At the recommendation of Waldoboro Town Manager Julie Keizer, representatives from Regional School Unit 40 and area town officials met Nov. 30 to discuss theĀ  handling of additional state subsidy funds the district received.

Keizer was joined by Jay Feyler and Bill Lawrence, town managers of Union and Warren, respectively, as well as Ann Dean, town clerk of Washington, State Rep. Paula Sutton, Republican of Warren, and some board members and selectmen.

Board Chairman Danny Jackson, Superintendent Steve Nolan and Business Manager Karla Miller were on hand to answer their questions.

Attendees received a folder with documents outlining actions taken by the board in its decision-making process.

It included the agenda from the Aug. 3 board meeting, highlighting the action item to "approve the extra subsidy received by the state go to the fund balance at the end of the 2017-18 fiscal year as recommended by the finance committee."

Also included was a copy of a letter each of the municipalities served by RSU 40 was sent regarding the subsidy. The letter outlined options for what to do with the money, which included letting the $590,526.59 roll into fund balance at the end of the fiscal year (as voted on by the board), or using 50 percent of the increase ($295,263.30) to lower the local contribution from each of the towns and let the remaining $295,263.30 roll into fund balance at the end of the fiscal year — the option the towns were hoping for.

The amount that would be returned to each town, using the cost-sharing formula, is: Friendship $37,251.60; Union $43,721.41; Waldoboro $104,863.64; Warren $78,643.38; and Washington $30,783.27.

Nolan also provided legal references outlining what action the district should take if the state share increased.

The additional state subsidy was awarded to the district in July, after each town held a town meeting to set its annual budget.

Nolan said it is a timing issue at the state level, and not all the details were worked out before the towns were trying to send out their tax bills. "Our budget is based on projections, and there are so many things not in our control," Nolan said. "And when information becomes available, we adjust accordingly."

One of the references stated, "Money allocated for school purposes may be expended only for school purposes," of which Nolan said, "I don't know what you were thinking about the money being returned to the towns."

It was noted that two years ago, the board returned $292,000 to the towns, but later that year had to borrow that amount to make necessary repairs to the ventilation system at Prescott Memorial School.

"Part of what influenced the decision the board made [this year] was not knowing what happened to those funds that were returned to the towns," Nolan said.

Feyler, who serves on the Maine Municipal Legislative Policy Committee, said the intent of the subsidy was for tax relief to the municipalities. "To me, you're thumbing your nose at the taxpayers," Feyler said, pointing out that the decision as to what to do with the extra subsidy should have gone to a vote by the taxpayers.

"It's doing the right thing," he said, noting that several other districts in the Midcoast have returned money to their towns.

Nolan asked, "What's the difference between the towns holding the money and the district holding the money?" to which Feyler said a vote by the taxpayers would be necessary for the district to spend any of the money.

To reverse the board's decision, the board would have to rescind its previous vote and have another vote. At the Oct. 5 meeting, board member Guy Bourrie of Washington made a motion to rescind the earlier vote to keep all of the money, but it failed.

Nolan suggested it would be helpful to know what each town did with the excess subsidy in 2015. The town officials present agreed to look into the matter and get back to him with a more formal answer.

Feyler said taxpayers got hit twice — by having the homestead exemption cut from 62 percent to 50 percent, with those funds going to the schools, and by the district's taking the additional subsidy and not returning a portion to the towns.

He also addressed the $1.8 million deficit the district is carrying. "I'd like to see us get rid of it," Feyler said, "Put it on the warrant and get rid of it."

In a previous meeting, Miller explained the district is not overspending the budget; instead, the revenues are understated. The "balance forward" category is not bringing in enough money to cover the expenses.

Nolan noted the balance forward was reduced from $680,000 last year to $510,000 this year, and said he would love to eliminate it totally. Unfortunately, now the district has to consider its portion of funding for the new Mid-Coast School of Technology building as well.

Keizer said a big part of taxpayers' frustration is they are being asked to spend more money on the schools, but are looking at the test scores dropping. She said it is a big consideration for people who are looking to move to the area.

"This is a partnership," Lawrence said, adding, "Our people are struggling and we need to think and be more creative on how to provide services. It starts with trust."

"I think overall it went well," Keizer said Dec. 1. "It was a great first step to improving communication. I think it highlighted that we need to keep the lines of communication open, and that we are all trying to work together.

"I understand their decision and why they made it. However, Waldoboro's Select Board does not agree that it was the intention of the legislation," Keizer said. "They felt that it was money that was to be returned to the town for direct tax relief."

She said the fact that the district is considering other factors now that might impact the budget, gives her some hope that there may be some movement toward returning the money at some point.

All town representatives said that if the money were returned to the municipalities it would be used to reduce the school portion of the taxes.

The School Board's next regular meeting is Thursday, Dec. 7, at Medomak Middle School.

RSU 40 serves the towns of Friendship, Union, Waldoboro, Warren and Washington.

Courier Publications reporter Beth A. Birmingham can be reached at 594-4401 ext. 125 or via email at