AYER/SHIRLEY -- At its March 20 meeting, the Ayer Shirley Regional School Committee voted unanimously to certify its fiscal 2014 budget dated Jan. 23.
The total ASRSD budget, which can later be amended downward, but not upward, is $22,997,118. The total operating assessment and excluded debt comes to $14,521,119. Ayer's assessment is $9,015,529; Shirley's is $5,505,590.
Relevant budget factors
ASRSD Finance Director Evan Katz said that for fiscal 2013, unanticipated special-education and facilities costs will deplete most of the district's reserve funding.
Current reserves and balances, he said, total about $750,000. The total for projected unfunded costs are estimated to be nearly $600,000 of that: $370,000 for special-education tuition, $170,000 for special-education transportation, and $50,000 for HVAC systems and new security measures, which include new locks, doors and keys.
"Into next year we think that we've better funded items that have given us trouble this year. However, next year we will have very limited resources," Katz said.
Factors that may affect the district's ability to adopt a balanced budget in fiscal 2014 include the uncertainty of Chapter 70 funds, federal budget cuts, and a slight downward trend in school choice tuition.
"We probably have $100,000 plus or minus to work with," said Katz. "With facilities uncertainties, and the volatility of special education and class sizes, this is insufficient, in my opinion, going into next year."
To help offset the use of fiscal 2013 reserves, the district has applied with the Department of Elementary and Secondary Education for the fiscal 2013 Foundation Reserve, and will be submitting a Circuit Breaker Extraordinary Relief application.
Shirley Finance Committee Vice Chairman Mike Swanton presented his "Plan B" budget scenario to the committee.
His plan is to hold the amount of the required local contribution (RLC), thereby reducing the district's budget by $335,000, and reducing Shirley's share by $208,000. That, he said, would bring the fiscal 2014 Shirley assessment increase of $555,591 down to $348,000.
That, in turn, would change the percentage of net school spending (NSS) above the RLC for a year, and add a year onto the end of Shirley's five-year plan to increase its NSS>RLC until it reaches a par with Ayer on a per student basis.
The plan, said Swanton, would put both Ayer and Shirley at the DESE target, and "we would expect there to be no more disparities due to the RLC line. It also (limits) Shirley's increase on the assessment to $347,928. We would subtract out the RLC and have an amount (NSS) above RLC, which is $491,000."
Swanton said that if Shirley could not come to an agreement with Ayer, and the town of Ayer insists on five years to make up the NSS>RLC, 55/45 split with Shirley, then that would result in a $1 million decrease in the school district budget.
The details of Plan B
So we move to plan b," he said. "For Shirley we move the money from the amount above RLC to the RLC line, so the RLC matches the DESE target, as does Ayer's. That would limit growth in Shirley's assessment to $348,000, but hold Ayer's amount above RLC to the amount in the fiscal 2014 budget.
"So only the $200,000 dropped down, so the school budget would have to decrease by $207,000, which creates a disparity in the percentages for NSS>RLC," he explained.
The plan would necessitate that the regional agreement be rewritten to take two years longer to rationalize the amount above RLC that Shirley was due to have caught up on in fiscal 17.
The district still has to take $207,000 out of the budget, but that's better than $348,000. And Shirley will still have to reconcile the $348,000. But I think this provides a rational solution, probably the least painful way to solve the problem, with a fix by fiscal 2019," Swanton said.
"I view this as sort of like a marriage, and sometimes you have to give more than you want to give, but divorce is not a pleasant situation.
"With regionalization we got a school system that neither town could have gotten alone, and although this is a very rocky patch, I think that we will come out the other end happy with what we accomplished."
If the two towns did decide to move forward with the proposal, their citizens would need to vote at their respective town meetings to insert language into the regional agreement that would say that for the purposes of the agreement, the RLC would be equal to the greater of the RLC determined by the DESE, or the DESE target RLC less any RLC paid to other districts, including but not limited to the Nashoba Valley Regional Technical School.
Swanton recommended getting the Ayer and Shirley boards of selectmen and finance committees together as soon as possible to "hash through it."
By us taking the $200,000 out of above RLC and putting it in the RLC, you increase that gap on the amount above RLC," said Swanton.
The $200,000, he said, was an amount he came up with in forecasting the amount that the state would increase the RLC annually, plus other factors, including the amount the state determines goes to the vocational high school.
"Unless we can stem choice-out -- how to keep the region sustained over the year -- it is the chicken and egg until you prove that the region is viable and provides a better educational opportunity than the choice-out option. Once we can demonstrate that, why would I send a child out of my district?" said Swanton.
The committee thanked Swanton for his time and attention to the problem, and then discussed whether or not public forums on the language of the amended regional agreement would have to come before the signing of the warrants for the two town meetings.
Member Dan Gleason suggested that if there was not time to include an amendment to the town warrants before they were signed by the selectmen, there was another option. If Shirley voters voted down the assessment at its Town Meeting, he said, that would give the committee more time to resolve the issue of the increased RLC, which is largely the result of the state hastening its goal to bring municipalities below the state RLC target up to speed.
Health insurance costs
Gleason also brought up the question of town employee health insurance. A new state law passed in 2011 makes it easier for towns to bargain for health insurance plans with unions, and allows towns to move their employees to the less costly health insurance plans used by the state through the Group Insurance Commission.
The municipalities may have stones yet unturned," Gleason suggested. "Ayer did it last year and moved $400,000. Two of the three parties have done that, and in a meeting with the (Shirley) selectmen there did not seem to be any plan of action, but we know there is a subcommittee to deal with it.
Two of the three parties have gone and done that, and I am wondering why the third hasn't looked at it.
Swanton replied that he would bring it up in a Shirley meeting.
"So you can't eat the elephant all in one chunk, but you can take little nibbles at it until the problem is resolved," he counseled.
Members of the committee said that they hoped to arrange a joint board meeting between the Ayer and Shirley selectmen and finance committees for early April.