Voters Reject Budget; Lawsuit In The Wings

By Thomas P. Caldwell

BRISTOL — Residents of the Newfound Area School District trimmed $277,762 in spending by rejecting the proposed 2018-19 budget on March 13, but they stand to save another $712,300 if they prevail in a lawsuit challenging how the administration calculated the default budget.

They may achieve the same thing without a lawsuit if the Newfound Area School Board agrees to hold a special school district meeting to establish a budget the voters will approve.

Under the statute governing official ballot towns, there is an option to hold a special school district meeting to address the budget in a situation like this, but the option has rarely, if ever, been used. Typically, the default budget is allowed to take effect.

School Board Chair Jeff Levesque said the board will be deciding what approach to take at its next meeting, on March 26.

The dispute over the default budget would have become moot if voters had approved the budget proposed by the district’s budget committee. In fact, voters in Danbury, Hebron, and New Hampton did support the $23,813,595 budget, but tallies in Alexandria, Bridgewater, Bristol, and Groton showed opposition. The result was a total of 761 votes in favor and 765 opposed — a four-vote difference.

That narrow failure to approve the budget resulted in the default budget of $23,535,833.

The  Dispute

A default budget is intended to keep municipalities and school districts operational by continuing the spending included in the last approved budget, with adjustments for “debt service, contracts, and other obligations previously incurred or mandated by law, and reduced by one-time expenditures contained in the operating budget.”

School officials argue that the $800,000 that voters approved last year to replace the high school roof is not a one-time expenditure but, instead, the first year’s spending in a capital improvement plan extending 10 years into the future. Including $712,300 in new capital expenditures in their calculation of the default budget is thus justified, they say.

Superintendent Stacy Buckley said the school district attorney agreed, saying that the definition of one-time expenditures is “appropriations not likely to recur in the succeeding budget, as determined by the governing body....”

Bristol resident Archie Auger, who had made the motion to add the $800,000 last year, maintains it was a one-time appropriation and, therefore, should not be included in the default budget.

He pointed out that the capital improvement plan had not even been approved by the School Board at the time of last year’s district meeting, and voters have never been asked to approve the plan.

Even with a capital improvement plan in place, each year’s projects must go before the voters to appropriate the money, unless voters agree to fund a particular project over a period of time, in which case it becomes a contractual obligation.

Levesque had refused to schedule a special meeting to discuss Auger’s concern in time to adjust the default budget if necessary before Tuesday’s vote, prompting residents and selectmen of the member towns to threaten a lawsuit against the school district.

When the School Board met on Monday, it tabled a discussion on the default budget because Auger was out of town and could not attend the meeting.

Bristol resident Paul Simard, one of those opposing the way the default budget was calculated, said he is waiting to speak with Auger before committing to a lawsuit, but he said, “I’ve got my checkbook ready!”

Case Law

A similar issue arose in the town of Weare, where selectmen entered into contracts after town meeting last year and included $60,000 worth of budget increases in the town’s default budget. Resident and legislator Neal Kurk prevailed in a challenge to the town filed in Hillsborough County Superior Court.

The court ruled that the statute on default budgets, when mentioning contracts previously incurred, referred only to contracts voted upon at a prior town meeting. It cited examples from the Municipal Budget Law that prohibits the governing body or budget committee from altering a proposed budget without a public hearing; that all appropriations shall be made by vote of the legislative body at an annual or special meeting, and that no money can be appropriated that does not appear in the budget or special warrant article.

“[T]he practical effect of including the challenged contracts in the default budget is the appropriation of money by the governing body without any meaningful input by the voters of the town,” the court ruled. “None of the safeguards set forth in RSA chapter 32 have any force and effect if the board of selectmen is capable of unilaterally increasing the default budget by an unchecked amount. …

“On the other hand, the Court finds plaintiff’s interpretation — requiring contracts included in the default budget to have been previously voted on at a Town Meeting — to be in line with the legislature’s intent and ensures the proper enforcement of the safeguard on unlawful or excessive spending by the Town.”

Legislative Action

The New Hampshire Legislature is looking to clarify the language of the law so there is less opportunity for misinterpretations.

House Bill 1307 would amend the definition of a default budget to stipulate that money taken out of a proposed operating budget also would be removed from the default budget.

HB 1396 would allow the governing body to increase the default budget by qualifying capital expenditures, providing it is certified by a third party as being “a non-deferrable issue of safety, code compliance, or protection against property loss.”

HB 1652 would require a town or school district to provide greater detail about how the default budget was calculated, including the amounts excluded as being one-time expenditures from the previous year. It would remove the provision of the current law that allows a community to hold a special meeting to revise a budget.

The state Senate also has a bill, SB 342, that would require written documentation of the specific cost items that constitute an increase or decrease in the default budget.

Anger

Several town selectmen and residents of the Newfound Area chastised the school board at its March 12 meeting for “twisting” the law to achieve more spending, and were angered at the school board’s refusal to answer questions about the budget.

“When the public is here with legitimate concerns and you sit here stone-faced and arrogant, you should reflect a little bit. Take a little responsibility,” said Bristol Selectman Don Milbrand. He termed the superintendent’s decision to call in a police officer when Groton Selectman John Rescigno was demanding answers “beyond deplorable.”

In a followup letter to Rescigno, school board member Vincent Paul Migliore of Bridgewater — saying he did so personally and not as a school board member — attempted to explain why the board handled the public comment period the way it did.

He said, “while policy was properly followed this past Monday evening …, I contend that facilitated communication with the public was not. Had it been, I think you would have all felt much differently about your School Board, and for that reason, I personally apologize as an individual member.”

Migliore said that, when he was board chair, he made it a point to explain the rules governing public comment segments. During that period, the school board listens to public concerns, but holds off discussion until the matter comes up on the agenda. “That important detail was one I never, ever neglected to share with anyone present, and prior to when they spoke to provide public comment,” Migliore said.

Bridgewater Selectman Terry Murphy said during the public comment period that he had spoken to two attorneys who agreed that the district had erred in setting its default budget, and he said the board’s determination to stick with the error was only going to result in the taxpayers losing faith and cutting back on spending to the detriment of the students.

“I’m really concerned about what it will do in the long term,” he said.

Other Ballot Results

Voters in the Newfound Area School District elected Heidi Milbrand in a three-way race for Bristol’s representative to the School Board, with current School Board member John Larson receiving 375 votes and Erin Camire receiving 264 votes.

In uncontested races, Sharon Klapyk was re-elected as Danbury’s representative with 1,025 votes, and Levesque was re-elected as Groton’s representative with 943 votes. Jason Roberts received 108 write-in votes for Hebron’s representative.

Ruby Hill received 1,087 votes for Danbury representative to the School District Budget Committee and Don Franklin received 960 votes as Hebron’s representative. No one ran to represent Groton.

Edward “Ned” Gordon was elected moderator with 1,247 votes.

On other ballot questions, voters agreed, 1,096-400, to place $1 into the expendable trust fund for building maintenance and by 1,156-332 to allow the School Board to convey land and buildings on the Hebron Common to the town of Hebron.

15 March 2018