Two taxpayers taking YME to court over its $8.7M project at two schools
OLIVIA -- Millions of dollars worth of construction bids have come before the Yellow Medicine East School Board in recent weeks and been awarded at costs as much as 20 percent below estimates, thanks to a very competitive construction market.
Board members were also happy to learn recently that the district qualified for federal Qualified Zone Academy Bonds to help finance the planned health and safety improvements. The funding could save taxpayers $6 million to $8 million in interest costs over the life of the bonds, if they are awarded by Aug. 31.
Work is scheduled to begin June 6 with the dismissal of school on $8.7 million worth of "health and safety improvements" to the high school and elementary school buildings in Granite Falls, part of $11 million in overall improvements being planned.
Not so fast, said two taxpayers in the YME School District, who had their day Tuesday in district court in Olivia.
The district is violating state law by awarding the $8.7 million worth of work under the state's alternative facilities authority as a health and safety project, according to the civil lawsuit filed by Patrick McCoy and Scott Wintz, both of Clarkfield. Most of the work does not meet the "threshold" to qualify as necessary health and safety improvements, their attorneys said, and consequently the tax levy for that work must be authorized by voters.
They are asking District Judge Randall Slieter to grant a temporary injunction to halt the project until their case can be heard.
If the judge grants the injunction, the school would not be able to launch the work during the summer and would have to rebid the project for next year. Also, the Minnesota Department of Education has warned that if the Qualified Zone Academy Bond funds are not awarded by Aug. 31, it may allocate them to other applicants.
A year's delay could cost the district millions of dollars in savings it now stands to realize, attorney Eric Quiring, of Ratwik, Roszak & Maloney of Minneapolis, told the court on behalf of the district.
The school is taking a significant risk going ahead with the project, according to the taxpayers' attorney Dustan Cross, of the Gislason & Hunter law firm of New Ulm.
Cross told the judge that his clients plan to bring this matter to the court on its merits alone, whether an injunction is awarded or not. They see a "substantial, statutory structural" issue at its heart. "Can the school district adorn any improvement under the guise of ventilation and other (health and safety) projects without justification to determine what qualifies,'' said Cross.
If a court agrees that taxpayers have the right to vote on the majority of this work, the school will be on the hook for the millions it is spending, he warned. "It's creating its own mess,'' he told the court.
The district is moving ahead with the health and safety work based on a 2009 study by Energy Services Group of Wayzata. It found that the high school and elementary buildings do not meet air ventilation standards set by the American Society of Heating, Refrigeration and Air Conditioning Engineers. Only 11 of 63 rooms in the high school and just five of 41 rooms in the elementary school met standards for ventilation or carbon dioxide levels.
A study analyzing how many cubic feet of air are moved does not meet the threshold for determining a health and safety need, according to Cross. He said the district failed to conduct studies that showed adverse effects on staff or students. It did not look at other options -- as simple as opening windows -- to address the needs, he added.
The school's attorney responded that it is not necessary to haul students to the hospital before the school district could act on health and safety needs.
Judge Slieter promised a decision on the temporary injunction request "ASAP.''
He must also decide on whether the case is more properly heard in district court or the Minnesota Court of Appeals, where the school argues it belongs.
Both sides agreed on one point: They are breaking new ground, as there is very little case law that would give guidance on the taxpayer rights issues being raised here.