SANFORD — Two years ago, the Sanford School Department was facing a $1.5 million sea of red ink.  A year ago, the fund balance deficit was nearly halved, honed down to $800,000.

On Tuesday, Christian Smith of the auditing firm Macpage told the City Council that in fiscal year 2016, Sanford School Department was out of the red — and had amassed a $400,000 fund balance.

That is due in part to an increase by $260,000 in Sanford’s state school subsidy last year, and a number of cuts in expenditures, including not replacing some teachers who retired or replacing them with teachers with fewer years experience, thus saving on salaries, among other decreases.

Smith told the City Council that the municipality (excluding the School Department ) carries a $7.4 million undesignated fund balance, an amount Smith called both significant and adequate.

The municipal fund balance is in line with other communities, like Augusta, Auburn and Scarborough.

“You’re right in line where most communities want to be,” he said.

As well, Smith said Sanford’s debt, at 2 percent of the state’s assessed valuation of the city, is well below similar communities. Smith pegged Augusta’s debt at 8 percent, Scarborough’s at 12 percent and Auburn’s debt at 13.8 percent of valuation. State statutes limit debt to 15 percent of the state’s assessed valuation of a municipality. 

“I think anything under 10 percent is good,” said Smith. 

There are no material weaknesses or significant deficiencies in either the school or municipal systems, he said.

According to financial statements, the cost of all of Sanford’s governmental activities — both school and municipal — was $70.5 million in 2016, an increase of $475,000 from the prior year. Of that, Sanford taxpayers funded $33.6 million through property, personal and excise taxes. The statements point out that both school and municipal managers continue to aggressively seek grant revenue to cover programs and services and help reduce the tax burden.

Councilors thanked municipal Finance Director Ronni Lynn Champlin and School Department Business Administrator Gwen Bedell for their work.

“(They did) a tremendous job,” said Councilor Fred Smith, a sentiment echoed by the other councilors.

— Senior Staff Writer Tammy Wells can be contacted at 324-4444 (local call in Sanford) or 282-1535, ext. 327 or [email protected].