North Middlesex committee debates policy to stop using E&D as regular revenue, sets targets for reserves

The North Middlesex Regional School District School Committee discussed a draft fiscal-reserve policy intended to stop using Excess and Deficiency (E&D) funds as a routine revenue source and to set clearer targets for the district's reserve accounts.

The discussion, led by the committee chair, centered on three proposals in the draft: (1) maintain a minimum E&D balance of about 3% of the general operating budget, (2) move excess funds above that minimum into separate stabilization and OPEB accounts, and (3) adopt a $500,000 unexpended-funds trigger prompting a review of the current year's budget.

Why it matters: Committee members said relying on E&D year-to-year masks operating shortfalls and makes budgeting unpredictable for the district's three member towns. The draft aims to make operating budgets sustainable without recurring transfers from one-time funds and to create clearer, dedicated reserves for capital and retiree liabilities.

Most of the discussion focused on whether the committee should “cold turkey” stop using E&D for operating revenue, how large the separate stabilization account should be, and how to implement the change without causing hardship for a member town.

School Committee member Nancy Haines noted the district’s…