LAGRANGE, Maine — Creditors owed about $1.03 million in past-due bills could seize property and other SAU 31 assets if voters don’t approve a $1.1 million loan the school district is seeking from the Maine Municipal Bond Bank, Superintendent Michael Wright said Wednesday.
“We want to impress upon [voters] that this is our best opportunity to take care of this debt. I want to let them know that it will not go away,” Wright said. “We do ultimately have to pay it and there is no bankruptcy protection [under state law] for school districts that go into bankruptcy.”
Wright spoke in anticipation of two public hearings for voters who have questions about the school system’s debt and a special referendum that will be held in the towns the district serves — Burlington, Edinburg, Enfield, Howland, Maxfield and Passadumkeag. The hearings will be held at 6 p.m. Jan. 9-10, at Hichborn Middle School in Howland, and the vote will occur in the district towns from 8 a.m. to 8 p.m. Jan. 24.
As of Wednesday, the district owed vendors about $580,000 for everything from medical insurance to school supplies, and a Tax Anticipation Note of $450,000 owed to Bangor Savings Bank was past due as of Dec. 8, Wright said.
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.
“They have really been great. Some of them have been small businesses who have really bent over backwards to work with us, but they are really hoping that we will get this approved because they are tired of waiting,” Wright said.
The school district sought the Maine Municipal Bond Bank bond to cover a $1.2 million deficit created partly by faulty budget practices and insufficient board oversight. Wright discovered the problems shortly after his SAU 41 consolidated with the district on July 1. A review of SAU 31’s records revealed, he 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 directly and adroitly with the financial miscues when he announced the bank’s tentative award of the loan 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.
The loan would come with a 2 percent interest rate. Wright hopes voters will approve it and end SAU 31’s financial crisis.
“There are many other things a superintendent should be doing other than making payment arrangements and answer phone calls from vendors,” he said. “I would like to get it behind us and get us moving in a positive direction.”
SAU (formerly SAD) 31 always seemed to have waaay more money to spend than a tiny school district should…Now we know why…For about a decade the various Supts. there were spending money the place just didn’t have. The loan might solve the immediate financial crisis but there will have to be cuts/taxes upped in the future to pay for what the district sort of bought over the last decade.
The superintendent should be made accountable for not being able to pay bills since a school system works on a fixed budget based on district approval of allowed expenses. An unexpected event could pose a short-term problem requiring a special meeting; however, in this case, outstanding bills seem to have accumulated over time without the preparation of an acceptable plan for corrective actions. Even with the approval of a loan, the school system will still have to make payments over several years. An independent entity should investigate this situation and find out where the school budget was overextended without appropriate oversight. The superintendent is ultimately responsible to ensure source fiscal management.
Who determines needs and decides how school funds are spent? Many people including the principal, superintendent, staff, and the school accountability committees who make budget decisions in SAU 31 school district. I understand that once the budget is drawn up it is presented to the Board of Education annually. In recent BDN articles covering this crisis, Board of directors continue to point fingers at everything & everybody but their own negligence in very poor budget management thus creating this HUGE deficit that school district SAU 31 now faces. The proposal is to pass their deficit onto the taxpayer. Many of us are already stuggling with hardship times, daily, attempting to stay afloat in todays poor economy.
Please, residence of this district, attend the meetings at HMS in Howland Jan 9 & 10th at 6pm, and again on Jan 24 at 8pm to cast your vote. If you don’t want your property taxes to go up-up-up substantially, then you’ll do the right thing and vote “NO” on this Bond-Bail-Out proposal.
News flash………….In case you did not know……..everything costs more including education even in a “poor economy” . The previous Superintendent did not ask for tax hikes. Your just getting them all at once. What did you expect? Time to pay up. A typical want everything for free attitude. We want everything but we do not want to pay for it. How bad can the taxes in Howland be? Move to Orono or Hampden………then you can complain. To urge the citizens of SAD 31 to vote this down is pathetic. Do yourself a favor and move away from the outrageous taxes of Howland. I have to laugh as I wrote that last sentence.
If the loan is voted down the district will still owe the debt! And the students as well as the staff will have to go some where else while the tax payers are paying these debts off. Wouldn’t it make more sense to vote yes for the loan & let the students/staff continue on? The taxes in this area are not nearly has high as other parts of the state. I agree with Blackbear72, everything cost more, deal with it!! If you do not agree with what the new Superintendent is trying to do for the students & staff of this district move on. I applaud the effort that he has done thus far & hope to see where he takes this district in the future.
Yes!. TownResident1 needs to pay attention to how you resolve these issues. Just pay up Townres. No need to get all picky about management details. Let’s just make sure that everyone that wants a job has one. Again, just pay up and stop questioning these “education” gods.
After reading your remarks Nonmyth, I wonder what your connection’s are to SAU31 owing about $1.03 MILLION in past due bills to creditors.
Newsflash…..In case you didn’t know…….The majority of the double dippers in the system graduated with education degrees around 1972. Not that this has anything to do with our current system overages. Can ’em. 20-1 student/tech ratio will still work with a touch of discipline. The public will support this. The system will call it unthinkable. Sorry, i’m just a dumb layman.
Thanks for posting your Newsflash. Those so-called double dippers are veteran teachers in the system that retire, then return back to teaching collecting a paycheck and a pension. I don’t know the head count on them at SAU31, it is happening -not chump change – especially in the current climate of 31 budget shortfall.
Here’s an idea Blackbear72, do some research before you post remarks. If you had, you would have discovered that Howland is not the only schools district who pays property taxes to district SAU31 and that property taxes in fact can be as equally as high as Orono and Hampden.
Google Student Teacher ratio at PVHS. Student Teacher is 9.03.1 which is 42.2% lower than the average for all ME public schools. 20.6 Teachers with 180 students in grades 9-12. Blackbear you’d probably call that “Pathetic”, I however think of it as a Red flag to the situation that the school district is currently in. Oh, and let’s not forget Enfield and Hichborn Middle School stats.
Please help me……I am confused by the use of two decimal points in one number 9.03.1. Everyone should base their opinions by what they find on google. I usually check there for “facts” first but forgot to this time. Go into a classroom at Sad 31 and tell us what you you see for student to teacher ratios…..maybe you might see a 31.4.7.3,7=8….5.5.5.2+2 student to teacher ratio. My ratio is right because I found it on google;)
Former Board Members should be sued for not meeting their legal fiduciary responsibilities. They hire the superintendents and must protect the public monies entrusted to them.
This isn’t the Milo School District, it is now the Milo-Howland School District, and this situation stems from Howland’s past officials, unfortunately it’s everyones mess now.
That’s right! Now didn’t the Milo school district have a similar problem a few years ago? What ever happened to the superintendent that cleaned up their mess? I think he moved on, but not before getting them into a much better position. Hopefully they’ve managed to hang onto the edge he gave them. Maybe this superintendent can do the same for Howland. Good luck to him. Does this debt now have to be paid by both districts? No mention of 41 anywhere except in the headline.
No, it is only paid by the towns in sau 31. Not sure why Milo is in the headline other than to drag it through some mud.
I think they’ve been there before. I guess we’ll see how this guy plays in the mud.
Time we allowed the State and Municipalities to file for bankruptcy. Someone needs to file a bill in the Legislature to allow this as is done elsewhere in the country. See below:
My Town Can’t Pay It’s Bills…Can It File Bankruptcy?
0inShareby Peter Orville, Binghamton Bankruptcy Lawyer
States, cities, towns and villages all over the country are in financial distress.� Some, like the village of�Johnson City in Broome County, New York are considering merging into the surrounding town of Union.� Others are not paying their payrolls on time, or drastically cutting back on essential services.� At least one town in Indiana is seriously looking into filing for Chapter 9 Bankruptcy protection.
The town of Georgetown,�in Floyd County Indiana has taken some�steps to file a�Chapter 9 Bankruptcy petition.��Town Council President Billy Stewart says�”There’s no way for Georgetown to pay” its debts, according to the Courier-Journal.� “We don’t have it.”
Municipal bankruptcies are rare, but in the past five years, there have been 33 Chapter 9 filings in the U.S., three in the first quarter of 2009.
Sounds like someone else needs to be superintendent.
Milo’s sup. is now the sup. of sau 31 and is cleaning up their mess.
Send them Betsy Webb that will fix thier budget She will make he town raise taxes to pay her higher wages.
“created partly by faulty budget practices and insufficient board oversight”. Sue the board members and take their homes.
Why is Milo in the headline???
Welcome to the joys of forming a RSU…I would suggest un-forming as soon as possible…
Sadly, news like this will become common place as the global financial correction begins to get underway with a fury in the coming year…