Superintendent warns of devastating impact to RSU 19 if loan isn’t approved

Posted Oct. 31, 2012, at 7:30 p.m.

NEWPORT, Maine — Cuts totalling about $750,000 are in store for Regional School Unit 19 if voters in the district don’t approve a $3.6 million loan on Nov. 6.

Those cuts alone won’t be enough to get RSU 19 out of trouble, said new Superintendent Greg Potter on Wednesday.

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.

The school board approved a list of cuts to be made if voters in Corinna, Dixmont, Etna, Hartland, Newport, Palmyra, Plymouth and St. Albans don’t pass the loan on next week’s ballot.

“I will implement those cuts the very next day,” said Potter. “We’ll get the staff letters out and folks will be laid off.”

Potter, who became superintendent in July, said 83 percent of RSU 19’s budget is made up of salaries, benefits and mandatory costs that must be paid. Only 17 percent of the budget is capable of being cut.

The district has already cut $830,000 from the budget.

In case the loan isn’t passed, Potter said, the following programs will be cut for this school year: elements of the music program, junior varsity and freshman baseball, JV cheering, all middle school “B” spring sports, all field trips, all after-school activities at Nokomis Regional High School in Newport, boys and girls JV and freshman basketball, JV softball, all boys and girls “B” basketball, transportation to sports, music, and other events, and tens of thousands of dollars in supplies and equipment.

Five and a half full-time equivalent support staff positions also will be cut, along with coaching positions of sports teams that will be cut.

“[These] additional cuts would also drop minimum local amounts to a level below what the state requires towns to raise for state subsidy qualifications,” Potter said.

Potter said cutting $3.6 million in one budget cycle would be devastating to the district. The loan would help RSU 19 stay competitive, he said.

“The district needs a loan. I’m choosing stability instead of decline,” said Potter. “Right now, our immediate need is getting through this year.”

He said the district would likely survive without a loan this year, but not without serious damage to its credit rating, which would affect future loans.

The district took out a $1.5 million Revenue Anticipation Note in July to pay previous bills. That loan must be paid back by the end of the school year. Right now, the district isn’t paying on that loan.

“What do you do in terms of your ability to pay other existing obligations on time? Pay the loan on time to the bank? We won’t have the funds available to pay teacher payroll for July and August if the district can’t get a Revenue Anticipation Note [because of poor credit],” said Potter. “We’ll continue this mess for much, much longer and we’ll continue to deplete programming and services for the kids.”

The district has 2,279 students this school year, which is down 10 from the previous year. Three of those students transferred to charter schools in Cornville and the Maine Academy for Natural Sciences at Good Will-Hinckley, Potter said.

“If the practice of school choice continues, are people going to go here [if the district has to cut programs]? Not likely,” said Potter. “We want a high level of involvement of kids in our schools, programs, extracurricular activities, athletic programs, all of those things we offer.”

The $3.6 million loan RSU 19 is asking for would be repaid over a 10-year term.

Selectmen and town managers from seven of the eight towns in the district met on Oct. 18 to discuss the loan. Six of the eight towns placed a joint ad in the Rolling Thunder regional weekly newspaper to warn taxpayers that the $3.6 million loan would have a significant impact on the tax rates of the towns.

Potter said adjustments to future budgets can be made so the impact is not so severe to taxpayers.

“The problem with [the six-town ad’s] approach is that the 2013-14 budget hasn’t been drafted yet,” said Potter. “If overall budget spending can be reduced in the district, the impact to the mill rates would be considerably less than the estimates shown.”

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