Regional School Unit 20 Finance Committee Chairman Gerry Reid offered a few suggestions for making up a $2.6 million budget shortfall Tuesday, Jan. 10 — including the possibility of renting out parts of district buildings.

For the last couple of months, Reid has updated the board about the challenges that will come with building a school budget for the next year, and so far his message has been that the district cannot afford to continue to maintain the status quo.

Tuesday night Reid added to that message, and offered suggestions about how RSU 20 could not only decrease spending, but also increase its cash flow.

“We’re dealing with a revenue loss issue and an ongoing enrollment decline,” he said.

The district is now seeing about $1 million less in MaineCare funds, and according to Reid’s report to the board in November, RSU 20 is also facing about $150,000 in non-routine facilities maintenance and at least $655,355 worth of cost inflation. At the Jan. 3 meeting of the Searsport Board of Selectmen, RSU 20 Superintendent Bruce Mailloux said the district will also be losing the benefit of the federal jobs bill, which had previously allowed the district an additional $690,000 to be used to preserve jobs for teachers, support staff and administrators.

The combination of those losses, Reid said Tuesday night, total $2.6 million.

Should the district continue operating as it has in past years, Reid said the tax increase for the district’s nine towns could jump between 13 and 14 percent. Taxpayers may see a bigger increase if inflation comes in at more than the two percent cost hike that Reid factored in with his analysis last fall, or if more towns follow the lead of Frankfort residents who are considering a move to School Administrative District 22.

Reid said while it looks as though the district won’t be contending with the loss of Frankfort students in the coming budget year, the potential departure of the town from RSU 20 remains “a looming challenge.”

With all of those factors in mind, Reid offered some options for closing the budget shortfall, including finding new and creative ways to increase district revenue.

“It’s something that’s almost never talked about,” said Reid.

Renting out space in some of the district buildings, said Reid, is one possible way of bringing in some additional cash. It’s an idea that he said will require lots of additional thought, as well as help from a local realtor, to determine if it would be the right move for the district.

“There’s a whole host of pragmatic issues around that,” said Reid. “… Until we do the fact-finding, it’s just all theory.”

Reducing the number of school buildings, said Reid, is also being considered as a way to cut costs.

“We have 13 buildings with an average utilization of 72 percent,” said Reid.

Three of those buildings he said are operating at 50 percent utilization or less, and steadily declining enrollments are expected to continue in the foreseeable future. Reid said that problem is not unique to the Pine Tree State.

“It’s a national phenomenon,” he said.

Reid said if locals had decided to adopt the school reorganization concept that was unveiled last May — which called for closing several outlying elementary schools and sending all RSU 20 high school students to Belfast Area High School — the savings would have amounted to $1.8 million.

“We’d still have a tax increase to live with,” he said.

Reid said another option is to consolidate some of the elementary schools.

“We have the capacity to consolidate up to five [elementary schools],” Reid said.

Should one elementary school be closed and students move to a slightly larger school within the district, Reid said that would result in a savings of about $267,000. Consolidation of five elementary schools would cut costs by about $1 million.

Reid also suggested the district consider letting the former SAD 56 central office building go back to the Town of Searsport. The building currently houses the RSU 20 special services department.

The district wouldn’t see a significant savings from doing so, but Reid said it’s worth considering since the town had previously expressed the desire to take ownership of the building.

“It’s not a big number, but it’s a matter of fairness and principal,” he said.

Reid also recommended slight increases to class sizes, noting that some classes could grow in numbers and still fall within the guidelines set forth in the district’s class size policy.

“There are more [classes] than I thought that fall below our policy, and some of them quite a bit,” he said.

A more detailed discussion about generating revenue will be added to a meeting agenda for discussion within the next month, and Reid said he has asked Mailloux and Assistant Superintendent John McDonald to provide updated figures for the reorganization concept as well as current class sizes.

Another topic Reid suggested adding to a future agenda is revisiting the district’s mission, and determining the priorities that are outlined there.

“When you start talking about class sizes and course offerings, you can’t really have those conversations unless you know what your priorities are,” he said. “… It’s an obvious, positive perspective to put on this whole process.”

Reid concluded by offering his own thoughts about how the board should approach the upcoming budget building process, which included a push to move away from cutting relatively minor expenses like those earmarked for supplies and books.

“Twenty percent of our budget isn’t buildings, staff, or benefits. It’s miscellaneous,” he said. “Last year we spent almost all of our time on that 20 percent.”

Aside from discussions about the potential closure of Frankfort Elementary School, Reid said there was little talk about district buildings or class sizes.

“We need to spend most of our time on the big, and frankly, more controversial topics,” he said.

Reid suggested the board allow administrators to craft that smaller portion of the budget themselves, which would allow time for the bigger discussions.

While Reid said the board should offer administrators a target amount to work with, he cautioned against reducing those lines any further.

“There is no fat in that 20 percent,” he said.

Two areas of the budget that Reid said should be funded as well as possible are technology and building maintenance, because putting off building repairs or technological upgrades could cost the district more in the long run.

“When you have a hole in the roof, you have to fix it,” he said.

Once the board has had thorough discussions on these issues and cost saving options, Reid said the real work will begin.

“We have the larger challenge financially to deal with this year than what we’ve had in the past,” said Reid.