Several months of work by Cape Elizabeth’s school administration, public officials and parents have finally paid off. The school district will not be merging, instead remaining independent. But that doesn’t mean the battle is over.

“We were very pleased,” said School Board Chairwoman Kathy Ray Friday. “But we will still have to jump through some of the same hoops” as those districts that are merging, including filing plans with the state by a Dec. 1 deadline and preparing to have residents cast the final vote on the budget.

Last week, Superintendent Alan Hawkins received notice from Commissioner of Education Susan Gendron that an audit of the 2005-2006 per-pupil expenditures showed the district was below the requirement in the category of system administration.

In May, the town was also identified as having at least three higher-performing schools in the 2007 report by the Maine Education Policy Research Institute, a research group funded by the Legislature based at University of Southern Maine. By meeting these two standards, Cape Elizabeth is exempt from having to consolidate with any other school districts as part of the sweeping consolidation legislation passed in June.

The school system must file a plan with the state by Dec. 1, showing how it will meet state spending targets in four categories – system administration, transportation, special education and facilities and maintenance. Scarborough and South Portland, which were also exempted from consolidation for having more than 2,500 students in their districts, have the same requirement.

Cape Elizabeth is ahead of the game in finding ways to be efficient. According to David Connerty-Marin, spokesman for the Department of Education, one of the state’s cost-saving recommendations for districts that are not consolidating is to share services with the municipal offices – the basis of Cape’s “one-town concept.” A Community Services employee works out the bus schedules, and the school department’s finance director manages the municipal payroll.

“If we were to consolidate, it would be very expensive for Cape Elizabeth,” McKenney said because the one-town concept would be lost.

Still, officials remain concerned that the exemption is only temporary.

“Eternal vigilance may be what we have to make sure we’re doing,” said Councilor Anne Swift-Kayatta at a town council meeting Oct. 10, where Council Chairman Paul McKenney announced the news.

“Going on next year, we might have to fight the battle all over again,” she said.

Connerty-Marin said because the exemption for high-performing, efficient districts was added to the law late in the process last spring, the definition of such districts, which did not previously exist, was “not as sophisticated as it might have been.”

The commissioner is scheduled to propose a revised definition of an efficient district to the Legislature on Dec. 1, one that Cape Elizabeth may not fall into.

Cape Elizabeth was one of six school districts that self-identified as efficient, according to Connerty-Marin. In order to meet the state’s definition, the audit had to show that the district was spending less than 4 percent of total per pupil costs on system administration. Cape Elizabeth came in at 3.1 percent.

Out of the five other districts that self-identified as efficient, Connerty-Marin said, as of last week, Yarmouth and School Administrative District 22 in Hampden also came in below the 4 percent per-pupil expenditure requirement. SAD 58 in Phillips did not ask for an audit, but made plans instead to reorganize. An audit showed SAD 75 in Topsham spending 4.01 percent per pupil on administration. Though it did not meet the efficiency standard, the district is made up of more than 2,500 students, so it will not have to reorganize. The audit for Brunswick had not yet been completed.

Regardless of Cape Elizabeth’s efficient, high-performing status, the consolidation law requires all districts to make some changes, including bringing the school budget to a citizen vote.

“That is going to be a huge deal,” said Ray.

Changes will be made to how the budget needs to be prepared and passed. The school board will have to separate the budget into 11 spending categories that will be presented, first to the town council and then to the citizens, in comparison with the state’s calculations for what those costs should be.

The town council will be given the chance to adjust the budget, before it goes to referendum – within 10 business days of the council’s vote.

If the voters disapprove, the board and administration will have to go through the process again. Until a budget passes, Ray said, the schools will have to operate under the previous year’s budget, which consists of “primarily payroll.” With contractual employees earning pay raises, cuts would have to come from somewhere else.

Ray said the board’s plan is to communicate with the public as best as possible. Though the board has always held public forums to answer questions about the budget, she said, they have always been poorly attended.

“Will they pay more attention now? We have no idea,” Ray said.