GROTON -- Ripple effects from the Groton-Dunstable Regional School District's financial woes reached their furthest extent when Town Manager Mark Haddad warned members of the Board of Selectmen that helping to balance the schools' books will push Groton to the limit of its ability to obtain cash in an emergency.
The news came at a meeting of selectmen March 10 when Haddad briefed members on the latest news surrounding a budget shortfall that has dogged school officials for the past several months.
The crisis began late last year, when the approved school operating budget for fiscal 2013 stood at $35,200,000. A review then revealed that total obligations by the district came to $36,204,212.
Initial cuts were able to eliminate the shortfall for that year and 2014 but since the initial problem with the budget had a rollover effect in subsequent years, a major problem remained for 2015.
The bottom line was that in the district's proposed budget for fiscal 2015, Groton would need to be assessed at $1.9 million over the estimated $15 million it paid in 2014 if the books were to be balanced.
Declaring the town's support for the schools, Haddad proposed a combination of cuts in planned municipal spending and use of the town's unexpended tax levy that would be boosted by removing payments for the new Center Fire Station from the levy to a debt exclusion.
If the plan worked, Groton could raise $1.5 million of the $1.9 million it had been assessed.
Since then, however, the School Committee voted to adopt a budget for 2015 of $35,696,179, and managing to cut $740,000 from its budget, reduced the shortfall amount that Groton would need to cover.
Running through the numbers at the March 10 meeting, Haddad told selectmen that his list of suggested cuts to the town's fiscal 2015 budget, including a mosquito control program, town counsel expenses, stipends of public officials, the Highway Department, Police and Fire epartments, minor capital improvements to public buildings, money to have been used to reopen Sargisson Beach for public use, and elimination of a proposed communication officer, still stand.
In addition, Haddad said he assumes that the fire station debt exclusion question will pass at town meeting and make up the rest with whatever remains in the tax levy.
Throwing a wrench in the works, however, will be a last minute $50,000 expense to make up for money spent on snow and ice removal.
When all was said and done, the town manager concluded that only a razor thin margin of $71,852 would remain in the tax levy.
"We're taxing it to the max," Haddad said. "We're dangerously close to the levy limit."
The levy limit is the total of all the taxes that can be collected in town based on property valuations.
To pay for it, the tax rate would rise to $18.41 per $1,000 of valuation for an average increase of $412 a year, a rise of 5.93 percent.
Overall, the town's budget for fiscal 2015 would go up from $30,357,337 this year to $32,025,074, a 5.5 percent increase.
When asked, Haddad confirmed that the $1,403,699 raised to help balance the district's budget would remain on the books permanently in subsequent years and is not a one-time fix.
It was for that reason that the town manager gave his warning to selectmen about being "dangerously" close to the levy limit. The only relief to that thin margin of reserve cash will be reliance on continued growth in town, which Haddad estimated would add $200,000 to the levy limit each year.
Should the district's expenses continue to rise in coming years, past the point that can be covered by the state's Proposition 2 1/2 limit on how fast the tax rate can increase each year, overrides might become necessary.
Haddad told selectmen that it is impossible as yet to tell if the school district will remain within the limits of Proposition 2 1/2 but that it is unlikely.
With that prediction, the board entered a discussion on potential outcomes of the shortfall scenario including the possibility that Dunstable might not support its end of the equation. Such an event would cause a number of dominoes to fall leading to an override, a super town meeting or deeper cuts in the school budget.
In the meantime, Haddad said that the schools plan to release the findings of an audit of the district's books as well as a detailed breakdown of the budget for 2015.
With more meetings between town and school officials planned and projections predicting an annual rise in municipal spending of over $1 million a year through 2020, board member Joshua Degen expressed a wish to see more detailed forward planning by the district.
"We need three- to five-year projections for the schools," said Degen. "And we need them earlier than later."