School, town at standstill over indirect costs

School, town at standstill over indirect costs

Katie Landeck
News Staff Writer

WINCHENDON — Town Manager James Kreidler reported to the Board of Selectman on Monday night that the School Committee Chairman Michael Niles and School Superintendent Salah Khelfaoui declined a request to sit on a proposed ad-hoc committee to review the indirect cost agreement which has become a major point of contention between the school and town officials.

The agreement — signed in 2005 by Mr. Kreidler, the former superintendent and three members of the school committee including Mr. Niles — established the school-related items the town is responsible for funding. These expenses include administrative services, retirement funds, unemployment assessment, Medicare assessment, school choice and charter, as well as several types of insurance.


The total cost of these expenses are estimated 18 months in advance as officials begin formulating the next fiscal year budget. Officials then deduct the total from the amount of funding they are required to give the school.

“It’s their bill, but we pay it over here,”  Mr. Kreidler said.

When the final numbers become available in the fall, the lines items are adjusted accordingly, based on the agreement.

This practice is common and used throughout the Commonwealth, according to state officials.

However, recent controversy arose prior to the Dec. 30 Special Town Meeting, when the school choice and charter bill for fiscal year 2014 came in $109,898 over budget.

Mr. Kreidler said the $109,898 needed to be reappropriated from the school’s operating budget back to the town since it is an indirect cost. Mr. Niles said only $47,000 should be reappropriated as the state will reimburse the school $62,000 for charter school tuition reimbursement.

At the town meeting, the tension was so apparent between the two parties that members of the audience suggested they needed a moderator to have a productive conversation. Ultimately, both parties said the indirect cost agreement needed to be reexamined.

Mr. Kreidler later e-mailed representatives from the school, select board and finance committee proposing forming an ad-hoc committee to review and possibly amend the agreement. The committee would consists of school and town officials, including Mr. Kreidler and Dr. Khelfaoui.

Mr. Niles rejected the idea in favor of a similar committee previously formed, which had been comprised of a similar school and town officials, but not the town manager.

“We have already created a committee that looks at net school spending,” said Dr. Khelfaoui. “Why would we create another one?”

Both the selectmen and Mr. Kreidler were not pleased with the response.

“This is ridiculous,” said Select Board Chairman Robert O’Keefe at Monday meeting. “ How on earth can a group of people get together to prepare a document (Mr. Kreidler has) to sign without (Mr. Kreidler)?”

Selectman Jackson Blair echoed Mr. O’Keefe’s sentiments.

“(Tell them) thank you for saying you’d prefer, it but that’s not the way it’s going to be,” he said.

The select board later backed off that decision and voted unanimously for Mr. Kreidler to contact Dr. Khelfaoui and propose a four person working group of the town manager, town accountant, school business manager and superintendent that would replace the committee.

The school district wants to address administrative costs, namely the portion of many town employees salary they pay.

“We pay a portion of a tax collector salary,” said Dr. Khelfaoui. “We have nothing to do with that, with or without the schools, the town will collect taxes.”

Additionally, Dr. Khelfaoui contends the school pays too large a portion — 52-percent — of the town accountant’s salary.

They are also expected to address net school spending, as the Department of Education believes the town has under funded the schools by about $324,000 since fiscal year 2012.

On the town’s side, officials hope to find a way to create better preliminary numbers.

“To try to reconcile a year later is nonsensical,”  Mr. Kreidler said.