City Finances Receive Clean Bill of Health

By Lura Jackson

 

The City of Calais had a preliminary look at the audit on January 11th at a Finance Committee meeting with Finance Director Crystal Gallina on hand to answer questions. Gallina described the audit as revealing the city finances to be “looking very good.” Superintendent Ron Jenkins was also present to provide perspective on the school system, including the need to continue the fight to reclaim state funding for the Blue Devil Health Center.

On the city side, Gallina advised the committee that the city’s undesignated fund balance is about $1.9 million. At the end of the last fiscal year, it was $1.7 million. Gallina said that the financial situation appears to be improving every year, and added that the auditors have been a “tremendous help” in being able to distinguish city and school accounts, among other benefits. Of the $1.9 million, approximately $100,000 is earmarked for certain projects, such as $20,000 for the dock expansion.

The undesignated fund balance is expected to stay healthy if not continue to grow. City Manager Porter said that he expected it will be approximately $2 million at the end of June, but noted that the city typically spends between $100,000 to $200,000 in paving.

According to Finance Director Gallina, for this budget year the city has saved approximately $31,000 a result of switching health insurance carriers. The savings are not a one-time boon and will continue into next year when as much as $95,000 will be saved. “The City plans to offset the rising costs in other budget areas and save for upcoming costly capital improvements with these savings,” Gallina commented.

City Manager Porter expressed his desire to abate the taxes on the school system’s acquisition of the former DHHS building, which has become the Calais Alternative School. Of the $130,000 now in overlay, that would be approximately $10,000 waived. The committee agreed with his assessment of the situation.

When Mayor Billy Howard questioned Superintendent Jenkins about how the situation is in the food service department in the schools, Jenkins replied that the school system has increased the number of employees and it is now running efficiently. “We're in a good position...we have a good staff at the moment.” Jenkins said the only unbudgeted item was for the purchase of two machines that would enable them to keep money from the free/reduced lunch program separate from the ala carte funds. “We should’ve done it years ago,” Jenkins said. Each machine is approximately $700-$800.

Jenkins addressed the committee about the situation facing the Blue Devil Health Center, which had all of its state funding – amounting to $46,200 – cut last year in a state-wide push to remove funding from student health centers. Despite the setback, and the fact that the state had already signed a contract to disburse funds earlier in 2017, the Blue Devil Health Center will be operational throughout the current school year. “I knew we’d be okay this year, but next year will be the problem,” Jenkins said.

There is currently a bill being reviewed by the legislature that would restore funding to the student health centers affected in the state. There are 22 student health centers in the state, 15 of which receive state funds. If the bill is successful, $600,000 will be granted to the affected health centers for the spring semester and an additional $600,000 will be given for the fall semester. Jenkins advised that two students from Calais were making the trip to Augusta to testify, and he urged the committee to provide support for the effort. Committee member Marcia Rogers agreed that she would, with Jenkins’s assistance, write a letter that would be signed by the City Council and presented as testimony. 

“That health center will not close on my watch. The services are just too important,” Jenkins said.

In general, Jenkins said of the school audit that it was a “good, clean report.” He said he wished there would have been more carryover, and said that the tuition amount has gone down, not hugely, “but enough to be annoying.” Jenkins said that he has tried to impress upon the school committee and council that if state-allotted funds aren’t spent, a lesser amount will be granted in future years. He said that enrollments have not increased to compensate. One point that may be in Calais’s favor is that the funding formula will now utilize a student count that takes place only on October 1st, rather than an average of October and April counts as has taken place in the past. “The October count is typically higher than in April, so it could work out in our favor,” Jenkins said, though he added that it was too early to tell.

Committee member Mike Sherrard said that Woodland has offered to bring students in Baring to their school at no cost, and asked Jenkins if something could be done to retain them. Jenkins said that when Baring turned down Calais’s offer to share bussing costs, a similar deal was made to Robbinston which was accepted. “If we waive Baring’s fee, it would be unequal,” Jenkins said. He agreed that he would look at the numbers and determine if an alternative agreement was feasible.

Regarding the ambulance audit, Finance Director Gallina reports that the net income for the fiscal year was $126,141. The cumulative position of the enterprise since its inception is now $5,700, meaning the original $400,000 that the city invested to start it has been paid back. The net income on cash activities for the year was $17,500. “I think that’s great,” said Committee Chair Mike Sherrard in response to the ambulance service having successfully paid off its balance and continuing to turn a profit. 

Gallina brought to the committee’s attention the realized issue arising from the city’s offering of MaineSTART in addition to MainePERs, both of which are retirement options. Per Gallina, MaineSTART is a defined contribution plan, meaning “what you put in is what you get out of it” while MainePERS is based on the top three years of salary. New employees have seven days to elect MainePERS or not. The problem that Gallina described is when a 20-something employee joins the city and fails to join MainePERS in time, a choice they may regret later when they recognize its benefits. “I’ve seen this elsewhere where employees leave to get retirement benefits,” Gallina said.

As a solution, Gallina proposed that if a full-time employee does opt out of MainePERS - which will soon require a 10 percent contribution from the employer - then the city will match what they put into MaineSTART, up to 5 percent. The committee widely agreed. “It’s a no-brainer for the city,” opined Sherrard.