NORTHFIELD — The Pioneer Valley Regional School District is set to borrow $450,000 to cover its deficit, but officials from the four member towns hope that there may still be time to reduce that amount by making a one-time $90,000 payment to the district.
But, considering the amount of time it would take for the towns to make that payment, and with school adminsitrators under pressure to finalize their borrowing plan soon enough to close one or two of the smaller elementary schools in the district this spring, the town officials’ plan is unlikely to work, Pioneer Finance Director Tanya Gaylord said.
“It’s going to be an uphill battle,” said Bernardston Finance Committee Chairwoman Jane Dutcher, who proposed the plan at a joint meeting this week with the selectboards and finance committees of the school district’s four member towns.
Last spring, the towns agreed to pay back a deficit from the school district’s lunch program — which was estimated to be worth $270,000 — in three yearly payments of $90,000, split among the four towns in proportion to each town’s financial share of the district.
That plan was made before the full deficit was discovered — about $540,000, including the $270,000 “lunch deficit.” Once the full extent of the district’s financial problem was known, the state got involved and made special legislation to allow the district to borrow money to cover its deficit.
Originally, the state’s plan was to override the towns’ three-year payment plan and simply require the full deficit, including the $270,000 “lunch deficit,” be covered through borrowing. The rationale was that the state could not legally allow the district to carry any deficit, even though there was a Town Meeting-approved plan to cover the $270,000.
School administrators, under pressure from town officials, negotiated for the state to allow the towns to at least pay the first $90,000 this year, as they had planned, bringing the total amount that would have to be borrowed to the present $450,000. After that, the expectation was that the rest of the towns’ three-year payment plan would be superseded by the state’s plan.
What Dutcher is now proposing is the towns be allowed make the second $90,000 payment, which would bring the total amount to be borrowed down to about $360,000. In the long term, it would save the towns about $8,000 in interest on the borrowed money, Dutcher said.
In the original three-year plan, that second $90,000 payment would have been made next year. But now, the school district has to finalize its borrowing plan with the state by Feb. 20. So if the $90,000 is to have any impact on the amount that has to be borrowed, it would have to be sent to the district within the next month.
Gaylord, upon hearing about the new plan, doubted there would be enough time to make it happen. The towns’ payments, she said, would have to be approved at town meetings, and she guessed that there wouldn’t be enough time between now and Feb. 20 — a firm deadline — for the towns to call special town meetings.
In their efforts to make the district financially sustainable, district administrators and the School Committee are weighing options to close Leyden’s Pearl Rhodes Elementary School or Warwick Community School. To meet the deadlines for the coming fiscal year’s financial planning, any school closure decisions this year have to be made by the end of March. And legally, the district can only close schools once it has a borrowing note in hand. To get that soon enough, the plan has to be approved by the state by the end of February.
That would give the member towns three weeks to negotiate something with the state and then go through whatever process is necessary to get the $90,000 to the schools.
Contact Max Marcus at mmarcus@recorder.com or 413-772-0261 ex 261.