The Community School District board of trustees wove a financial safety net Jan. 10 as they approved up to $450,000 in a line of credit. The day before, the school board approved borrowing the money from First National Bank.  

As reported in the Register, the trustees approved negotiations for the loan Jan. 2. Alternative Organizational Structure 98 Superintendent Robert Kahler said the district has a cash flow issue and may need money for payroll and accumulating bills credit while awaiting reimbursement for flood-related damages. He said CSD reserves, which would normally cover the costs, have been decreased in recent years to lower taxes and are running thin. 

“We really cut the fund balance down to save taxpayers money but there is so little in the fund balance we have to take this loan so we can pay our staff,” said school board member Abby Jones at the Jan. 9 meeting. 

The upcoming line of credit, or tax revenue anticipation note, has 6% interest, according to CSD documents. They state at maximum, if the complete note is spent on the first day and repaid at the deadline, it would incur $14,850 in interest. According to Kahler, the interest is only charged on what gets used, the note will be repaid this fiscal year and the funds will only be used if needed. 

"If we don't have to utilize it at all, fantastic,” he said. “But (it’s there) to have it as needed." 

Kahler said he spoke to Maine School Management Association who said the notes are common practice. According to trustees, the CSD has taken similar action before, and trustee Ronnie Campbell said it was normal in the past. “We never really used it, but it was there. We did have to vote on it quite a bit,” he said.  

The process to get the line of credit involved three meetings – two with the trustees and one with the board. According to board members, the CSD statutes state the board of trustees is responsible for borrowing money and the school board selects the lender. Members of both boards approved the process and acknowledged the need. However, some expressed concern with how the district got to the point of needing it. 

“I hope that with all this going on we will actually trim some things,” said board member Stephanie Hawke. During a discussion about the preliminary budget, she later said: “I think everything should stay flat until we figure out our spending because we’re not on a good path right now and things could get out of hand very quickly.” 

School board member Bruce MacDonald said the process is a reason to consider combining the trustee and school board into one larger organization. MacDonald said it seems strange to be doing business separately. 

“I think this is an example of how we got wound up in our own knickers,” he said. “We can, by state law, look to meld the two functions together into perhaps a larger single board with people who have interest in all these other kinds of things ... where the right hand knows what the left hand is doing.” 

The board agreed to bring up the conversation in a meeting later this year after the budget has been completed.