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Voter rejection means debt paid from municipal budget

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GROTON — The town has $200,000 less to operate with in the new fiscal year than it does the current fiscal year, under the new budget approved by the town meeting last month.

But the money could get even tighter now that voters earlier this week refused to let the town raise taxes for the $2.5 million bond for the high school land purchase.

Alan Genovese, superintendent of the Groton-Dunstable Regional School District, said this week that voter rejection of the debt-exclusion proposal at this week’s elections in Dunstable and Groton will affect the town budgets — but not the school budget — unless votes are retaken and reversed in the fall.

That’s because it would be against state law — and in violation of the regional school district agreement — to change the school budget already approved by town meeting, Genovese said.

That’s because it would be against state law — and in violation of the regional school district agreement — to change the school budget already approved by town meeting, Genovese said.

Meanwhile, voters in Groton and Dunstable are responsible for paying for the bond that they authorized the district to issue in 2005, meaning the money to cover the bond cost must come out of municipal operational budgets.

The debt-exclusion proposal stemmed from a recent legal settlement between the school district and the Casella family, from whom the school acquired the land for $1.8 million in 2001 through eminent domain.

The family sued the school district, saying it significantly undervalued the land. A jury in 2005 determined the property value to be $4.13 million and ordered the district to pay the difference.

The district filed an appeal, but town meeting in both towns authorized borrowing $2.5 million in case it lost the case because the state Department of Revenue required the authorization as an assurance that Dunstable finances would stay afloat, according to School Committee member Chuck McKinney.

In October, the School Committee agreed to drop the case and pay the family the rest of the money to avoid spending more money on the legal battle.

A yes vote on the debt exclusion would have meant paying extra taxes that would last through the life of the bond. A no vote meant taking money out of the towns’ operational budgets to cover the bond.

The district financed the $2.5 million through short-term borrowing; the interest payment is about $60,000 in fiscal year 2009 with $48,000 of that being Groton’s share and $12,000 from Dunstable, according to Genovese and Groton Board of Selectmen Chairman Fran Dillon.

The district has planned to issue a bond when the short-term borrowing expires on Oct. 24. That would mean an additional $54,000 between Groton and Dunstable, including principal payment, in fiscal year 2010, Genovese said.

It will be up to town and school officials to decide whether the figure will be discounted from, or included in, the municipal funding for the school district.

Genovese hopes voters will agree to pay for the debt through a debt exclusion. He said he will work with town officials to help voters understand the consequences of rejecting the debt exclusion if the question goes back on the ballot this fall.

If another vote is not taken before Oct. 24, the district could issue a “bond anticipation note” to extend the short-term borrowing, though that would make the debt more costly in the long run, Genovese said.

McKinney and Dillon have said payment for the debt isn’t a matter of school versus town because voters have obligated themselves to pay for it one way or another.

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