MANCHESTER — The Manchester School District will receive $1.2 million from Auburn — paid out over the next three school years — according to the terms of an agreement reached between the two communities, following Auburn's decision to stop sending students to attend high school in the Queen City.

The terms of the deal were announced by Manchester Superintendent of Schools Thomas Brennan at the outset of a special Board of School Committee meeting held Thursday night.

According to Brennan, Auburn will pay Manchester $550,000 for the upcoming school year, followed by $325,000 each of the following two years. Auburn voters overwhelmingly approved a plan in March 2011 to send all public high school students to Pinkerton Academy in Derry beginning in 2013. The agreement states that Auburn students who started high school in Manchester can finish at a city school if they desire, rather than transfer to Pinkerton, and Auburn will make tuition and capital payments to the city for them.

“I think it's a fair arrangement,” said School Committee Vice Chairman Dave Gelinas, Ward 7. “I think we did everything we could do to try and convince them (Auburn) not to send the students elsewhere, but the agreement is fair.”

“I think it's the best outcome of a bad situation,” said School Board member Arthur Beaudry, Ward 9. “Manchester gets its money, Auburn gets to send their students where they want to send them, and we don't have lawyers making a lot of money off the situation if we had ended up in court over this.”

The arrangement provides the Manchester schools with $250,000 more than anticipated. The recently-approved school budget includes a payment of $300,000 from Auburn for the next school year.

“This gives the district some extra money right away,” said Gelinas. “We'll be looking to use that extra $250,000 to make repairs to ramps and stairways at some of the portables.”

Because the $250,000 surplus is considered unanticipated revenue, the School Committee can't spend it without permission from the Board of Aldermen. The process to get the go-ahead is already under way.

“I've been directed to draft a letter to their (the Aldermen's) attention requesting that they allow us to use it,” said Brennan.

Past estimates have suggested Manchester stands to lose as much as $1.7 million per year once Auburn pulls all its students out. Brennan wasn't ready Friday to assign a dollar figure to the hit his budget will take three years from now, after the last payment from Auburn has been doled out.

“There will be a negative impact to our budget, there's no question about that,” said Brennan. “How negative an impact remains to be seen.”

“It's going to be a major hit,” said Beaudry. “You don't have the students coming, but you still have to heat the buildings, etc. We need to start having discussions about ways to make up that revenue.”

While Board members feel the city did what it could to convince Auburn to continue sending its students to Manchester, some feel there are other opportunities that are not being explored.

“There are so many aspects of this city, so many opportunities, that aren't taken advantage of,” said At-Large School Board member Kathy Staub. “I think some of those could create opportunities that would be attractive to some students, and maybe draw them in to our system. What happened here with Auburn is regrettable.”

Gelinas said that thus far, the board has not held any discussions about approaching another district to fill the revenue void left by Auburn's departure from the district.

“I'm not sure there is anyone nearby that would send their students to Manchester, they all have their own high schools,” said Gelinas.