School Funding Formula Working Group Established

CHATHAM – The select boards in Chatham and Harwich have agreed to establish a working group to review the Monomoy Regional School District funding formula.

 The group will also review the future of the district’s two elementary schools, both of which have seen a significant drop in student population since the two towns regionalized 14 years ago.

 The two boards met late last month at the request of Harwich officials, who say that continued school budget increases are pushing up against its financial limits. If that continues, it will force the town to cut its budget to accommodate school funding.

 Harwich has “kind of hit a wall regarding where we are with levy capacity,” said Harwich Town Administrator Jay McGrail at the June 28 joint meeting held in Chatham. Harwich is at 99.7 percent of the amount of property taxes it is allowed to collect under Proposition 2½, or less than $50,000 according to figures provided by McGrail. If school budgets continue to increase at 6 or 7 percent as in the past several years, the town will have to seek overrides or cut town services, he said.

 “We have virtually no fiscal capacity remaining inside the levy,” McGrail said. In the past 16 years, which covers the period prior to regionalization, Harwich’s education assessment climbed 62 percent, while Chatham’s went up 16 percent, he said.

 Harwich is working to tap more revenue sources, he added, just as Chatham has done in recent years. “We should see some of that come to fruition in the next year,” he said. Chatham has been able to absorb education budget increases while remaining well below its levy limit, which has approximately $1.2 million available, according to McGrail’s figures. The town also allocates 1 percent of room tax revenue to its elementary school budget.

 At issue is the enrollment-based funding formula in the regional school agreement, established when the towns merged school systems in 2012. The formula is based on a three-year rolling enrollment of students from each town, as well as a foundation enrollment set by the state. Currently the formula has Harwich paying 76.36 percent of the school district’s budget, with Chatham paying 23.64 percent. The same percentage currently applies to capital costs, such as the window and siding replacement project currently underway at the middle school in Chatham.

 McGrail proposed resetting the formula back to the 2012 level, with Harwich paying 72 percent and Chatham contributing 28 percent, as well as splitting future capital costs 50-50. Doing so would shift about $711,000 from Harwich to Chatham in the school operating budget, and move another $1.7 million in capital costs from Harwich to Chatham.

 While Chatham officials agreed to establish the working group and study the formula, select board members said they were comfortable with the current agreement.

 “I can tell you right now it resonates very clearly with Chatham folks that that’s kind of a fair way to allocate costs,” said Chair Jeffrey Dykens. “It’s difficult to get over that hurdle.”

 He added that Chatham readily agreed several years ago to assume the full operating costs of its elementary school after Harwich complained that under the formula they were subsidizing Chatham’s school. Voters in both towns approved amending the agreement in 2022 so that both towns pay for their own elementary school, which shifted about $1 million from Harwich to Chatham. Consolidation of elementary schools should be considered as part of the working group’s study, McGrail added.

 “I know that that’s a raw subject in both our communities,” he said, “but I think this working group probably should look at it and talk about it.”

 Officials from both towns agreed maintaining a strong school system was a priority. Monomoy has built a solid reputation since regionalization and has been able to retain students from both towns and attract school choice students as well. But that status is fragile, warned retiring Superintendent Scott Carpenter. 

 “If we get to the point where either town is fiscally stressed and mulling an override, we’re going to see families flee,” he said. 

 While both towns have seen a decrease in students, Chatham’s numbers have declined faster, McGrail noted, with student population dropping by 34 percent since 2007. Much of that can be attributed to the rising cost of living, especially housing, in both towns, but more especially in Chatham, said new Superintendent Robin Millen. It’s most stark at the elementary level. When she joined the district in 2014, there were a combined 900 elementary students across the two towns. Projections show that number shrinking as low as 370 within the next five years, she said.

 “This is a community problem,” she said. “We have to not only think about housing for new families as we build our enrollment, but how do we keep our families here.”

 Dykens called those figures “alarming.”

 “I feel as though the issues are accelerating rather than decelerating,” he said.

 While Chatham represents 22 percent of the district’s foundation enrollment, it pays 26.3 percent of the costs, said Chatham Town Manager Jill Goldsmith. 

 “Any proposed change to the formula should clearly demonstrate why enrollment is no longer the most equitable and appropriate basis for allocating district costs and reflecting education demand,” she said. Harwich’s initial proposal is “a great way to lay the foundation for discussions,” she added.

 There are other ways to calculate district assessments fairly, said Harwich Select Board Chair Peter Piekarski, although he did not detail those options, saying that was for the working group to study.

 McGrail also noted that Monomoy is not unique in the fiscal difficulties facing its member towns. Brewster and Eastham, both part of the Nauset Regional School District, held overrides for school funding this year, he said. 

 Any solution “won’t happen tomorrow,” he added. Changes to the regional agreement require approval by town meetings in both communities as well as by the state Department of Elementary and Secondary Education. If any changes are approved, they would not be implemented until fiscal year 2019, at the earliest. “But having the light at the end of the tunnel would help from a planning perspective,” McGrail said.

 The two boards agreed at separate meetings last week to establish the nine-member working group, to be composed of the town administrators, one select board member from each town, a Monomoy School Committee member from each town, either the superintendent or business manager from the district administration, and a finance committee member from each town. Citizen representatives from each town as well as a student representative from both communities will serve as non-voting members. Piekarski will serve as Harwich’s representative; the Chatham board has yet to choose its representative.

 “This is a hard sell for everyone,” said McGrail. Having equal representation for both communities on the working group, he added, will help sell any changes to both towns.