New Stabilization Fund Could Be Seeded without Tax Impact

January 19, 2024

Bedford Town Manager Matt Hanson told the School Committee on Tuesday that a new stabilization fund for out-of-district special-education tuition could be funded without impact to taxpayers.

School Superintendent Cliff Chuang wants to seed a new fund with $950,000, the highest amount allowable, which would then be available for multiple years. 

The special fund, enabled by a vote of the Legislature a few years ago, will be on the March 25 Annual Town Meeting warrant.

Hanson said he was involved in establishing a special-education stabilization fund when he was Tyngsborough’s town manager, and the initial funding was with free cash. 

“The reason we created it was because of huge swings in special education costs,” he said. Bypassing that variable resulted in “a more realistic bottom-line education budget.

“You are in a really good position to ask for the money this year,” he told the committee. 

Earlier Tuesday, town Finance Director David Castellarin told the Select Board that the state has certified the town’s free cash amount at more than $15 million.

In recent years, the Finance Committee has approved reserve fund levels sizable enough to cover unexpected out-of-district tuition charges. The reserve account is funded with the tax levy, like the rest of the budget.

School Committee Chair Dan Brosgol noted that $950,000 is significantly more than past reserve fund transfer requests. Chuang said the amount reflects a cumulative reserve fund transfer impact and will emanate from outside the tax levy if seeded from free cash.

The superintendent acknowledged the need to develop governing policies, such as approval authority for spending from the fund. He has proposed that the Select Board and the School Committee should both be involved “to ensure that elected town leaders are on the same page.”

Answering a question from School Committee member Sarah McGinley, Chuang said a meeting to consider using the stabilization fund probably wouldn’t take place until near the end of the fiscal year, “to see if we can cover the cost some other way.” He noted that there is $150,000 allocated for out-of-district tuition in next year’s budget.

School Committee member Sarah Scoville asked Hanson about a “realistic” initial allocation to a stabilization fund, and he said at least $500,000. He added that he expects pushback from the Finance Committee chair, who is “very protective of free cash.”

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