MSBA Announces Move to Increase Reimbursement Points for Regionalization

FOR IMMEDIATE RELEASE                                                                                                                CONTACT:  Carrie Sullivan

April 14, 2008                                                                                                                                                             (617) 720-4466    

TREASURER CAHILL AND THE MSBA MOVE TO INCREASE REIMBURSEMENT POINTS FOR NEWLY CONFIGURED REGIONAL SCHOOL DISTRICTS

Additional Funds will Benefit Communities who Regionalize to Solve their School Building Needs

BOSTON, MA – State Treasurer Tim Cahill, Chair of the Massachusetts School Building Authority (“MSBA”) and Katherine Craven, MSBA Executive Director, are pleased to announce that the MSBA Board has voted to authorize a new regulation that would provide the MSBA with the flexibility to award up to 3% reimbursement points for a project the avoids duplication in districts where regionalization efforts have been successful as a result of working with the MSBA.

This proposed revision to the MSBA’s regulations, which will work its way through the regulation process, is an effort to further incentivize communities to consider regionalization as a potential cost-effective solution to their school facility problems. 

The MSBA received 423 Statements of Interest (SOIs) from 162 different school districts. In reviewing certain SOIs, the MSBA identified potential opportunities to address issues raised by school districts through exploration of solutions combining regional resources. Certain districts may lend themselves to mergers with neighboring communities because of small and decreasing enrollments and budget challenges for capital and operational costs.  These additional reimbursement points would be awarded under the “Alternatives to Construction” incentive point category, which contemplates awarding funds for school facilities solutions where construction has been avoided. 

The MSBA is also working on organizing a regionalization roundtable with other public education stakeholders to further explore regional school construction efforts.

“We are encouraging districts to examine all possible cost-effective solutions to school facility problems, including regionalization and combining schools,” said Treasurer Cahill.

“These additional funds that we propose to give districts who regionalize will help communities that are finding it increasingly expensive to build and operate schools,” stated Katherine Craven, MSBA Executive Director.  

During the next five years, the MSBA will collaborate with municipalities to equitably invest up to $2.5 billion in schools across the Commonwealth by finding the right-sized, most fiscally responsible and educationally appropriate solutions to create safe and sound learning environments.  The MSBA is

committed to protecting the taxpayer’s dollar by improving the school building grant process and avoiding the mistakes of the past in the funding and construction of school facilities. 

To date, the MSBA has made approximately $5.4 billion in reimbursements to cities and towns for school construction projects inherited from the former program -- $3 billion of which are accelerated “payments-in-full” to districts which had been waiting years for a partial payment from the state prior to the creation of the MSBA.  Those payments have saved municipalities millions of dollars in interest costs and reinvigorated a system that once had $11 billion in outstanding obligations. In its three year history, the MSBA has successfully contained the Commonwealth’s formerly rampant and unsustainable financial liability for the costs of 1,150 local school construction projects and last year was able to reopen a sustainable, reformed grant program as a result of programmatic reforms and sound fiscal management.

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