SHIRLEY -- Article 3 on the May 14 Annual Town Meeting Warrant -- a $173,843 supplemental appropriation for Fiscal Year 2018 that was approved -- is "non effective, " interim Town Administrator Rocco Longo told the selectmen Monday night.

Referencing a May 18 letter from Jonathan Deforge, one of Shirley's representatives on the ASRSD School Committee, Longo explained that the town's use of that money, the source for which was identified as "reduction of school assessment," was incorrect -- or at least premature.

The amount in question represents the town's presumed share of a surplus in the district's Excess and Deficiency (E&D) fund. That is, any amount over 5 percent of the district's operating budget for FY2018, as certified by the state Department of Revenue.

According to Massachusetts General Law, a regional school district can (but is not required to) use all or part of the certified E&D balance as a revenue source for its proposed budget, Deforge said in the letter. But if that balance goes over the five-percent benchmark, the district must use that additional money as a revenue source, which is what the School Committee did.

Trouble is, so did the town. Assuming ownership of the E&D surplus that members of the town's financial team apparently believed was a given, Town Meeting in Article 3, Supplemental Appropriations FY2018, clawed back the $173,843.

But the school district had already rolled that money into its own budget, as shown in the budget booklet presented to Ayer and Shirley town officials before their respective town meetings.


Deforge said he spotted the discrepancy at Shirley Town Meeting but before calling it to the town's attention did some back-checking to be sure his read was correct. ASRSD Financial Manager Bill Plunkett concurs that there was an error, Deforge said. He and Plunkett attended Monday night's meeting.

If the town gets a reduced assessment due to the E&D surplus, it would be for "the "subsequent year," not FY2018, Plunkett explained after the meeting.

But that money isn't available for Shirley to spend this year on items listed in Article 3, including $10,500 to pay the consultant conducting the Town Administrator search, $74,046 to help cover the Snow and Ice budget and $89,297 marked for Capital Stabilization. (Another transfer -- $19,500 -- to cover curbside trash pickup expenses, came from the Solid Waste Revolving Enterprise Fund and was not affected by the mistake.)

"The Town of Shirley has not been requested by ASRSD, to my knowledge, to reduce an FY2018 assessment payment, nor has ASRSD refunded cash to the Town of Shirley, " Deforge said in his letter.

The upshot is that Shirley will have to plumb other sources for those supplemental infusions.

Nobody questioned that a mistake was made, but Chairman Enrico Cappucci said he would have preferred Deforge to speak up at Town Meeting so that Article 3 could have been tabled. "Now we need to ask Town Meeting to make up that money," he said.

"I wanted to be respectful," Deforge told the board.

Which doesn't mean the outcome won't be the same, eventually. Citing discussionduring a budget presentation in February, he said it was clear the School Committee aimed to use that E&D surplus "to lower the assessment," which could explain the mixup.

Selectman Bryan Sawyer, formerly Finance Committee chairman, said the important thing now is to prevent similar stumbles in future.

The 2019 Town Budget was built in rush mode, coming off a recall election that seated two new selectmen and amid resolving turmoil at Town Hall, where key positions were still in transition and some departments were shorthanded.

"It was difficult for a new interim Town Administrator and a new Town Accountant" to take over the budget process so late in the year, Sawyer said, so it wasn't too surprising that this matter "fell through the cracks."

Longo said it also points up the need for the town to establish and maintain better, more consistent dialogue with the ASRSD, particularly during budget season but throughout the year as well. And it underscores the need to start the budget process earlier, he said. 

As for the missing money, Longo said there were other pockets the town could get it from and that the matter could be resolved at the fall Town Meeting.

In a big picture sense, the situation seemed to highlight the need for an additional independent audit of the town's books, which Longo brought up earlier in the meeting. The cost: $30,000.

Over the past several years there have been four collector/treasurers, four different accountants and the offices were short-staffed, Longo said. Reconciliations are a particular concern, he said.

Given the transitions, vacancies, system makeovers, new processes and personnel changes over the past year, the added audit work is a must do now, he told the selectmen, noting that the auditor basically "moves in" for several weeks, poring over the books and helping the financial team get back on track.

The board agreed.

Responding to a follow up question by e-mail Wednesday morning, Jonathan Deforge said it should be noted that the school district's $7,735,108 assessment to the Town of Shirley was -- and is -- correct. "There are no changes needed to the ASRSD budget as a result of this mixup," he said.