POLAND – The town’s treasury just went down an unbudgeted $142,000 so that the state could sign off on its $18 million debt for building Poland Regional High School.

The town will now be sending the bill to the Poland School Committee to make up the loss, said Town Manager Richard Chick.

“Poland’s treasury is out $142,000 because we’ve paid the bill,” said Chick during a workshop session the selectmen held with the town’s budget and school committees. “But we can’t afford to eat that out of surplus.”

An audit by the state’s Department of Education revealed the shortfall last year, and the state needed to collect the funds before closing the books on the project. Chick went on a scavenger hunt through five years of town warrants, budgets and invoices to reconcile the discrepancy.

Chick said he first assumed that too much had been spent. Through the maze of town and school records, the town manager discovered that a five-year bond for $230,000 approved in 1997 had never been issued.

“We had two people chasing down the spending side of the project,” said Chick. “It turns out that the difference came from the funding side.”

Selectmen Chair Glenn Peterson noted that the School Committee was ending the 2003-04 year with a $138,000 surplus. Vice Chairman Steve Robinson said the School Committee should be able to pay back the town.

School Committee member Laurie Levine responded that this year’s surplus had already been allocated and was not earmarked to pay back a bond issue.

Levine offered to check with School Union 29 administration on the details of budgeted debt payments.

Because several bonds had been approved through a series of town articles to fund the project more than five years ago, the missing $230,000 went unnoticed as bills from the bond bank came due, Chick said.

The state’s Education Department agreed to finance $18 million for the new school when Auburn told Poland that it would have to make other arrangements for its high school students. The state’s funding agreement carried the condition that Poland’s new high school would also serve students from Mechanic Falls and Minot.

The state deposited $17.26 million in 1998 to pay for the bond proceeds sold through the town, according to town records. The large amount masked the absence of the original bond, authorized by Poland voters to fund architectural work and construction preparation, Chick said.

When the bottom line was tallied, the town spent $88,000 less than anticipated, so it came up $142,000 short instead of the $230,000, said Chick.

Since last year’s audit, the town tried to sell a new bond to pay the state. That effort failed because the town could not show it spent the money within the last three years, as required for issuing the bond. Chick said he could legitimately show only about $60,000 in expenditures within the time frame.

“The consequences would be too great to go ahead and jeopardize the new bond issue,” said Chick. “For this small of amount, it just made sense to finance it internally.”

Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.