Newfound Budget Committee approves spending plan, despite unanswered taxpayer questions

BRISTOL — Members of the Newfound Area School Board tabled a recommendation on the administration’s proposed $26 million operating budget, after a public hearing on Jan. 13 revealed a number of unanswered questions. The district budget committee, which convened separately after the public hearing, did not hesitate and voted, 4-0, in favor of the budget, which now will appear on the school district warrant.

Newfound’s budget development was hampered this year by a delay in closing the books on the 2023-24 fiscal year, due to a cyber attack that destroyed the financial records on the School Administrative Unit 4 computer servers. The central office has been working to reconstruct last year’s spending to guide its recommendations for next year, but was still revising numbers during the hearing.

The budget process normally has the administration working with department heads nearly as soon as school opens in the fall to project spending needs for the following school year. The superintendent then presents a budget proposal to the school board for review, and the board’s recommendation then goes to the budget committee, charged with setting the final budget to go before voters, and with justifying the costs to taxpayers.

Budget committees can get an early start on their work by periodically meeting during the year to see how spending is going. That is easier for municipalities because their actual expenditures are known, while the timing for school districts — especially those who operate under the Official Ballot Act commonly referred to as SB 2, which has earlier deadlines — has the budget committee working without knowing how accurate the current-year budget projections were.

By law, budget committees have the right to ask for any pertinent information as they develop their budget. They adjust budget numbers as they see fit to ensure spending is appropriate for both the school district and the taxpayer.

They hold a public hearing to allow residents to ask questions and make recommendations, then take those comments into consideration as they finalize the budget that will go before voters at the annual district meeting. In the case of SB 2 districts, where the district meeting is split into a deliberative session and a ballot vote, they also need to calculate a default budget in case their proposal gets rejected.

Once voters adopt a budget, it is no longer a “line-item” budget, but, rather a “bottom-line” budget, meaning the public or budget committee cannot dictate how the school board chooses to spend the money, as long as, for the most part, spending remains within the approved bottom-line figure.

The exception is money voters authorize to be spent out of the unassigned fund balance, the unspent money from the previous year. That spending does not appear in the budget, but it will appear in the “actually spent” column of financial reports, and may cause spending to exceed the budgeted figure. Auditors will note the over-expenditure and make sure voters had authorized it.

In recent years, the Newfound Area School District has constricted the process: the superintendent presents the administration’s recommendation to the school board and budget committee simultaneously. This year, budget committee member John Jenness of New Hampton questioned whether a budget committee is even needed, since the district operates under a tax cap that limits increases in the tax assessment to member towns to 2%.

A further complication to this year’s budget development is the pending withdrawal of three of the seven towns comprising the Newfound district. Business Administrator Angela Carpenter could rely on no precedent because of the unique manner in which Bridgewater, Hebron and Groton withdrew to form the Pasquaney School District. By law, Carpenter had to calculate the tax cap based on seven towns, but she also did a calculation of what the cap would allow for spending if only the four remaining towns were counted.

She also had to determine the savings to the district from not staffing the Bridgewater-Hebron Village School and supporting the students attending that school; what state and federal revenues would be lost because of having fewer students; and estimating what the district could realize in tuition revenue from students in the three departing towns that wish to continue attending Newfound. Hill also sends students to Newfound on a tuition basis.

Superintendent Paul Hoiriis prepared a document for the Jan. 13 public hearing that summarized how they came up with their budget proposal. Budget Committee Chair Ashlynn Hatch led the hearing, acknowledging the budget committee had not had a chance to see the final numbers until that night. Carpenter handed out a revision to her calculation of the default budget during the meeting.

The central office had prepared a spreadsheet ahead of the hearing to help guide the budget discussion, but copies did not get distributed at the meeting, leaving residents with unanswered questions. The spreadsheets would not helped much, and may have led to more confusion, because they list only the current-year budget and not the proposed spending. They also state the 2024-25 budget total as $26.2 million, which conflicts with the $27.98 million figure presented at the meeting. The difference has to do with grants received and changes in other revenues.

A handout Carpenter prepared for the budget committee’s Jan. 2 meeting carried much more detail, but there still would have been questions because of the last-minute changes.

Budget questions

Among the questions residents voiced was how the withdrawal of the three towns would affect the budget. Operation of the Bridgewater-Hebron Village School will become the responsibility of the newly formed Pasquaney School District on July 1. The remaining four towns in the Newfound district — Alexandria, Bristol, Danbury and New Hampton — will be responsible for the Bristol, Danbury and New Hampton elementary schools, Newfound Memorial Middle School and Newfound Regional High School.

Background data unavailable during the budget hearing showed $43,650 in savings from no longer operating the Bridgewater-Hebron Village School. The district also anticipates a reduction in special education costs of $205,408.

Carpenter estimates the loss of revenue from the three towns at $2.3 million.

The proposed $26.5 million budget is $1.49 million less than the current-year budget and falls $900,611 below the $27.4 million tax cap, but above the tax cap if calculated for just four towns.

The budget figure includes 10% salary increases for custodians, support staff and administrative assistants, and 3% raises for program specialists and administrators. The district currently has a hard time recruiting custodial and support staff, and relies instead on contracted services at $696,500 and $2.6 million, respectively. By raising wages to attract workers in those two categories, the cost is reduced to $635,000 and $2.2 million, respectively.

The default budget, as presented at the hearing, stands at $26.25 million, or $230,983 less than the proposed budget.

Approval of the proposed budget would increase the assessments to the four towns, which are based on average daily attendance and the smaller size of the school district.

Each year, the school board also places articles on the warrant to designate a portion of the money remaining from the prior-year budget into expendable trust funds for building maintenance and technology. Brian Gallagher of Bristol, who had served as Newfound’s first business manager, asked about last year’s unassigned fund balance and district audits.

“Zero right now is our estimate,” Carpenter responded, “because I can’t, I don’t have the prior year in the system still, so because of the cyber attack, I cannot give that number.

"We’re saying $0 for estimated purposes.”

That means the $450,000 voters last year agreed to take from the fund balance for building repairs, and the $150,000 for technology, could not be spent this year.

The last school district audit took place in 2022, so auditors will be reviewing two years of financial records this year — one of the anticipated increases in the budget.

Linda Phillips of Bristol had a list of questions for the budget committee: Do the grants cover new positions the district will be obligated to pay once the grant money runs out? Does the budget take into account the decreasing number of students? How many students’ education plans require special education services?

“I don’t see a listing for capital items that are anticipated to be funded out of this budget,” she said. “They can really whack a budget, and they don’t always come out of the general maintenance fund.”

Budget Committee Vice Chair Rick Alpers of Bristol interrupted her, complaining, “You can’t just rattle off seven questions in a row without answering one at a time. No one here is going to memorize the seven questions she’s asked in great detail.

"It’s unfair to hammer down.”

Hatch commented, “I think this year is a different situation, because a lot of the numbers we don’t have because of the hack. So it’s hard as a budget committee to build a budget when we’re still recovering data. I understand your perspective, but I don’t know the answers to your questions.”

Hoiriis and Carpenter said many of those answers are in the detail sections of the budget, but did not have them immediately available.

“The numbers are just buried inside the spreadsheet; that’s the problem,” Carpenter said.

The background data prepared for the budget committee’s Jan. 2 meeting estimated the departure of the three towns would result in a decrease in state aid from $3.7 million to $2.45 million; adequacy aid from $3.98 million to $3.53 million; and special education aid from $190,000 to $122,000.

Because some of the students in the departing towns will continue attending Newfound schools, tuition revenue is estimated to increase from $980,000 to $1.7 million.

Hatch said the withdrawal means about a $2.5 million net loss for Newfound.

Attendees asked for another meeting to get their questions answered. The committee could have taken another week to review the revised figures and hold an additional public hearing on Jan. 20, the date set aside as a snow date for the hearing. Doing so would have run up against the statutory deadline for completion of the budget.

School Board Vice Chair Kimberly Bliss asked the board to postpone its decision on whether to recommend the budget, saying, “because of the budget hearing tonight, all the discussion, the fact that we don’t know what the budget committee said in their meeting ... perhaps we table this recommendation until our next meeting.” The motion passed.

The budget committee met briefly after the public hearing and approved the proposed operating budget, which will go before voters at the deliberative session at Newfound Regional High School at 10 a.m. on Saturday, Feb. 1.

Also on the school district warrant for discussion on Feb. 1 is an article to restructure the school board and budget committee. Having just four members could result in tie decisions. Article 6 asks voters to add an at-large position to bring the total to five members.

District voters also will be asked to approve the cost items in a one-year teachers’ contract, estimated to cost an additional $391,459. A longer-term agreement will be negotiated next year.

Approval of the tuition agreement between the Newfound and Pasquaney school districts is also on the warrant.

The filing period for those interested in running for the Alexandria positions on the school board and budget committee, as well as for school district moderator, opens on Wednesday, Jan. 22, and closes on Friday, Jan. 31. The election, which includes the articles on the district warrant, will take place on Tuesday, March 11.