State OKs school ... at $500K more
Clark's shorter, less costly plan nixed
March 10, 2010
SOUTHBRIDGE — The state threw the school project a gut-punch Wednesday when the Municipal Finance Oversight Board rejected Town Manager Chris Clark's proposed "wrap-around" financing plan. Instead, it unanimously voted to give Southbridge a 30-year "level debt" plan under which the district would end up paying about $500,000 more than if it had used Clark's concept.
To Clark, it's a mixed blessing. The school project is still moving forward, but not the way he hoped.
"We asked for something that'd give us more flexibility, but [the board] didn't see it that way," Clark said. "It creates six years of fiscal stress [instead of three], but after that, the pay-down plan is actually better for the town."
He said he has a way to fund the extra money needed in the first few years "all mapped out," but wasn't ready to release it because the Town Council hasn't yet seen it.
"The feeling of the entire board was that there was a bit of a balloon in the town's proposal," said Department of Revenue spokesman Robert Bliss, noting state financing practices favoring level debts aim "to keep cities and town from getting themselves in financial ditches."
The DOR is one of the agencies represented on the board, which replaced the Emergency Finance Board in 2003. DOR's director of accounts meets with the state treasurer, state auditor and attorney general to review various funding requests, one of them specifically being "debts incurred by regional school districts for land acquisition, school building, playground, school roadway and parking lot construction or improvement," according to the online Citizen's Guide to State Services.
"This board has not approved such a debt structure in its existence," Bliss said. "They see it as a dramatic change from past practice … and felt that if they gave it Southbridge, they'd have to give it to other towns."
See Friday's Southbridge Evening News for complete coverage of community news.