Amid Claremont crisis, Pittsfield school district works to dig out of its own million-dollar hole

As a crippling financial crisis uncovered in recent weeks in Claremont makes headlines, Pittsfield, too, is reckoning with a budget shortfall of more than a million dollars as a new school year gets underway.

Pittsfield’s deficit, discovered early this year, is roughly $1.8 million, 16% of last year’s $10.9 million budget, and potentially bigger by percentage than Claremont’s.

The shortfall forced the 500-student district to remove 25 positions from its budget for this school year and cut back on a range of courses at Pittsfield Middle High School.

New Pittsfield superintendent Sandie MacDonald said that her district discovered its budget issues in the winter, when an interim superintendent took over following the abrupt resignation last November of former Superintendent Bryan Lane. In contrast, the full extent of Claremont’s deficit only became publicly known this summer.

“I think that they were continuing to spend and maybe they didn’t uncover their issue until they literally ran out of money,” said MacDonald, who became superintendent in July.

Still, despite discovering its shortfall about six months before Claremont did, the deficit will have significant ramifications for students in Pittsfield. The eliminated positions include 16 para-educators, a guidance counselor and a vice principal. High school students will not have access to classes like calculus, psychology and environmental science. The district will also delay necessary maintenance on bathrooms and playground equipment, for example.

Taxpayers can expect a warrant article at town meeting to cover the deficit. Any portion that can be absorbed over the course of this year will be subsequently refunded, MacDonald said.

Both Pittsfield and Claremont are still investigating exactly what went so wrong, with more answers available in the former district than the latter.

In Pittsfield, administrators engaged in a problematic practice called “looping,” in which a portion of expenses for a given school year is paid with revenue raised for the subsequent year. For years, for example, teachers’ summer paychecks came from the wrong budget, according to MacDonald.

Pittsfield also spent far more on special education services, which districts are legally mandated to provide, than it included in its budget. In addition, general overspending played a role, MacDonald said. For example, the district purchased a reading curriculum that it thought would be covered through grant funds.

The work of a financial auditing firm and forensic accountant is ongoing in Pittsfield. MacDonald hopes to have a final calculation of the deficit by Sept. 30.

The factors behind Claremont’s deficit — which is between $1 million and $5 million — remain less clear, district leaders have said. In May, administrators alerted board members that the district had believed it had surpluses at the end of the 2019-20 and 2020-21 school years.

During those years, the district failed to submit grants for reimbursement to the state, Superintendent Chris Pratt said.

Besides the specific mismanagement, Pittsfield and Claremont also bear certain challenges that more affluent districts don’t face.

New Hampshire relies on local property taxes to fund K-12 education at the highest percentage rate in the country, according to a report by the National Education Association. This system inordinately burdens taxpayers in municipalities with low property values, like Claremont and Pittsfield. The two communities have an equalized valuation per student of $874,000 and $1.1 million, while the state average is $2.1 million.

“In a property-poor town, you have to raise twice as much in taxation to fund the same education,” MacDonald said.

Pittsfield also has among the highest percentage of students with disabilities in the state, at 25% last year, according to the Department of Education. Special education services, particularly in a small district, can be costly and unpredictable.

The state, which reimburses school districts for particularly expensive services, has in recent years failed to allocate enough money to cover these costs, leaving districts with less money than expected.

In February, Pittsfield instituted a spending freeze and never reached the point of experiencing immediate cash flow issues, as seen in Claremont.

All of Pittsfield’s bills to vendors that were paused last spring have since been paid and the district has settled on a payment plan with the New Hampshire Retirement System that would get last year’s unpaid employer contributions covered by next April, MacDonald said.

The district is also attempting to save money this school year to offset the deficit warrant article taxpayers will have to shoulder come March.

In Claremont, meanwhile, the district has placed its superintendent and business administrator on leave and hired a comptroller to begin conducting audits of revenues and expenditures in recent years. The exact amount of the shortfall remains unclear.

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