Rockport will receive $900,000 under terms of a settlement reached with Camden and School Administrative District 28 over faulty billing over the past decade.

Terms of the agreement were announced March 9 in a joint statement issued by the chairs of the Camden Select Board, Rockport Select Board and Camden Rockport School Board:

"The Select Boards of the Town of Camden and the Town of Rockport together with the M.S.A.D. 28 School Board would like to announce that we have come to a resolution regarding the tax assessment error in which the school district for multiple years mistakenly overcharged the town of Rockport for their portion of the district's budget and undercharged the Town of Camden," the announcement stated.

Camden agrees to refund SAD 28, as part of a special assessment, $750,000 in eight equal consecutive annual installments which will be rebated by the SAD 28 to Rockport. That amounts to $93,750 annually.

In addition, the school district has agreed to contribute an additional one time payment of $150,000 to Rockport upon the court’s order approving the agreement.

Camden Rockport School Board Chair Patrick McCafferty said Wednesday, March 10 that a review of finances showed Rockport had been overcharged $1,662.032 in total over the past 14 years.

Rockport acknowledged there are statutes of limitations that come into play which would likely have limited Rockport’s recovery, had it pursued the lawsuit, to six years. The overpayment for those six years that were most likely to be recovered in court was $900,000, and attorneys fees would not have been recoverable.

The lawsuit was filed Aug. 28 in the Knox County court by Rockport against Camden and School Administrative District 28.

The crux of the problem, according to the lawsuit, was that SAD 28 was divvying up the costs of education based on the wrong formula. The district was billing the towns based on the percentage of students each town sends to the schools, rather than the property valuations of each town.

For instance, in 2019-2020, Rockport accounted for 47% of the students in SAD 28 (for kindergarten through eighth grade schools) and was billed based on that percentage. But the town should have been billed based on it having 42% of the valuation of the two towns combined.

That error amounted to Rockport paying $450,571 too much for 2019-2020 and Camden underpaying $450,571.

Last year, the district said it was investigating how far back the errors were occurring, but it appears to go back to at least 2009.

The error was found by the school district's new business manager earlier in 2020. SAD 28 then hired attorney E. William Stockmeyer to advise the district on what the proper cost-sharing method should be. The attorney issued a memo to the school district on July 29, and the following day Rockport was informed by the school district of the long-running error.

"The overpayments to MSAD 28 over a number of years resulted in a loss of funds to Rockport that could have been used for other town funding priorities such as road repairs and public infrastructure improvements," the lawsuit stated.

"Moving forward the leadership of Camden, Rockport and the Camden Rockport School District are committed to a more connected and cohesive relationship — one where we can communicate openly to reduce problems and conflicts and share questions and concerns. Our first step will be quarterly leadership meetings between the leadership of the towns of Camden, Rockport and the Camden Rockport School Board," stated the March 9 announcement.

The announcement was signed by Rockport Select Board Chair Debra Hall; Camden Select Board Chair Robert Falciani and Camden Rockport School Board Chair McCafferty.

The attorneys who worked on the case were Melissa Hewey of Portland, who represents School Administrative 28, William Kelly of Belfast who represents Camden and Eben Albert of Portland who represents Rockport.

Rockport’s attorney fees are $62,892. They are not covered by insurance as Rockport filed the lawsuit, the town said.

"While our attorneys fees were not covered by insurance, or recovered as part of the settlement, we would not have recovered the fees in litigation either and we would have incurred more fees by continuing the litigation," the town said.

The school district has spent $24,482 thus far on legal fees. The school board said the district is expecting $18,552 of that amount to be reimbursed by the district's insurance company.

The insurance company is also paying $100,000 of the $150,000 the district is paying to Rockport.

Camden has not yet responded on how much its legal costs have been.