NEWPORT, Maine — Due to errors involving the budget, Regional School Unit 19 may be out of money before the end of the year, according to new Superintendent Greg Potter.

Potter said the district is at least $1.2 million short of its $23,324,293 budget approved by the towns.

“I think we’re going to run out of money by November, easily,” Potter said Friday. “It’s that bad.”

An immediate spending freeze is in effect, he said. Teachers and administrators can’t buy their supplies until a solution is found.

“Right now, I can’t allow administrators to buy materials to start the school year. … I can’t,” said Potter. “I’ve said ‘zero’ for right now. I have to pay bills associated with the prior year and get them taken care of to get that prior year completely done and behind us.

“So I’ve told principals, ‘You can’t even buy a piece of paper for next year. Nothing. There is no money. You can’t do it.’ That’s how bad this is. It’s serious. It’s very serious,” he said.

Potter took over as RSU 19’s superintendent on July 2 after William Braun retired. Potter had previously been the superintendent for RSU 12 in Whitefield. He said the cash flow problem was brought to his attention not long after he first walked through the door on his first day.

“I hit the ground on July 2, and I was told we had to go to the bank [that day],” said Potter. “There were a lot of bills sitting here needing to be paid, and some of them had been sitting here for three months.”

Braun, who retired on June 30, didn’t immediately return a phone call seeking comment on Friday.

Potter discovered that the 2011-2012 school year had a budget line of $830,000 carried over from the previous school year, but that money doesn’t actually exist.

“I can pretty confidently say that that $830,000 is not a balance you had to bring forward,” said Potter. “It wasn’t there. So why did we plan it that way? That’s my question. You finish your budget year and you didn’t have $830,000 you thought you were going to use to help pay your bills?”

He said the balance forward for the current school year is $661,000, but that money also isn’t actually there.

On top of that, Potter said, a spreadsheet error led to the school district not collecting $362,916 from towns in the district for debt service. The RSU 19 towns are Newport, Plymouth, Palmyra, Etna, Dixmont, St. Albans, Hartland and Corinna.

“I see at least a $1.2 million problem. At least,” said Potter. “That would be a July 1, 2012, pre-audit guestimate. That’s the best way I can put it.”

He said that he didn’t see anything to indicate that any money was taken or missing.

“There will be options [on how to fix the cash flow problem], but the options will be fairly limited,” he said.

A couple of options, Potter said, were to seek public permission for a five-year loan from a lending institution or explore the Maine Municipal Bond Bank.

“They would require a pretty significant plan to even consider it, I’m sure,” he said.

A public referendum would be needed for any borrowing of that magnitude, he added.

“If the public is not amenable to borrowing over a period of time, then what do you do?” Potter asked.

Potter said a spending freeze may put a dent in the budget gap, but more will have to be done.

“I do think we can find savings in the next year’s budget, but it’s not going to be anywhere near enough to make up the problem that is there,” he said. “It will stem it somewhat, but my fear is that if this school district is not allowed to float some sort of a loan, it’s going to get miserable. It’s going to get miserable in terms of programs and offerings. We have to really start taking things away from kids big time, because that’s where we’ll be. It will be very, very difficult.”

A budget committee meeting will be held at 6:30 p.m. Tuesday, Aug. 14, in the cafeteria at Nokomis Regional High School in Newport. Potter has invited managers and selectmen from towns in the district and the public to attend the meeting.

Potter said he’s meeting with his administrative team next week in order to find cuts in the budget. He’ll bring those ideas to the Aug. 14 meeting.

“If we don’t come up with a very good plan in the next six to eight weeks to deal with this, we’re going to be in trouble. Big trouble,” he said, adding that bills and payroll might not be paid if the right plan isn’t in place in time.

21 replies on “Newport-area school district short at least $1.2 million; institutes spending freeze”

    1.  Better include the superintendent, too. The budget knowledge is one place where both ought to be intimately involved and not an item to delegate responsibility to someone else. The superintendent needs to own the error, too.

  1.  No one will accept responsibility and they will try and force towns to raise property taxes for their incompetence. Same old song and dance.

    1. If I am going to pay more money for taxes, my kids had better be allowed to attend a different school when they get older. Sounds like a good time for Etna & Dixmont to withdraw from RSU 19 to me.

  2. Looks to me as though the folks in charge of the Newport-area school system have figured out the best way to get noticed and perhaps employed by the LePage administration.  Super William Braun must have retired only because he’s gunning Mary Mayhew’s position at DHHS!

    I can see these folks now sitting in their backrooms trying to figure out how many peon educators they’ll now need to layoff to make up for their own incompetence.

    1. You have to be kidding to blame the new Superintendent for the failure of the school board, business manager, budget committee, and the previous superintendent.  It seems to me they should all be brought in the next meeting to do some serious explaining on what went wrong.  It is time for some heads to start rolling and folks being out of a job after they have the public hearings on this. It is not the new superintendents fault and comparing him to Mary Mayhew is just plain ignorant. The poor guy got left with a mess its very unfortunate situation for him to be in.

  3. First person to be responsible is  William Braun.  He should know the budget inside and out, except no excuses from him.!   How long has this been going on?    Someone knew if they say go to the bank.

  4. Maybe the State will give them Millinockets 720,000. Though Millinocket was relying on money that wasn’t coming (apprantly)

  5. That is the problem with these RSU/AOS system it was poorly planned out in the first place.  It was done as a reaction move by Baldacci, Sue Gendron (worst education commissioner ever) and Democrats because TABOR and Tax Referendums being on the ballot all the time.   It was done in a move to cut costs, reduce taxes and to improve education.  None of these things happened.  Instead we have higher education costs, taxes are higher , more than 60% of the districts not following the law.  Those who have they have seen the quality of education go down, the mismanagement of where the money ends up.  You have school sports and other extracirricular programs cost increasing instead of money being in the classroom.   While those who participate in these programs the numbers on the steady decline.  Administration is also growing as well .  Instead of being cut  which was supposed main reason for this law.  You are seeing the results of what is wrong with school consolidation. Those cities and towns in Maine having their residents vote to pulling out of these RSU/AOS districts. With them becoming Independent Municipal School Units instead.  They want tax relief, better education, and some local control of these districts.   Instead they have ended up with a Socialist Monopoly.   Just as folks have seen the past 30+ years with the One Size Fits All model from Maine Democrats.  Which has done nothing.  It is time to do away with this farce and have LePage and the Legislature look at some of his ideas and see if they will work.

    1.  Some of them were done in haste to avoid paying the penalty.  The intent was to save on administration costs, but that didn’t always pan out.

      1. It was done as I said because of TABOR being on the ballot twice and it is likely to be on the ballot in 2013 possibly as early as June election.  The fact this plan like all Baldacci and Sue Gendron ideas on education it has not worked it has done nothing but increase costs to taxpayers. As much as Democrats don’t like what LePage is doing for education they don’t try any of his ideas.  It can’t be worse than what the Democrats have given us what is being 27th nationally, laptops which children most are misusing them, failing schools more than 2/3 of which are failing in some form (the district in my town is on that list).  We have awful test scores as well we need to fix the Maine School test that is given to all 4th , 8th and 11th graders it hasn’t worked.  I would like to see some type of open system through open enrollments  and public/private academy style high schools where everyone is allowed locals, students statewide, nationally and foriegn exchange programs.  You also do a search for the best qualified teachers.  No more folks who aren’t qualified by given a job because they are friends with the superintendent or the school board.  Also allow classes through video conference so they learn with kids from other states.  We need upgrade education styles and plans which Democrats are strongly opposed with.  They believe if you listen to Emily Cain and others along with folks on this board we have no problems that things are ok.  If they are ok why are we in the mess we are in, democrats are supposed to be good at education.  Well being 27th and dropping is not acceptable anymore.  It is time to put more money in the classroom, cut growing administration,  consolidate sports and extracirrcular programs let 2 high schools that are struggling share these programs.  It is time to have taxpayers get some relief and a better system that they can afford.

  6. Sounds like Greg is on the right course but he can’t do it alone. There is no easy solution but if school and citizenry work together it will work out here as it has in other parts of the state in similar situations.

    Best wishes for a successful resolution.

  7. I find this situation completely unbelievable. In my position as Administrative Officer of my District for the Palm Beach County Sheriff’s, I was responsible for preparing, defending, and monitoring a $16,000,000 budget in the last year before I retired. There wasn’t a penny that was expended from that budget, that I was not aware of and authorized for payment. I monitored the budget daily along with my other assigned duties. It was the first thing I did when I got to work in the morning , and again before leaving the office at night. How anyone can say that money that was carried forward to the next year, “didn’t really exist” with a straight face is beyond my comprehension. If I had done this in my position, I would have been demoted from Lieutenant to Deputy, and re-assigned to counting rabbits in the Western PB County sugar cane fields on the midnight shift. Someone needs to do a thorough investigation of this case of misfeasance.

  8. I guess Mr. Braun got out at the right time.  I remember him telling the high school staff as he was explaining why supers got a better retirement package [because of certain things they could do just prior to retirement that had a negative effect on teachers retirement]  that “my mother never raised no fool”

  9. sounds like newport was as well run as howland, funny how no one is responsible. seems to me that a whole new board is needed, just like in howland. who needs a board with no responsible members? if your a town wanting these type members please contact district 31, we have plenty.

  10. There is a process called forensic accounting.  It is tedious and time consuming, but someone must go back through probably multiple budgets to find the mythical money that was brought forward.  The fact that bills were sitting unpaid for several weeks is evidence that the check signer knew there was no money.  

    One thing that should be frozen immediately is the former superintendent’s retirement package.  A new bookkeeper is definitely in order.  Mistakes on spreadsheets happen, but they should be found before a school system is over a million in the hole.  

    If schools didn’t run on the two sets of books system mine does, one set with the things the towns have to pay for, another for the things that get grants or federal or state money, things like this wouldn’t happen.  In our SAD it is done to keep the taxpayers ignorant of all the monies in and out.  

    It is ineptitude or theft.  

  11. Freeze Braun’s retirement package immediately, fire the business manager, remove or demand resignations of the rubber-stamping budget committee.  There has to be a way to do this.  We cannot tolerate the incompetence.  Think of the money that is paid to inept administrators like Braun.  My casual contacts with the superintendent’s office made it clear to me that the office is badly administered: lost files, poor listening skills leading to unanswered and misanswered questions, and a defensive staff are all indicative of a problem. 

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