LAGRANGE, Maine — Voters from the six towns of SAU 31 agreed during a special referendum Tuesday to assume the burden of a $1.1 million loan needed to save the school unit from a financial crisis caused by leaders’ mismanagement and lack of oversight.
Residents of Burlington, Edinburg, Enfield, Howland, Maxfield and Passadumkeag favored accepting the five-year Maine Municipal Bond Bank loan, and its 2 percent interest rate, by a 606-127 vote, according to totals released from the school system’s headquarters on Wednesday.
Exactly how much in new taxes the loan will cost the towns is impossible to predict at this point, Superintendent Michael Wright said.
“This just becomes one of many variables in next year’s budget,” Wright said Wednesday. “In public meetings I have shown how we will offset the cost of the loan through some of the cuts we have made and will continue to carry over into next year.”
School officials hope to carry through about $500,000 in cuts made last year and expect a state subsidy increase of about $100,000 this year, Wright said. They continue to examine potential savings through staff reductions such as retirements and hope that any tax increases created by the loan will be minimal.
Wednesday’s referendum followed a meeting on Jan. 10 in which district residents voted 304-30 at Hichborn Middle School in Howland to approve the loan. State law and the loan requirements demanded a districtwide referendum after a district meeting.
Wright discovered the mismanagement after SAU 31 merged 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.
Howland voted in favor of the loan 221-37; Enfield, 240-29; Maxfield, 15-7; Burlington, 40-35; Passadumkeag, 57-14; and Edinburg, 33-5, according to Wright.
“It is an overwhelming statement about the support of the communities for their schools. We received a positive response in each town,” he said.