On Aug 27, Gorham’s volunteer Fiscal Sustainability Committee held their fourth of eleven scheduled meetings. Jointly developed between the Gorham Town Council and School Committee, the group is composed of community members, business owners, elected officials, and both municipal and school department staff. Their work is guided by a professional facilitator.
The two-hour meeting was packed with information to aid the group in identifying both the challenges and possible solutions for sustainable economic growth for Gorham.
Superintendent Heather Perry began with an extensive explanation of school finance for the committee, explaining there are only two large revenue streams available to the school department, state subsidy and local tax dollars.
Perry reviewed for the committee the State of Maine’s intricate school funding formula, called the ED279, through which money is allocated to each school district statewide. The required local and state contributions are set by the state and vary year to year for every school district, but are always below actual annual operating costs. The gap between the funding and costs continues to grow for nearly all communities in Maine.
This gap raised concerns amongst the fiscal sustainability members. Committee members asked well-considered questions and noted the frustration for Gorham residents who see both state and local funding going up, but the state’s increase is not keeping pace with year-over-year increased costs.
Cost drivers for the district continue to be increased special education needs and general staffing, and Superintendent Perry noted that 78% of the school budget is salaries and benefits. Councilor Phil Gagnon noted that Gorham has long committed to ensuring Gorham can pay staff well enough to hire and retain high quality educators, and Superintendent Perry confirmed that Gorham educators are “middle of the pack” in terms of pay in Cumberland County, but that this rate is still above the state’s average salary used in the funding formula.
The School Department lost out on $400,000 due to perceived reductions in the free/reduced lunch needs in Gorham. This is due to families no longer filling out the annual paperwork that is sent home at the start of the school year, perceiving no need now that school meals are free for all students in Maine, however this paperwork is used by state and federal agencies to identify needs and provide additional funding. The committee noted this as a possible area to address in the future.
Town Manager Ephrem Paraschak opened his presentation of municipal finance by explaining the various revenue streams available to the town, including taxes and fees. He noted that while the annual operating budget of the town continues to rise, the use of Tax Increment Financing (TIFs) is helping to fill the gaps in revenue versus the budget. Mr. Paraschak compared some of the data, struggles and strategies of neighboring communities such as Windham, Westbrook and Scarborough, noting the benefits of collaborative conversations and learning opportunities between the communities.
During Mr. Paraschak’s presentation on expenditures, Councilor Gagnon described the town’s Parks and Recreation Department as “nice to have, not need to have,” and asserted that the program loses money due to the cost of staffing. Town manager Paraschak responded by noting that fees and an enterprise account take care of those costs.
The town manager also clarified that if pressed to make reductions or programming changes, the Parks and Rec department would not be on his list. He noted that the town should be looking at fee structures every few years, not 17, as was previously done, and given that the nearly $3 billion in assessed property value in Gorham is 86% residential and single family, there needs to be a focus on mixed-use and commercial development to offset the tax burden on homes. Most importantly Gorham needs to dramatically expand and diversify its tax base in the coming years.
According to Paraschak, roads are the greatest expense for the community, to which Councilor Lou Simms encouraged smart growth in Gorham, noting that “the more we invest in roads, the more money we need to maintain them.” Committee member Bill Benson suggested that the group should define what they want Gorham to look like in the future, and to make the case for excellence, while committee member Susan Sato questioned what might be viable and sustainable pathways to generate revenue.
Member George Fox reminded the group that their task was to focus on fiscal responsibility, and there will need to be a focus on both revenue generation and lowering costs. The group discussed the balance required with both municipal and school staff contracts in order to keep quality employees but manage cost. Member Susan Coyne thanked Perry and Paraschek for the presentations, noting the vast information shared.
The committee will next meet on Monday, Sept. 23 at 6 p.m. to define the issues and begin developing recommendations. Members of the public are welcome to observe, or view past meetings on Gorham Community Access Media, and can find all materials or offer suggestions and questions to committee members through the town’s website, which has a page dedicated to the Fiscal Sustainability Committee.