Withdrawal Committee Meeting Minutes – 5/29/19

Present: Albert St.Pierre; Scott Bushway; Lucien Beam; Alan Dustin; Steven Dalessio; Joseph Levesque; William Stahl; Sarah Vogel

Mr. St.Pierre called the meeting to order at 5:38 PM

Motion to approve minutes of May 22, 2019 as presented made by Mr. Stahl, second Mr. Dustin. All voted in the affirmative.

Introduction of Patrick Adrian, reporter for the Eagle Times, Town of Charlestown attorney, Jim O’Shaugnessy from the firm of Drummond/Woodsum, and the Charlestown School Study committee members – Trina Dearborn, Scott Wade, Gabe St.Pierre, Terry Spilsbury, John Murray.

HISTORY. Mr. St.Pierre presented a brief history of the actions taken by the citizens of Charlestown regarding the formula and funding of the Fall Mountain School District.

● 1986 Charlestown called for a withdrawal study to be done, through Nathan and Rich. It was determined that Charlestown would be able to leave the five town cooperative at no additional cost. The four remaining towns voted down the proposal.

● 1987-88, an article was placed on the warrant to change the formula. Voted down at town meeting.

● 1998 TRACE study, resulted in Charlestown found to be overpaying.

● 2002 District wide vote to change formula.

● 2015 Charlestown motion to change to 50/50 formula to fund district. Districtwide, the resulting vote was 913 yes, 1970 no. 68% to 31%. However, Charlestown voted 805 yes, 294 no.

● 2019 Charlestown article to enact RSA 195:25. The vote was 71% yes in Charlestown.

WHERE WE ARE. Ms. Dearborn presented the findings of the Charlestown School Research Committee.

● Charlestown has the HIGHEST local taxes in the state.

● Property values are continuing to drop, while taxes increase.

● There is no grievance process for problems/concerns with funding a complex, multilayer charging formula.

● There is no district Budget Committee to be a check and balance to the School Board.

● Charlestown will pay 45.03% of the 2019-20 school year budget by ADM.

● 63.16% of taxes in Charlestown go directly to the school district.

WHERE WE WANT TO BE. Scott Wade presented the conclusion of the Charlestown School Study Committee. The people of Charlestown want:

● A simplified charging formula for costs in Charlestown.

● 5 member school board in Charlestown, for Charlestown.

● Charlestown voters to control costs for the education of Charlestown students.

● Continue to fund our own Pre-K to 8th Grade.

● Tuition our high school students to Fall Mountain.

Gabriel St.Pierre presented on the Inequities and Anomalies of the SAU 60 Budget.

● ADM (Average Daily Membership) is not a benchmark. The students at FMRHS are not tracked by town. There is a 36 child discrepancy in Charlestown between the published number in the 2019 Annual Report and the number of students that Charlestown is billed for at the high school level.

● There are fluctuations from 8 to 9th grade. In the 2016-17, Charlestown gained 2 students going from 8th grade to 9th grade. Walpole lost 6.6 students. Most costs are distributed by ADM, and if we can’t track our students, ADM is unreliable.

● Line items can be followed through the budget, and year after year, many do not get used. An example is Contract Services Student Testing. This budget item is distributed via Method 6, and is is budgeted for $25,000. Method 6 is based on ADM, of which Charlestown will pay approximately 45%. The actual amount used in 2017 is 0.00. In 2018, $25,000 was again budgeted. The reported actual amount spent for this line item in 2018, $0.00. $25,000 was placed in that line of the 2019 budget. The amount, unused, is simply put into surplus. The surplus amounts are then distributed back to the towns in a proportion that is unequal to the percentages paid in.

○ Scott Wade asked Mr. G. St.Pierre about where this $100,000 in unspent funds goes? Mr. G. St.Pierre has a graph showing how the unspent funds are redistributed to the towns. Charlestown pays about 48% of the budget, but only received 17.92% back when unspent funds are redistributed. 50% of unspent funds are attributed to the High School Capital Reserve Fund. The remaining 50% is redistributed to the towns as a percentage of the budget that the individual towns contribute, after the amount of State Aid is factored in.

● The SAU 60 actual budget as reported in the School District annual reports changes. For example, regarding fiscal year 2016, the reported actual budget in the 2017 annual report was $28,954,000. In 2018, the number reported for the 2016 actual was $29,354,570. In the 2019 Annual Report, the actual amount spent reported for 2016 was up to $29,457,554 .

● In 2010, the district entered into a 6 year bond. Between Fy 16 and FY 17, the bond was paid off. The $627,712 was no longer owed. What happened was that the 2018 budget increased by $993,966l, for a total of $31,205,365.00. When the bond payments ended, the budget absorbed that cost plus over $300,000. Mr. Dalessio clarified that even though the bond had ended, the $627,712 was rolled into the budget. Over the last three years, this amounts to $2,375,525 that the budget absorbed.

Terry Spilsbury presented a summary of the present atmosphere in Charlestown: (This is Mr. Spilsbury’s words, with his permission.)

“Good afternoon, folks. I’m often accused of speaking in a very soft voice, so I’m going to try to speak much more loudly than comes naturally. My name is Terry Spilsbury, I live in Charlestown. I’m an elected member of the town Finance Committee, and after the March vote when Charlestown voters supported this withdrawal study, Albert asked me to join our local committee. So this evening, I’ve been asked to pull together what I would call “closing arguments.”

Charlestown has been sending out dismay signals for decades, and we’ve been sending out SOS signals for the last decade, with no real help forthcoming. Everybody is aware that Charlestown consistently, year after year, comes up here to the deliberative session in force, protests loudly and sometimes succeeds in making adjustments.

Charlestown consistently votes down the school budget even while it supports its municipal budget, consistently is outvoted by the other four towns, and has made many prior calls for studies for reallocations and cost containment.

The result of all this is why I would characterize the mood of Charlestown voters and taxpayers as “very frustrated”. Therefore, it comes as no surprise to those of us on the inside that the support for mandating this withdrawal study was over 70%.

Real estate taxes are out of control. Charlestown’s municipal mill rate is second highest in the state, second only to Claremont — at 37.54 and going up, and I have no doubt it will go up again when it is reset this fall. That’s primarily driven by local education rate where we pay 23.71%, the highest in the state. There are 215 taxing municipalities in the state of NH. It is quite a claim to be #1. Not something to be proud of.

There are only a handful of municipalities in the state who pay over $20. At $23.71, no town in this district is even close: Langdon $17.30, Alstead at $15.04, Acworth is 13.19, Walpole is 13.18. Charlestown’s education rate is dramatically more than the other towns and escalating.

Trends are all in the wrong direction. The revaluations of 2011 killed us after the 2008/9 recession. The revaluation of 2016 made it worse, with no signs of recovery. And quite frankly, as a close watcher of the real estate market, I see no evidence at all that it is not going to be worse again when we do our next revaluation in 2021.

So the upshot is that we are in a death spiral. The mill rate goes up, property value goes down; this drives the mill rate up further and drives the property values down even further. It’s like a negative reinforcing echo chamber. The result, of course, is intense pressure on municipal budgets.

As somebody who came to the state a dozen years ago from Connecticut, I was really amazed when I got involved almost immediately in watching the town budget makers, the Select Board and the Finance Committee, pinch pennies, and I suspect, as fellow Granite Staters, you selectmen are pretty tight with budgets in your towns as well. But it can get excruciating. It’s been a decade more of tight discipline, cost containment, pretty much level funding at the municipal level, and massive accumulated deferred maintenance. Building needs which we have now estimated at over one million dollars; deferring any recommendation of a bond because we don’t know how we would fund it.

The buildings that include a 45 year old town pool that is falling apart, a Fire Department that is coming apart at the seams, a very beautiful and historic library that needs massive renovation to its mortar, and on and on. We have a building needs committee working out to try and figure out what to do and how to juggle that balancing act.

In our most recent budget we just approved, we included purchase of a police cruiser and a highway truck. But, a fire truck and an ambulance that were heavily promoted by their departments, I believe they came to practically every finance committee meeting, was ultimately voted down. The finance committee voted to recommend against approval, and when the Charlestown voters went to the poles on March 12, it was quite interesting set of dynamics. They approved the municipal budget, but voted down the school budget. They approved the other capital projects, but where the finance committee recommended against, they convincingly turned down a fire truck — a 29 1⁄2 year old vehicle is what we are working with and want to replace, and an ambulance that is 14 1⁄2 years old. So, in that same vote, they overwhelmingly approved the withdrawal study.

This is a very coherent set of messages. The voters and taxpayers are demonstrating that they are prudent and discerning and they are making value judgements. They have a sense of what they can afford and what they can’t afford. For the school costs and the real estate tax rates are literally killing our community. And I think everybody in these five towns sense that there is a difference going on in Charlestown. It’s causing us to defer and forgo necessary services. It’s forcing the property values down.

It’s a very sensitive issue, but I’m going to allude to it: I think it’s also very much influencing negative demographic trends relating to touchy topics such as poverty, transience and community spirit. So, this plea for help is about allowing Charlestown voters to make their own value judgements — to weigh their own choices and have that local control, self-determination, home rule. These are New Hampshire credos.

We think that if we can take control again, of our education expenses and incorporate them into the decision making of our select board and finance committee, we can find the right balance for ourselves given the constraints and given the commitment to education. The current system fundamentally stifles and prevents the vote of the Charlestown voters.

Slogging through the details of what’s wrong here is very tedious business, and Gabe is only trying to give some examples. I think everyone here realizes that there are literally dozens of problem areas. The inequities –things we can see and understand are inequitable. The anomalies — things that aren’t operating the way they were intended to. And the mysteries – things we just can’t even figure out. So, with that kind of cost allocation problem, opaque accounting, this intermediated decision making, all of these dynamics undermine the possibility of intelligent thoughtful evaluation. And they make sound decision making for the community virtually impossible.

Ultimately, the RSA’s withdrawal criteria are feasibility and suitability. Charlestown voters are clear in that they want to regain control of their own edification spending. If the terms of the withdrawal are spelled out clearly, and then Charlestown voters approve them, doesn’t this by definition, mean that they are feasible? Because Charlestown taxpayers in that case are saying that they are willing to shoulder the burden of taking care of their schools independently. It is suitable because that is what they prefer. Other towns may choose to stay in the district. But as their representatives, you must each realize that granting Charlestown the right to exit is exactly what preserves your town’s right to choose its own destiny. So no other town should act to block what one town has decided is in its best interest. Charlestown voters are very clear on that point.”

Mr. Dalessio asked if ADM applies to the elementary schools? Mr. A St.Pierre answered, Yes, K-12 total is how ADM is figured for use in the budget.

Mr. O’Shaughnessy clarified terminology and options for school districts, and clarified recent amendments to 195:25. Wording of “feasibility and suitability” no longer exist in the RSA. The process required of this committee is to study the current situation, and report the finding to the State Board of Education and the Co-operative District School Board. In those finding, the committee must determine that it is recommended, not recommended, or that the committee needs additional time. If the committee is recommending withdrawal, only then is a plan needed in accordance with 195:26. Upon completion of report, the committee must take the report to the Commissioner and Board of Education. The findings will be submitted in letter form. According to Mr. O’Shaughnessy, the Board will need a lot of lead time for their agenda. The question to ask is “When do I need to get this letter submitted to be on your September or October agenda?” Mr. A. St.Pierre will contact State Board of Education secretary and get this committee’s findings on their agenda.

Formation of Subcommittees: (Ms. Vogel will arrange for a smartboard to be present at each meeting.)

1 Methods of financing a single district and Methods of financing Co-op from withdrawal perspective. Mr. Beam, Mr. Dustin (Mr. G. St.Pierre sitting in), Mr. Levesque

2 Education impact of Charlestown and impact of Co-op comprised of four remaining towns. (Impact from school and SAU perspective. Including if Charlestown does not tuition in.) Ms. Vogel, Mr. Stahl, Mr. Emig

3 Disposition of buildings. SAU assets and liabilities. Mr. Bushway, Mr. Dalessio, Mrs. Henry

The main Committee agrees to a schedule consisting of meetings on the second and fourth Wednesdays of the month starting 6/12/19.

Motionto adjourn made by Mr. Beam, seconded by Mr. Dustin. All voted in the affirmative. Meeting adjourned 7:39 pm.

Respectfully submitted, Alissa Bascom

Withdrawal Committee, May 29, 2019

(Note: These are unapproved Minutes. Corrections, if necessary, will be found in the Minutes of the June 12, 2019 meeting.)

One thought on “Withdrawal Committee Meeting Minutes – 5/29/19

  1. Sarah Cahill 06/12/2019 at 4:27 PM Reply

    Does anyone know the % of State Aid that Charlestown has received against their School spend over the years? That would shift spend from the state to the town, with the difference to be made up in taxes. If they had a large % previously covered by aid, and it is now gone, then that feels like a Concord issue not an apportionment issue. Interesting to not see that tackled at all in the meeting notes thus far.

    Just curious as this seems to be a rinse and repeat issue, and I’m interested in understanding better since it certainly has the potential to impact Walpole taxes.

    Like

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