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Nashoba closes FY25 with near $410,400 operating surplus; budget committee urges building E&D reserve
Summary
Finance director Ross Mulcahren reported an unaudited FY25 operating surplus of roughly $410,397 and revenue over expectations of $959,098; the budget and warrant subcommittee recommended reducing annual reliance on excess-and-deficiency funds by $200,000 per year to build a more resilient reserve.
Finance and operations director Ross Mulcahren presented an unaudited FY25 final operating report to the Nashoba Regional School Committee on Oct. 22, saying the district ended fiscal 2025 with an operating surplus and higher-than-expected revenue.
Mulcahren said the FY25 expense side produced an overall surplus of approximately $410,397 and that revenue came in about $959,098 over expectations. He noted expense pressures in several cost centers — specialized transportation, school-choice and charter tuition outflows, and substitutes — and that special-education costs were higher than budgeted but were offset in part by approximately $1 million in circuit-breaker reimbursement.
Mulcahren told the committee the unaudited results would be submitted to auditors and to the Department of Revenue; the near-term expectation is to return a healthy balance to the district’s excess-and-deficiency (E&D) fund after audit close.
Scott, chair of the budget and warrant subcommittee, presented the subcommittee’s recommendation: because the district’s practice of relying on E&D to smooth the budget has, in recent years, meant declining annual contributions (for example, the district contributed $1.7 million to E&D in 2023 but only $400,000 in FY25), the subcommittee recommended the district reduce its annual use of E&D by $200,000 per year with the goal of eventually making E&D a non-recurring funding source. "Our proposal is that we reduce our use of excess and deficiencies fund by $200,000 per year, for the foreseeable future with the goal of getting our use of it down to 0," Powell said. The committee voiced general support and indicated administrative staff should reflect that guidance during budget development.
Mulcahren and Superintendent Downing explained the practical tradeoffs: using E&D reduces immediate assessment pressure for member towns but relying on it annually risks depleting the fund and leaving the district exposed to future revenue shortfalls. The board and administration noted that reaching the state 5% cap on E&D balance creates options to return funds to towns or lower assessments.
No formal policy change was made at the Oct. 22 meeting; the budget and warrant subcommittee sought the committee’s informal endorsement of the gradual reduction approach to be incorporated into upcoming budget workshops.
