RSU 19 voters put $3.6 million loan proposal on Nov. 6 ballot

By Alex Barber, BDN Staff
Posted Oct. 15, 2012, at 7:49 p.m.

NEWPORT, Maine — More than 250 people showed up the Sebasticook Valley Middle School gym on Saturday morning in the next-to-last step needed to address Regional School District 19’s budget crisis.

Residents of Corinna, Dixmont, Etna, Hartland, Newport, Palmyra, Plymouth and St. Albans cast 233 ballots at the meeting. They voted 163-68 to move the district’s proposed $3.6 million loan to the Nov. 6 ballot. Two of the ballots were judged to be spoiled.

“I think it’s encouraging,” said Superintendent Greg Potter. “People are listening and people are understanding what is at stake.”

What’s at stake is that district finances will fall into the red by December if the loan isn’t approved.

When Potter took over as RSU 19’s superintendent on June 2, he discovered that the district was in serious financial trouble.

Due to serious errors in previous budgets — including the fact that member towns were not billed for their obligations to the school district, RSU 19 has a $3.6 million shortfall this year. Potter immediately instituted a spending freeze and asked for an audit.

Nearly $800,000 in cuts have already been approved, but Potter stressed that cuts alone won’t bridge the budget gap.

Of the $3.6 million the district is asking voters to approve, $1.5 million will cover the Revenue Anticipation Note. A RAN is a common loan given to a school district before the school year starts and must be paid back in full by the end of the school year. At the moment, Potter said the district is not making payments on the RAN. Instead, he’s asking voters to convert the RAN into a general obligation bond that will be repaid over 10 years.

The $1.5 million RAN, he said, paid for bills only from the 2011-2012 school year. Dixmont and Etna will not help repay the loan because it was discovered that when RSU 19 was formed, School Administrative District 38, which those two towns were in, brought a positive balance to RSU 19, while SAD 48, which include the other six towns, had a negative balance.

However, all of the towns — not just Etna and Dixmont — were given discounts over the years. To make it right, RSU 19 board members decided not to include Etna and Dixmont in the $1.5 million repayment.

The rest of the $3.6 million is a $2.1 million loan that will help cover expenses through the remainder of the school year. It will also be paid back over 10 years.

Saturday was a step toward getting the needed loan, said Potter.

“I hope to put the district where it needs to be, so as we move forward, we can discuss the real important things, and those things are how we service kids,” he said.

Potter said it has been a challenge to find cuts as the district is already very cost-efficient. RSU 19 has a cost per year of $9,500 per pupil, which is among the lowest in the state, he said.

Potter said he’s aware of the possibility that the loan could be voted down in November. After the meeting, about two dozen people stayed behind to give their ideas on how the district could save some money.

Cutting teacher workshop days would save about $50,000 per day, said Potter. The district can’t cut student academic days simply because of a budget crisis, he added. That measure is usually reserved for a natural disaster.

Suggestions from the brainstorming session included having students attend school in the summer instead of winter to save on fuel costs, rebidding vendor contracts, having a pool of volunteers and getting a grant coordinator who is paid by revenue produced.

http://bangordailynews.com/2012/10/15/news/mid-maine/rsu-19-voters-put-3-6-million-loan-proposal-on-nov-6-ballot/ printed on November 21, 2014