Judge does not rule on USD 410 lawsuit years ago

Staff reporter

After nearly 90 minutes of closing arguments and rebuttals Monday morning, Judge Steven Hornbaker said he would review the information and make a ruling soon.

Rural Hillsboro resident Raymond Brandt doesn't believe USD 410 constituents were given all of the information before voting on a multimillion dollar bond issue last year.

The bond issue was for improvements and additions at Hillsboro Elementary School and Hillsboro High School, and a new track and football stadium at Tabor College.

The question was put on the ballot in the June 5, 2007 election, and it passed.

The day before the election, Brandt filed suit.

Brandt also takes issue with an interlocal agreement between the school district and the college for the construction of a new sports facility and is contesting whether public funds can be used to make improvements on a facility owned by a private entity.

For years, the school district has used the college facilities for sporting events, so the school district and college decided to work together for a new facility.

As part of the agreement, the school district and the college will each chip in more than $2 million toward the project. Each entity then will own 50 percent of the facility.

According to Brandt, there is no clear-cut answer as to what will happen to the stadium property after the bonds are paid.

The original interlocal agreement stated the agreement will continue for 40 years unless the bonds are paid before that time. Upon termination of the agreement, the athletic facilities will continue to be jointly owned by both entities.

In her summary, Susan Schrag, Brandt's attorney, contended that Brandt's position is that the school district and Tabor College cannot jointly own property.

She cited a 1951 state statute that implied the same interpretation.

Statutes have evolved regarding joint ownership, she said, but the fundamental aspect of state statutes require school districts to own property which tax dollars support.

Schrag referred to a court case where two school districts could not own a school building for a single use.

"Man cannot serve two masters," she said, referring to the future and parties who get along today may have issues arise in the future.

The length of the bond and relationship between the school district and Tabor College would be 40 years or less.

Schrag continued that the 1963 school unification act gave school districts the power to hold property in their names. She quoted state statute 72-8212 that school districts "shall have the title" to and caring of school property.

Others can use the property but the board of education "shall have the title."

The concept that school districts can do whatever is advisable to operate their districts was addressed by Schrag as it was presented by the school district's attorney, Mark Biberstein.

"We say that the home rule statute (72-4505(e)) doesn't change what's already on the books. You cannot use a statute as an excuse not to obey the law," Schrag said.

She next attacked the school district's interlocal agreement with Tabor College.

"When the agreement terminates, it is illegal for Tabor College and the school district to jointly own the property," Schrag said. "When the agreement is terminated, the bond issue is illegal. Even if the interlocal agreement was done properly, the joint ownership issue remains illegal.

Schrag said the interlocal agreement between USD 410 and Tabor College had to contain a "laundry list" of requirements.

The agreement stated it would terminate in 40 years or sooner and upon termination, the facilities will be owned jointly until otherwise disposed.

"The agreement doesn't specify the disposition of the facility," Schrag said.

In July 2007, Schrag said she had requested a copy of the interlocal agreement which had not yet been drawn.

In January 2008, Schrag said she called the Kansas Attorney General's office and was told that an agreement had been filed of which she received a copy.

In that agreement, she noticed there was no mention for disposal of the property after it was paid.

Schrag continued that in May, the school district filed an amended and restated interlocal agreement.

"If I were a voter, I would like to have known what was going to become of this facility after the bond life," Schrag said.

The amended agreement stated that upon termination of the agreements, the district would transfer ownership to Tabor College.

"The true intent of the parties all along has been to give the facilities to the college," Schrag said.

She asked the court to find the matter to be illegal because the bond election notice did not advise voters of the intent of the property after the bond ended.

The board purposely slowed down the process for 90 days to avoid filing an interlocal agreement, Schrag said.

One of the duties of the attorney general's office, Schrag said, is to review interlocal agreements.

"It's not rocket science to compare agreements with state statutes," she said. "This wasn't a case of discretion (on the part of the attorney reviewing the document) but fact," and the agreement should have been denied.

Schrag continued that a taxpayer has a right to complain about how his tax dollars are being used.

It then was Beberstein's turn.

The position of the school district is that Brandt doesn't like the stadium project and Beberstein contested that the school district and the college can jointly own property.

Everything changed in 2003, Beberstein said, when the Home Rule statute was adopted. It changed the way school district could authorize operations.

Prior to the law, school districts were only able to do those things specifically under the law.

"The bill takes the reverse approach and allows school districts to take action unless specifically restricted by the law," Beberstein said.

He continued that KSA 72-8212 did not indicate that school districts cannot jointly own property.

"In 1868, cities did not hold title to streets. Counties held title," Beberstein said.

In 1987, KSA 12-406 was adopted which Beberstein interpreted as allowing joint ownership. There aren't any court cases that say any different. Old cases cannot be held to the new standards, he said.

Beberstein then contested that disposition of the property after the bond is paid doesn't mean in the future, but at the time the agreement is terminated.

He said that all parties agreed that an interlocal agreement could be a vehicle for joint projects and the amended agreement was to accommodate Brandt.

The intention was to acknowledge recommendations made by the plaintiff and adjust the agreement as needed to settle the issue.

Beberstein then challenged that Brandt did not file his appeal within the required 90-day period.

"The bond issue met the requirements. It's not up to the law to express how property will be disposed," he said.

Deputy attorney general Mike Leach responded that Brandt didn't have any injury or reason to file suit against the state official.

He continued that Schrag wants Brandt's attorney's fees for mandamus which is a document issued by a court that orders a public official to perform an act. In this case, it would be reimbursing Brandt for his attorney's fees.

"The court cannot authorize a mandamus against the attorney general's office," Leach said.

Earlier Schrag had asked the court to require the attorney general to withdraw its approval for the interlocal agreement.

"The attorney general cannot take any action to withdraw approval of the agreement," Leach said. He said it would be like to trying to "unsign" a document.

"The attorney general has no role in the interlocal agreement. He approved agreement and it is done. It cannot be nullified," he said.

In rebuttal, Schrag said the school district seems to be "making it up as they go along."

"This emperor is running around in the buff. It's not Mr. Brandt's fault it (the interlocal agreement) was ill-advised," she said.

Schrag said the defendant's attorney should not have to use opposing counsel and the court to help them "figure out" the agreement.

She continued that the Home Rule law shouldn't relieve the school board from being compliant and the school district should hold the title to the land.

Schrag did not agree that the attorney general is faultless.

"It is not right for a citizen to hire an attorney to have the attorney general do his job," she said. "The agreement requires four pieces of paper and they've only got three."

It then was Beberstein's turn.

He provided legislative history regarding Home Rule for school districts. The statute addresses disposition of property at the time of termination.

"They would have to re-write the law regarding bond issue election," Beberstein said.

He continued that litigation has been frustrating and the delay is costing taxpayers for attorney's fees and interest rates for the bonds have increased.

Leach said the lawsuit had been filed for eight months before his office was involved.

"Even if the attorney general had done nothing, the agreement would have been deemed approved after 90 days," he said.

With all being said, Hornbaker took the information with his notes and said he would make a decision.