RSU 19 superintendent discusses schedule, options for final loan attempt

By Alex Barber, BDN Staff
Posted Jan. 31, 2013, at 7:13 p.m.

NEWPORT, Maine — Residents in the eight towns that make up RSU 19 should expect to vote on a third stabilization loan for the district on March 7, according to a school official.

Superintendent Greg Potter has proposed a timeline for what he called the third and final loan attempt, this time for $2.8 million. On Feb. 25, the ballot measure will be presented for approval during a regional public meeting at Nokomis Regional High School at 6 p.m. If approved, the loan attempt would go to a referendum vote on March 7.

During Wednesday night’s board meeting, RSU 19’s board of directors voted to proceed with a $2.8 million stabilization loan attempt. Voters rejected two previous attempts — a $3.6 million request in November, and a $2.9 million request in January.

The latest loan request comes with a condition that assets of the district will be liquidated in order to pay down the loan.

“I think the only real possibilities would be items that wouldn’t necessarily require public permission to sell — like office space,” said Potter on Thursday.

The only property mentioned that could be sold so far is the superintendent’s central office building in Newport.

Potter said a Realtor did a comparative market analysis that valued the property at $350,000.

“It’s probably better to assume [the sale price] will be something less,” said Potter.

Selling a school building would require a public referendum, he said, but the district could have other options.

“We haven’t really done an exploration on that particular issue [but] we’re talking about forestry management with stumpage or harvesting revenues [on school property],” said Potter. “But that’s not really a liquidation of property.”

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 had a $3.6 million shortfall this school year. Further cuts have dropped the shortfall to $2.9 million. The district’s fiscal year ends on June 30.

On Tuesday night, Bill Stockmeyer and Dick Spencer, attorneys for Drummond Woodsum of Portland, told the budget and finance committee of a statute in Maine law that could be pursued by the lender of the $1.5 million revenue anticipation note the district took out at the beginning of the school year to meet expenses. The loan was taken through Androscoggin Bank.

“If the district is unable to pay off the debt, essentially what would happen is Androscoggin Bank would seek to enforce the contract they had with the board,” Potter said on Wednesday night. “In the statute, and I understand this has not happened in the state of Maine, but there’s a provision in the statute that basically says that if there is such a default, and a lending institution seeks to recoup the money that was lent, the statute basically states that the sheriff or law enforcement can seize public property without a definition of what that actually means.

“So there were questions of, ‘Does that mean certain households or businesses or public property could be seized?’ The attorneys could not answer that because there really has not been a precedent,” Potter said.

Newport Town Manager James Ricker said he fielded a number of calls from residents on Wednesday who are concerned about the possibility of their property being seized.

“I’m upset that they would resort to that type of … threats to the taxpayers,” said Ricker on Wednesday. “In speaking with the town’s attorney today, he knows of no record in the country of that ever happening. I think it was wrong of the school district to do that and shame on them.”

If the loan isn’t passed again, Potter recommended a one-month shutdown of the district. The district would shut down from March 15 to April 15, which includes 18 student school days. Those days would be tacked onto the end of the year, moving the last day of school to July 3, barring any more snow days.

Potter said the shutdown would allow the district to not pay hourly employees for two pay periods, and instead use that money to pay down debts.

The district is currently $800,000 in debt to providers, including two months behind in its insurance to Anthem Blue Cross-Blue Shield, amounting to $500,000.

“In a sense, it’s kicking the can down the road a bit,” said Potter.

Lisa Krahn of Etna expressed her displeasure about the possibility of an 18-day shutdown.

“You’re going to affect a lot of households who are not going to have childcare. And there aren’t enough childcares to pick up all those kids just like that in middle of the school year,” said Krahn on Wednesday night. “It’s going to be a huge effect to households in the middle of the school year to just say you’re out for three weeks. It’s going to be detrimental.”

Potter and the board agreed to meet with town managers and selectmen of the eight towns in the district in coming days.

Potter said on Thursday that St. Albans is the only scheduled meeting so far. Board members and Potter will meet with St. Albans officials at 5:30 p.m. on Feb. 11. The other towns will be scheduled soon, he said.

“That meeting will be followed by a public discussion of the loan and budgeting for next year,” said Potter.

All subcommittee meetings for RSU 19 have been suspended in order to allow board members time to meet with area towns.

http://bangordailynews.com/2013/01/31/news/mid-maine/rsu-19-superintendent-discusses-schedule-options-for-final-loan-attempt/ printed on August 1, 2014