A circuit court judge is halting work on a disputed new school project in the Oldham-Ramona-Rutland School District.
The ORR school district attempted to finance the construction of a new Pre-K through 12th grade school through bond votes four times. Voters rejected all four efforts.
Last June, the district tried a different path — a capital outlay opt-out vote. This proposal allowed the district to pay for the project over 21 years.
Ahead of the vote, Superintendent Don Hoeke sent a letter explaining that if the opt out measure passed, the district would seek bonds or issue $14.5 million in capital outlay certificates to pay for the new school.
Voters approved the proposal with a 52% simple majority, as opposed to the 60% supermajority the bond votes required. However, the ballot didn’t include information about the financing plan.
The board issued capital outlay certificates totaling $14.7 million. A group of residents sued, arguing the school board tried to circumvent voters and wasn’t clear at the election by leaving out the financing information.
To qualify for injunctive relief, the plaintiffs — in this case, the or the residents suing district — had to prove they are likely to succeed based on merits or facts, prove that potential harm is imminent and irreparable, the school board won’t be injured if a preliminary injunction is entered and it must be in the interest of the public.
According to court documents, the Third Judicial Circuit Court found that to be the case for all four.
On the merits, a key question was that of if the school board’s actions comply with state law for capital outlay certificates.
Judge Kent Shelton said even if their actions complied with state law, “the legislative intent behind the capital outlay certificate statute was to permit school boards to incur modest amounts of debt without triggering the more rigorous procedural requirements associated with general obligation bonds. The intent was not to create a method for incurring substantial debt without voter approval.”
He added that leaving the 21-year duration on the excess tax levy off the ballot “failed to reflect the full financial scope of the board’s resolution.”
He said while the delay from the injunction could cause ORR to deal with construction delays and potential contractual penalties, “those consequences result from decisions made in the face of legal uncertainty and under the threat of litigation.”
The taxpayers in the district, on the other hand, “face the prospect of long-term financial exposure” so the balance is in favor of them not the school district.
The preliminary injunction puts a pause on any more debt issuance and construction of the new school until a full hearing on the merits of the claims can be had.
Judge Shelton noted the school board may be in violation of other laws, such as opens meetings and procurement and contracting laws.
Debates on a potential dissolution of the district altogether continue despite the legal battle.
