would not be consolidating until 2009-2010. District allocations would be reduced 50% for administration and 5% each for special education, transportation and facilities. The expenditures for the District were reviewed, and the impact of contractual obligations coupled with rising energy costs yielded a maintenance of effort increase of $1,161,217. Our revenues were also impacted by the loss of over $300,000 due to our inability to continue to bill for MaineCare (Medicaid) services for some of our students. As the first of many state subsidy calculations arrived from Augusta, our efforts to craft a budget were further compounded by a large state budget shortfall coupled with increased property evaluations and a declining student enrollment throughout the District. The final State subsidy amount for the upcoming fiscal year was decreased by $742,618 from the previous year. The Finance Committee’s daunting task was to cushion the financial impact to District taxpayers while at the same time insuring that the educational needs of our children were being met.

As in many households throughout the District, hard financial decisions had to be made. After numerous meetings and discussions with District administrators and several public hearings, the Finance Committee recommended to the School Board a list of proposed reductions totaling $1,744,053 with three necessary increases totaling $84,000, resulting in a net reduction of $1,660,053. The School Board also voted to increase the use of fund balance, an additional $200,000 to $600,000 to further supplement the budget and decrease the local contribution. The resulting budget of $35,967,526 equates to a 1.25% decrease from the current budget, but due to the loss of funding from the State, still requires a local contribution increase of 2.08%.

In closing, I want to thank the School Board, Finance Committee, District administrators and local citizens for all their hard work and dedication in working towards finalizing this budget to bring to the voters. As always, the Finance Committee is committed to considering all aspects of the impact of budget development, such as maintaining the quality of education while remembering the bottom line impact to taxpayers in our District.

We hope you will endorse our work by your attendance at our School District Budget meeting on June 7^th at the Orion Performing Arts Center and your vote at the District Budget Validation Referendum occurring on June 10^th. As always your comments and input are welcomed and we thank you for your time and interest in the education of the District’s students.

Sincerely yours,

Dorothy “Dee” Carrier, Chair

Finance Committee

M.S.A.D. No. 75 School Board