GRAY – SAD 15 and the town of Gray disagree about a state ruling that says the district still owns Pennell Institute, and the issue may go to court.

The school board learned Wednesday night that the Maine Attorney General advised last month that SAD 15 remains the trustee of the Pennell Institute educational trust, which owns the 1880s building in Gray village.

The one-acre property was a gift in trust from Henry Pennell in 1976 to the town of Gray to establish an educational institution, later known as Pennell Institute. When SAD 15 formed in 1961 to include Gray and New Gloucester, a court ordered the property be conveyed to SAD 15.

Several years ago, the school district determined it would no longer maintain the property for educational purposes and sought court approval to sell it and use the proceeds for educational purposes.

The Maine Attorney General’s office, which oversees educational trusts, ruled the property could be sold for fair market value or swapped for equal value land and the proceeds used for educational purposes.

In June of 2003, Gray filed a request to set aside the order. Town leaders said they want the building back. It is listed in the National Register of Historic Buildings.

The Gray Town Council informed SAD 15 earlier Wednesday that the town will write a letter to the attorney general stating they disagree with the opinion of Assistant Attorney General Christina M. Moylan and Chief of the Consumer Protection Division, Linda Conti.

If the AG will not reconsider giving the building back to Gray, the town intends to file a suit to Cumberland County Superior Court, SAD 15 Superintendent Victoria Burns said.

School board Chairman Alan Rich said SAD 15 would not spend additional money on legal fees on the issue. The board will decide later the extent of its involvement in any future legal action.

In other business, preliminary estimates of General Purpose Aid to Local Schools for 2005-06 indicate that SAD 15 will receive $1,550,066 more than last year.

“Obviously this is positive news, but it’s in the early stage,” said Terry Towle, SAD 15 director of finance and operations.