Establishing a Stabilization Fund at a Regional Vocational School in Massachusetts

State law in Massachusetts allows regional schools, including regional vocational technical schools, to establish a Stabilization Fund for capital projects. The governing statute is Massachusetts General Laws c.71, §16 G½.

Not all regional schools have attempted to create such a Stabilization Fund. This article is written to assist those who wish to try.

From my experience, the process is straightforward but can also be long and frustrating.

Here are the basic steps to follow:

1. Educate Yourself. Read the law. Talk to others who have gone through the process. Ask questions. Contact me. Reach out to your professional association. The Massachusetts Association of Regional Schools (MARS) and Massachusetts Association of Vocational Administrators (MAVA) are both excellent resources. Talk with your School Business Manager to make sure the two of you are united on this. You need to march together. Make sure that everyone knows, right from the very start, that it isn’t easy to use money from the Stabilization Fund. Any money placed into such a Stabilization Fund could only be used for capital projects and could only be used by a vote of two-thirds of the regional School Committee. It is not a piggybank to be opened at will by the School Business Manager or Superintendent

2. Educate Your School Committee. If you have a Finance or Budget Subcommittee, that is probably the best place to start. Talk with the Subcommittee chair first, to make sure there’s at least general support for the idea. Then bring it to the full Subcommittee. Make a presentation. Let them ask questions until they can’t think of any more. (The questions are the same ones you will hear from town and city officials later.) Once you have strong consensus on the Subcommittee, ask that group to make a recommendation to the full School Committee.

3. Seek a Vote from Your School Committee. Once you have support from the Subcommittee that handles money matters, put the item on the Agenda for the full School Committee. In the meeting package, include a memo outlining the reasons why you are seeking to establish a Stabilization Fund. In the memo, address any major concerns that were raised at the Subcommittee level. Remember that it is highly likely that your memo will find its way into the hands of Mayors and Selectmen in your district. Make sure it is strictly factual. Make sure all later correspondence to your member communities uses the same or very similar language.

4. Notify Your Member Communities of the Vote. After your School Committee takes a vote to establish a Stabilization Fund, the fun is just beginning. Now you need to mobilize support in a majority of your member communities. If you have 9 member communities, you need positive votes from 5 of them. If you have 18 member communities like I did, you need a positive vote from 10 of them. The first step is to notify the Boards of Selectmen and City Councils in your district of your School Committee’s vote. Make sure Mayors and Town Managers are notified, too.

Here’s part of the letter we sent to our 18 member communities:

“On January 2, 2013, the District School Committee at Montachusett Regional Vocational Technical School voted to establish a Stabilization Fund in accordance with the provisions of Massachusetts General Laws c.71, §16 G½. The law requires that district communities be notified and vote to approve the action by the School Committee.

The Monty Tech School Committee requests that an article be placed on an upcoming Town Meeting Warrant/City Council Agenda seeking approval to establish the Stabilization Fund.

We suggest the following wording:

That the Town/City of ______________vote to approve the establishment of a Stabilization Fund according to Massachusetts General Laws c.71, §16 G½ for the Montachusett Regional Vocational Technical School District.

5. Educate Your Member Communities. Use the letter to member communities as an opportunity to explain why you are making your request.

We added this:

“Stabilization Funds are commonplace throughout the Commonwealth of Massachusetts and in the cities and towns throughout our region. Most, if not all, of our 18 district communities have utilized Stabilization Funds for many years.

Monty Tech wishes to establish a Stabilization Fund in order to help address its many capital needs. As you may know, the district maintains and regularly updates a Five-Year Capital Plan which identifies the major structural and equipment needs of our school district. While we do our very best to keep school facilities and equipment updated, and stretch every dollar through the use of faculty and student labor, we have found that funds allocated for capital projects in our annual budget are not sufficient to meet the district’s needs.

We believe that setting up a Stabilization Fund is fiscally prudent.”

6. Expect Questions, Rejection and Delays. The school district is comprised of 18 member communities, including two cities and 16 towns. In some of the communities, we were invited to speak to the Board of Selectmen, Finance Committee, Financial Advisory Board or City Council. In others, we heard nothing. In those cases, I guess our letter explaining the Stabilization Fund was sufficient. The elected officials in those communities simply voted to put the matter on the Town Meeting Warrant. In five of the Towns, however, nothing happened at all. They either intentionally left the matter off the Town Meeting Warrant – or simply forgot to put it on. In one community, we entertained a long series of questions and I followed up with a letter further clarifying our position.

7. Expect Some Unfair Questions and Comments. During our meetings, we heard several unfair questions, some which appeared designed simply to get us upset. They never did. But you need to be ready. The length of this article prevents me from going into great detail, but the questions fell into five main categories: the potential size of the Stabilization Fund, concerns about unmet capital needs at municipal school districts, claims that approving a Stabilization Fund would automatically result in increased assessments to member communities, suggestions that a Stabilization Fund is something “new” or “special”, and claims that the vocational school looked so good it didn’t need any capital improvements. Finally, we heard the terribly unfair and inflammatory phrase “slush fund” tossed around more than once. Be prepared to address these issues. By reading the law and noting the severe limitations placed on the use of a Stabilization Fund, you should be ready.

8. Don’t Give Up. When we started the approval process at Monty Tech, the very first vote from a community was a rejection. To make matters worse, the vote was unanimous. And it was from our second largest community. The Budget Subcommittee chair and School Business Manager took the defeat badly. I was disappointed, of course, but knew that we had 17 other chances to get 10 votes in our favor. In another community, we showed up for a Town Meeting on a Saturday morning to discover that the Finance Committee had voted not to recommend approval. Again, I was disappointed but not defeated. When given the opportunity to speak to Town Meeting, I thanked townspeople for always supporting our school and reminded them that their Town had a Stabilization Fund which their municipal school district had the chance to tap from time to time. We didn’t. In the end, Town Meeting voted solidly in our favor, over the objections of the town’s Finance Committee.

9. Celebrate Your Success. In our case, the School Committee voted 17-1 to establish a Stabilization Fund. That vote took place on January 2, 2013. Our ninth and tenth positive votes from member communities were secured – separated in time by just two or three minutes-on the evening of June 18, 2013. We didn’t exactly pop open any champagne, but we did congratulate one another on achieving success. We saw it as another small step to improve our ability to respond quickly to small- or medium-size capital needs in our school. It’s a small step that you, too, can take with some planning and some work.

10. Spread the News and Help Others. Though not required by the statute, we notified the Massachusetts Department of Revenue and the Department of Elementary and Secondary Education of the vote taken by our School Committee and the names of the ten communities that supported us, and the dates they cast those votes. I also testified in Boston on a bill that would simplify the way Stabilization Funds are created and answered questions from one or two other districts trying to set up a Stabilization Fund.