Howland-area voters approve $1.1M bailout loan for embattled school district

Posted Jan. 11, 2012, at 1:55 p.m.
Last modified Jan. 11, 2012, at 5:33 p.m.

HOWLAND, Maine — A vast majority of voters approved on Tuesday night SAU 31’s application for a $1.1 million loan to save the school unit from a financial crisis caused by mismanagement and a lack of oversight.

The 304-30 vote at Hichborn Middle School approving the Maine Municipal Bond Bank loan is, to Superintendent Michael Wright, the best sign yet that voters would approve the loan in a special districtwide referendum on Jan. 24.

Referendum voters must approve the loan for the bailout to work, Wright said.

“It was to me encouraging and gratifying to see that there was that much support for a plan that has involved an awful lot of work,” Wright said Wednesday. “I left there feeling very encouraged that we can continue to move forward.”

“I’m hoping that we have the same level of support and that people understand that they have to get out and support it once again and not take last night’s vote as a sign that everything is all set,” Wright added.

Tuesday’s vote followed a public hearing at Hichborn on Monday in which many residents voiced anger at the SAU 31 board of directors, which serves residents of Burlington, Edinburg, Enfield, Howland, Maxfield and Passadumkeag, and former Superintendent Jerry White for helping create the problems Wright found when SAU 31 joined with his SAU 41 last summer.

A review of SAU 31′s records revealed, Wright said, that school leaders gradually had created the deficit by projecting revenues from undesignated fund balances that never actually occurred.

The bond bank’s executive director, Robert O. Lenna, credited school leaders with dealing adroitly with the financial miscues when he announced the bank’s tentative loan deal on Dec. 5.

Besides Wright becoming superintendent and the layoff of 14 ed techs and three maintenance workers, the school district has a new business manager and appointed new board leadership.

Creditors still are owed about $1.03 million in past-due bills and could seize property and other SAU 31 assets, Wright said.

Among the district’s bills: about $580,000 for everything from medical insurance to school supplies, and a tax anticipation note of $450,000 owed to Bangor Savings Bank that was past due as of Dec. 8, Wright has said.

“There were a lot of people who spoke out in opposition of the whole scenario, the deficit, and they expressed their anger and frustration on Monday night,” Wright said. “I really did not know how large that group would be on Tuesday night and, frankly, when they packed the room I didn’t know until the vote took place how it was going to go.”

The school system has paid Bangor Savings its interest but not the principal. The bank and vendors have been very patient with the school system, especially given the state of the economy, but that won’t last much longer, Wright said.

The special referendum will occur in the district towns from 8 a.m. to 8 p.m. Jan. 24.

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