North Middlesex finance committee reviews FY25 closeout, FY26 outlook; school choice, circuit breaker and delayed capital projects highlighted

The North Middlesex Regional School District Finance Committee reviewed the district’s FY25 closeout and early FY26 budget performance on Oct. 2, focusing on a returned health-trust payment, use of the school-choice revolving fund, special-education reimbursements, transportation and postponed capital and technology projects.

District finance staff said the district initially paid roughly $1 million in FY24 toward potential run-out claims when a regional health trust disbanded; about $536,000 of the sum was later returned to the school-choice revolving fund and roughly $500,000 was recorded as unanticipated revenue in the general fund. "We paid that out of two places — school choice revolving and the general fund — about half from both locations," Nancy, a district staff member, said. She said auditors and state guidance allowed returning funds to school choice when the trust returned money to members.

Why it matters: the committee is weighing how one-time returns and new supplemental state aid affect future budgets and town assessments. Committee members pressed staff for clarifications about restrictions on those funds and about how much of the school-choice revolving fund the district can safely use in FY26 and beyond.

Nancy described the school-choice revolving fund as a temporary source tied to incoming school-choice students and said it is not guaranteed in perpetuity: "If we continue to use it more at a higher rate than we're depositing money from school choice students, it will eventually get to be unavailable." She reported the district budgeted $450,000 from that fund for FY26 but noted actual school-choice revenue has declined; last year the district received $323,003.20 in school-choice revenue, she said.

On special education funding, Nancy said the district received an extra $302,000 in circuit-breaker reimbursement that arrived in July and that the district chose to carry that amount into FY26 rather than spend it in FY25. "That fund helps cover unanticipated tuition or transportation costs for special education," she said.

Staff described other FY25 drivers and savings. Jeremy, a district staff member, said the district imposed a soft freeze late in the year, delayed capital projects and technology refreshes, and shifted some curriculum positions to grant funding. He listed specific deferred projects that were tied to Ashby planning, including floor work, HVAC controls, CCTV and access control, network switch updates for Ashby, a portion of Chromebook refreshes and some classroom projector replacements. "We obviously put holds on those," Jeremy said. He estimated the Ashby security upgrade alone could approach $100,000 because of higher wiring and copper costs.

Transportation and operations: administrators reported early FY26 savings from routing changes. Nancy said the district currently shows bus-run savings (one afternoon run was in question earlier), and Brad, a district staff member, said busing had been "very, very smooth" this year compared with prior years. At the same time, staff flagged near-term risks: heating costs are running higher than budgeted and staff noted a potential $140,000 shortfall in the district-wide heating line if usage and prices hold.

Staffing and class-size concerns: leaders said vacancies and delayed hires contributed to FY25 savings but noted class-size pressures. Brad asked building principals to perform staffing audits with the special-education department at two schools to ensure paraprofessional assignments match needs. "We are concerned about our current class sizes," Brad said, noting seventh-grade classrooms with 32 students as an example.

Use and governance of E&D (Excess & Deficiency): Nancy explained how returned unanticipated revenue was handled for reporting and future budgeting and reminded the committee of the statutory cap on E&D reserves. She said the district treats returned one-time revenues as unanticipated revenue and typically applies certified E&D toward the next fiscal year’s budget, which also affects the amount returned to the member towns when the budget is finalized.

Next steps and scheduling: the committee asked for a staffing-audit summary for the full school committee and a detailed list and timeline of deferred capital/technology items. The finance committee agreed to meet again at 8:30 a.m. on Oct. 30. The committee adjourned by voice vote after a motion to adjourn was moved and seconded.

Votes and formal action: the only recorded formal motion in the transcript was to adjourn the finance committee meeting; the motion carried on a voice/roll-call affirmation by members present.