HEATH — As the Hawlemont-Heath regionalization process continues, the town of Heath has its eye on a looming hurdle: Other Post-Employment Benefits (OPEB).

Melissa Dunnet, business administrator for Mohawk Trail Regional School District, explained that “OPEB is retirement and future retirement costs that (the state) wants us to put aside” for staff members.

Heath’s financial obligation for OPEB is valued at around $1.2 million. This liability would be paid to the Mohawk Trail district in order for Heath to join the Hawlemont Regional School District for grades kindergarten through six. Heath would remain in the Mohawk Trail Regional School District for grades seven through 12.

“Right now, it’s a very slow, kind of ambiguous process,” Heath Town Clerk Hilma Sumner said of the regionalization process.

“One of the things the Selectboard has stated is that they’re really interested in obtaining clear information about” how the OPEB value was estimated, Sumner said. “The Selectboard would really like some documentation of where (this estimate comes) from.”

OPEB obligations have been the focal point of two October letters. An Oct. 15 letter, addressed to state Sen. Adam Hinds, D-Pittsfield, and state Rep. Paul Mark, D-Peru, read:

“The town of Heath respectfully seeks your support and assistance in our efforts to seek financial assistance from the commonwealth to address Heath’s OPEB” obligation, adding that OPEB “is a significant obstacle to Heath being able to join the Hawlemont Regional School District.”

An unsigned copy obtained by the Greenfield Recorder anticipated signatures by Selectboard members Brian DeVriese, Robyn Provost-Carlson and Gloria Fisher, along with Finance Committee Chair Ned Wolf and Budge Litchfield, Heath’s representative to the Hawlemont Regionalization Study Committee.

Sumner said that the town has not heard a response from either Hinds or Mark. When reached for comment, Hinds’ office released the following statement:

“This $1.2 million obligation is another example of the significant challenges disproportionally confronting our small towns. This is a significant burden for a small town like Heath. I look forward to working with Representative Mark to begin a dialogue with the town of Heath and my legislative colleagues to identify a path forward.”

Mark’s office did not return a request for comment.

Previously, an Oct. 8 letter sent by Wolf and Litchfield to the Selectboard outlined how the OPEB liability “presents a significant obstacle to Heath being able to” leave Mohawk Trail and join Hawlemont.

“Heath is confronted with a ‘perfect storm’ involving a $1.2 million OPEB obligation in the same year that our $1.45 million debt payments for broadband begin to impact our tax rate,” the letter reads, adding that the town is unlikely to receive a tax levy.

Due to the conflation of OPEB and broadband payments, “the Heath Finance Committee estimates that the (fiscal year 2021) tax rate could be as high as $25.08” per $1,000 valuation, the letter reads.

Wolf and Litchfield’s letter also outlined four potential scenarios for Heath to pay its OPEB liability to the Mohawk Trail district.

Heath could pay its OPEB obligation using the projected savings of being a member of the Hawlemont district. The savings, based on the number of enrolled students from Heath, would vary annually. The letter states that could be $89,000 per year or less, and it would take an estimated 14 to 20 years to pay off all OPEB obligations, without needing a bond.

A second option is a 20-year repayment plan where Heath pays an increased assessment to Mohawk Trail for services for grades seven through 12, which will cover the elementary-related OPEB.

“Heath would budget for the school assessment costs plus a defined sum toward OPEB, a total of which should be less than or equal to the current amount we budget,” the letter reads. This second option would require approval from both the Mohawk Trail Regional School District School Committee and the Heath Selectboard.

Alternatively, Heath could obtain a bond to cover the $1.2 million OPEB obligation and leave the Mohawk Trail district, the letter reads, adding that there’s “real uncertainty for Heath’s eligibility for another bond (and) Heath tax rate projections … would be over $26” per $1,000 valuation if a bond were obtained.

Lastly, there is the option of “a blended scenario, where over a five to 10-year period, Heath pays $60,000 annually from (the) majority of the (projected) cost savings, and at the end of 10 years, (Heath) obtains a loan for the (OPEB) balance due,” the letter reads. After 10 years, Heath’s financial situation may allow it to obtain a bond.

Litchfield and Wolf recommended the second and fourth options, and also strongly suggested that Heath seek financial support from the state.

“We recognize the financial impacts of Heath students attending Hawlemont go far beyond Heath’s borders,” the letter reads, “and (we) are most hopeful that our legislators will support this request.”

Reach Maureen O’Reilly at moreilly@recorder.com or at 772-0261, ext. 280.