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News of $500,000 School Overpayment Upends Bethel Meeting

Bethel — At the School Board’s request, voters on Tuesday postponed consideration of the proposed school budget until town and school officials get to the bottom of an estimated $500,000 overpayment of property tax funds from the town to the school district.

It’s unclear how the overpayment will be accounted for and returned.

“We don’t have a definitive answer at this point,” said Kristin LaFromboise, chairwoman of the School Board.

Selectboard Chairman Bill Hall, who was a longtime finance director in Hartford and a consultant with the Vermont League of Cities and Towns, told the crowd at Town Meeting that the town “didn’t have the appropriate financial controls in place.”

In addition, the town fell behind on its auditing, Hall said in an interview. The town had to switch auditing firms and the new firm, Wisehart, Wimmette and Associates, of Essex Junction, Vt., is now auditing the books for fiscal years 2012 and 2013.

Under Vermont’s school finance system, the town government collects property taxes both for its own needs and for the school district. The town then transfers revenue to the school district.

At some point in the past two years, the town reached the limit of what the school district needed to operate Bethel’s K-12 school system, but continued to send funds, Hall said.

So far, the audit has uncovered a roughly $100,000 discrepancy for 2012 and a $400,000 overpayment for 2013.

The delay in considering the school budget will give auditors for the town and school district time to reconcile the accounts, LaFromboise said. The school district’s auditing firm and a business consultant the district hired disagree on the nature of the overpayment, she said, adding that the district is also seeking the advice of the State Auditor’s Office.

“I expect we’ll deal with it fairly soon,” said Hall, who added that the accounting mishap might have been caused by the complexity of dealing with the town’s books during the cleanup after Tropical Storm Irene.

After the August 2011 storm devastated the White River Valley, a deluge of money followed, including federal funds and a line of credit.

“Our bottom line has been padded,” Selectman Carl Russell said at the school meeting. The town will need to reconcile its books as the repairs from the flooding are completed and paid for.

The revelation of the accounting issue called to mind a similar problem from the recent past. A few years ago, school administrators discovered a deficit of around $480,000 that had accrued over several years. Bethel taxpayers paid it off over three years.

“I just see this as repetitive motion that’s becoming a bit concerning,” said Carla Hodgdon, a member of the town Planning Commission.

The overpayment overshadowed a $5.2 million school budget that promises a slight property tax cut, thanks mainly to an increase in enrollment and in the number of tuition students attending Whitcomb High School.

Despite the tax decrease, several attendees expressed concern about school spending and taxes, and incumbent School Board members Virginia Cole-Levesque and David Eddy Jr., won re-election over challenges from David Stanley (53-31) and James Gray (54-32), respectively.

At the Town Meeting, all business proceeded smoothly. Lisa Hill, who was appointed to the Selectboard last year after the death of Joe DeFreitas, was elected to a three-year term on the board by a vote of 114-21 over Carol Delia.

Voters also approved a town budget of $1.35 million that carries an increase of 2.9 percent and contains no new programs.

“We did not think it was the time for any new initiatives,” Hall told residents.

Also winning voter approval was a $12,000 appropriation for recreation facilities. The 30-year-old filters and pump at the town swimming pool are failing, and replacing them is expected to cost $20,000, said Corey Stearns, a member of the town’s Recreation Committee.

In other business, voters also expressed support for moving the annual meetings from the renovated Town Hall back to the school, which residents said is easier to walk into and would enable a meal between the town and school meetings.

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