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Union jury awards school district $91M in funding fight with county commissioners

MONROE A Union County jury on Thursday delivered a victory to the school district in its budget fight with county commissioners, and said the county owes the district more than $91 million in additional money.

It’s rare for such disputes between school boards and county commissioners to wind up in court, although state law allows for that recourse. Richard Schwartz, lead attorney for the district, called it the largest award of its kind he is aware of.

“I feel vindicated,” Superintendent Mary Ellis said shortly after the verdict came back mid-day, following about one and a half days of deliberations. “A jury of our peers determined we were doing things for the right reasons. I’m a very happy girl.”

The county has 30 days to decide if it wants to appeal, Schwartz said. If commissioners don’t appeal, they need to figure out how to come up with the additional funds.

One option, Schwartz said, is for the county to turn to its rainy day fund balance. Other possibilities include cutting services or raising taxes.

Commissioners Chairman Jerry Simpson said the board will meet Friday in closed session to discuss its options. He favors appealing the verdict.

“I don’t know where you come up with that kind of money,” Simpson said. “If that verdict stands, it will have a monumental impact on ... the ability to deliver critical county services, and will be a financial hardship for people on fixed incomes and others if we have to raise taxes.”

Union County’s tax rate on property and personal property is 66 cents per $100 of valuation. Covering the entire verdict through a tax hike is unlikely, but would roughly result in a 59 percent increase in the tax rate.

The jury awarded the school system $4.97 million in general operating funds and $86.18 million in capital funds, which would be on top of the money the county already allocated to the district for the current fiscal year.

The bulk of the capital funds will go to roof repairs, Americans with Disabilities Act compliance, and safety and security issues, according to Ellis. During the trial, the district detailed millions of dollars in unmet capital needs over the past few years, and the jury appeared to have focused on numbers associated with those concerns.

Union County schools has about 42,000 students, and is the state’s sixth-largest district.

During testimony, Ellis told the court, “I am not asking for extravagant things. I am asking for children to not have to attend schools with leaky roofs and for children in wheelchairs to be able to get into buildings.”

Failing at mediation

The two sides were roughly $8 million apart on capital and general fund needs when commissioners approved their $298 million 2013-14 budget in June.

They designated $82.3 million in general operating funds for the district. While that represented a nearly 2 percent increase over the prior year, the school board had wanted several million dollars more.

For capital funds, the school board sought a little more than $8 million, but the county approved $3 million a year for the next three years.

The school board then sought mediation to resolve the funding dispute. This marked the fourth time the district has used mediation, an option available to it under a 1997 state law; no district in the state has used it more.

But unlike the previous times, mediation failed to produce a settlement and the school board sued the commissioners for the money.

Judge Erwin Spainhour, senior resident Superior Court Judge in Cabarrus County, presided over the two-month trial. Before closing arguments began on Tuesday, he warned the crowd of about 100 people in the courtroom to refrain from commenting, saying, “Believe me, this is a big case.”

School and county officials had traded barbs throughout the run-up to the trial. School board Chairman Richard Yercheck said the two boards will need to work on their relationship, and said his group is open to that.

As for the verdict, Yercheck simply said, “I am elated at the number they came back with.”

Bell: 704-358-5696; Twitter: @abell
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