Pioneer: How do you categorize repair costs?
District, towns differ on threshold dollar amount for capital projects
Recorder file photo Students play outside the entrance to Bernardston Elementary School.
NORTHFIELD — What kind of repairs should tenants be responsible for, and what should be taken care of by landlords?
That’s what the Pioneer Valley Regional School District and its four member towns are trying to determine.
Bernardston, Leyden, Northfield and Warwick all own their elementary schools and lease them to the district. While towns are responsible for “capital” projects at their schools, the district is responsible for “maintenance.”
The problem is, the language used to decide which category a repair falls into is wide open for interpretation.
“Capital Costs shall include all expenditures relating to capital outlay such as payment of principal and interest on bonds or other obligations issued by the district, and any other expenses associated with the acquisition of real estate, the construction and improvement of buildings, grading, purchase of equipment, and other activities incident to placing in operation the original school plant and any subsequent additions and improvements thereto,” reads the current agreement. “Operating-costs shall include all costs not included in capital costs as defined (above), including interest on temporary notes issued by the District in anticipation of revenue.”
The district and towns are working on a clearer definition.
The School Committee’s Building and Grounds Subcommittee’s draft agreement may leave less room for interpretation.
It defines capital expenses as: the cost of acquiring land; the cost of constructing, reconstructing and adding to buildings; the cost of remodeling or making extraordinary repairs to school buildings; the replacement of original or operating equipment to place school buildings, additions and related premises in operating condition; and the payment of principal and interest on bonds or other obligations issued by the district to finance capital costs.
The subcommittee has proposed that repairs over $1,000 that have a useful life of one year or more should be funded by the towns that own the schools, rather than with the district’s maintenance budget.
That amount sits all right with Northfield, but other towns think the threshold is too low.
In Bernardston, selectmen believe anything that costs less than $5,000 and has a life of five or fewer years should fall under the category of maintenance and be paid by the district.
Bernardston Selectman Robert Raymond has said that he believes many capital costs could be avoided if the district kept up on building maintenance. Board Chairman Louis Bordeaux suggested that a town buildings committee could track school maintenance to make sure issues are addressed early on, so they don’t become huge problems.
The Warwick Selectboard has asked that the lower limit be raised to $10,000, with a useful life of 20 or more years.
“Capital expenses are things you can borrow for,” said Warwick Town Coordinator David Young. “When we spend $152,000 on a truck, that’s a capital item. When the truck’s water pump goes later and it costs $900 to fix, that’s not a capital item, it’s a repair.”
Young said Warwick also seeks an avenue to dispute “emergency repairs” which the school can do without asking the town.
“It’s unacceptable to us that, in emergency cases, the school can do whatever it wants,” Young said. “It’s not that we don’t think they have good intentions, but it creates some structural stuff that opens us up for liabilities.”
Warwick suggests that a system be put in place so towns could challenge their responsibility to pay for emergency repairs. A board of arbitration would be created, made up of the chairmen from the three other towns’ executive boards.
“The other three towns would decide (whether emergency repairs were justified), rather than the school district,” Young explained.
The topic hasn’t been a point of much discussion for the Leyden Selectboard.
“The agreement has worked well for us,” said Selectboard member William Glabach. “It would be nice if we had a consistent definition (of capital expenses), though, so one school wouldn’t have to go through a hassle to get something another school’s been able to do.”
While changing the definition of capital and maintenance projects may ease some issues, the proposed solution has its own problems.
Raising the threshold would allow more projects to be done without having to go to each town’s annual meeting for approval as a capital request.
Doing this could result in an increase of several thousand dollars to the district budget, through line items for maintenance at each school.
Anything included in the district budget is paid by all four towns, with each paying a percentage based partially on the number of students each town has enrolled.
Any increase to the budget can make for a tough sell when it’s time for the towns to approve their shares at their annual town meetings.
In recent years, state funding for public schools has reached a standstill, while it continues to cost more to provide the same services. With the increased burden on their shoulders, the four towns have asked year after year that the district do all it can to keep budget increases to a minimum.
The Building and Grounds Subcommittee will continue to work on a new agreement, taking into account the last several years’ capital and maintenance expenses.