AYER/SHIRLEY -- Conflict resolution and overcoming adversity were the themes of the evening as the Ayer-Shirley Regional School Committee meeting opened with Page Hilltop Elementary School third-graders singing about mediating disputes, and first-graders singing "We Shall Overcome."
Once the students received applause and praise from the School Committee, its members got down to business with a discussion about the budget dilemma due, in large part, to the state's recent changes in its Chapter 70 formula for communities' required local contributions (RLC).
ASRSD Superintendent Carl Mock said he and School Committee Chairwoman Joyce Reischutz met with the Shirley Board of Selectmen and Finance Committee the previous evening to discuss the budget and the impact of the RLC changes on the district's and town's ability to balance the budget and "have some affordability with the region."
Mock said State Sen. Jamie Eldridge had told him that he would try to set up a meeting to discuss the state and regional funding mechanisms, and also offered some other possible sources of help.
The state's Ch. 70 formula
The state's new formula, designed to finish the Ch. 70 equity reforms of 2007, has changed the fiscal 2014 assessments for Ayer and Shirley.
Because Ayer has been paying a significant amount above the RLC over the past six years, its RLC is now on a par with the state target figure and the town will pay $8,651 less in fiscal 2014 than it did in fiscal 2013.
Shirley, however, has been paying significantly less than the Department of Elementary and Secondary Education's target figure for RLC. Its fiscal 2014 RLC is projected to be $202,963 below the DESE target. That puts Shirley's increase from fiscal 2013 to fiscal 2014 at $260,699.
Mock went over the details of the apportionment of local contributions for Ayer, Shirley, the Ayer-Shirley region, and Nashoba Valley Technical High School. The breakdown of the fiscal 2014 foundation enrollment is 759 for Ayer-Shirley and 71 for Nashoba Tech.
Each district's share of its municipality's total fiscal 2014 foundation is 87.71 percent for Ayer-Shirley, and 12.29 percent for Nashoba Tech.
On a per student basis for fiscal 2014, the RLC for Ayer-Shirley's 759 students is $5,342 per pupil. The RLC for Nashoba Tech's 71 students, however, generates about $8,000 per student, a difference of nearly $2,700, Mock pointed out.
He said that at the previous night's selectmen's meeting, he had walked the selectmen and Finance Committee through the town's equalized valuation and the property percentage that is applied statewide.
"Each has a 50 percent impact on the combined effort," he said, as he presented them again.
The bottom line is that Shirley's fiscal 2014 foundation budget $8,748,075. The target RLC is $4,825,554.
The state is looking for about a 59 percent RLC to foundation budget ratio statewide. For Shirley that factor is 44.84 percent. As an increment toward the state target, the total fiscal 2014 preliminary contribution for Shirley will be $4,535,092. When compared to the foundation budget line, the percentage is actually a shortfall of 3.32 percent. Therefore, another $87,499 will be added to Shirley's RLC to make up some of that increment, and the shortfall would still be $202,963.
The fiscal 2014 RLC contribution for Shirley as a percentage of the foundation budget is 52.84 percent, or $4,622,591, which results in Ayer-Shirley's total increase in its assessment of $260,699.
As ASRSD Finance Director Evan Katz explained, in fiscal 2013 there was no statewide equity reform "catch-up" in the Ch. 70 formula. "The target was frozen last year, and this year they reinstated the goal to catch up," he said.
"That makes it difficult to predict what it is they are going to do," lamented Shirley Finance Committee Vice Chairman Mike Swanton. "If you don't know what they are doing with one thing, and you go one way, it could be the wrong way and then we have the issue we have before us."
Municipal revenue growth factor
School Committee member Jim Quinty questioned the numbers used to determine Shirley's municipal revenue growth factor. The MRGF is an estimate of the total percentage increase in a municipality's general-purpose revenues from one year to the next.
Typically, a municipality must increase its minimum local contribution for education by at least this growth factor percentage, thus ensuring that the schools receive their fair share of increasing revenues. Consequently, the MRGF is critical to estimating required increases in school spending for budgetary purposes.
Katz responded that the MRGF is based on the actual numbers for towns' tax rates, tax levy and local receipts.
"One reason these (state figures) come out in January is that the setting of the tax rate becomes an important part of setting the MRGF, because they can't run these numbers for fiscal 2014 until the fiscal 2013 tax rate is set. They are locally generated numbers," he explained.
The pothole fund
He said he had been in touch with DESE School Finance Programs Administrator Roger Hatch since late fall "to see if he could give us some advance information."
He also contacted DESE Governance and Facilities Program Manager Christine Lynch, and is planning to apply for funds from the state's "pothole" account, formally known as the Foundation Reserve Award.
The pothole funds were established to supplement Ch. 70 funding and provide relief for extraordinary and unanticipated needs. Although it was not funded last year, nor will it be for fiscal 2014, he said he could apply for this year's budget.
"There are a couple of categories we are eligible for," said Katz. The startup costs we absorbed beyond the state grant of $300,000, and extraordinary special-education costs.
"(The state is) aware of the strain this puts on our budget and how it upsets the balance. Anything we can get out of this pothole account is a resource for us to tap and solve any budgetary issues that we have. This is a good place to go so the state will recognize the absorption of transitional costs, this (the RLC increase), and the special-education costs."
It applies to the numbers generated a year ago, so it's a little ironic that some places have RLC issues, but if they relate to fiscal 2014 we wouldn't be able to apply until next year, and the pothole account is not funded for next year. The application is due at the end of next month.
In need of a long-term solution
"We don't know the odds of getting any of it, and it is still a one-time solution for a problem that is not going to go away," commented committee Vice Chair Pat Kelly.
We are operating with at least 12 fewer positions than we were a year ago and $120,000 less than the certified budget going into fiscal 2012. Something is going to have to give here."
"Shirley would have looked at state receivership had we not regionalized," said Quinty. "Now we have some control to find a way to grow into what our actual needs are. It may not seem like a good place now, but at least we know where we are going now."
"All the parties need to walk into this with an open mind," said Swanton. "We need to think creatively about how to solve this immediate problem and think down the road how to fix this problem now and in the future. Stemming (student) choice-out (to other districts) might help fund some of the year-to-year increases and take some of the pressure off of the two towns, but we are not there yet, and we are in it for the long haul."
The committee made the decision to try to get the Ayer and Shirley Boards of Selectmen and Finance Committees, as well as their state representatives, together at their next meeting on Feb. 27. They then plan to meet on March 5, hold a public hearing on the budget on March 12, and certify the budget on March 20.