Professional Documents
Culture Documents
Transaction ID 59649335
Case No. 12800-
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Plaintiffs,
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v.
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CHRISTINA SCHOOL DISTRICT, MR. )
ROBERT SILBER, personally and in his
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official capacity as Chief Financial Officer )
of Christina School District, DELAWARE )
DEPARTMENT OF EDUCATION, DR.
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STEVEN GODOWSKY, in his official
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1
C.A. No.___________
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VERIFIED COMPLAINT
Under Delaware law, students and their families may choose to attend their
regular district school or, as an alternative, may choose from among schools
managed by other districts or independently managed charter schools. If a student
in a particular school district chooses to attend either a regular public school in
another school district or a charter school, the home school district is required to
transfer to the chosen school or district a share of local property tax revenues equal
to the preceding years local cost per student. See generally 14 Del. C. 408, 509.
The claims asserted in this Complaint arise from: a) Defendant Christina School
Districts (Christina) unlawful withholding of a large portion of such funds,
thus depriving some of its own resident students of the equal funding intended by
Delaware law; b) for prior years, the Delaware Department of Educations
(DOE) complicity in Christinas misappropriation of funds belonging to the
Plaintiff Charter Schools; and c) for the current school year (FY 17), DOEs
wrongful attempt to reverse its August 12, 2016 decision that certified the local
cost per student under 14 Del. C. 509. DOEs role regarding revenues from
local property taxes levied by Christina was that of a fiduciary stakeholder,
8.
12.
guardian of K.B.P., N.P., J.P.H., K.P.H.. and D.S. all of whom attend ASPIRA and
are residents of Christina School District. Ms. Patrick brings this action on behalf
of her children, K.B.P., N.P., J.P.H., K.P.H.. and D.S.
18.
at 1970 Prospect Road, Wilmington, DE 19805. Ms. Simms is the mother of M.H.,
L.S. and K.S., all of whom attend EastSide and are residents of Christina School
District. Ms. Simms brings this action on behalf of her children, M.H., L.S. and
K.S.
19.
at 332 Amoroso Way, Newark, DE 19711. Ms. Vick is the mother of E.V. and
I.V., both of whom attend Family Foundations and are residents of Christina
School District. Ms. Vick brings this action on behalf of her children, E.V. and I.V.
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20.
Defendant Robert Silber is, and at all times relevant hereto was, the
Chief Financial Officer of Christina School District and is named in his personal
and official capacity. Mr. Silbers responsibilities include: oversight and direct
supervision of the financial and budgetary functions of Christina School District;
preparing Christina School Districts annual budget; paying all financial
obligations of Christina School District; and monitoring Christina School Districts
budget performance during the fiscal year. On information and belief, Mr. Silber is
a resident of the State of Delaware.
22.
law and organized for the purpose of overseeing public education in the State of
Delaware. DOE is subject to suit in this Court, and to service of process at its
primary district offices, located at 401 Federal Street, Suite 2, Dover, DE 19901.
23.
Defendant Dr. Steven Godowsky is, and at all times relevant hereto
was, the Secretary of Education for the State of Delaware and is named in his
official capacity only. Dr. Godowsky made the post-September 1, 2016 attempt to
reverse DOEs August 12th certification regarding district requested exclusions.
On information and belief, Dr. Godowsky is a citizen of the State of Delaware.
BACKGROUND
24.
sources, including federal programs, State appropriations and revenues from local
property taxes levied by each district.
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taxes, the revenues from which are held for the benefit of all of the districts
students, including those who choose to attend charter schools.
26.
each local district and those charter schools attended by their residents, of the local
property tax revenues raised to support operating (as opposed to capital) expenses,
in order that such revenues be shared equally on a per student basis. DOE is
obliged to calculate the local cost per student (Local Cost Per Student ) to
ensure that local property tax revenues equaling the Local Cost Per Student follow
each district child to the charter school of his or her choice. Local Cost Per Student
is calculated according to a formula set forth in Section 509(e) by starting with
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each districts Total Local Operating Expenditure [from the] Preceding Fiscal
Year. Then, in response to submissions from each district proposing to exclude
specific amounts from the Total Local Operating Expenditure, DOE calculates the
Local Cost Per Student.
27.
Preceding Fiscal Year, Section 509(e) permits the exclusion of the following five
categories of local expenditures in calculating each districts Local Cost Per
Student (Exclusions):
i.
ii.
iii.
iv.
v.
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29.
the final amount of Exclusions to arrive at the Local Cost Per Student.
30.
During the several years prior to FY 17, and because the public
under the States system for funding public education, many charter schools refine
their hiring and other expenditure decisions immediately after DOEs Section 509
certification so that they can be ready for the opening of each school year. After
the September 30 unit count, Section 509(b)(2) requires that a true up occur no
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later than December 31. While the number of students might change as a result of
that September 30 count, DOEs certification of the Local Cost Per Student is not
changed by the September 30 count.
33.
District attended Delaware charter schools during the FY 16 school year. Each
Charter School Plaintiff educates students residing in Christina School District.
CHRISTINAS ABUSE OF THE SYSTEM
34.
Over the past several years, and particularly during the period in
which OMB took primary responsibility for reviewing each local districts
proposed Exclusions, certain categories of Exclusions claimed by Christina have
grown dramatically while its student population has diminished.
35.
For example, for FY 08, Christina excluded just over $18 million,
spread among the five categories of Exclusions permitted under Section 509. 2 By
FY 16, those Exclusions had grown to exceed $49.5 million. Moreover, while the
trend was upward, the year-to-year Exclusions did not grow in a straight line.
36.
improperly reducing the operating revenues shared with charter schools educating
Christina children.
37.
Christinas irregular funding trend and, on several occasions, questioned DOE and
Christina, asking to see support for the Exclusions from Christinas total operating
expenses. Despite those requests, none has ever been provided.
38.
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school district business managers to advise them that DOE believed there were
irregularities with the Exclusions claimed over the past several years. At that
meeting, DOE informed the business managers that its scrutiny of the proposed FY
17 Exclusions would be more rigorous than in the past.
42.
On April 25, 2016, DOE officials met with Newark Charter leaders to
DOE adjusted the proposed Exclusions for each local school district
and, on August 8, informed the local district business managers the amount of
approved Exclusions.
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46.
On August 12, 2016, the DOE posted its certified Local Cost Per
Student for each local district and sent an e-mail to all Delaware charter schools
drawing their attention to the posted certification (August 12 Certification).
48.
Plaintiffs refined their budgets for the FY 17 school year by hiring faculty and
staff, entering into contracts for the services to be provided throughout the
academic year, and purchasing equipment and supplies.
49.
the August 12 Certification. Charter School Plaintiffs, some of which had already
opened their doors to students, continued to rely on the August 12 Certification
particularly since September 1 was the statutorily imposed deadline.
OTHER FORCES INTERVENE
50.
Exclusions. Defendant Silber also complained that Christina wanted to keep more
of the FY 17 local tax revenues.
51.
revised certification, consistent with that letter, would be made. At some point after
the Secretarys September 7 letter, DOE updated its financial online data with
figures apparently derived from Exclusions permitted for FY 16.
53.
supporting data for its Exclusions, including its Category 5 Exclusions and other
deductions from operating expenses, it is apparent that its proposed FY 17
Exclusions are in violation of Section 509. For example:
Christina apparently claims that it is entitled to exclude expenditures
supported by local tax revenues raised in a 2003 referendum simply because
it identified on the ballot certain programs to be undertaken with those
funds. In other words, Christina alleges that it made a pact with its voters
and that justifies an exclusion for those funds. However, the ballot used for
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forth herein.
55.
10 Del. C. Ch. 65, empowers this Court to declare the right and duties
Section 509 requires that DOE annually calculate the Local Cost Per
Student and certify each local districts local cost per student expenditure by
September 1 of each year.
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57.
Between April and June 2016, the DOE met and otherwise
communicated with school district business managers to discuss and review the
Local Cost Per Student funding formula and the proper exclusions listed in Section
509(e).
58.
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63.
As of September 22, 2016, the Local Cost Per Student data available
Plaintiffs have committed to contracts and expenditures for which they may not
have funds if the attempted revocation of the August 12 Certification stands.
65.
Plaintiffs, on the one hand, and DOE and Secretary Godowsky, on the other,
regarding the Local Cost Per Student certification for FY 17.
COUNT II: Interim Injunctive Relief
Asserted Against Christina, DOE, and Secretary Godowsky
66.
forth herein.
67.
funds during a dispute over a districts Local Cost Per Student for a given
academic year.
69.
threat of immediate and irreparable harm that will occur if Christina spends the
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local tax revenue being wrongfully withheld from them. They have no mechanism
for raising additional revenue to replace those funds in the event Christina spends
or otherwise encumbers such funds.
COUNT III: Equal Protection
Asserted Against All Defendants
Pursuant to 42 U.S.C. 1983
70.
forth herein.
71.
resides in Christina will benefit equally from funds raised from local Christina
taxpayers for operating expenditures, regardless of whether they choose to attend a
regular Christina school, a charter school or anothers districts school.
72.
Christinas borders, have been denied equal protection under the law as a result of
the attempted revocation of the August 12 Certification and the resulting unlawful
Exclusions retained by Christina. Because of those Exclusions, Christina children
who attend charter schools will not receive the same level of benefit from local tax
revenues as their peers who remain in regular Christina schools.
73.
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forth herein.
75.
acquired a vested property interest in funds which should flow as a result of the
August 12 Certification.
76.
forth herein.
78.
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79.
would receive the local cost per student funds per the August 12 Certification.
80.
Charter School Plaintiffs of their significant vested property interest in local cost
per student funds that would otherwise have followed from the August 12
Certification.
81.
threatened revocation of the August 12 Certification until after DOEs website was
changed sometime after September 7, 2016.
82.
forth herein.
85.
86.
August 12 Certification, in part, because prior to this year, DOE had never
modified or changed a Section 509 certification once it was made.
COUNT VII: Unjust Enrichment
Against Christina School District
88.
forth herein.
89.
revise its August 12 Certification will result in an improper windfall to, and unjust
enrichment of, Christina at Plaintiffs expense.
PRAYER FOR RELIEF
WHEREFORE, Plaintiffs pray for the entry of relief, as follows:
A.
from spending any of the funds represented by the amount of the challenged FY
17 Exclusions i.e. those not included in the August 12 Certification;
B.
2.
4.
C.
that the Court direct that Christina and/or DOE account for all FY 08
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E.
that the Court award Plaintiffs such other and further relief as is just
and equitable.
SAUL EWING LLP
/s/ William E. Manning
William E. Manning, Esq. (#697)
James D. Taylor, Jr., Esq. (#4009)
Allison J. McCowan, Esq. (#5931)
1201 N. Market Street, Suite 2300
Wilmington, DE 19899
wmanning@saul.com
jtaylor@saul.com
amccowan@saul.com
Telephone: (302) 421-6800
Facsimile: (302) 421-5861
Attorneys for Plaintiffs
Dated: October 4, 2016
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