Borough picks lawyers

2 firms to handle education suit, lobbying effort

Posted: Thursday, January 18, 2007

The Kenai Peninsula Borough took the first significant step Tuesday toward suing the state of Alaska over inequitable school funding when the assembly passed a resolution awarding a contract to a joint venture of two long-time Alaska law firms.

Resolution 2007-003 authorized Borough Mayor John Williams to enter into a contract with the firms of Jermain, Dunnagan & Owens, and Robertson, Monagle & Eastaugh. That contract has two functions — lobbying and litigating.

Jermain will develop and file the lawsuit alleging the state’s school-funding mechanism has for years severely under-funded the Kenai Peninsula Borough School District.

Robertson, meanwhile, will lobby state lawmakers in an effort to encourage a full-scale rewrite of the state’s education foundation formula to produce more equitable funding for district schools.

A final decision on the resolution will have to wait until the meeting of Feb. 6, however. Assembly member Paul Fischer, of Kasilof, called for reconsideration.

Moves to pursue a possible lawsuit began last spring. In late fall, the administration proposed hiring a law firm with which it had already done business — Robertson, Monagle & Eastaugh — but the assembly asked the administration to seek bids through a request for proposals.

Bids were due and returned last week. The Jermain-Robertson joint venture submitted the only bid. Williams said Wednesday that the best estimates, based on the way the RFP was structured, suggest the suit and lobbying effort should cost less than $1 million. Final numbers are not yet known.

An amendment to the resolution authorized spending an initial $90,000, money already appropriated in the 2006 borough budget. The administration has said it will come back to the assembly next month with a further request for $100,000.

More expenditures undoubtedly will be necessary, but requests will be handled incrementally, giving the assembly the option of halting at any time.

The assembly split over the amended resolution, finally voting 6-2 in favor. Assembly members Fischer and Grace Merkes, of Sterling, opposed the idea of suing the state, though they favor a concerted lobbying effort on behalf of school funding.

That minority opposition found favor with school board member Debbie Brown, who testified before assembly debate saying she favored talking over suing. Brown said the issue of a lawsuit had never been an agenda item before the school board.

She also said that during the 2005-2006 school year, the district had spent money buying legal analysis of the likelihood a lawsuit would be successful. However, the report it generated was delivered in a school board executive session and she doubted anyone on the assembly was privy to its contents. Brown said she could not reveal what was said in the closed-door session, but said the board never voted to initiate a suit.

“Had there been a vote, I would have voted no,” she said, adding that it would be bad timing to take such an adversarial approach just as a new state administration was beginning — one supported by many peninsula voters at the polls in November. She also said a suit would be an unnecessary use of public funds, and recommended waiting for resolution of a similar lawsuit, Moore vs. State, now in Anchorage Superior Court.

Donna Peterson, superintendent of the Kenai Peninsula Borough School District, disagreed, and came down solidly in favor of filing a suit and conducting lobbying.

“The issue of how to properly fund schools has been before the borough for many years,” she told the assembly.

The district, she said, had done all it could to deliver an education to students despite an area cost differential factor that had under-funded schools to the tune of about $10 million a year for many years.

“An equity lawsuit is something we have discussed for years. The decision is yours to make,” she said.

Fischer asked Peterson why the school board hadn’t come to the assembly with a resolution supporting a lawsuit, “so that Juneau would see that not only the assembly but the school board itself wanted to get involved with it?”

Peterson explained that the harmed party is not the district, the school board or the borough, but borough taxpayers and that the expectation had always been that the borough would take the lead. The Alaska Supreme Court has said that boroughs and school boards cannot act as plaintiffs. The law firm hired to engage in litigation will find qualified taxpayers to serve as plaintiffs.

Peterson did say the inequitable area cost differential had been the school board’s number one legislative issue for the past four years.

During discussion, assembly member Grace Merkes said she could back a lobbying effort.

“But I am not willing to support any kind of a lawsuit at this time,” she said.

Fischer said not to expect the legislature to “roll over” in the face of a suit. He noted that last year Rep. Mike Chenault, R-Nikiski, a co-chair of the House Finance Committee, had succeeded in getting a one-time increase in schools spending, and that Gov. Sarah Palin’s proposed budget this year seeks to continue funding at the current year’s level.

“In that sense, I think we need to give the governor a chance,” Fischer said.

He also said he didn’t like being in the position of playing “the good guy” on the one hand (lobbying), and “the bad guy” on the other (litigating).

Assembly member Deb Germano, of Homer, said that while in the past few years have seen some additional money for schools, she did not see a real solution — a rewriting of the foundation formula and area cost differential — on the horizon.

Gary Knopp, of Kenai, said he would support the resolution, in part, because it is phased and that the initial phase would provide the assembly with a wealth of information it needs.

Gary Superman, of Nikiski, argued that it was time to move forward with the two-pronged approach, including the lawsuit, saying the assembly had to make a choice “either to get on this horse and ride it ... or not.”

Later during assembly comments at the end of the meeting, Superman said that it was proper that the school board not weigh in on the issue as a body.

“They are not the taxing authority. They are the requestors of us,” he said. “That burden is with us. I think we are spending the money wisely and incrementally with this effort, and it’s already been out on the street that we are pursuing this.”

Hal Spence can be reached at

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