Inter-Lakes board learns gory details of school district withdrawal

Just how complicated is the process for withdrawal from a cooperative school district in New Hampshire? The Inter-Lakes School Board found out last night at a special meeting held for the sole purpose of inviting a legal expert to explain the state laws that define the procedure.

The meeting was called in response to a motion that passed at the Meredith town meeting in March, in which a resident gained a majority support for a measure asking the town's Selectboard to request that the school board embark upon a study of the feasibility of a withdrawal from the cooperative school district Meredith shares with Sandwich and Center Harbor.

Thus far, the town has made no such request and the selectmen who attended the meeting didn't appear eager to start the process any time soon.

The initiative was sparked in reaction to votes at the annual school district meeting that had the school board's budget recommendations rejected in favor on more spending. Many of the pro-spending votes that night came from Sandwich voters, who make up only about 12-percent of the registered electorate but accounted for half of those in attendance at the meeting.

As Barrett Christina, staff attorney with the New Hampshire School Boards Association explained, the procedures for withdrawal are outlined in state statutes 195:25-28. He said the process can start one of two ways: the school board may undertake a study of the withdrawal of a district, or the process can be triggered

by a majority vote on a warrant article at a regular or special town meeting.

As Board Member Jack Carty noted, the motion that occurred in March was not a formal, posted warrant article but rather a motion from the floor made by resident Mark Flanders, who was present for last night's meeting.

Flanders said he consulted with the town's legal counsel priot to making his motion and crafted it such that it would not be legally binding. "I knew that at the time and presented it that way... there's nothing thus far that could compel anybody to do anything," he said.

Once such a study is begun, a study committee is formed composed of at least one member of the school board from each of the districts, one member of each town's selectboard and other members as may be appointed by the committee for additional expertise.

Once formed, the committee has 180 days to complete its report and submit it to the State Board of Education. The committee is asked to conclude that either: a withdrawal is not feasible, or that a withdrawal is feasible and a plan for withdrawal is included with the report.

If the committee concludes that a withdrawal is not feasible then dissenting members of the committee may submit a minority report accompanied by a withdrawal plan.

Such a plan must include many details of how the district's assets would be divided, how the liabilities would be resolved and would be what the resulting districts would look like and be governed. The law specifically requires the plan to detail how students in all affected districts would continue to receive their education.

Once the State Board of Education receives and approves the plan, it is then returned to the voters of the cooperative district for final approval or denial. The law states that a withdrawal must take effect on July 1 of the calendar year one year subsequent to passage of the plan. Therefore, the earliest that a district could withdraw from the Inter-Lakes School District would be July 1, 2012. The withdrawing district would remain within the same SAU, to withdraw from SAU 2 requires its own process.

The stickiest part of the process, what Christina referred to as the "meat and potatoes" of the ordeal, is the resolution of the cooperative district's debts and the division of its assets.

"What this essentially boils down to is the withdrawing district is breaking a contract. When you breech a contract, you have to pay damages," Christina said.

The withdrawing district would be liable to the cooperative district for its share of existing debt service, such as bonds and leases, that it would be responsible for if it remained in the district. The withdrawing district would forfeit any equity it had in the cooperative district.

Real property — land and school buildings — which are contained within the withdrawing town would be titled to that district, but only after the withdrawing district refunds the cooperative district for any capital improvements made on the property that other towns contributed to. This includes the construction of the buildings, as well as projects such as an athletic field that other towns contributed to.

"This is one of the oldest cooperative school districts in the state, and the makeup of the district has changed over time," said Assistant Superintendent Trish Temperino, wondering aloud if records of all capital improvement projects still exist.

There are other issues, too, such as which district Inter-Lakes teachers would work for if Meredith withdrew, a question that elicited an expression of consternation on the face of Superintendent Phil McCormack.

With the messy divorce that such a process seems to entail, it's not surprising that only two cooperative school districts have pursued the path of withdrawal since the laws were enacted. Those two cases involved the Town of Mason withdrawing from the Mascenic district and Surry from Monadnock. Christina, who has experience with both cases, since each occurred within the past few years, said, "It didn't go well, it was not a pleasant experience." He noted that a lawsuit resulting from the Monadnock withdrawal remains in litigation.

On their own, it was noted, none of the district's communities could produce enough high school students to run a program at an acceptable per-student cost.

Board Member Howard Cunningham encouraged those present to consider issues beyond dollars per student. "It's not only per capita costs, it's also quality of education." He noted that a withdrawal process would also likely result in a significant disruption for all the students who would have to transfer to a new school yet to be determined.

Board Member Lisa Merrill observed that the district's smaller towns, Center Harbor in specific, don't have enough voters to bring much impact on the final decision. Yet, since that town doesn't have a single school building, it stands with the most to lose.

After hearing the presentation, Board Member Dan Cunningham turned to the four present members of the Meredith Board of Selectmen and asked if they were inclined to begin the study process.

Selectman Chuck Palm answered "there is a real question about the warrant issue," meaning that the town didn't feel compelled by Flanders's town meeting motion to act.

Added Selectman Peter Brothers, "We may be leading people down a path that we don't necessarily want to take." He acknowledged there might be points of conflict between the cooperative district's communities but suspected that there were means short of withdrawal for those concerns to be addressed. "Let's find out what all the other options are."

"I'd like to see more dialogue as to what the issues might be and what we can do about them," Brothers said.

At the end of the meeting, Palm asked the school board if the two bodies could meet to further the conversation, a request welcomed and acceded to by School Board Chair Richard Hanson.