WESTBROOK – Concerns over a $760,000 deficit in the Westbrook School Department budget have led to new guidelines being put in place to allow the city administration to help the school department track and monitor spending and revenues.

The guidelines were developed at the request of Councilor Mike Foley, who told the told the city administration and the school department prior to the initial vote on the municipal and school budgets on May 7 that he wanted them to work on a set of policies to ensure that there are no future large deficits.

The new policies were included as a part of the final approval Monday of three new appropriations from the city’s general fund balance. Those appropriations include the establishment of a fund to help offset future property tax increase, $1.2 million to pay for the city’s capital improvement program and $760,000 to cover the school department deficit.

The new guidelines include the establishment of two school department accounts, one to be used for accounts payable and the other to be used for payroll. According to guidelines, each day, the money needed to cover expenses for both school accounts will be transferred from the city’s general fund. At the end of the business day, any extra money in those accounts will be transferred back to the city, leaving a zero balance in each account. Also, all revenues will be deposited into the city’s general fund instead of a school department account.

Additionally, School Superintendent Marc Gousse and the city’s comptroller, Alicia Gardiner, will review the budget on a monthly basis to ensure that there are no problems and make adjustments if they are necessary to avoid a deficit.

At the meeting on Monday night, City Administrator Jerre Bryant relayed to the council just how the school department’s budget ran a deficit.

He explained that under their contract, teachers have the right to elect to be paid throughout the calendar year, instead of just during the school year.

“The school needs to have adequate funding to pay (those teachers) over the summer,” Bryant said.

According to Bryant, in 2010, revenues fell short of the money needed to meet the school’s payroll obligations to the teachers during the summer, which led to the deficit.

After approving the new procedures, the council gave its final approval to the school budget, voting 6-0 (Council President Brendan Rielly recused himself from the vote, saying he wanted to avoid a potential conflict of interest because does some legal work for the school department) to send the budget to the voters on June 12.

As approved by the council on Monday night, the $30.9 million school budget represents a 0.15 percent increase in spending and a 1.16 percent increase in the amount needed from local taxes over this year’s $30.8 million budget. While the budget initially represented a property tax increase, the city’s tax stabilization reserve account will allow the city to keep the tax rate at the same level as this year.

The school budget saw some significant reductions shortly before it was presented to the council for final approval.

The initial budget came in at $31.1 million, but earlier this month, Gousse said the school department’s health insurance costs, initially budgeted at a 5 percent increase, came in with just a 4 percent increase. Lower dental insurance premiums and a number of teacher retirements added to the savings, he said.