Vote ends Lynn net school spending snag

LYNN – City Council voted to support a legislative solution to the city’s net school spending problem that could have cost the district $7 million in education aid.Councilors Hong Net, Buzzy Barton, Brendan Crighton, Richard Colucci, Wayne Lozzi, Dianna Chakoutis and President Daniel Cahill voted unanimously, without discussion, to accept a provision in the state budget signed by Gov. Deval Patrick that resolves what had become a sticky and potentially costly situation.”It also waives penalties for the community, or, rather, it gives the commissioner of education (Mitchell Chester) the ability to waive all penalties for Fiscal (years) 13, 14 and 15,” explained Chief Financial Officer Peter Caron, who is also the city’s director of assessing.Perhaps most importantly, the solution allows the city, over the next four years, to start including teacher retiree’s health insurance in net school spending.The Department of Elementary and Secondary Education requires communities to contribute a certain amount of money that, when combined with state educational aid, represents a community’s “net school spending requirement,” or what a community is required to spend on education. Lynn fell behind in its required spending when it was discovered that it had been erroneously claiming retired teacher health insurance costs under net school spending for an undetermined amount of time.Chester warned in a February letter that the city had dropped $8.5 million below the state’s minimum school spending requirements. A lack of action to cover the shortfall could result in a $300,000 fine and a $7 million reduction in state aid to schools, wrote Chester.Caron said while the threat of a fine hung over the city, it was never assessed and now the threat has been lifted. The vote not only clears the city of any monetary penalties, but it also clears the way for Inspectional Services Director Michael Donovan to borrow $3.9 million over an 18-year period to be spent specifically on energy efficiency improvements to six of the city’s schools.Donovan said the Bank of America loan hinged on the city’s ability to resolve its net school spending issue. With the City Council’s vote, the bank will approve the loan and he can get on with school maintenance projects, he said.”We’re running out of time for summer projects,” Donovan added.It is anticipated the new projects will save the city $131,000 per year in energy costs.”We’ll save $658,000 over 20 years,” Donovan said. “Actually more, because it’s not like we buy new boilers every year.”Included in the projects are brand new HV/AC systems for Breed Middle School and Callahan Elementary School, replacing systems that date from 1978 and 1952, respectively, Donovan said. He said Harrington Elementary School’s system would also be updated with a digital rather and pneumatic controls.”This is the second phase of the energy efficiency project, and it will save us $371,000 a year, including these projects,” Donovan said. “That is about 10 percent of the school’s utility costs.”