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Date: 4/24/2023
SOUTHAMPTON — Member towns of Hampshire Regional School District are getting a pleasant surprise this budget season: a refund. The district will make a distribution of Excess and Deficiency monies built up over a number of years.
The total amount refunded will be $617,734.
“This was a good surprise,” said Southampton Town Administrator Ed Gibson. “Actually, we received our notification right from the Department of Local Services. That’s what brought it to our attention.”
Jon Lumbra, liaison to the School Committee, explained to his fellow Selectboard members that Debra Waggoner, director of the Excess and Deficiency department of the Massachusetts Department of Revenue, certified an excess for the district of 9.39%, or $1,321,669. Under state law, districts may retain up to 5% of excess funds. The remainder, in this case 4.39%, must be returned to member towns.
Southampton’s share of the refunded Excess and Deficiency monies will be $350,387. Mention was made that Williamsburg, which saw a six figure increase in its school assessment for fiscal year 2024, will receive about $111,000 in returned monies. No amounts of Excess and Deficiency refunds were discussed for Westhampton or the New Hingham Regional Elementary School District, a coalition of Chesterfield and Goshen.
As of April 19, Douglas Finn, town administrator for Westhampton, had not been notified by the district about the excess monies coming back to the town. Nick Caccamo, town administrator for Williamsburg, was also surprised to learn of the impending school rebate. That may be because the district is still weighing its option to appeal the certification of its Excess and Deficiency balance.
Discussion at Southampton’s board meeting revealed that HRSD officials voiced some intention to create stabilization funds, places where the excess monies could be stashed, rather than returning such a large excess to the towns. That may not be an option, according to Lumbra. The district has a 30 day window for filing an appeal of its Excess and Deficiency certification.
“They had a verbal discussion with DOR, when an appeal was denied, an informal discussion…but to my knowledge, no request has actually been made,” Lumbra said. The district finalized its budget in early March. “We’re past the 30 days. We can’t wait, and I know that while some of them, who had all the best intentions of creating stabilization funds — and [were] hoping that we would all vote to move all this in there — the plans are not before us. We have to finalize our budget.”
HRSD Superintendent Diana Bonneville could not be reached for comment by press time.
Board member Maureen Groden saw the Excess and Deficiency rebate as income. Lumbra agreed. If the town actually accepted a check for the refund it would be deposited into free cash. The difficulty in following that path, which the board hoped to avoid, is that the money would be in the system as an income. The money could not be used in FY24 and would not be available for other uses until the following budget year.
Groden commented that district personnel mentioned a quarterly credit. Taking the Excess and
Deficiency refund as a credit against the fiscal year 2024 school assessment would satisfy Gibson. The town’s administrator saw that taking the credit against the FY24 assessment would be the simplest, most manageable strategy.
“I think it absolutely is the best option,” Gibson said. “Their first correspondence with us was that, well, we’ll give it to you in the fourth quarter. That could’ve been a little rough…[but] I know they’re considering that right now. I have not received a yes or no to that, but I think [taking a credit is] the fairest way.”
Taking a credit against the town’s FY24 school assessment also avoids the difficulty of recalibrating HRSD’s budget. The discussion clarified that taking a credit would not trigger a recalculation of the district budget, which would disrupt the budget process for the district and member towns. Rather, the amount of the town’s assessment will be reduced. Annual Town Meeting voters will vote on the town budget, with the reduced school assessment, leaving the school district budget unchallenged.
Board members were concerned the district still has the authority to circumvent how the town deals with the Excess and Deficiency refund. Members were also curious about the district’s plans for the money. The questions revealed the refund, while welcome, introduces questions into the budget process, prior to Annual Town Meeting, that town leaders do not have answers for.
“Has anything been put out with the numbers? From Hampshire Regional?” asked board member Francine Tishman. “As to the surplus and how it will be allocated to all the towns?”
“Let’s say four out of five towns decide they’re going to let them start stabilization funds, three buckets that they’re talking about,” Grodin said. “We’re not going to be required to do that, as the fifth town in the district?”
Southampton will receive 56.7% of the refunded E and D monies. Lumbra commented that the other towns should be informed of the board’s decision. Selectboard Chair Christine Fowles predicted that taking an immediate credit would also appeal to the other municipalities.
“I wouldn’t be surprised if towns followed our lead on this recommendation,” Fowles said. “I would be amazed if they didn’t.”