NEWPORT — School Administrative District 19 continues to struggle in its attempts to pay off a $3.6 million dollar debt, and it may have an impact on whether the district can meet payroll and pay other bills next month.

District officials are preparing to make a series of cuts to this year’s school budget in order to save an estimated $800,000. Cuts include eliminating the music program and all junior varsity sports teams at Nokomis High School and the seven other middle and elementary schools in the Newport-based district.

“This is a serious situation resulting from an undercollection of revenue between this school year and the last,” said district financial manager Jerry Nault.

School district superintendent Gregory Potter could not be reached for comment Thursday afternoon, but the district’s website describes the situation as “very grave,” and says that the district could run out of money to make payroll and pay other bills as soon as December.

The district’s request for a $3.6 million bank loan in a districtwide vote on Tuesday was narrowly rejected 3,853 to 3,500. The towns in the district are Corinna, Dixmont, Etna, Hartland, Newport, Palmyra, Plymouth and St. Albans.

Nault said the district incorrectly estimated a budget surplus of about $830,000 at the beginning of the 2011-2012 school year, and that as a result reduced the commitment of the towns in the district by the same amount, producing an overall $1,660,000 in anticipated revenue that did not exist.

It also failed to bill towns last year for a $363,000 debt service that voters had authorized, leading to an overall balance of just more than $2 million owed this fiscal year.

In July, the district took out a $1.5 million loan it has since been unable to repay. Nault said it is likely the district will default on that loan in June.

Nault said the district will curtail spending and estimated cuts of up to about $1 million dollars from this year’s budget of $23,324,294. He said that those cuts would still not be enough to cover the debt.

“We will be forced to make cuts that we wouldn’t have had to if we had that $3.6 million,” said Nault. “And we will probably have to ask the public again if they will allow us to borrow money.”

Rachel Ohm — 612-2368
[email protected]