Union school board seeks rehearing on $91M appeals case

The Union County school board said Wednesday it wants a rehearing on the N.C. Court of Appeals’ decision reversing a $91 million judgment it had won in a budget fight with county commissioners.

The school board filed a 157-page request for a rehearing Tuesday.

The issue grew out of a funding dispute over how much money commissioners should provide the school board beyond what was already allocated for 2013-14. In October 2013, a county jury awarded the school district the surprise amount after a two-month trial.

Throughout the appeals process, N.C. counties and school districts closely followed the case for the precedent it could set.

“The board decided this (request) was something we needed to do to assure a correct legal result,” school board chair John Collins said in a statement.

In April, the appeals court unanimously ordered a new trial in the case, and said the trial court erred in allowing the school district to present evidence of capital funding needs for more than a single budget year.

The school board said it asked for a rehearing because the court was mistaken in several key ways — including the major ruling that evidence in the case was limited to the board’s budget request for a single budget year.

Such a ruling deprives students “of funds that are ‘legally necessary’ to maintain a system of free public school,” the school board said. “The (court) sidesteps the crux of the matter: what happens if the amount ‘legally necessary’ is greater than the amount requested in the (school board’s) budget proposal?”

The board also cited concerns with the appeals court ruling on jury instructions, among other issues.

The school board needs to resolve these issues “before either of our boards might have to face the prospect of a new trial,” Collins stated. “I think we can safely say no one would look forward to that, and we would hope for a more peaceful resolution.”

County commissioners chair Richard Helms said he was not surprised by the school board’s move, and that Collins had recently indicated they were going to take that step.

Helms also said legal fees will continue to grow, and further stretch county resources at a time when the school board is likely to look to the county for supplemental pay for teachers and administrators.

Legal fees are nearing the $2 million mark for taxpayers. The county’s bills have hit $802,932 as of early April, while the school board’s bills came to $1.1 million through February, records show.

The court of appeals has 30 days to decide whether to rehear the case.

If the court turns down the request, or if the request is granted and the school board is unhappy with the final outcome, it can take the case to the N.C. Supreme Court.

Back in 2013, commissioners and the school board were about $8 million apart in their funding discussions when the school board filed its lawsuit.

During the trial, the school district detailed millions of dollars in unmet capital needs over the past few years – including safety, roofing and security needs – and the jury appeared to have focused on numbers tied to those concerns.

About $5 million of the original judgment covered current operating expenses, and $86 million was for capital expenses for current and prior needs.

County commissioners had called the jury’s actions a “runaway verdict” that would trigger a “catastrophic” tax increase or major cut in services if allowed to stand. But the school board said commissioners had disregarded their legal obligation to provide sufficient funds to the school district.

This story was originally published May 13, 2015 at 9:06 AM with the headline "Union school board seeks rehearing on $91M appeals case."