Closing a budget gap of at least $1.4 million has posed a challenge for the Regional School Unit 20 Board of Directors in recent weeks, and now the district is faced with the need to hold a referendum vote to find a new way of distributing costs to the nine district towns.

And that won’t happen, said RSU 20 Superintendent Bruce Mailloux, at least not in time to make a difference to taxpayers in the 2012-13 proposed budget.

Monday morning, Mailloux said he and the Board of Directors had operated under the belief that debt service from the former SAD 34 could be spread across the nine district towns by way of a board action. However, the legal question of whether RSU 20 Directors could accomplish that through a board vote was not raised until recently.

That’s because under the RSU 20 consolidation plan, the Reorganization Planning Committee added a clause that recommends the board consider distributing the debt service expenses from the former SAD 34 towns, which Mailloux said is considerably higher than what was the case for the former SAD 56, over all of the district towns.

“We were under the impression the [RSU 20] board could do that,” said Mailloux. “We never thought it would be any other way than through a board action.”

But as it turned out, the question of how the board can execute the distribution of debt service among all of the towns in the event of an “unforeseen cost shift,” said Mailloux, was an issue that needed to be resolved before the 2012-13 budget process is completed.

On Friday, Mailloux learned from district lawyers at the Portland law firm, Drummond and Woodsum, that the re-distribution of debt service can only legally be accomplished through a district wide referendum vote, and Mailloux said that wouldn’t happen this year.

“It is the opinion of Drummond and Woodsum that the board does not have the authority to do that because it requires a change in the [Reorganization Planning Committee’s] plan,” said Mailloux on Monday, adding that the time crunch involved with getting the budget proposal out to voters in June means getting a referendum out to voters on that issue “will not be possible” for this year.

Mailloux explained on Wednesday, May 2, that in the reorganization plan — drafted prior to the formation of RSU 20 in 2009 — a cost sharing formula was developed to determine the assessments for the district towns. Those assessment levels, as part of the consolidation plan, were to remain in place for the first three years of the RSU’s operation.

That cost sharing arrangement ended with the 2011-12 budget, Mailloux said, which means the towns will be assessed on the straight valuation of their communities in the proposed 2012-13 budget.

“Let’s say a community represents 30 percent of the [district’s] total property valuation,” Mailloux said. “That community would then pay 30 percent of all the costs.”

Holding the line for three years on the cost sharing arrangement, said Mailloux, was done in an effort to keep the cost shifts between the former SAD 34 and 56 towns at a minimum.

What complicates the issue is the very nature of each of the former two districts, Mailloux said. There is a provision in the consolidation plan that recommends the RSU 20 Board of Directors vote to spread the payment of debt service from the former districts to all of the nine towns.

“The issue is, when we became consolidated, on the Searsport side they were way above [Essential Programs and Services],” said Mailloux.

The EPS formula, which the state uses to determine the level of state funding the district will receive each year, also sets forth guidelines for what the state deems appropriate for staff-to-student ratios.

Mailloux said having staff ratios that are above what EPS calls for is common for small, rural districts, but it often creates the need for locals to cover more of the expense of the budget under the line known as “additional local share.”

The former SAD 34 was also above the EPS formula, Mailloux said, but “not nearly as much” as the former SAD 56.

When the RPC added the clause about the re-distribution of debt service, Mailloux said, the idea behind it was for each of the former districts to help each other out on their respective higher costs — greater EPS expenses on the former SAD 56 side and higher debt service from the former SAD 34.

With the cost sharing arrangement under the consolidation plan coming to an end in the 2011-12 budget year, Using the straight valuations of each community would mean much of the costs would shift over to the former SAD 34 towns.

“Right now, we’ll have to go by straight valuation,” said Mailloux. “The debt service is going to have to stay right where it is, and it’s not going to be pretty.”

When the cost-sharing topic came up at Tuesday’s meeting, BAHS Administrative Assistant Betty Lu Brown asked if the percentage increases shown for the nine towns as part of the April 24 budget talks were accurate.

“They could be more, they could be less, but it would shift more onto the [SAD] 34 side,” Mailloux said. “But the totals are the same.”