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POLICY CODE:            DBC




TO:                  Superintendents of Schools

                        Chairs of School Boards


FROM:            J. Duke Albanese, Commissioner


DATE:             February 14, 2001


RE:                    Implementing L.D. 1346 (“An Act to Improve the School Administrative District and Community School District Budget Development and Approval Process”): Chapter 710, Public Laws of 1999


L.D. 1346 was enacted during the 2nd regular session of the 119th Legislature as Chapter 710 of the Public Laws of 1999.  The complete text of Chapter 710 is posted on the Maine Legislature’s Web site, with all other session laws enacted during the 2nd session of the 119th Legislature.  As a shortcut, you may go directly to the posting of the text of Chapter 710 at the following Web address:

Key components of the new statutory requirements are as indicated below:

¡         The State Board of Education and the Department of Education will strongly encourage school administrative units to adopt and implement the model school budget approval process that has been developed by the State Board of Education.  This model is designed to provide early and continuous collaboration between school officials and municipal officials and to encourage frequent opportunity for public comment in the development of each unit’s annual budget.

¡         Changes in a district’s budget format or in its budget approval process are not mandated.  However, if a district chooses to change  its budget format and its annual budget approval process after January 31, 2001, these changes must comply with the new statutes.  Several options are available for consideration by the district.  These options are as follows:

A.    Continue using the current budget format and approval process.

B.     Initiate a referendum to consider changing to one of the following:

ü      Cost Center Summary Budget Format with a district budget meeting for approval (as described in Chapter 710)

ü      Cost Center Summary Budget Format with a district budget meeting for approval, followed by a validation referendum for a final up-or-down voter approval (as described in Chapter 710)

Consideration of the validation referendum may be initiated by (a) a majority vote by the district board, or by (b) a petition signed by 10% of the voters voting in the last gubernatorial election.

C.    Implement the Cost Center Summary Budget Format by a majority vote of the district board, without a referendum.  Note: this third option is available only for SADs that are already using a district budget meeting for budget approval.

¡         If the validation referendum is adopted by the district, then the district must also vote by referendum, every three years, to determine whether this validation referendum should be continued for another three years.

¡         Regarding the failure to obtain an approved budget, Chapter 710 specifies the following:

ü      If a district has also adopted the validation referendum for final voter approval, but  the budget approved at the district budget meeting is not approved at this validation referendum, then another district budget meeting, followed by another validation referendum, must be performed.  This process must be repeated until a budget has been approved.

ü      If, by July 1st, the district has been unable to attain approval of its proposed budget, then the latest budget as submitted by the board of directors is automatically considered the budget for operational expenses until a final budget is approved.

You may wish to review the budget preparation, format, and approval process that is used in your district.  For example, you may wish to consider the following points:

1.      Budget Preparation. Do citizens and elected officials have early information regarding the developing budget?  Are they involved in this development process?

2.      Budget Format.  Does this format help you, and key stakeholder groups, such as municipal officials and parents, understand your district’s financial resources, as well as its plans and priorities for using these resources?

3.      Budget Approval Process.  Are your proposed budgets being approved as initially recommended by your board?

After a careful review of your budget process and of the options which Chapter 710 makes available to you, you may want to encourage a workshop or public forum to review your findings and solicit a discussion among key stakeholders.  If you decide to begin this review, then additional materials may be useful.  In addition to the statute itself, the following can be obtained from the Department of Education or from the Maine School Management Association:

¡         School Governance Report by the State Board of Education, dated January 15, 2000

¡         Legal Summary, prepared by Drummond, Woodsum, and MacMahan for a MSMA workshop presentation on September 15, 2000.

In addition, the Department plans to prepare additional materials which will be posted on the Department’s Web site.

The Department will also form a Resource Assistance Team, on request, to attend a public meeting of key stakeholders in your district and provide technical assistance in the consideration of possible changes in your budget preparation, format, and approval process.  To request a Resource Assistance Team, contact Jim Watkins (624-6790) or email him at . 

            Clearly there is much to this new public policy regarding the budget preparation, format, and adoption process.  If you have any questions regarding this Administrative Letter, or if there is anything that the Department can do to assist you, please let us know.