A public hearing on a bond issue through Newcastle’s municipal tax-exempt bond fund for Lincoln Academy drew about 30 people June 12. Lincoln Academy is seeking a $10 million bond to refinance debt at the lower municipal tax-exempt rate.

Every town in Maine except large cities has a $10 million line of credit on the tax-exempt bond bank, though few towns use the full amount, according to Steve Ward of First National Bank. Lincoln Academy approached Newcastle about using the town’s tax-exempt rate to pay off some bonds. After reviewing the plan, town attorney Peter Drum determined the town would be at no risk, but would not be able to use its tax-exempt rate until the end of the year. Lincoln Academy agreed to pay the difference between the tax-exempt rate and the ordinary municipal rate until Newcastle could refinance any potential bond after Jan. 1, although Newcastle has no plans to issue a bond.

Several citizens had questions about the relationship between Lincoln Academy and the town. Dennis Anderson said the town does not have access to the school’s books, although the town pays student tuition for Newcastle children. By contrast, Great Salt Bay School posts all of its salaries and expenditures online, so townspeople know what they are paying for in the school budget. Anderson said the town has no say in Lincoln Academy’s policies.

Chairman Brian Foote said Lincoln Academy has always been open to hearing the town’s concerns, while Benjamin Frey mentioned that the town votes on the budget, but there were only 15 people who showed up for the vote this year.

Lincoln Academy’s Head of School David Sturdevant said the school spends between $1,000 and $4,000 more per student on tuition than the state provides.

The school is expected to save about $1.25 million. Resident Nicholas Barth suggested a portion of that go to the town in lieu of taxes.  Lincoln Academy began paying funds in lieu of taxes last year.

Resident David Levesque said he is concerned about transparency. Officials from First National Bank said bank records could not be made public. “However, we have done a very thorough credit analysis,” said Ward.

Resident Mal Carey said that based on his review, the documents submitted by the school did not explain how Lincoln Academy planned to pay off the bonds. Jim Saffian of Pierce Atwood said the funds wouldn’t be repaid from the savings on the interest rates, but instead with funds from other sources.

Selectmen also had a few questions, mostly clarifications based on the paperwork Saffian, Ward and Sturdevant prepared.  Selectmen agreed to speak with Drum and other town attorneys before signing the intention to proceed.

After the hearing, Henry Kennedy, executive director of Kieve-Wavus, asked about a possible purchase of a boathouse downtown, at 75 Main Street. The property was brought to Kieve-Wavus’s attention by a realtor for the developer of a high-end condominium development, The Standard. There are six units in the building, and despite early interest, the homeowner’s association is opposed to Kieve-Wavus using the boathouse as a class site. The condo owners claim such a use would cause their property values to fall by at least half.

After listening to Kennedy and the condo owners, selectmen said they did not have authority to approve Kieve-Wavus’s plan or forbid the sale, and that the dispute would have to go to the Planning Board. Both parties will appear before the planning board on Thursday, June 15 at 6:30 p.m.