In October 2006, the Algonquin Regional High School addition / renovation project was approaching completion and the Massachusetts School Building Authority was about to pay the first of two expected lump sum grant payments totaling $36M to close out its participation in the project.
A dispute arose between Northborough and Southborough as to how the grant should be apportioned and credited to each of the Towns. A few years earlier, due to the efforts of Northborough’s James Casella and Susan Sartori (Financial Planning Committee) and Elaine Kelly (Appropriations Committee), an understanding had been reached that the methodology of MGL Chapter 70B would apply; but with the passage of time and with transitions in Regional District leadership, that understanding had been lost, and the District was applying a different treatment based on the capital cost sharing formula in the Regional Agreement.
In December 2006, I made a presentation to the Nortborough Board of Selectmen, estimating that the correct treatment of the grant would favor Northborough by an additional $1.5M, compared to the treatment the District was applying.
By January 2007, the Regional District had received legal opinions from District Counsel, District Bond Counsel, and Southborough’s Town Counsel, and awaited an opinion from Northborough Town Counsel.
In February 2007, I prepared this analysis of the issue and submitted it to Northborough Town Counsel for consideration in the formulation of the Town’s legal opinion. People close to the issue have told me they consider it the most complete examination of the issue’s many elements.
Eventually the matter proceeded to litigation. In April 2013, Worcester Superior Court issued a ruling in favor of Northborough. The highlighted sections include points in the decision noted six years earlier in my analysis.
In January 2015, the final financial settlement of $1.7M was filed with the Court.
In 2006 I was a member of the Financial Planning Committee. By 2015, I was in my first year as a member of the Board of Selectmen. In the Board meeting to approve the settlement, the Chair acknowledged my contribution by inviting me to offer the motion.
The concluding summary of the issue is found in the Northborough Financial Planning Committee’s report in Chapter 9, page 9-96 of the Northborough FY2016 budget:
Apportionment of ARHS State Construction Grant
The Committee is pleased to report that a final and favorable settlement has been reached concerning the treatment of state grant for the Algonquin Regional High School construction project. The settlement provides for Southborough to pay Northborough a sum of $1,699,466 in installments over a period of eight years, with interest accruing on the unpaid balance during that period.
The disagreement concerned how the grant should have been apportioned by the Regional School District to the member towns of Northborough and Southborough: whether by the capital cost sharing formula of the Regional Agreement (which the District had in fact done); or according to provisions of MGL Chapter 70B, which govern state reimbursement to school districts for school construction projects.
In December 2006, the Financial Planning Committee estimated that Northborough would receive approximately $1.5M LESS in grant under the District’s treatment than it should under the MGL Chapter 70B grant apportionment formula.
From 2007-2010, attempts to negotiate a compromise fell short: the Chapter 70B statute was argued by some to be either ambiguous or inapplicable; the relevant State agencies declined to offer guidance as to whether and how the statute should apply; and Southborough, having already benefitted from the District’s actual treatment of the grant, had no motivation to concede that benefit. In April 2009, the Regional District proposed a “split the difference” compromise, under which Northborough would have received $686,000 over a period of 17 years; Northborough Town Meeting approved the proposed compromise, but Southborough Town Meeting did not. In 2010, Southborough leaders declined to present that compromise a second time to its citizens.
In November 2010, having exhausted all options for diplomatic resolution, Northborough filed a request for declaratory judgment, seeking the Court’s interpretation of the relevant language in MGL Chapter 70B.
In April 2013, the Court found in favor of Northborough. The decision directed the Regional District and the member towns to recalculate the grant apportionment according to the Chapter 70B formula, and to devise a schedule for repayment, to be submitted to the Court for approval.
In February 2015, after further appeals and rulings, the settlement was finalized.
The Committee gratefully acknowledges the efforts of the following people whose advocacy and expertise contributed to the favorable resolution of this issue: former Financial Planning Committee members James V. Casella, Susan Sartori, and Jason Perreault; Appropriations Committee chair Elaine Kelly; Finance Director June Hubbard-Ward; and Town Administrator John Coderre, who very capably and professionally guided the Town’s efforts throughout the lengthy diplomatic and judicial process.