Interest From High School Project To Stay In Nauset Budget

ORLEANS – Approximately $900,000 in interest accrued through the ongoing Nauset Regional High School construction project will stand pat as part of the regional school district’s operating budget for fiscal 2025.

The Orleans finance committee delved deeper into the proposed $29.2 million operating budget with Nauset officials April 18. That included additional questions surrounding use of the interest, which initially raised questions during a presentation of the budget to the select board in March.

The budget includes $1.2 million in “estimated receipts,” an increase of $919,000 from the current fiscal year. Giovanna Venditti, the school district’s business director, told the select board March 27 that the additional revenue came from interest garnered on $38.2 million that was borrowed for the high school project and later invested. Town officials had concerns that use of a one-time revenue source as part of the new operating budget would leave a deficit in the same amount in the budget for fiscal 2026.

The finance committee raised those same concerns last week. But Chris Easley and Judith Schumacher, the chair and vice chair of the Nauset Regional School Committee, firmly defended the use of the interest revenue.

Easley said the district is making significantly more interest on its investments than it has in the past, and that the committee was advised by its bond counsel that it was permissible to use the interest as part of the school budget.

“What I get a little gruffed about is that somehow it’s implied that we’ve done something wrong. And we’ve not done something wrong,” he said.

Finance officials said that while they didn’t question the legality of using the interest, they still had concerns about how its use would impact the district’s budget for fiscal 2026.

“I believe people understand that ‘Yes, it’s allowed,’” said Lynn Bruneau of the finance committee. “But the question is, is it a good risk to take for the potential of a black hole in next year’s budget?”

Richard Messina of the committee questioned the “optics” of using the interest as part of the budget. Without having that $919,000 to fill the budget next year, the fiscal 2026 budget could reflect an increase of 20 percent, he said. That increase would lead to larger assessments to the member towns of Orleans, Eastham, Brewster and Wellfleet.

“Should you include that there? Because it’s an anomaly,” he said. “You’re not going to plug that next year with another 900 [thousand] and the year after that.”

Easley said there will not be a “black hole” created in the fiscal 2026 budget by using the interest revenue for fiscal 2025. He said it’s estimated that the district will have between $700,000 and $1 million in “excess and deficiency” funding above what it is allowed to legally carry. That extra revenue will be enough to help sustain the budget for fiscal 2026 and possibly fiscal 2027, he said.

Still, Ed Mahoney of the finance committee questioned whether the interest revenue should instead be invested back into the high school project. Easley said the project has already been budgeted for, and that the interest would go back into the district’s E&D account by law if it’s not used as part of the operating budget.

Either way, Easley said, the use of the interest remains the same.

“It’s like ‘What pocket does it go into?’ It’s going to be used to do the same thing. It will go to defray the costs, the assessments, to the town,” he said.

During the March 17 presentation to the select board, Town Manager Kim Newman advocated for another source of funding for the $919,000, even if that meant a Proposition 2½ override. But she said Monday that the interest will remain in the school budget as originally presented.

Schumacher said the district and the regional school committee try to be conservative in estimating revenues each fiscal year, and noted Nauset officials are not using the interest revenue lightly.

“It’s obviously nice to have additional income,” she said. “It helps everybody. But it comes with a challenge that we pay attention to it. Because we know it isn’t going to be here forever. This is not a perpetual endowment.”

Bruneau also spoke in favor of the town and the school district starting the budget process review earlier in the year in the future. Schumacher said that with so many stakeholders involved, including select boards and finance committees in each of the four member towns, there’s “frustration on all sides” with regard to communicating and presenting the regional budget.

“We’re trying to be responsive,” she said. “We’re trying to be communicative. We did not do anything different this year than we have done in past years. Can we improve it? Sure, and that’s what we're trying to do.”

Email Ryan Bray at ryan@capecodchronicle.com