SWAMPSCOTT — Town and school officials took a close look Thursday at how tuition payments from Nahant are managed and budgeted, as questions about a school department revolving fund became a focus of a joint meeting between the Finance and School Committees.
The discussion centered on how the account operated, how much money it holds at a given time, and how those funds are accounted for within the town’s overall budget. These questions come as committees and departments throughout Swampscott continue to work through a challenging budget year, with limited financial flexibility and growing pressure to better understand how current spending fits in with future obligations.
Questions about the revolving fund gained traction earlier in the week during public comment at Monday’s Finance Committee meeting, where Select Board member MaryEllen Fletcher pointed to the remaining funds in the account at the end of the last fiscal year.
“At the end of 2025, the schools had $574,000 sitting in the Nahant revolving fund,” Fletcher said. “We have never had a discussion about having a cushion in a revolving account. And this has to be addressed … we all have to really focus on fiduciary responsibility.”
Finance Committee meeting members indicated ahead of Thursday’s meeting that they were looking for a clearer understanding of the school’s overall budget, including how the revolving fund is structured, as they prepare to present a recommended budget at Town Meeting in May.
At Thursday’s joint meeting, that discussion expanded into a more detailed look at how the revolving fund is used, including what types of expenses can be charged to the account and how those decisions are made.
School officials explained that the fund can be used for a range of education-related costs tied to Nahant students, including teachers, guidance counselors, psychologists, and instructional materials. Those costs can be either fully or partially attributed to the revolving fund, depending on need.
“There’s rules for all revolving funds … some far more stricter, some less strict,” said Assistant Superintendent of Finance and Operations Sheryl Stella. “As far as what we can charge to the Nahant revolving fund, it’s any educational expense related to Nahant students. So it’s a little more broad.”
The revolving account is tied to tuition payments from Nahant, which sends students in grades 7-12 to Swampscott Public Schools, as they do not have a public middle or high school. The fund was approved by Town Meeting under the state revolving fund law and allows the school department to retain and use those payments with more flexibility. Previously, school officials had to return to Town Meeting to access those tuition payments through the general fund, a process that could be difficult and time-consuming.
Committee members also pointed to the fund’s current balance and projected use over the next two fiscal years as a part of their review, and whether a more aggressive use of the fund could be used to reduce the ask of the overall budget.
Finance Committee Chair Eric Hartmann acknowledged that the schools are using a portion of the funds in the revolving account to offset reductions they’ve made at the town’s request in their fiscal year 2027 budget. The schools are charging an additional $168,000 against the account, which Hartmann projected would then end the year with a balance of $216,000.
“That’s a question I think we just want to understand, because it seems to me … you could potentially choose to charge another $216,000 of teachers or guidance counselors or whatever to that account, and end the year at the end of 2027 at zero,” Hartmann said. “And in theory, $216,000 less in your appropriated budget for the town.”
Stella said that while such a move would be possible, maintaining a balance in the account is a deliberate strategy to help stabilize the budget over time.
“Our election was to spend less of the Nahant revolving fund because we knew at that time that we were entering some tough financial years for the town,” she said. “That would allow us some money going into the next couple of budget cycles to be able to pull from to have a lower budget ask of the town.”
Stella also cautioned that fully drawing down the account could create larger challenges in future years. “If you zero it out, then we have nothing to help offset our ask as we go into ‘28,” she said.
Stella added that some other towns and school departments have clear guidelines about how much money should be kept in their revolving accounts, whether it’s a percentage of their overall budget or a dollar amount tied to another line item. Committee members signaled that such guidelines may need to be formalized in Swampscott.
“I think we should probably have a policy, or at least a document that talks about ranges of what collectively people think we should be carrying in these accounts,” Hartmann said.
School officials indicated that those conversations have already begun internally, but agreed that additional coordination with town leadership could help align how the fund should be managed going forward.
The discussion highlighted broader challenges that both committees face in balancing immediate budget pressures with longer-term financial planning. School Committee Chair Glenn Pastor said the conversation is part of a broader effort to navigate a difficult financial period collaboratively.
“We’ll work together, and we’ll get through this somehow,” he said.
