Bank imposes limit on credit line for SAD 5

ROCKLAND — In response to the financial problems experienced by SAD 5, the Camden National Bank has capped the district’s credit line at $450,000.

The bank’s decision brings to a halt the district’s policy of piggybacking one loan on top of another whenever it borrowed money. The action came two weeks after the SAD 5 auditor, Sam Davidson, revealed that the district had up a $441,956 deficit last year.

In a letter to the district’s finance officer, Walter Webster, Camden National Bank Vice President Robert E. Worthing informed the district of the bank’s concern about approving additional loans to SAD 5.

Worthing noted that although the bank was willing to give the district another two years to pay off its existing $450,000 loan, any further borrowing would require a separate loan agreement.

Worthing said the bank was “willing to work with the district” on clearing up its debts. He said that if the board agreed to limit the existing line of credit to $450,000, the bank would consider discussing future loans at the same 5.45 percent interest rate that it currently received. Worthing made no guarantee that the future loans would be approved.

The bank also offered to work with the district to help it overcome its present financial difficulties. The bank’s letter was referred to the district’s finance committee during Thursday night’s board meeting.

Superintendent Donald Kanicki informed the board that his office had attempted to identify the source of the deficit but some financial records appeared to be in disarray. He said that Davidson’s deficit figure of $441,956 did not agree with the district’s books. He said a $75,000 balance listed as being on hand at the beginning of the 1991-92 year was actually a $211,546 shortfall.

In order to avoid future budget problems, Kanicki asked the board to approve a major overhaul of the district’s bookkeeping system. Under the new economic impact system, major accounts such as transportation would be tracked to determine how much it will cost “in the first year, the second year, five years or ten years up the road,” Kanicki said. The finance committee will review Kanicki’s proposal at a later meeting.

The school board rejected an attempt by Chairman Edward Miller to put an end to the district’s policy of giving free activities tickets to board members and district employees. Miller compared the free ticket perks as similar to “what they do in Washington.”

“I’d like to see the board make a decision on this,” Miller said. “It’s a cop-out when you table it. We’re in tough times. Either say yes or no…that’s what they do in Washington.”

Kanicki noted that it was his personal practice to refuse the free pass and pay full admission to school activities.

Athletic Director Leo Smith said he often swapped the free tickets to sporting events in return for getting timekeepers and game officials to work the games. He said not every teacher or employee took advantage of the free-ticket policy.

Board member Mary Waterman estimated that the free passes were worth approximately $100 annually. When she asked her colleagues to compare that benefit with their $240 annual salary, Clarence Leonard observed that “if everybody else in the district took a 50-percent cut it would solve our problems.”

After the discussion the board voted 9-2, with Miller and Daniel Fogarty in opposition, to retain the free-pass policy until the end of the school year.

The board also reported that revenue from the fall football program was $2,579. Last year the district took in $2,035 from high school football.