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Letter to Steve Grossman: Why add override burden to Newton effort to fix schools?

2012 October 17
by Sean

Updated: Treasurer Grossman responds in the comments. What do you think?

My letter to State Treasurer Steve Grossman, Chairman of the Massachussets School Building Authority regarding the MSBA requirement that we have separate override questions for each of the three school buildings covered by Mayor Warren’s override proposal:

We have just learned that the MSBA is requiring Newton to have separate overrides to request funding for three desperately needed school projects. Why?

It strikes me as a burden that causes problems for cities, such as Newton. We have more schools, therefore more potential school building projects the might require override funding. And, with a larger population, we have a greater likelihood of split outcomes … or worse, no results on all projects.

There doesn’t seem to be much purpose served. Proposition 2-1/2 is already a burden on maintaining and renovating our school buildings. What possible policy objectives are served by adding additional burdens on top of Prop. 2-1/2?

Thank you.

I’ll share his response if I get one.

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22 Responses Post a comment
  1. Mike Striar permalink
    October 17, 2012 11:05 AM

    Great question, Sean. I asked the same question of fellow bloggers on an earlier thread about this topic. Then, when the Mayor decided to break his initiative into 3 separate overrides, I assumed he knew something we didn’t, and that there must be some legal requirement forcing trifurcation. If my assumption was incorrect, and the MSBA requirement was driven by something arbitrary rather than a point of law, Mayor Warren would have been far better off challenging the MSBA to support their position, rather than giving in and splitting these into three separate votes.

  2. Jerry Reilly permalink
    October 17, 2012 11:15 AM

    @Mike Striar – you win the word-of-the-week award for “trifurcation”

  3. October 17, 2012 12:17 PM

    Maybe the pro-override committee will want to use “trifurcation” in their marketing campaign. Something like “Thirteen Villages: One trifurcation”

  4. schlock permalink
    October 17, 2012 12:41 PM

    If questions 2 & 3 fail, can the mayor shift priorities from a successful # 1 general override to address the failed # 2 & # 3? too bad South Pacific closed – we could have had substitutions from column A & column B…

  5. Treasurer Steve Grossman permalink
    October 17, 2012 03:35 PM

    This MSBA policy (www.massschoolbuildings.org/guidelines/votes) has been in place since 2008 and has been consistently applied to all communities in the Commonwealth, large and small. It reflects the fundamental principle of transparency and open government so that the taxpayers are aware of how their hard-earned tax dollars are spent and can hold us accountable for our investment of public funds. This is in keeping with the open checkbook initiative we helped launch in 2011 http://www.mass.gov/opencheckbook, and the comprehensive financial disclosures about school projects that are available on the MSBA website: http://www.massschoolbuildings.org

    Since its inception in 2004, MSBA has distributed more than 9.1 billion dollars in taxpayers’ money to the Massachusetts cities and towns for school construction. It is pivotal we continue to maintain the integrity and credibility of the program.

    I look forward to working with the leadership and residents of the city in which I was born and live to realize all of our ambitious goals in the months and years ahead.
    – State Treasurer Steve Grossman

  6. TomSheff permalink
    October 17, 2012 03:45 PM

    Steve, thanks for blogging, I hope you stay blogging.
    While I agree that transparency is incredibly important in Government, there is no way that this city will vote in favor of 15 (or whatever the correct number is) separate overrides for school repairs. Clumping them together allows each district a piece of the override money, thus, allowing people to feel that their tax dollars are going for their village (or community). On top of all of this, overrides tend to be divisive and have a tendency to separate our community.(I hope this season is less divisive than the past). Can’t speak for other cities/towns but for us, this policy is bad.

  7. schlock permalink
    October 17, 2012 04:58 PM

    well, the MSBA sites indicate no substitutions, it is what it is – # 2 & # 3 PTO’s better get cracking or their projects will not be going out to bond on schedule. Move Newton Forward you still datbased? Lobbies in place? bake sales and Halloween charity parties can’t start soon enough..

  8. Mike Striar permalink
    October 17, 2012 05:53 PM

    With all due respect to Treasurer Grossman, this MSBA “policy” undermines voter’s rights. Having now read the Treasurer’s explanation, I believe Mayor Warren made a mistake in opting for three separate overrides. The Mayor’s response to the Treasurer should have been one sentence long, consisting of four words… “See you in Court!”

    Instead, Mayor Warren has chosen the path of least resistance, opting to not challenge the Treasurer. In doing so, Mayor Warren has failed to stand up for the voting rights of his constituents, and has substantially decreased the likelihood of success in addressing Newton’s critical infrastructure needs.

  9. Dan Fahey permalink
    October 17, 2012 06:14 PM

    @Mike,

    The MSBA isn’t telling the city it can’t do an override for multiple projects, it’s just saying if you want us to provide funding for one or more, you must do it following the MSBA’s rules.

    We do want the state’s funding on this, which is estimated to be around $20 million over the two projects.

  10. Mike Striar permalink
    October 17, 2012 06:53 PM

    Dan– The State doesn’t print their own money. It’s not the MSBA’s money, and it’s not Treasurer Grossman’s money. It’s OUR money. The State collects it from the citizens of Massachusetts, including an extraordinary amount from Newton residents. School reimbursement is not a gift to us. It’s a mechanism to bring the money we paid in taxes, back into the community.

    When a State agency sets rules that are unfair to Newton, I expect our local elected officials to stand up to the State. Why is this unfair? For exactly the reason Sean detailed in his letter to the Treasurer. It puts a disproportionate burden on Newton, because we have a lot more school buildings than most communities in Massachusetts. We should be able to fix those buildings with a single override vote.

    This “policy” and Treasurer Grossman’s logic, are a distortion of the intent of Proposition 2 1/2, which allows voters in a City or Town to raise taxes for any project or proposal they like.

  11. Jane permalink
    October 17, 2012 11:38 PM

    I support Trea. Steve Grossman’s stance on this issue: “It (MSBA policy) reflects the fundamental principle of transparency and open government so that the taxpayers are aware of how their hard-earned tax dollars are spent and can hold us accountable for our investment of public funds.”

  12. Ted Hess-Mahan permalink
    October 18, 2012 07:46 AM

    One of the difficulties with Prop 2-1/2 is that unlike an operating override, which includes a specific amount on the ballot, a debt exclusion ballot question does not include a dollar figure on the ballot. The debt exclusion is based on the project budget that is contemplated at the time of the vote.

    According to DOR’s guide:

    Exclusion questions are designed to fund specific capital projects. Therefore, the borrowing or spending purpose in an exclusion question must describe the particular project(s) being funded by the question.

    A debt exclusion covers debt service on the amount of borrowing authorized or contemplated for the stated purpose at the time of the referendum. Debt service includes payments of principal on permanent debt and interest on permanent and temporary debt….

    Override and capital expenditure exclusion questions must also include the total amount of additional taxing authority being requested and the fiscal year in which it will be used. This information is not included in debt exclusion questions.

    So, what happens if the project costs increase after the voters approve a debt exclusion?

    DOR’s guide says:

    The debt service on any additional borrowing above the amount fixed at the time of referendum is not covered unless (1) it is a modest amount attributable to inflation, new regulatory requirements or minor project changes, or (2) another debt exclusion is approved by the voters.

    In other words, if something comes up (or is disclosed) that causes the price tag to increase significantly after the debt exclusion vote, the city would have to go back to the voters to get authorization for the cost overruns. This, in fact, is what is happening in Lexington with the Estabrook School, which is partially funded by the MSBA and for which voters approved a debt exclusion in January 2012. According to an October 16, 2012 Wicked Local article: “A recent estimate showed a $2.8 million, or 9.2 percent, increase in total construction costs, reflecting increases in the price of materials, School Committee Chairman Margaret Coppe told the Board of Selectmen Monday, Oct. 15.” So now town officials are trying to determine whether they need to go back to get voter approval for these increases.

    What does this have to do with Newton? At last night’s joint meeting of Public Facilities and Programs & Services, the aldermen were informed about the timeline for planning and approvals required. A cause of concern for me is that under the current schedule, we will not have an “approved budget” for the project–including the proportion to be reimbursed by MSBA–until June 2012. The Board of Aldermen must appr0ve funding for the project within 120 days thereafter (the schedule distributed to the aldermen would place that vote in August 2013 when many people, including aldermen, are on vacation). When I asked, I was told that the March 2013 debt exclusion for Angier and Cabot would be based on budget estimates that are calculated using a formal that includes the number of students and square footage. So if those estimates are off (and I don’t think I need to remind anyone that Newton has had some recent experience with this), the city may well have to go back to voters to approve a further debt exclusion. Which is why I would feel a lot better if the debt exclusions for Angier and Cabot were placed on the ballot after we have an approved budget from the MSBA that includes the total reimbursement amount (I was told that MSBA would cover 30-35% for construction but only about 8% for site preparation).

    This is not a criticism of the administration or the MSBA. The city’s process for approving school projects and funding just does not mesh well with the MSBA process and Proposition 2-1/2. Cost overruns do happen. Indeed, last night, the aldermen learned that the cost to renovate the Carr School just went up from $8-10 million to $12.5 million. I did not get all of the details, but my understanding is that it involves replacing rather than fixing the roof, and remediating hazardous materials.

    No one is seriously questioning the need to replace Angier and Cabot, and I do not question the need to go to the voters to get approval for the funding to cover the debt service. My concern, based on what I have learned and on Lexington’s experience, is about the timing of the debt exclusion election, and the validity and reliability of construction estimates at this stage of development.

  13. Sean permalink
    October 18, 2012 07:55 AM

    Aldercritter Ted for the explanation win!

    What’s not clear to me: Do you have to do a debt-exclusion override to get MSBA funding? Or, is it the case that, if you want MSBA money and you want to do a debt-exclusion override you have to do it their way?

  14. Ted Hess-Mahan permalink
    October 18, 2012 08:03 AM

    “based on budget estimates that are calculated using a formula” not “formal”

  15. Ted Hess-Mahan permalink
    October 18, 2012 08:09 AM

    @Sean, from the Treasurer’s MSBA Policy:

    All articles, motions, resolutions, orders, Proposition two and one-half ballot questions, and any other votes of a regional school committee or the district’s member communities related to the approval, funding, and/or debt authorization for a Project, as applicable, shall be a separate, stand-alone vote, solely for purposes of the one Project. The article, motion, resolution, order, vote and/or ballot question related to the Project must not pertain to or be bundled with any other school or municipal project. The article, motion, resolution, order, vote must be project specific and must include specific information about the project location and scope.

    A debt exclusion is not required by the MSBA, but if a community needs funds that exceed the levy limits, it must be through a project specific override or debt exclusion and cannot be bundled with anything else.

  16. Mike Striar permalink
    October 18, 2012 12:46 PM

    Let’s keep in mind that Newton didn’t have an override of any kind, debt exclusion or general, to built Newton North, and the MSBA was still obligated to reimburse a percentage of the cost. It’s the fact that we’re now trying to fund these other school projects in a more responsible way, through a ballot initiative raising the necessary funds, which is triggering this ridiculous MSBA policy.

    In this case that policy interferes with the right of Newton voters to craft and vote on an override of their choosing. Rather than push back against this policy, Mayor Warren has laid out multiple overrides to fit the policy, and in doing so has significantly diminished the likelihood of success.

    Our students deserve better than this. We’ve been talking about fixing or replacing these school buildings for decades now. Two of my three children went through their entire K-12 experience while school buildings continued to deteriorate and the City promised, but took no action. If either of the proposed debt exclusions should fail, that record of broken promises could continue for years to come. While it might be easy to blame such a failure on the voters, the real responsibility for failure will be on the structure of these overrides, which collectively comprise the most divisive voting scenario Newton has ever seen.

    The people of Newton should be pulling together to make sure ALL of our school buildings are in proper working order, not dividing our city with multiple votes that allow people to vote in favor of repairing their own child’s school, and against repairing schools that other people’s children attend.

    It appears to me the solution is a single, general override. I believe that override could be structured in a way that satisfies the MSBA. If it failed to satisfy the MSBA, I would be in favor of seeking immediate help through the Courts, as an override is the mechanism established by Proposition 2 1/2 that allows voters to make these types of decisions.

  17. Sean permalink
    October 18, 2012 01:29 PM

    Mike,

    Yes and no. It’s the wrong policy. (I’ll have more later.) But, Setti shouldn’t be spending time fighting the policy. We need to get moving. If the MSBA is imposing unnecessary requirements, we should plan to meet them.

    In the meantime, people who care about Newton can challenge the MSBA policy. If we’re successful in time …

  18. Mike Striar permalink
    October 18, 2012 02:22 PM

    Sean– As we’ve seen in the weeks leading up to the November elections, the courts act swiftly on matters of voting rights. I’m not a lawyer, but in my opinion, the City should seek summary judgment on the grounds that the MSBA policy discriminates against the right of Newton voters to structure our own override, while still maintaining our legal right to MSBA reimbursement. You were completely correct that this policy puts an undue burden on Newton, because we have so many school buildings. Why should our hurdle be higher than surrounding communities with fewer schools, whose residents contribute proportionately far less in tax revenue to the the State?

  19. Barry Cohen permalink
    October 19, 2012 10:11 AM

    Any answer on how much each school will cost, just construction and not debt costs, and how many students in each? That’s Angier and Cabot.

  20. Kevin permalink
    October 25, 2012 06:31 AM

    Welcome Newtononians to our new fiscal sheriff! Grossman has all of Mass taxpayers on tender hooks. When any school budget now goes above estimates you can count on funding to be immediately revoked stalling the process by many months if not years.

    Here in Concord we’ve likely lost a at least a year caused by a ill advised planning decision to build a hallway from the new HS to the gym so the kids won’t have to walk outside during the winter. With that and a few other design changes due to sight assessments, the budget increased $15 million. MSBA immediately pulled funding early last year and then went dark until this week. Get used to Grossman’s heavy hand. We get the message. No frills. No bells and whistles. No hallways.

    From a policy stand point I think a clear majority in Massachusetts are willing to spend more on education. Grossman and his staff need to get this message loud and clear. We all agree there won’t be another Newton North High School but there sure as hell should be a way to get the schools built without this turning into a pissing contest between local building committees and Grossman who seems very willing to use the nuclear option (letter in the mail, we’ve cancelled your school funding) without some mechanism to vet out why the cost overrun has occurred and determine whether its’ frivolous or a reasonable design change.

    As an earlier commentator said, it’s not the MSBA’s money. It’s our tax dollars and we all have a vote next time around.

  21. Mike Striar permalink
    October 25, 2012 11:57 AM

    That’s a great post, Kevin.

    I had dinner last week with a friend of mine from Concord, and he was telling me about the situation with the high school there. After reading your post, I took a look at some of the news articles about the MSBA cutting off your funding. Instead of telling Concord that any increased cost would have to come out of residents pockets, the MSBA chose to punish the entire school district, pulling the rug out from under the new high school AND refusing to fund any other school projects in that district. As you read, here in Newton, Grossman is using MSBA “policy” to interfere with our communities right to structure a single override to address all our school building needs.

    It’s absolutely infuriating that the MSBA under Steve Grossman, has strayed from their core mission, HELPING communities build new schools. What makes the situation in Newton even more aggravating, is that we have a mayor who could have pushed back against Grossman’s heavy-handed approach, but chose instead to back down.

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