NORTHFIELD — A bill intended to help the Pioneer Valley Regional School District through its financial issues has all but passed, now requiring only the signature of Gov. Charlie Baker.
The bill was enacted by the state House and Senate on Monday, and must be signed or vetoed by the governor within 10 days.
“I expect he will sign it,” said State Rep. Paul Mark, D-Peru. “I can’t imagine what his objections would be.”
The bill allows the district to borrow up to $2 million to be paid back over a period of up to 10 years, and to spend at a deficit through the 2018-2019 school year, if necessary. It also requires the district to hire a financial overseer who reports to the state department of education.
But, Pioneer’s financial situation is now understood to be far less dire than it seemed to be when the bill was written at the beginning of the summer. When the deficit was discovered in May, it was estimated to be as high as $2 million. Now, district Director of Finance Tanya Gaylord estimates the deficit to be $546,000.
And, the amount the district ultimately borrows could be significantly lower, Gaylord said. Included in the district’s total deficit is a deficit worth between $240,000 and $270,000 that accumulated over more than 10 years through the district’s school lunch program. At the four-member towns’ spring town meetings — two of which were held before the district’s full deficit was discovered in May — all four towns voted to pay back the “lunch deficit” themselves in three annual installments to total $270,000.
Whether the district must borrow for the full $546,000 deficit — or only for the portion remaining without the lunch deficit — will be determined by the overseer, who begins working with the district today (Oct. 31). Gaylord has pointed out, to the displeasure of town financial planners, that the state could well require the district to borrow for the full deficit, despite the town meeting decisions.
Allowing the towns to pay the lunch deficit per their town meeting votes would reduce the amount of the total loan, which would in turn reduce the interest on the loan and the amount of time it would take to pay it back. Gaylord said she will recommend honoring the town meeting votes.
“I’d like to see us borrow very minimally, if at all,” Gaylord said.
Either way, Gaylord expects the district to not need the full 10 years allowed by the legislation to pay back its loan. Likewise, the overseer may not be needed for the full 10 years. The legislation only requires him to be in place or for at least three years, and beyond that, for only as long as the district is borrowing.
“We’re in a much better position than we thought we were,” Gaylord said.
Contact Max Marcus at mmarcus@recorder.com or 413-772-0261 ex 261.