BELFAST – After defeat at the polls of a second plan to bail out SAD 34 from a budget shortfall, the district will seek permission at a districtwide meeting May 16 to spend $550,000.

On May 2, voters in Belfast, Belmont, Morrill, Northport, Searsmont and Swanville defeated a proposal to spend $550,000 on hand from a state Medicaid overpayment and borrow $240,000 to secure enough money to complete the year.

The budget year ends June 30. The shortfall in the 2005-06 budget was first made public in December.

A plan to borrow $834,326 was shot down by voters on March 14.

Board Chairman Kirk Moore of Belfast said Monday the district has learned it can secure approval to spend the $550,000 at a vote at a public meeting. Borrowing approval, however, must come through a referendum.

Moore said having access to the $550,000 would not allow the district to finish the year without defaulting on contracts with faculty, staff and vendors. But being able to apply those funds to bills would give the district more options.

The money would allow the district to keep schools open through the scheduled end of the year, he said.

Or, the district might consider closing school early during the week of June 12-17. Moore doubted that a combination of the $550,000 and closing school early would close the budget gap, but said it might allow the district to avoid defaulting on contracts to pay administrators, faculty and staff.

Even if vendors who are owed money agree to wait for the new budget year for payment, Moore said, the district is unable by law to pay them from the 2006-07 budget. Those vendors may have to go to court against SAD 34 to seek judgments.

“We can’t pay that without a court order,” he said.

In advocating for the two referendum plans, Moore and other district officials have said hiring attorneys and paying court fees will ultimately cost taxpayers more than the bail-out proposals. The bills will have to be paid, they have said, either this budget year or next.

In addition to seeking voter approval at the May 16 meeting for spending the $550,000, Moore said an article seeking approval to borrow $240,000 will be added to the June 13 budget referendum. That referendum primarily seeks approval of the 2006-07 budget proposal of $22.5 million.

“We only have certain alternatives left. We’re exhausting every possibility,” he said.

The meeting is scheduled for 7 p.m. Tuesday, May 16, at the Troy Howard Middle School in Belfast.