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The city's top budget officer begins working with the schools to try to prevent future problems.

By JOSIE HUANG Staff Writer August 3, 2007

The city's top budget officer began working Thursday with school employees assigned to her after an estimated $2.5 million deficit led to public outrage and the resignation of the school finance director.

Ellen Sanborn, Portland's assistant finance director, said she started out by reviewing the job descriptions of the five accountants and clerks who lost a boss when Richard Paulson stepped down Monday.

Sanborn and her City Hall staff plan to provide budget analysis on an ongoing basis to avoid another deficit and to help update data on grants that the School Department has received. Sanborn said she will divide her time between City Hall and school offices on Allen Avenue so the staff can ask for her help directly.

"The staff is clearly feeling beat up," said Sanborn, who spent the morning with four of the employees. "But there's a recognition that they've finally got some help now, and this will settle down. There is nothing that can't be fixed."

The city's takeover of the school budget is the first major step that public officials have made toward restoring taxpayer trust in the management of school finances.

Sanborn's new assignment -- worked out between City Manager Joe Gray and Superintendent Mary Jo O'Connor -- was heralded as a wise decision by city councilors and taxpayer advocates, who said they have been pushing for a permanent consolidation of the two finance departments for at least two years.

"It would have been nice to do this without having a crisis to precipitate it," said Councilor Jim Cloutier.

In a more controversial move, the Portland School Committee hired Bryan Dench, a lawyer from Skelton, Taintor & Abbott in Auburn, to investigate the budget deficit and produce a report.

School Committee Chairman John Coyne would not say whether he expected more firings or resignations, only that "anything is possible."

"We might find out that everything was done wrong, or we might find out that with Dick Paulson's resignation, everything landed where it should have," Coyne said.

Others, however, said the investigation was unnecessary, and at an estimated $10,000 to $20,000, too costly.

"I think it's typical of the committee to say, 'Let's go spend more money on who's to blame,' " said Steven Scharf, president of the Portland Taxpayers' Association.

Scharf said the blame falls squarely on the school superintendent because "when there is a major failure, the leader needs to go."

City Councilor Jim Cohen also questioned the purpose of the investigation.

"It doesn't seem like the question that is being asked is one where the goal is to save money. It seems more retrospectively focused on what went wrong in the past and who's responsible," said Cohen, who chairs the council's Finance Committee.

The School Committee's counsel, Harry Pringle of Drummond Woodsum in Portland, recommended the panel hire Dench for his expertise in school finances.

Dench, reached Thursday, said he could not comment on the investigation. But he said, "I'm looking forward to it, and I'm sure it'll be possible to come up with a satisfactory and complete conclusion at the end of the process."

Coyne said he is meeting with Dench early next week to work out the details of the contract, which would call for a report within a month. Dench would be paid out of the committee's $35,000 contingency fund.

Coyne said the cost will be worth it.

"This is a good investment, dollar for dollar, if we can return some of the public trust, " Coyne said.

Staff Writer Josie Huang can be contacted at 791-6364 or at:

jhuang@pressherald.com.