KINGFIELD – SAD 58 faces a loss of between $30,000 and $60,000 if a judge rules against a Maine oil company in April.
The financial dispute pits Oakland-based Petroleum Products Co-op of Maine against Irving Oil Corp.
“It seems like a wonderful arrangement, where PPCOM used our oil to settle part of its debt with Irving,” Superintendent Quenten Clark said last week.
He said he has already been told the district will not be reimbursed for 12,000 gallons of diesel fuel stored at a PPCOM facility, and that there is a possibility SAD 58 will not receive 19,000 gallons of heating oil in storage as well.
According to Clark, school district lawyers, and lawyers representing PPCOM, several towns, an orphanage, and five other school districts have been pre-buying heating oil and diesel fuel from PPCOM for years.
After a relatively warm winter, SAD 16, SAD 47, SAD 49, SAD 58, and the Waterville School Department had nearly $1 million in pre-bought fuel oil left in a PPCOM storage facility in Winslow.
SAD 58 had plans for its 31,000 gallons in the tank, Clark said. While he said the district might use the full 12,000 gallons of diesel fuel before school ends for the summer, most of the heating oil would probably be left over, and he said he was hoping to be able to cut heating costs for next year with the amount left over.
But all that changed last week when the districts received a letter from PPCOM informing them that, because of a dispute with Irving, the company could not access the storage facility and did not have the funds to reimburse the districts, which own the oil.
At the center of the dispute is nearly $8 million Irving contends PPCOM owes for oil supplied by the fuel giant. Because PPCOM was unable to pay the bill, Irving claimed the oil in the Winslow facility belongs not to PPCOM, but to Irving.
A judge agreed last Tuesday, and ruled that PPCOM may not in any way access or use the oil in the tank. But the ruling also requires Irving to deliver oil on an as-needed basis to the districts. An April hearing will decide the issue once-and-for-all, said Clark, when a judge will rule whether or not the oil in question belongs to Irving or to the districts that paid for it.
If the ruling favors Irving, Clark said the districts will be billed for whatever they have used by Irving, at an Irving-determined price. That means districts could be charged more than double the amount they paid for it, based on today’s prices.
“It’s interesting we have to pay our lawyers to go see if our oil belongs to us,” Clark said.
Clark said SAD 58 has the money to pay for “whatever oil” the district needs for this year, although taxpayers will eventually see the loss, probably in next year’s budget.
But “that’s not the issue,” Clark contends. “The issue is somebody has run off with our money, or our oil, or whatever.”
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