That $1.5 Million Town Owed Schools in Reimbursements? Nevermind

by | Dec 17, 2019

By Elizabeth F. McNamara 

In August, school finance consultant Mike D’Amico told the School Committee that in tracking state reimbursements for capital expenditures, he’d found the town had held onto $1.5 million that should have been returned to school coffers.

He was referring to the 35 percent reimbursement from the state Dept. of Education (RIDE) for money the district had spent out of its operating budget since 2010 on capital expenses. RIDE also reimburses for bond money spent on capital projects (like the construction of Cole Middle School), but that money is bonded by the town and so is returned to the town and stays with the town.  (Find the original story here.)

“The general idea is that whoever has to spend the money gets the reimbursement,” said Committee Chairwoman Carolyn Mark at the time. “The schools have not been getting their share of the reimbursements for capital projects.”

That idea, however, was met with some confusion and dismay from both incoming Town Manager Andrew Nota (who started in September) and members of the Town Council. In particular, it rankled because the council had given the school district the amount it asked for in the fiscal year 2020 budget as well as giving the strapped district an extra $263,000 for FY2019 in February. 

When Nota took over as town manager, he said he was discussing the issue with school officials and would be talking to RIDE. On Monday he said an agreement had been reached.

At a joint meeting of the Town Council and the School Committee at Swift Community Center Monday night, Nota said town and school officials (plus their lawyers) met with RIDE officials to discuss reimbursement policies. The bottom line: the schools would not be getting that $1.5 million. As Nota told it, they already had received that money, in the town’s yearly appropriation to the schools. If the school district had gotten the reimbursement money instead of the town each year, that could have offset the amount of money requested in their annual budget, lowering the district’s overall budget request. In essence, the town covered the school district’s capital budget needs, in part by using that reimbursement money.

Going forward, Nota explained, any operating budget reimbursement money will be put into a School Improvement Fund administered by the town for school capital projects, in compliance with RIDE’s recommended format.

On Tuesday, Chairwoman Mark said she was pleased with how it all played out but she acknowledged D’Amico’s findings were not handled as well as they could have been. Mark was aware of D’Amico’s findings before he spoke publicly at the Aug. 13 meeting, but the full School Committee was not. It was not until after the finding went public that the schools’ lawyer Matt Oliverio checked with RIDE to see how the money should be distributed. Mark said she couldn’t recall when Oliverio had been told of D’Amico’s finding.

“The truth is, if you look at the statute, the money does come from the town,” said Mark Tuesday. “The best practice is that it’s put into a school improvement fund.” And that’s the plan going forward, according to Town Manager Nota. 

“Based on where we landed at the meeting last night, I think everybody can feel good about where we are,” Mark added. “We’re all committed to following best practices.”

In the end, said Mark, D’Amico’s finding helped the town and school district put a better system in place going forward. 

“If [D’Amico] hadn’t brought it to our attention, we wouldn’t have gotten to what I think is a much better place.”

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