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School board may fight for its money

By Steve Welker | The News Herald

Published: July 2, 2009

Morganton, NC - Did the Burke County commissioners short-change the schools by hundreds of thousands of dollars in the 2009-10 budget?
School board members will discuss that question during a special meeting at 10 a.m. Monday in the Staff Development Center, 509 W. Concord.
If the members agree and the school board formally challenges the budget appropriation, they and the county commissioners could find themselves on opposite sides of a conference table — with an independent mediator in the middle — on Wednesday. Hanging over all their heads will be the specter of a court case in 2005 (detailed below).
Board Chair Tracy Norman believes the commissioners owe the schools up to $1 million more than the $13.77 million the county appropriated Tuesday in its 2009-10 budget.
"We're going to fight for that money," schools attorney Jon Jones declared Thursday.
The county commissioners also will have a special session Monday. Theirs will start at 8:30 a.m. in the commissioners' meeting room at the County Services Building, 110 N. Green St. An amendment to the 2009-10 budget ordinance is among the items on the agenda, but it's unrelated to the schools' appropriation.
The commissioners approved the county budget ordinance on Tuesday, a few hours after a five-hour-long meeting at which the school board voted to buy out Superintendent David Burleson's contract.
Before the commissioners voted on the budget, Vice-Chair Bruce Hawkins proposed an amendment to move $363,800 from the schools' budget to a county contingency fund. Unanimously approved by the commissioners, the action reduced the schools' appropriation to $13.77 million, which is $330,000 less than the $14.1 million the district requested.
The commissioners' chairwoman, Ruth Ann Suttle, dismissed any suggestion that the action was retaliation for the school board's decision on Burleson's contract.
The money remains available to the school district, she and assistant county manager Paul Ijames said. However, they said, the school board will have to ask the commissioners for any money from the contingency fund and the school board will have to justify any requests to the commissioners' satisfaction.
Suttle and County Manager Ron Lewis said in separate interviews that the commissioners exercised their statutory duty to oversee expenditures of the taxpayers' money.
Jones' opinion is that the Hawkins amendment reduces the schools' appropriation to a level where the district can't function.
The $363,800 constitutes the entire fund for policy, administration and public-relations services. It covers expenses for postage and office supplies, for example.
It also includes $65,000 for legal fees (including bills from Jones and possibly special counsel Richard Schwartz); $12,000 for dues and membership in the N.C. School Boards Association that is helping the school board search for Burleson's successor; the board's own travel expenses; and the $200-a-month "per-diem" paid to board members.
But there's much more at stake than the 6900 fund, and both Jones and Lewis agreed it's a "very serious" issue that some people still believe a court settled in what's known as "the consent decree."
On July 18, 2005, the school board formally challenged the county's appropriation for the 2005-06 school year. The commissioners filed a counterclaim. Within eight days the two boards ratified an agreement signed by Superior Court Judge Robert Johnston.
Maynard Taylor was the commissioners' chairman, Ron Lewis was county manager and attorney Daniel Kuehnert (now one of Jones' partners) represented the county commissioners.
Buddy Armour, then board chairman and still a school board member; Burleson; and attorney Sam Aycock represented the schools.
The consent decree guaranteed the schools an appropriation of no less than $13.7 million annually, starting in 2007-08.
The judge also ordered the two sides' administrative staffs to negotiate a funding formula for use in 2007-08 and thereafter. The formula was to include "a set percentage (to be established by commissioners prior to the 2007-08 fiscal year) of the anticipated ad valorem tax revenues ..."
Meaning property taxes.
The group met and agreed on a figure of 43 percent of the county's anticipated annual property taxes.
Ijames says the county commissioners never formally ratified that figure.
Jones contends the commissioners set it by precedent when they used the 43 percent figure to decide the 2007-08 and 2008-09 budget appropriations. Also, Jones points out, Ijames referred to the 43 percent figure in a county budget workshop on June 15.
Prior to that date, as the commissioners and the county staff – as well as the schools – faced the prospect of recession-reduced income, the commissioners discussed giving the schools only the minimum required appropriation: $13.7 million.
Ijames and Lewis proposed "reconciling" the 2007-08 and 2008-09 appropriations with the 43 percent goal for ad valorem tax appropriations. Ijames calculated that would give the schools about $234,000 from 2007-08 and $187,000 from 2008-09. Adding $421,000 to the $13.7 million, the schools would receive slightly more than the $14.1 million the district requested.
Norman and some other school board members see it differently. They believe the county owes the district the $410,000 plus the $14.1 million requested for 2009-10 — $751,000 more than the amendment-adjusted $13.77 million appropriated by the county.
Jones said one of the board's options at Monday's meeting is to formally challenge the budget under N.C. General Statute 115C-431. If it does so, there must be a joint meeting of the two boards no later than Wednesday.