School district may lose surplus funds due to technicality

June 5, 2012 2:46 pm Published by Leave your thoughts

Business owners have a number of responsibilities to meet and regulations to follow if they wish to avoid being tied up in business litigation. However, business law help from a trusted business attorney can provide the answers that a particular Phoenix-based CEO or manager is searching for. Nonetheless, some federal or state laws can affect an SMB in such a way that the organization may lose financial assistance.

For example, the Cave Creek Unified School District in Scottsdale, Arizona received a certain amount of funds to build more schools from a bond measure that was approved by voters twelve years ago. However, after building two schools, the district had a surplus of $13 million, according to Arizona Central. In 2010, the Legislature passed new regulations that would allow Cave Creek to use the extra money to renovate and make repairs to the schools.

Despite this new resolution, in April of 2011, the Goldwater Institute based in Phoenix filed a lawsuit claiming that the new legislation was unconstitutional because the voters originally intended the money to be used for building new schools instead of renovating.

By September, a Superior Court judge found the law unconstitutional, which forced the surplus funds to be tied up.

"Only district schools can ask voters to approve bonds, and the money can be spent only on buildings and buses. Independently run charter schools cannot seek bonds," the news source stated. "However, in Cave Creek, the charters would be district-run and the district would maintain ownership of the buildings so it still could ask voters to approve a property tax to raise money for renovation and maintenance."

At the end of the summer or early fall, the Court of Appeals will reveal the final determination of where the funds will end up.

Other organizations that find regulations in Phoenix too complex may need to speak with a business attorney who has corporate experience.

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