Newton working with state for release of school funds

With less than three months remaining before cash designated for the Newton North High School construction project is expected to run out, Newton officials said they are working to resolve an impasse with the Massachusetts School Building Authority over its release of a $46.6 million grant to build the new school.

As of last week, Newton still hadn't received the grant because it had not submitted an itemized budget and project scope to the satisfaction of the school building authority. Without the state grant, funds will run out by November or December, said the city's comptroller, David Wilkinson, and Newton would have to either take out another bond in a difficult credit market, use money that would otherwise be invested, or stop construction.

However, the city's spokesman, Jeremy Solomon said that halting construction is highly unlikely and he is optimistic an agreement can be worked out in time.

"We are working with the MSBA closely to provide them with the information in as much detail as they need in order to move forward," Solomon said Tuesday. "The city stands ready, willing, and able to do what is necessary on our end to get the [agreement] signed."

Carrie Sullivan, spokeswoman for the school building authority, said the budget information that Newton supplied to the state did not provide sufficient detail. "Once Newton has submitted this info to our satisfaction, then we can set up a meeting to discuss the next steps," Sullivan said.

Newton North is one of 428 projects statewide that the school building authority inherited from the Department of Education when the authority was created in 2004. Of those projects, 300 have received their grants and the rest are in various stages of completion, Sullivan said.

In August, Newton officials provided the authority with a one-page document containing budget and scheduling information for the $197.2 million project. Last month, the authority sent an e-mail to the city solicitor's office saying it needed more information, something Solomon told the Globe in September would be submitted "in a matter of days."

Solomon said Tuesday that Mayor David Cohen is speaking directly with the school building authority's executive director, Katherine Craven, although Sullivan would not confirm that. She did say that the city of Newton has been in contact with the authority since the request for more detail.

Wilkinson, the city comptroller, said Newton has $11 million in cash after having recently paid a $5 million construction bill. Those funds came from a $23 million bond sale last June.

Given the tumultuous credit market, the city would be unlikely to want to take out an additional bond before the next scheduled one in March, Wilkinson said. "There's a whole series of costs that go with a bond sale," Wilkinson said. "You don't want to have more of them than you plan on unless you absolutely have to."

Wilkinson said the city could continue construction by tapping its general fund.

However, using that money for Newton North would mean less of it could be invested, generating less revenue from interest. That interest revenue is figured into the city's operating budget, he said.

"Today, it's not a major problem," Solomon said. "If it drags on into the next year, then it would become a problem and raise our expenses. We would certainly like to get the [agreement] sooner rather than later but we respect the MSBA's desire to examine the project thoroughly."

Despite the struggle to obtain the state funds, Solomon said construction has been running on schedule.

"We have an aggressive project construction schedule and we've been meeting it every day," he said. "The structure's steel [frame] is nearing completion and you can visualize the building when you drive by the site."

The new high school is expected to open in September 2010.

Earlier, Newton officials cautioned that the city needs to go slow on other spending projects due to the financial crisis.