Questions have been raised over how utility funds were used within the school budget for the 2025 fiscal year – which runs from July 1, 2024 to June 30, 2025 – particularly the unclear disposition of the funds in a $175,000 line item and the use of a $200,000 free cash allocation intended to offset costs at Swampscott’s new elementary school.

In 2024, Swampscott opened its new elementary school at 10 Whitman Road, merging three old buildings into one. With more than 750 students in one building, officials said it was difficult to predict utility costs during the school’s first year of operation. In May 2024, a Memorandum of Understanding (MOU) appropriated funds for the following fiscal year to offset anticipated utility costs, but questions have since emerged over how that money was used.

“It is a serious issue,” Select Board Member Mary Ellen Fletcher told the Swampscott Tides. 

The MOU, dated May 1, 2024 and signed by former Town Administrator Sean Fitzgerald and former Superintendent Pamela Angelakis, said $200,000 from free cash would be appropriated to the “school operating budget to fund the increased anticipated costs associated with the new school building.” The money was placed in a “designated ‘reserve’ line within the facilities budget.”

“These funds will be used to offset the utility costs associated with the town and school buildings,” the MOU read.

At the same time, $175,000 was included in the regular school budget under an “electric school” line item for the elementary building. There were other lines for the high school and middle school.

During the 2025 fiscal year, the elementary school spent $196,000 for utilities. The money, however, appears to have been drawn entirely from the facilities reserve fund rather than only drawing $21,000 from that reserve fund, which equates to the excess above the allocated school budget line item.

“My issue here is in the ‘25 budget the schools had a line item for $175,000 for utility at the elementary school. When I read this agreement, it said to use those funds to offset that amount. That is not what happened here,” Fletcher said at the tri-board meeting last week. “The full amount, short of ($4,000) was used for the utility, so I think there is a serious problem with this MOU, and it appears to me that the schools are in violation of this MOU.”

School Committee Member Suzanne Wright said when Director of Finance and Operations Cheryl Stella-Herrick gave her update of the budget in September 2025, she said “we have used all but $4,000 and change of that reserve.”

“Their year to date spending was $196,000, which means the offset would have been $21,000, so the funds should have $179,000 in it,” Fletcher said. “The reserve should have $179,000, and it does not.”

Finance Committee Chair Eric Hartmann agreed with Fletcher at the tri-board meeting, noting that “the plan was to have a $175,000 budget for utilities in the school budget and then $200,000 in the reserve in case it ended up being $375,000 it’d be covered.” Hartmann added that while “not everything was covered,” the reserve fund should have only been dipped into for the $20,000 above the allocated school budget numbers.

The MOU had also stated that “any funds that are not needed explicitly for utility costs within the facility cost center are to be returned to the town and ultimately flow back to free cash.”

“Where’s the $175,000?” Fletcher said to the Swampscott Tides. “They didn’t use it.”

In the MOU there was also a note that “future recommendations for appropriations to the school operating budget will be determined each fiscal year by mutual agreement between the town administrator and superintendent, if necessary.”

No formal agreement was made between the town administrator and superintendent during the following fiscal year.

Yet, School Committee Vice Chair Glenn Paster told the Swampscott Tides that the School Department “used our $200,000” and the following year, for the 2026 fiscal year “the chair of the Select Board at that time, Mary Ellen Fletcher, said clearly – noted in the minutes – that the School Department should use an additional one more year of $200,000 from free cash for utilities.”

“This is what we were told to do, and we did it,” Paster told the Swampscott Tides, adding that “Everyone’s trying to work through a budget situation that is not the town’s doing” but instead a result of matters passed on the state level.

In January 2025, the three chairs of the Select Board (Fletcher), School Committee (Paster) and Finance Committee (Hartmann) met informally prior to the Town Meeting that would finalize the 2026 fiscal year budget. While the meetings were not public and were neither official nor binding, Fletcher requested that Town Hall staff take minutes, which were never formally reviewed, approved or released.

The first meeting, on January 13, 2025, shared that the elementary school’s utilities were forecasted to be $220,000 for the 2026 fiscal year. The minutes, reviewed by the Swampscott Tides, noted that it “is difficult to get a gauge on bills because the school department didn’t take over utility bills until August.”

In the second meeting, on January 17, 2025, the minutes note that Fletcher “supports removing $200,000 under utility.”

The School Department had not finalized their previous fiscal year’s financials until September of that year, so Fletcher told the Swampscott Tides that she did not have all of the information on hand during the January meeting.

“We’re not doing this going forward,” Paster told the Swampscott Tides, adding that the School Department has listed $250,000 in its budget for the elementary school’s utilities in its 2027 fiscal year budget. The estimated 2027 fiscal year school budget increase of 3.96%, or $1,352,998, includes the full utilities, Paster confirmed.

“There’s always going to be these one-offs,” Paster said in the tri-board meeting. “But the more we can put in the budget, I think the better.”

At the same time, the School Department has said it has been able to save money, to the extent that Paster said they “were able to add this amazing health teacher program at the middle school” within the budget. 

Superintendent Jason Calichman said at the tri-board meeting last week that the School Department “came in under budget,” saving money throughout the allocations.

“There were a lot of things that actually went our way,” Calichman told the Swampscott Tides. “I certainly felt we were being fiscally responsible, but then it ends up being an issue. To me, this is a good thing, we came in under budget by a very small percentage of the budget. When you look around, you don’t see that everywhere…We’re committed to teaching the whole child, and it’s more than just big grades. We care about them as individuals. We want them to want to go to school every day. We want them to feel happy and in a good place mentally. At the same time, we’re fiscally responsible and mindful of the town’s constraints.”

Select Board Member Danielle Leonard asked at the tri-board meeting if the group hadn’t discussed this issue in the two years since the MOU. Paster said “many times.”

Select Board Member David Grishman said that the group should receive information from Stella-Herrick prior to “jumping to conclusions” and “these accusations against the School Committee or anyone else.”

“Let’s just get the information and then we can have a discussion,” Grishman said. 

It is not clear yet when the next tri-board meeting will be for the group to discuss the matter. The group did say they will meet again before the Town Meeting in May, focusing on long-term town financial issues. There is also discussion to work on parameters around reserve funds. 

“There’s a lack of transparency creating a big problem,” Fletcher told the Swampscott Tides. “These are taxpayers’ dollars.”

Paster concluded at the tri-board meeting that the School Department will do whatever it takes to move forward.

“If the answer is what the answer is, we can put this years(-long) discussion behind us,” Paster said at the tri-board meeting. “If it’s whatever it is and you want to claw back the $175,000, we’ll claw back and cut whatever we need to cut.”