Lower Merion to appeal court ruling, moves forward with new tax hike for next year as supporters and critics come out for latest board meeting

Ardmore >> Days after a judge threw out its appeal, Lower Merion School District officials Monday night said they will continue to fight the taxpayer lawsuit through another appeal. At the same time, the administration also moved forward the 2017-2018 budget that includes another tax hike — but one that is a bit smaller than had been projected a few months ago.

Under the proposed final budget that was presented at Monday night’s monthly business meeting of the Board of School Directors, the increase will be 2.99 percent, lower than the 3.85 percent the administration proposed in January.

Residents packed into Monday’s meeting, waiting to weigh in on the taxpayer lawsuit and other school district business. Just a few days prior, a three-judge panel threw out Lower Merion’s appeal of Montgomery County Judge Joseph Smyth’s order from last August that the district must rescind a portion of the 2016-2017 tax increase. According to the opinion in the latest ruling, the appeal was tossed because the district’s attorneys failed to file post-trial motions that the court determined were required.

The district has taken the opposite view, saying it was correct in not filing the motions. District solicitor Ken Roos, in reading from prepared comments, explained last week’s ruling from the Commonwealth Court and what the district’s next legal steps would be.

“The Panel concluded that Judge Smyth’s Order was a permanent or final (as opposed to a preliminary) injunction and that the District should therefore have filed post-trial motions rather than taking an appeal,” Roos said, according to a printed copy of his prepared remarks. “All district legal counsel believe that conclusion is incorrect and that post-trial motions were neither required nor appropriate in a case in which significant questions and issues remained (and remain) undecided. I also want to be clear that this issue was carefully researched and thoroughly and collaboratively deliberated at the time and that the decision not to file post-trial motions was a conscious and deliberate one. The Board has therefore directed its special counsel to seek appellate review of the panel’s order through Application for Reargument en banc and any other appeals deemed necessary.”

According to Roos, the court was wrong because the trial court had noticed the hearing as a preliminary injunction hearing and not as a trial for a permanent injunction. He added that it is possible to convert a preliminary injunction hearing into a trial on a permanent injunction but it can only be done with the consent of all parties.

“The trial court erred in converting the hearing on the preliminary injunction to a final hearing on the merits of the permanent injunction because it did so without a stipulation from the parties,” Roos said.

He also said the district posted a bond that applies to a preliminary or special injunction and not to a permanent or final injunction, as per Judge Smyth’s directions, according to Roos.

Roos went on to say that the Rule of Appellate Procedure says that an injunction is appealable and not a preliminary injunction.

“Whatever label the injunction is given, the fact remains that much of the case remains untried and undecided … It follows that the injunction was an interlocutory order appealable as of right as opposed to an order with the requisite finality needed for post-trial motions,” Roos said.

Citing a case of City of Philadelphia v. Frempong, Roos went on to say, “in the case of an order that is appealable as of right … ‘post-trial motions are neither required nor permitted.’”

After the meeting, Roos explained that the district’s decision to appeal means it would be taken to a larger panel of judges.

Following the comments made by Roos, the board weighed in on the ruling.

“Despite the decision and the next legal steps the district may take, our primary focus continues to be providing high-quality education to over 8,300 students in our 10 schools,” Board President Robin Vann Lynch said. “As board directors, we take great pride in the academic, co- and extra-circular experiences and that make attending out schools special.”

In response to a question during the public comment portion of the meeting asking how long the district would continue to fight the suit, Vann Lynch indicated the district will continue its fight.

“...Our core values suggest we will fight it until we win,” Vann Lynch said. “… Our constituents and as a publicly democratically elected school board, we will continue to do what’s right. There’s no fuzzy math here, nothing to hide from. We unapologetically provide the kind of education for all of our kids.”

When asked further by the resident about a budget or a cost the district is willing to pay for the legal fight, Vann Lynch added that she could not answer that but it’s an issue the board could take up.

Along with the discussion of last week’s court decision involving last year’s budget, the board also had to hear a discussion on next year’s 2017-2018 budget that runs from July 1 of this year to June 30 of next year. When the preliminary budget was introduced early this year, it called for a tax hike of 3.85 percent. However, at Monday night’s meeting, it was announced that the increase was dropped to 2.99 percent.

According to Superintendent Robert Copeland, the reason for the drop was an unexpected savings in money it was to put aside for insurance. In November, the district was told by its insurance actuarial that it would need to put about $29 million aside for health insurance. However, the district was later told it could lower that amount to about $27 million.

“So we’ve reduced that line item by $2 million,” Copeland said. “… So that’s what allowed us to bring down the tax rate.”

Copeland also spent time discussing the reserve fund that has been an important part of the lawsuit.

Under the suit that was filed last year, the district has over the past several years projected budget deficits and then ended up with surpluses each year and that money has gone into a fund balance of about $55 million, according to figures Copeland used Monday night.

According to Copeland, after 2020 the district will need some of that money to cover costs associated with its pensions.

“We can see that [by] roughly 2020 there’s going to be a significant parting of what our revenue capacity is ... what we estimate our expenditures will be,” Copeland said. “So in order to maintain our programs from 2020 on, we have this reserve. If you spend down that reserve now we will get to the 2020—2021 period … and say, ‘and now I don’t have any way to meet my revenue projections. We’re going to have to drastically reduce our programs.’ ”

As has been discussed in many past meetings, Copeland also cited the increase in student enrollment as a driver of its overall cost increases.

Copeland also cited costs associated with special education that is increasing the district’s overall budget without more money from the state. According to figures provided by Copeland, over the last 17 years the state’s funding for special education has remained flat at less than $3.5 million but during the same time, the district’s special education costs have increased from less than $15 million to nearly $47 million.

Following the district’s presentation, members of the public were able to speak on agenda items and most of those did so on budget issues.

Jane Broderson, who founded the SaveLMSD, a group that has been opposed to the suit, was the first to speak and said the plaintiffs in the lawsuit are making promises about refunds that they can’t keep.

“If something seems too good to be true, it usually is,” Broderson said “Do we really think we can maintain our amazing programs and class sizes the way they are and keep our Triple A municipal bond rating in the face of the largest influx of new students in the state while at the same time slashing $40 million out of our budget and handing out tax refunds, too? Beware of Greeks bearing gifts.”

According to Broderson, the plaintiffs have said taxpayers could expect a $1,400 tax refund but she estimates the refund would only be about $200.

 

Philip Browndeis, one of the three plaintiffs in the suit, read a prepared statement from lead plaintiff and attorney Arthur Wolk, who was unable to attend the meeting.

“Now that the law and facts have determined that you engaged in systematic misrepresentation to your budget to the taxpayers and you illegally accumulated more than $60 million in reserve, do you intend to voluntarily refund that money to the taxpayers?” he said.

“Given that you lied to us about how much the last contract with the teachers’ union cost and bragged that you only gave them a half-percent salary increase but neglected to mention the 7 percent increase in benefits, do you intend to increase salary and benefits again just two years later?” he said.

Other residents spoke both for and against the suit.

Daniel Marein-Efron of Wynnewood said he wishes to not be part of the suit and questioned the motives of the plaintiffs.

“As a resident who does not want to be a part of this class-action lawsuit against the schools, I respectfully ask the plaintiffs to withdraw the lawsuit,” Marein-Efron said. “The lawsuit is not about efficient spending by the school. Instead, the lawsuit distracts administrators from focusing on being more efficient. This lawsuit is about depriving other people’s children a great education and giving them a basic one instead, especially racial and economic minorities and students with disabilities.”

Judith Levine, who described herself as the parent of a Bala Cynwyd student and a professor who studies social policy that addresses social inequality and a proud graduate of Lower Merion, said she wanted to lend her support for the budget and thank the board for what she called its foresight “as you grapple with challenges that the district will be facing because of increased enrollment.

“My family lives here because the district is strong and we want it to stay that way both for the education of our children and the maintenance of our property values. I don’t fully understand why there’s a fiscal argument of keeping the schools strong,” Levine said.

Still, others expressed their support for the suit.

Brad Moser of Gladwyne said there has been a misunderstanding of those who support the Wolk lawsuit.

“It’s not that we want less of the quality of an education, it’s that we want an education that is fair to all of the community and the school board and the students aren’t the only people who live here. We’re going to lose our family home of 62 years because my mother can’t afford to pay the taxes anymore – it’s gone.”

Moser said as a contractor he often had to tighten his belt and negotiate with others. “What about the negotiations with all the things you guys are spending money for?” Moser said. “It’s not that we want to lower it, what we want to do is be sure we get the best bang for our buck. And when you deal with the different unions, those unions have a responsibility, like the rest of us Americans to tighten our belts.”

After the majority of the audience left following the public comments, the board voted to tentatively approve the 2017-2018 budget with the 2.99 percent tax hike with a final vote on it expected in June.

Following the meeting, Roos said they the district has 14 days after last week’s decision to file its appeal. The court then would have 60 days to decide whether it would hear reargument.