RSU 40 budget committee recommends $40.8M FY2026 budget, creates reserve funds amid federal funding uncertainty

The RSU 40/MSAD 40 budget committee voted Thursday to send a proposed FY2026 general fund budget of $40,815,369 to the full board for approval and to the district budget meeting, and to establish two reserve funds to protect instruction and special-education services if federal aid falls short.

Committee members approved the package after hearing presentations on adult education, food service, system administration, debt service and capital needs and debating where to trim optional items. The motion sent to the board included language authorizing an "improvement of instruction" reserve (to be funded up to $750,000 if needed) and a special-education reserve (to be funded up to $650,000) for unanticipated gaps if federal grants do not arrive.

The recommendation follows presentations from administrators and staff outlining program changes and cost pressures. Karen (business manager) told the committee the district currently holds an unassigned fund balance of “around $2,000,000,” and recommended creating reserve accounts so taxpayers would not be asked to cover programs temporarily if federal Title funds are delayed or reduced. Karen said the reserve would be funded only if federal funding did not arrive and any expenditures would require separate board approval.

Budget highlights and drivers included: - Adult education: presenters reported 18 enrolled students and an estimated 6–10 on track to complete graduation this year. The adult-education cost center shows a 4.1% increase driven chiefly by adding health benefits to the director position. (Presenter name not specified in transcript.) - Food service: Storm Hendricks, food service director, described rising food costs and shifting dollars from supply lines into food lines at several schools. The local-tax request for food service remains $55,000; most operating costs are funded by state and federal reimbursements. “The price of food just keeps going up,” Hendricks said, noting equipment grants this year that replaced aging kitchen gear. - System administration: the business office budget rose in contract services and technology; the committee heard an explanation that moving the accounting system to a cloud-hosted environment added one-time and recurring costs. Audit and liability insurance line items were cited as upward pressure. - Debt service: the committee was told debt service drops by $46,544 as middle-school interest payments near expiration in FY2028; principal payments remain. - Capital/operations: administration proposed shifting roughly $680,000 in facilities money into a lease payment structure to accelerate several critical projects (septic work at the high school, heating and ventilation controls at middle and high schools). The committee discussed using a lease to fund more work over a shorter period.

The committee also reviewed federal grant risk. Administrators reported an increase in the district’s direct certification rate when MaineCare was added, which raises the percentage of automatically certified free/reduced students and therefore affects federal reimbursement levels. However, they flagged a severe projected reduction in Title V (McKinney-Vento/compensatory) funds: an allocation that this year was roughly $124,000 was estimated by the state at about $9,400 for next year. Administrators summarized that the district’s total Title (I/II/V and related) funding is “just shy of $900,000,” and that specific program lines (about $347,000 on the budget print) represent critical services that would be difficult to replace from local taxes if federal aid disappears.

Insurance and audit costs remained a significant unknown. The district received a minimum/maximum insurance guidance of 3%–14% and is budgeting 10% for now; administrators said a 14% result could translate to roughly $280,000 more than the 10% estimate. The final insurer determinations were expected to be released to districts soon.

On staffing and program requests, the committee took several directional actions rather than final hires: it removed a proposed human-resources director and a line for board meeting video production equipment from the tentative budget after members said those were lower priority for this cycle; it also removed a proposed district-level substance-abuse prevention coordinator from the FY2026 package and asked administration to research models and options for next year. Administrators said one pre-K teacher funded through a grant would be eliminated because the grant funding is not available; they also proposed keeping one van driver position funded this year while removing a second van-driver request and finding savings in existing budgets to cover operational needs.

The committee approved the budget recommendation on a voice vote. The recording shows two members opposed and one abstention; the committee chair confirmed the recommendation will go forward to the full board and that final adjustments (for insurance and administrator contract numbers) can be made before the district meeting if needed.

The budget packet forwarded to the board preserves the district’s core programs while setting up contingency mechanisms for the most at-risk services if federal titles are reduced. Administration will present refined insurance and contract figures to the board once final numbers arrive.

Ending: The full RSU 40 board will receive the committee’s recommendation at its next meeting; any changes to the recommended figures can be made at that board meeting prior to the district budget vote.