by Linda Brenckle
The history resumes in October of 2006 when the RSC received its first MSBA lump-sum payment of $25.4 million (75% of its calculated grant). In September and October of that year, Northborough requested clarification of how town RSC assessments would be impacted using both the 70B and RA formulas and whether SBA or MSBA rules apply to the $10 million permanent borrowing done in 2002. The Appropriations Committee asked then District Superintendent Ms. Rosemary Joseph to delay a decision regarding application of the SBA reimbursement until the clarification was received and resolved.
In January 2007, legal opinions about handling the reimbursement issue were sought from the Southborough Town Counsel, Mr. Aldo Cipriano, RSC Counsel, Ms. Naomi Stronberg, and RSC bond counsel Mr. Rick Manley, as well as the Massachusetts Department of Revenue. Then, in February of 2007 Northborough requested the opinion of their Town Counsel on the matter. The State Department of Revenue did not respond. Opinions from all counsels varied and legal evidence was found for allocation of funds using either 70B or the RA. At that same time Northborough provided a calculation to indicate that the difference in allocating the grant to towns using 70B provisions as compared to the RA was a $1.5 million credit due to Northborough, less than Mr. Jackson had previously anticipated.
The RSC applied the $25.4 million in aid to reduce the total debt, effectively reducing principal and eliminating years of higher interest payments for the RSC, and thus, for both towns. Using this approach, applying the reimbursement directly to the total debt, while beneficial to both towns, was also the equivalent of applying the RA formula to all project monies. The question of how to handle the MSBA grant had not been resolved. The Regional School Committee, according to legal counsel, could not vote to decide.
In August of 2007, Southborough notified the RSC of their position on the matter of reimbursement: that there had been no intervening legal action to change the RA. The RSC established the Regional Reimbursement Working Group comprised of representatives from both towns to recommend how grant apportionment should be handled. The process ended without resolution and in December of 2007, Northborough requested that the RSC file a declaratory judgment action in court whereby the RSC would be the plaintiff naming the towns of Northborough and Southborough as the defendants.
The RSC received the $10.7 million balance of the MSBA reimbursement grant in May of 2008. This money was again allocated to pay down total debt.
In response to Northborough’s request for a declaratory judgment, the RSC requested additional information from legal counsel. In June 2008, Dr. Gobron received an opinion from Thomas Harrington of Miyares and Harrington, attorneys-at-law, indicating that the declaratory judgment as requested by Northborough, would resolve the reimbursement issue without requiring the RSC to take a position. The purpose of a declaratory judgment is to resolve disputes over the official interpretation of a statute. Further he noted that either of the towns or the RSC could serve as the plaintiff in the declaratory judgment. In August of that year Northborough reiterated its request for a declaratory judgment and additionally asked that all involved parties abide by the ruling.
In January of 2009, with input from UniBank Fiscal Advisory Services, the RSC suggested that the two towns use a Split-the-Difference compromise regarding the reimbursement funds. After refinement of the numbers, Unibank calculated the difference using 70B and the RA formulas to be $1.37 million. Because lump-sum payments had already been used to reduce total debt, the adjustment would have to be made in assessments to the two towns. The $1.37 million difference would be divided equally between the towns, reducing the assessment on Northborough and increasing it on Southborough by $686,326 over a 17-year period beginning in fiscal 2011 and ending in 2027. The annual cost would be a $40,372 reduction to Northborough and an equivalent increase to Southborough. Because it is related to debt service it would be exempt from Proposition 2-1/2 limits.
Both Northborough and Southborough requested approval for the Split-the-Difference compromise on their town warrants in 2009. Northborough residents approved the compromise but Southborough’s did not. In November of that year, the RSC voted to request that both towns place the compromise on their warrants again in 2010.
This brings the history to current day. In February, the RSC announced that Southborough had decided not to place the compromise on its 2010 Town Warrant because the article was overwhelmingly rejected in 2009. In March, Mr. Coderre of Northborough again officially requested that the RSC initiate a declaratory judgment as outlined in the Northborough’s original request in December of 2007. That request was declined by the RSC. The issue will be taken up at Town Meeting this year at the end of April.
Recent Comments