PARIS — Directors of School Administrative District 17 voted 15-4 Monday to authorize a $4 million loan to cover payroll for the district’s 600 employees this week and make other payments.
Administrators planned to close on the loan Tuesday.
The money will ease a cash flow shortage while the district waits for reimbursement for COVID-19 related expenses.
“We were required to expend nearly $7 million prior to Dec. 15 in order to receive reimbursement from the state for the same amount,” Superintendent Rick Colpitts wrote in an email to the board Monday afternoon. “We have enough cash to cover some of that but will require a loan of $4 million to cover the remainder of the payments and payroll.”
He said the district would be able to repay the loan within a month with reimbursements for COVID-19 related expenditures are received.
But the thought of borrowing $4 million with even the slightest possibility taxpayers might end up on the hook, caused several directors to balk, including some on the Finance Committee.
The committee met ahead of the board meeting and failed to adopt a recommendation for the vote.
One obstacle was the wording of the proposal, which called for the note to be paid in full “in anticipation of tax and other revenues” for the fiscal year ending June 30, 2021.
Director and committee member Natalie Andrews of West Paris took issue with the payout date coinciding with the start of the next fiscal year, which is July 1, 2021. She proposed in committee to adopt the date of April 30, 2021.
“I do not want this money to go into next year’s budget,” Andrews said during the Zoom conference meeting. “Several years ago we were in a position to borrow money to cover reimbursements that the state did not honor. We promised to reimburse the taxpayers, but then when the reimbursement came in many board members wanted to keep the money.”
Finance Committee member Barry Patrie of Waterford supported the proposal and countered that the money would be there from relief reimbursements and were being tracked separately from the overall budget.
“The state has the money in hand from the federal government,” Patrie said. “They are required to reimburse us. We were required to spend on the relief first in order to get it back.”
Some directors raised the possibility that the money might not actually be released as promised.
Colpitts said district officials were guaranteed to receive the reimbursements under the program’s guidelines.
Other directors complained of the 11th hour request for such a substantial amount and noted that the money spent by the district was not all billed quickly, leading to a shortage of cash to make payroll.
Finance Committee member Lewis Williams of Hebron sought to clarify the issue for board members.
“Let’s keep this in perspective,” he said. “It’s not $4 million, it is up to that amount and it’s for cash flow. We had to spend the money upfront to get our kids in school. And last summer parents pushed like heck for it to be done.
“The bills have to be paid,” he said. “I move we approve it as is and let administrators do their jobs. The proposal was written by our lawyers, and with precedent set by other districts.”
Scott Buffington of Paris said he thought the eight district towns should have the authority to approve the borrowing and asked whether emergency town meetings were necessary.
Director Stephen Cummings spoke in favor of authorizing the loan.
“I’ve been in this position before,” Cummings stated. “If you can’t meet payroll you won’t have employees. That’s as simple as simple gets. I want everybody on this board to understand what that’s like. Because I don’t think most of you know. That’s all I am going to say.”
Finance Committee member Robert Jewell of Paris said he found it highly unusual for the administration to come before the committee, paperwork already drawn up, with no advance notice.
“If we don’t pass this today and people don’t get paid, I find that very, very disrespectful and highly irregular,” Jewell said. “This doesn’t happen in a business.”
Chairwoman Diana Olsen of Otisfield called for a roll-call vote, which passed 17-4.
Those in favor were Olsen, Patrie, Cummings, Williams, Jared Cash of Norway, Curtis Cole of Norway, Stacia Cordwell of Oxford, Amanda Fearon of Hebron, Judy Green of Waterford, Mark Heidmann of Harrison, Ron Kugell of Oxford, Albert Kisowski of Harrison, Sarah Otterson of South Paris, Kristin Roy of Otisfield and Gary Smith of Oxford.
Opposed were Andrews, Buffington, Jewell and William Rolfe of West Paris. Christopher Miller of Norway was absent and Troy Ripley of Paris dropped out of the meeting before the vote was taken.
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