WOLFEBORO — The town of Ossipee is challenging the mechanism governing how tax payments are made to the school district.
OSSIPEE — The Governor Wentworth Regional School District is asking a judge to order selectm…
The Governor Wentworth Regional School District has asked a judge to order the town to comply with state law requiring selectmen to pay over the money approved by district voters “as the school board shall require” for the maintenance of the schools. The law was last updated in 1927.
Attorney Rick Sager of Sager & Smith PLLC of Ossipee argued Friday that the town’s objection is to the payment schedule set by the school district, not the cost.
The town wants to make equal monthly payments of $716,000. But the school district maintains that the payment schedule — which asks for 30% of the total budget in the first two months of the fiscal year that runs from July 1 to June 30 — is set based on its financial needs.
The district’s billing schedule asks for a payment of $1,606,670 in July; $1,182,445 in August; $111,332 in September; $535,557 in October; $535,556 in November; $535,557 in December; $434,776 in January; $1,071,114 in February; $535,557 in March; no payment in April; $970,333 in May and $1,071,113 in June, totaling $8,590,010.
Unlike towns that can carry over unspent money, by law school districts must return surplus to taxpayers or can add it to capital reserve accounts if approved by voters.
“It would be a benefit for a court to interpret this statute or if the Legislature would really sink their teeth into it,” Sager told Judge Amy L. Ignatius during an afternoon hearing in Carroll County Superior Court.
Selectman Martha Eldridge who was in court with fellow Selectman Susan Simpson, said following the hearing the board is trying to manage the town’s cash flow to avoid the added expense of borrowing tax anticipation notes. In managing its own budgetary needs, Eldridge said, they’ve started splitting payments to outside agencies approved for funding at town meeting.
Attorney Barbara Loughman of Soule, Leslie, Kidder, Sayward & Loughman PLLC of Wolfeboro, representing the school district, said the payment schedule is set up to assure that the school district has the needed funds to make bond payments due in July and August, and to cover other expenses including health insurance and equipment leases. Seventy-five percent of the budget is personnel costs and teachers aren’t paid weekly during the summer months but rather receive a balloon payment.
Payment dates for money borrowed to fund capital projects are set when the New Hampshire Municipal Bond Bank sells bonds for multiple districts. Loughman asserts that RSA 198:5 is clear in requiring selectmen to pay over the money approved by district voters “as the school board shall require”” for the maintenance of the schools.
Sager asserted the school district doesn’t need judicial relief but rather to restructure its debt and rework its budget so that the payments its requests from Ossipee are of a similar amount throughout the year.
“The town of Ossipee doesn’t have any bad faith here. They just want to have their own financial house in order,” Sager told the judge.
Loughman argued if just one other town in the six-town regional school district followed suit and withheld full payment there would not be sufficient funds to operate the schools.
“We’re not blaming the Governor Wentworth Regional School District but the Legislature for not updating the law,” Sager said.
Loughman stressed the money at issue doesn’t belong to the town but rather is appropriated by the voters of the Governor Wentworth Regional School District which is made up of the towns of Brookfield, Effingham, New Durham, Ossipee, Tuftonboro and Wolfeboro.
Ignatius gave both sides until next Friday to file additional pleadings that she will consider before issuing her ruling. Ossipee has agreed to continue to make monthly payments of $716,000 to the school district until the judge hands down her opinion.