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The town of Rockport is expected to receive $900,000 as part of a settlement agreement with the town of Camden and the local school district the two towns share after it was discovered that Rockport was overpaying its portion of the school budget.

The settlement brings an end to a lawsuit Rockport filed in August against the town of Camden and Maine School Administrative District 28. The lawsuit alleged that the district incorrectly calculated the town’s yearly education payments for at least a decade. The error resulted in Rockport overpaying for its share of the budget and Camden underpaying for its share.

MSAD 28 provides public education for Camden and Rockport students in kindergarten through eighth grade. The students go on to attend Camden Hills Regional High School, which is operated by the Five Towns Community School District.

As of Monday, the settlement agreement had not yet been filed in court or approved by the judge presiding over the lawsuit, according to court documents. However, the towns and school district issued a joint statement detailing the agreement last week.

Through the agreement, the town of Camden will pay MSAD 28 a total of $750,000 over eight years. The school district will then rebate those payments to the town of Rockport, according to the statement.The school district itself has agreed to pay a one-time $150,000 payment to Rockport.

The town of Rockport has overpaid its share of the school budget by about $1.6 million since the 2006-07 school year, according to MSAD 28 Superintendent Maria Libbby.

The error in the district’s funding formula was discovered last year, in time to adjust payments for the 2020-21 school year.

In Maine, the majority of school districts generate a large portion of funding from local property taxes, which are based on property values.

Since at least 2009, MSAD 28 has been using the wrong education funding formula to generate revenue from the towns in its district, according to the lawsuit. Instead of billing each town based on its property valuations, it has calculated payments based on the percentage of students each town has in the district.

MSAD 28 realized the error last year after the district’s new business manager found discrepancies between Excel spreadsheets used by the business office to determine each town’s annual payment and his own calculations on what the amounts should be based on the state’s education-funding formula.