A loan for Wiscasset's school district withdrawal costs would be a better deal than tapping reserve money, according to a new analysis.

At 3.5 percent interest, a 10-year, $2 million loan would cost about $443,500, said Daniel Lay of the town's investment advisory firm, H.M. Payson.

Opting for a loan would also keep the $2 million in the reserve fund where it would earn about $1 million over 10 years, Lay said.

“To me, the math calls for bonding it,” Lay told selectmen September 3.

The $1 million income is a conservative projection, Lay said. “We may well do much better than that,” he said.

A local petition drive has been under way for a referendum to consider asking selectmen to take approximately $2 million from the reserve fund, as needed, for the withdrawal. A resident involved in the petition, former Wiscasset school board vice chairman Doug Smith, has said the town vote is being sought for November; that's when voters will also be considering a deal for withdrawing from Sheepscot Valley Regional School Unit.

Reached September 4, Smith said the firm’s projection of $1 million in income from the $2 million staying in the fund is “fortune telling.”

The cheapest way to fund the withdrawal costs is through the reserve fund, Smith said.

Comments on the possible use of reserve money were mixed Tuesday night. Selectman Pam Dunning called the petition a knee-jerk reaction to the projected withdrawal costs. “I think we really need to take our time and find the most fiscally responsible way to pay for things,” she said.

Restoring that $2 million to the reserve fund might mean foregoing capital spending for years, board members said. Selectman Tim Merry said it was too soon to be discussing how to fund the withdrawal.

Passage of the withdrawal plan will only count if at least about 834 voters cast ballots in November.

However the withdrawal would be funded, it would be worth it, Selectman Jeff Slack said.

“I think when we ran our schools, they were in great shape,” said Slack, who served on the town's withdrawal committee. Since joining the district, he said, “It's been a never-ending down, down, down, down.”

Susan Johns can be reached at 207-844-4633 or susanjohns@wiscassetnewspaper.com