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Duxbury looks at options for financing debt

By Rachel Goff

On Monday, April 7, the Duxbury Select Board discussed a plan for repaying the town’s total debt of almost $340,000.

According to Bonnie Batchelder of Batchelder Associates, who performed the 2011, 2012 and 2013 financial audit for the town, Duxbury’s debt is a result of misreporting of operating expenses over the last three years. During that time, the town received over $1 million in aid from the Federal Emergency Management Agency (FEMA) to repair damage done by Tropical Storm Irene in August of 2011 and earlier flooding that spring, but those accounts were all properly dealt with, Duxbury town treasurer Kym Andrews said. Andrews took over for Duxbury town clerk Ken Scott after he resigned from his financial duties last December.

Duxbury received and discussed a draft version of the audit on April 2 and accepted a final version of the audit at the April 7 meeting.

Duxbury took out a $228,000 line of credit with Merchants Bank to pay to repair damage done by Irene until it received reimbursement from FEMA, but due to a misreporting of operating expenses that resulted in a $110,344 budget deficit on top of the borrowed money, the town was unable to pay back the line of credit when it became due at the end of last October.

Merchants Bank granted Duxbury an extension on the line of credit until June of this year and the town has provided the bank with titles to two of its trucks as collateral. The select board met again with Merchants Bank last week to discuss repayment of the loan, “and there really isn’t anything else that [they] can do,” select board chair Dick Charland said.

To repay the line of credit, Duxbury will put requests for proposals (RFP) out to other banks, including Merchants Bank, with whom the town has had “a good, working relationship,” Charland said. According to Duxbury’s attorney, the town can finance a loan over a maximum length of five years.

Per Batchelder’s recommendation, the town is also looking into borrowing money to rebuild its General Fund, which currently stands at negative $9,000. In the meantime, Andrews is assessing “what our cash flow is going to look like between now and tax collection time,” she said, in order to determine where to take money from to continue to pay the town’s operating expenses.

When the multi-year financial audit was presented to the board at their meeting on April 2, several residents expressed concern for the accountability of those responsible for the misreporting of funds that resulted in the debt, and Andrews said that Batchelder and select board chair Dick Charland reiterated that there was no fraud or other financially bad behavior. Minutes from the April 2 meeting note that in response to questions about accountability, Charland said Duxbury is currently discussing the situation with counsel.

Batchelder, in presenting the audit report to the select board, indicated that the work of the former town treasurer was “sloppy,” Andrews said, “but she was clear that there were no issues of fraud.”

When asked why the town didn’t catch the misreporting earlier, in its annual town audit, Andrews explained that, in the past, Duxbury has paid $2,500 for its municipal audit, while most town spend around $10,000. “You get what you pay for,” she said.

On Saturday, May 10, at 9 a.m. at Harwood Union High School, Duxbury will hold a special Town Meeting asking residents to vote on several articles, including authorizing the town to borrow the money needed to repay its debt.

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