The Select Board, School Committee, and Finance Committee met Monday to review the utility reserve usage agreement between the town and the school district for fiscal year 2025 — which runs from July 1, 2024, to June 30, 2025 — and to clarify how the related budget line item was ultimately “zeroed out.”

“We wanted to make sure that we had this resolved before we went into the budget for this year,” said Select Board Chair Katie Phelan.

Questions were raised at the previous tri-board meeting about how utility funds were used in the fiscal year 2025 school budget, particularly regarding a $175,000 line item and 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.

Director of Finance and Operations Cheryl Stella-Herrick walked the three committees, on Monday, through a timeline that began in October 2023, noting that the $175,000 line item was not included in the approved budget.

There were four tri-chair meetings “to talk about school budgeting issues that we knew we were facing” around transportation, the new school operation, and special education costs, prior to the budget approval in 2024 for the 2025 fiscal year.

On January 29, 2024, the School Committee submitted the 2025 fiscal year budget to the town, which was a 5.1% increase from the previous year and included money for utilities at the elementary school. The budget was presented to the Finance Committee on February 5, 2024.

Four days later, then–Town Administrator Sean Fitzgerald emailed then–Superintendent Pamela Angelakis proposing a 3.84% school appropriation, or $32,199,096, along with two warrant articles for utilities and special education to fully fund the School Committee’s voted budget.

The School Committee reduced the appropriated budget at that time to reflect the decreased appropriation, meaning the utilities line at the elementary school was zeroed out.

The appropriation was approved at the Town Meeting that May.

Finance Committee Chair Eric Hartmann noted that Fitzgerald and town staff thought on further deliberation that since it was “something we only expect to last a year or two, it shouldn’t be a fund. We should do it differently.”

“We postponed that article but then asked the town to increase the appropriate budget for the school by that same $200,000,” Hartmann said, adding that “it wasn’t funded the way the MOU was signed” and the money that was actually zeroed out is what people are considering the “missing money.” 

Stella-Herrick noted that the initial thought process in 2023 was for that “once we have solar up and running on the roof and on the parking lot canopy, those costs should in theory going down, so I think there was a hesitation to build something into the budget that would eventually might be going down.”

“The original intent was a positive intent,” Stella-Herrick said.

Select Board Member Mary Ellen Fletcher, however, said that “we were informed that the additional $200,000 was to offset the school’s budget, not to fund the school budget.”

“To me, that’s where the issue for 2025 lies,” Fletcher said.

Phelan noted that “even if the reality of the MOU was to offset, there was no funds in the budget to offset,” since the line item for the utilities was zeroed out.

School Committee Member Miguel Contreras said later that at the first night of the May 2025 Town Meeting, specifically at two hours, 43 minutes in, “it was confirmed on the floor in front of all the members” that the line item was being zeroed out.

Hartmann said that there “certainly wasn’t clarity” at Town Meeting about where the money was coming from or how it was being used.

At the beginning of the tri-board meeting, Superintendent Jason Calichman also noted that he can “understand completely how this is confusing,” especially “as someone who wasn’t there when this all went down,” as he was the principal of the Swampscott Middle School at the time.

“It took me quite a few meetings with Cheryl to wrap my head around the timeline and everything that happened,” Calichman said. “I think the good news for all of us is that the MOU is over and done with and we will be funding utilities in our budget, just like we did in FY 25 and 26.”

As for the next fiscal year, Stella-Herrick said there was discussion between the three board chairs to fund the utilities in a similar manner with an appropriation. 

“January 13, 2025, materials were presented at that time by the School Department. In those materials, it assumes that $200,000 is from the utilities reserve to fund the elementary school,” Stella-Herrick said. “The School Committee FY 26 voted budget shows zero in the utility line for the elementary school for FY 25 and FY 26.”

In the 2025 fiscal year 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.”

In January 2025, the three chairs of the Select Board (Fletcher), School Committee (Glennn Paster) and Finance Committee (Hartmann) met informally prior to the Town Meeting that would finalize the 2026 fiscal year budget. 

“Tri-chair is a mechanism used to hold conversations, to facilitate ideas and then the responsibilities of the chairs is to bring that information back. It’s not to make decisions,” Fletcher said at Monday’s meeting. 

After questions from the Finance Committee, the School Department stated that if “that’s not funded through free cash, we need to add it back to our budget and again increase our appropriation,” Stella-Herrick said.

In May 2025, the Select Board had a meeting discussing the matter “and we noted that the line out would be zeroed out,” Phelan said. 

“At least for (fiscal year) 2026, there was a more clear understanding of what the school had been doing for the budget going into pre-Town Meeting than we had for fiscal year 2025,” Phelan said. “Maybe we learn from our mistakes, but here we are still.”

Stella-Herrick did note in the meeting the confusing aspect is why the budget will not go forward in a similar fashion in the future.

“This is why going into this budget cycle, there was no way in which we were going to be funding the School Committee budget this way because it gets incredibly confusing, and unless you’ve been in every meeting and every discussion since 2023 and on every email…it’s not a good way to fund a budget,” Stella-Herrick said.