SHIRLEY -- With unanimous approval save one abstention, the Finance Committee voted Monday night to recommend use of the town stabilization fund to cover any change in the Shirley school budget assessment up to $55,000.
That recommendation, however, will come with the understanding that the town must move forward to solve its bigger overall budget problem with a five-year financial plan and general override.
Said FinCom Vice Chairman Mike Swanton, "It would be our intent that there is subsequent work to do and that includes an open, honest conversation, and we need the selectmen and finance team commitment to this open conversation about how to solve this structural deficit we have every single year."
Closing the Gap
Shirley's Special Town Meeting on the Ayer Shirley Regional School District (ASRSD) budget is scheduled for Wednesday, June 26, just two days after Ayer's. The original school budget assessments proposed by the school district were rejected at the towns' respective Annual Town Meetings last month, at the request of the school committee.
The committee's strategy was to wait until the House and Senate budgets came out, with tweaks in the new Required Local Contribution (RLC) formula that had led to a large increase in Shirley's assessment.
At a meeting between Ayer and Shirley town finance, finance committee, and school district representatives earlier in the day, Swanton said that ASRSD Superintendent Carl Mock had presented the new school budget estimates based on the latest Senate version of the towns' assessments, with a $150,118 increase in the Ayer assessment, and a $144,528 reduction in Shirley's.
These latest estimates would bring Shirley's increased assessment over last year's down from the originally proposed $555,590 to $405,472. Ayer's increase would go from $239,016 to $389,134.
Mock stressed at the FinCom meeting that based on those figures, which are still only estimates, Shirley's assessment increase was now down to $56,000 above that which Shirley had already voted when it approved a $350,000 increase over the FY13 Shirley share of the school budget at town meeting.
During the committee's discussion about its recommendation concerning the school assessment at the STM, Swanton said that one of his concerns was that the town had spent all of its free cash to balance the budget.
"I am also concerned that if we take money out of the stabilization fund there is no guarantee we will get another $300,000-plus in stabilization for next year," he said.
"We still haven't solved the problem between the state target for RLC and what we are actually paying, and we still don't know if the state will come back again next year with the same kind of surprise they came in with this year. And we still have another two years to make up the amount of (Net School Spending over the) RLC with Ayer.
"Taking monies out of stabilization without having solved some of these underlying problems sets us up for potential problems next year or the year after that," he said.
"If we did take money out of the stabilization fund, all the parties need to know that we have not solved the underlying financial issues and have sort of kicked the can down the road as a way to do that."
"There was a discussion earlier that the school committee may bring down the amount from $55,000 to $25,000 as a way to make it more real to the voters," said FinCom Chairman Frank Kolarik. "The point being that the schools' position is that the certified budget is what they see as a minimum budget."
"But that is not solving the ongoing problem," said FinCom member Joe McNiff. "We go through the same thing every year. Like the DOR (Dept. of Revenue) said, in order for the town to remain viable, you need a large override to keep the town on track."
The committee's newest member, Stewart Cady, referenced the 2009 DOR report on the town, which Kolarik referenced at the last ATM.
"Exactly what you said at town meeting was that this increases every year, and you have only 2-1/2 percent you can kick into it. It's not the school district that's causing this, it's that our tax base has not increased well enough, fast enough as it ought to, and the town has to say 'I need $500 to buy sand for the dump truck, or I need $3,000 to pay for an election.'"
"It's not like we need just a few line items to fund this; the whole town needs an extra three percent," he later added.
"Even if the town did not have a reduction in state aid, the needs are going up. Somewhere there needs to be a marketing campaign to be able to run the town, period. We need to invest as citizens of the town."
Mock said that he had complimented Kolarik a couple of times on his narrative at the most recent town meeting, setting the stage.
"The first time I talked with Frank a couple of years ago we talked about an override," he said, "but the willingness of people to discuss a general override in town?the sense that we are in this together--is different than it was in town a couple of years ago.
"We have been spending several years cutting," added FinCom member Roy Ellis. "This might be a good point to say that this is the new normal and we have to do something about this budget now."
"What you are saying is absolutely right," remarked school committee member Joyce Reischutz. "It's not the FinCom or the school committee saying this, it is all of the departments. And everyone in the town tends to say that we need this. It's not just an override, it's raising the base of the town, so that when we get the 2-1/2, it's enough to function."
"I recommend that the money come out of stabilization with the understanding that the town move forward to solve the bigger overall problem with a general override," Kolarik stated.
A Potential Temporary Compromise
Earlier in the budget process, Swanton later explained, the school committee had suggested that it might be able to cut its proposed budget by about $150,000. Since then, however, due to the change in the state's RLC formula and several other factors, any cuts in the school district budget would be harmful to the district.
In addressing the issue at the FinCom meeting, Mock pointed out that, as of July 1, 2012, the school district's free cash and excess and deficiency funds amounted to $189,409, or less than one percent of the General Fund Budget of the district. One additional student requiring a residential placement could easily wipe out those funds, he said. The school district does not have a stabilization fund.
By comparison, the towns of Ayer and Shirley free cash, E&D, and stabilization funds as of July 1, 2012 made up 11.9 and 7 percent of their respective GF Budgets.
Swanton indicated that at the earlier meeting, there was a suggestion that instead of the $150,000 cut, the school district cut its budget by half that amount. The remaining $75,000 increase in Ayer's assessment would be split between Ayer and Shirley, with Ayer taking on 68 percent, and Shirley, 32 percent.
All parties are still considering that option, Swanton said.
Representatives from the Shirley FinCom plan to attend next Monday's Shirley selectmen's meeting to discuss the issue. The school committee's next meeting is on Wednesday, June 19, at which time it may identify any cuts that are "doable," and agree on a lower budget estimate, according to Mock.
The Shirley FinCom will meet again the evening of June 26, just prior to the Special Town Meeting.
At the STM, the school committee will make an amendment to the school assessment on the warrant based upon the actual numbers from the state, which, to date, are still unknown.