Manchester Essex School Committee votes to borrow up to $95.3 million for the new Essex Elementary School

The Manchester Essex Regional School Committee voted Oct. 20 to authorize the district to borrow up to $95.3 million to build a new Essex Elementary School. Every member voted yes by roll call, from the meeting video. The vote sends the question to the Nov. 16 town meetings in Manchester-by-the-Sea and Essex and the Dec. 10 ballot votes.

What happened

• The committee authorized borrowing for the full project budget, with language that any state grant money and any savings from refinancing go first to lower what taxpayers pay, from the meeting video.
• Manchester Town Administrator Tony Barletta said his Select Board wants a cap on what Manchester would pay and asked the committee to come back to the two towns before building if the state's share comes in well below the estimate.
• The district's finance director said the state's expected reimbursement rate is 36.84 percent of eligible costs, that the rate cannot fall below a 31 percent floor, and that the state board decides Dec. 9, one day before the ballot vote.
• The district's auditor reported a clean opinion for the most recent audited year, with $1.3 million in unassigned fund balance and a retiree health care trust that is 22.4 percent funded.
• The committee adopted its background check policies on a second read and heard a first report from Middle School Principal Matt Roy.

The borrowing vote

Finance Director Michelle Cresta walked through the numbers before the vote. The total project budget is $95.3 million, the figure set by the Essex School Building Committee in its schematic design vote (read about that Oct. 13 vote). About $57 million of that is eligible for the state grant from the Massachusetts School Building Authority (MSBA). At 36.84 percent, the grant would be about $20.9 million, leaving a local share of about $74.4 million to split between the towns under the regional agreement. All of the figures are estimates until the state sets the rate and the project is built.

Cresta said the district locked in a 31 percent base rate when it entered the state program. The design earned three more points for energy efficiency and one for indoor air quality, and the district's maintenance plan earned 1.84 of a possible two points. The state pays its share as the project goes, bill by bill, and holds back the final 5 percent until it audits the finished building. The district is still waiting on that last payment for the Memorial School project.

A second roll call vote, which Cresta called a formality, sends the authorization to the two towns. The full text of the motion will appear in the minutes.

Manchester asks for a ceiling

Barletta told the committee that Manchester's Finance Committee had voted to recommend the article and the Select Board had put it on the warrant the night before. (Read how the Select Board set the warrant but held back on the school article.) At that meeting, Vice Chair Catherine Bilotta said she cannot support the article without a firm dollar limit for Manchester. Barletta said the board wanted a not to exceed amount tied to Manchester's share. Because the MSBA, bond counsel and town counsel had already reviewed the article language, changing it was not possible. He asked instead whether a cap could go in the motion at town meeting, or whether the committee would commit to going back to the two select boards and finance committees before moving forward if the reimbursement dropped by a large amount.

Cresta said the article is not an apportionment vote. The split between the towns is set each time the district borrows and is voted by the towns each year in their capital budgets over the life of the debt. Superintendent Pam Beaudoin said the rate cannot go below 31 percent. A member asked the project team to work out what the local share would be at that floor.

Three Manchester Select Board members attended. One said the concern is not with the building committee's work but with money that has seemed to move around in recent years. Another said the project differs from the Memorial School in two ways: the towns are voting before the state has set its share, and Manchester is being asked to pay the larger part of a school in Essex. For his Cricket article on the warrant, Barletta said he used $95.3 million as the total, $74.3 million after reimbursement, and an estimated $49.5 million for Manchester and $24.8 million for Essex.

Committee members and the superintendent answered that the district has never split costs evenly. Essex paid its share under the same formula for two schools in Manchester and for the fields, and the Essex building will house programs that serve students from both towns. Beaudoin said there is no way to set a local ceiling under the regional agreement and that the towns and the district will keep meeting as the borrowing plan takes shape.

What the committee will do next

The committee agreed to send a letter to the local newspapers on why the project benefits the whole district. Theresa Whitman, the committee's representative on the building committee, will draft it for the following week. The cost ceiling question goes to the building committee's next meeting, where the project manager can answer it. Manchester's Select Board meets twice more before town meeting.

Whitman reported that the building committee held community meetings in both towns and submitted its schematic design to the state on Oct. 14. Its communications subcommittee plans to post one frequently asked question twice a week on the two towns' community Facebook pages, and the final community meeting was set for Nov. 4. (Read what the building committee decided Oct. 27.) District employees cannot advocate for the vote, and members may do so only as individuals without district resources.

A clean audit

Frank Seretti of CBIZ, the district's auditor, said the audit found no misstatements, no control weaknesses and no disagreements with management, and the district received an unmodified opinion, the best available. A new accounting standard for sick and vacation time raised that liability by about $600,000 on paper; Cresta said it does not change the budget.

The general fund ended the audited year with $3.8 million, including $1.6 million in the capital stabilization fund, $600,000 set aside to balance the following year's budget and $1.3 million unassigned. The state certified the district's excess and deficiency fund at $1.2 million, about $628,000 under the 5 percent limit. Revenues came in $210,000 over budget and spending $94,000 under. The district paid down $2.5 million of debt and had $37 million in principal outstanding.

The retiree health care liability rose by $520,000 to $24.6 million. The trust for it holds $7.1 million and is 22.4 percent funded, up from about 20 percent, which Seretti said is among the highest of the regional districts he audits. (See how this year's $33.7 million budget fits together.)

Middle school and other reports

Roy, in his first year as principal, said he is assessing the school's climate, instruction and family engagement. A parent survey asked for clear and early communication on big decisions. He wants the middle school to have its own identity, a sixth through eighth grade curriculum that does not depend on any one teacher, and more student talk in math classes.

The student representative reported that the high school term ends Nov. 6, not Oct. 30 as some older copies of the calendar say. Beaudoin said the late bus returns Nov. 2, Monday through Thursday except on early release Wednesdays, leaving from the middle high school, and the district will track ridership. A site visit team from the New England Association of Schools and Colleges was at the school that week.

What was decided

• Warrants: approved by roll call, all yes, from the meeting video.
• Minutes of Oct. 6: approved by roll call, all yes, from the meeting video.
• Authorize the district to borrow up to $95.3 million for the Essex Elementary School project, with grant money and refinancing savings to reduce the taxpayer cost: approved by roll call, every member voting yes, from the meeting video.
• Send the borrowing authorization to the two towns: approved by roll call, all yes, from the meeting video.
• Background check policies, second read: adopted, voice vote, all in favor, from the meeting video.

What happens next

• Nov. 16: special town meetings in Manchester-by-the-Sea and Essex vote on the borrowing article.
• Dec. 9: the MSBA board is expected to set the district's reimbursement rate.
• Dec. 10: ballot votes in both towns.
• The School Committee's next regular meeting was Nov. 3; it meets again Nov. 17 at 6 p.m.

Where to find the records

• School Committee agenda, Oct. 20
• Meeting video, on the public access channel
• School Committee agendas page, where minutes are posted when approved

Earlier coverage: Tuesday on Cape Ann: the Oct. 20 agenda (Oct. 19), the preview; community meetings on the school plan (Oct. 26).

How we did this: Cape Ann Current watched the meeting online and checked names against the agenda and the committee's member directory. These are our meeting notes, not the committee's minutes.