Appeals court upholds decision in favor of District 834

Judge: 2015 bond not changed by school closures

The Minnesota Court of Appeals ruled in favor of the Stillwater Area School District June 19, stating that the district does not need to have another vote on the $97.5 million 2015 Long Range Facilities Bond.

The bond was approved by voters in May 2015, but resident Melissa Douglas alleged in a lawsuit that the school board’s vote to close the three elementary schools on March 3, 2016, illegally changed the use of bond proceeds.

The original lawsuit, filed by Douglas March 1, 2016, asked a district court judge to order District 834 to use money from a $97 million voter-approved bond to improve Marine, Oak Park and Withrow elementary schools, or to request approval from voters before doing otherwise. The lawsuit argued that the school district has a statutory duty (based on Minn. Stat. 475.58) not to “materially deviate” from the voter-approved purpose of the bond money without obtaining voter approval for the change. Douglas’ court filing argued that closing three schools would amount to a material deviation from the purpose of the bond and would violate a social contract created with voters.

In August 2016, district court judge John McBride dismissed the case by concluding Douglas had “not demonstrated that the District has failed to perform a clear legal duty.” The ruling also found that “the relief that she has requested is beyond the Court’s authority.”

Douglas asked the Court of Appeals to review McBride’s decision.

Presiding Court of Appeals Judge Jill Flaskamp Halbrooks wrote the opinion of the court.

“We conclude that the district court did not err by denying Douglas’s request for a writ of mandamus,” Halbrooks wrote. “We conclude the school district did not violate Minn. Stat. § 475.58, subd. 4, and does not need to hold another bond referendum to make HVAC improvements at Oak Park, even though the school district has since resolved to repurpose it as an administrative facility.”

The court found that the decisions made by the school board to close Withrow and Marine elementary schools and to use the Oak Park elementary school building as an administrative building “has abandoned a portion of the project but not the purpose of the bond referendum.” Halbrooks stated that the court reviewed Minn. Stat. § 475.58, subd. 4 — the state law that governs the proper use of bond proceeds — and determined its interpretation of the law.

“Because the ballot language does not specifically require the school district to improve any of the three elementary schools that it planned to close and because the project modifications are minor in scope, we conclude that the school district has not abandoned the purpose of the bond referendum,” Halbrooks wrote. “Here, the ballot language states that HVAC upgrades would take place at elementary schools and facilities, without identifying specific locations. Because neither the cancellation of improvements at the elementary schools slated for closure nor the HVAC upgrade at Oak Park depart from the original purpose in this bond referendum, voter approval of these changes is not required.”

Halbrooks stated that the Court of Appeals interpreted the meaning of the term, “ballot language,” as the information solely found on the voting ballot itself.

“Douglas also argues that other information — the [Minnesota Department of Education] review and comment, the school district’s published notice, and the school district’s resolution — binds the school district because these documents amount to a social contract,” Halbrooks wrote. “This argument is without merit because Douglas fails to cite to any binding authority.”

Following the release of the court’s decision, Douglas said she may bring the case to the Minnesota Supreme Court.

“I am evaluating the opinion with my attorney at this time with regard to a petition to the Supreme Court to review the case,” Douglas said in an email. “The Court of Appeals decision definitely has state-wide importance to school facility financing.”

Douglas issued a written statement June 19 outlining her thoughts on the ruling by the court of appeals.

“Today’s Court of Appeals’ decision effectively eliminates local voter control of funding for new school facilities,” She wrote. “Voters still must pay for new school facilities if a referendum passes but school boards are no longer obligated to honor their public promises. Using general ballot language, schools boards now have broad discretion to direct school facility funds to any purpose without a public process or voter consent.

“All communication between school boards and voters, outside of the official ballot, are now only campaign promises,” she continued. “Voters can no longer rely on school officials for unbiased information on bond measures. The bait-and-switch tactics of the Stillwater Area School Board will become the new norm.”

Douglas wrote that taxpayers of other school districts in the state will face similar problems when voting of facility bonds.

“The Court of Appeals clarifies once and for all that Minnesota’s school facilities bond referendum process is deeply broken,” Douglas wrote. “Today’s decision has dire implications for state educational facility funding. Without reasonable guarantees that proposed projects will be implemented as advertised, bond referendums will fail at increasing rates — ultimately doing the most harm to students and communities.”

A spokesperson for the Stillwater Area School District declined to comment on the outcome of the case.

Contact Alicia Lebens at [email protected]

  • Carl Blondin

    Mrs. Douglas’ description of the Court of Appeals decision is inaccurate and misleading. The Court of Appeals simply followed clear and well settled law when it made its decision. She and her attorney sought a sea change in Minnesota public bonding law and the Court properly rejected their spendthrift proposal. The law was followed 100 percent correctly when the bond was passed. The amount of money listed on a bond referendum is a limit on government spending, not a license for waste as Mrs. Douglas and her attorney want. The District later lawfully and properly followed the law for schoolhouse closings.