Union County commissioners, school board tensions rise again over funding issues

Tensions erupted again this week between Union County commissioners and the school board as a new legal fight looms over an old issue — how the county funds the school district.

Commissioners warned that the new school board budget request could “bankrupt the county,” and unanimously voted this week to expand their legal team. The district can sue over budget disputes, and did so two years ago in a case that is still not resolved.

“It’s like you are looking at a tornadic cloud coming at you,” commissioners chair Richard Helms said Tuesday of the potential for more litigation. “If you don’t prepare, you could lose everything.”

On Monday, commissioners asked for a joint meeting next week with the school board to go over the budget. The two sides can’t even agree on which numbers to use for discussing the 2015-16 budget.

And what happened in the 2013 legal case is driving commissioners’ concerns of a new lawsuit.

The school board won a stunning $91 million judgment against the county, which was overturned by the N.C. Court of Appeals last month when it ordered a new trial.

In a key finding, the appeals court held that the trial court erred in allowing the school district to present evidence of capital funding needs for more than a single budget year.

School officials apparently believe they need to ask for all their capital needs in a single budget year if they want a shot at getting that money in court, county officials said.

The new request

At a meeting Monday, Jeff Yates, the county chief financial officer, cited two budget scenarios from the school board’s new budget request.

In one scenario, he said, the school board is seeking $497 million in the upcoming year, including $393 million in capital needs and general operating costs of $104 million. That represents a 366 percent increase from the district’s current budget and would more than triple the overall county tax rate.

Giving the school board a half-billion dollars would “totally bankrupt the county,” Helms said.

Dan Karpinksy, the school district’s CFO, said the $393 million in capital needs represents what the school board is seeking over eight years, not a single year, and includes bond referendums for those needs.

The county and school board appear to agree that the school board is seeking $104 million in operating expenses. That’s a 20 percent increase from the current year, and a large part of the increase covers $11 million in teacher supplemental pay.

Yates cited a second school budget scenario that covers operating costs and nearly $35 million in capital expenses, including nearly $15.8 million as debt service on a possible bond referendum.

But school district spokeswoman Tahira Stalberte said the district is seeking $177 million in capital needs for the new school year, with nearly $158 million to go before voters in a bond referendum. The remaining money, nearly $20 million, would be for capital maintenance.

School board chair John Collins could not be reached for comment. In his budget message, Collins stated that capital requests reflected “years of insufficient capital funding.”

More legal fees

On Monday night, commissioners agreed to spend up to $200,000 for the Charlotte firm of Womble, Carlyle, Sandridge and Rice to handle both the old case, which the district could appeal to the N.C. Supreme Court, as well as a potential new one.

“The county needs to be prepared for trial when it adopts the budget next month,” said county attorney Ligon Bundy. “I am recommending that you prepare for the worst.”

Taxpayers continue to cover all legal fees for the boards. That sum is nearing $2 million, including county bills of $803,098 as of this week, and school board bills of $1.1 million through February.

This story was originally published May 19, 2015 at 4:40 PM with the headline "Union County commissioners, school board tensions rise again over funding issues."