Absent change in Minnesota statutes governing a township’s ability to donate levied funds to charter schools, Kent Sulem, Minnesota Association of Townships (MAT) general counsel and director of governmental relations has strongly advised Lutsen, Tofte and Schroeder to stop giving money to Birch Grove Community School.
Sulem sent a letter to Tofte Supervisor Jeanne Larson on August 8 outlining his reasons why the town boards should refrain from giving the school township funds.
“While MAT cannot serve as the town’s direct attorney, I can advise that all current information leads me to conclude that regardless of any vote at the annual or continued meeting, the board lacks statutory authority to simply contribute money to charter schools in question. Minnesota Statute 365.10 allows the residents to authorize the board to take a variety of actions, including contracting for service and protecting the good order of the town, but the board has final say as to whether town funds will actually be spent.
“In the case at hand, absent the ability to lay out very solid findings of facts as to how proposed expenditure fits the statutory authority being relied upon, and public purpose for the town’s involvement, the board needs to hold strong and say no regardless of the advisory votes taken at the annual meeting,” wrote Sulem.
Further, Sulem cautioned that individual town board members could be held financially accountable for illegal issuance of town funds.
“I realize this can be difficult, particularly at the town level where you are closest to residents, but ultimately it would be the individual board members facing charges for the unlawful use of public funds…
“…As I understand the school’s request has doubled from the $10,000 per town request (total $30,000) to at least $20,000 per town ($60,000) with a three year intended obligation (although absent a valid contract, the current board cannot bind a future board to make any such payments) that could be a very difficult financial burden on the individual board members.”
Over the last two years the townships have been trying to get a ruling from the state about their legal authority to donate levied funds to the charter school, and several attorneys have weighed in with a variety of opinions based on the state’s vague statutes concerning charter schools, with Sulem being one of those attorneys.
“At least part of the controversy can be traced back to a memo I wrote to the late Representative David Dill and Senator Tom Bakk in April 2015. At that time I was asked to identify ways the township could assist a charter school with funding needs. The memo stated in part that if the school could show that they had incorporated under a certain set of statutes, they would be considered a public corporation and thus the town board could simply vote to transfer town funds to the school, which is treated as a public school district, pursuant to Minnesota Statute 365.10, subd. 14.
“Subsequent to the memo’s release, two events occurred that make it fairly clear that the charter school in question does not qualify for funding under Minnesota Statute 465.035. “First, the State Auditor stated that according to their files, the charter school [Birch Grove Community School] was not incorporated under the necessary statutes that would have authorized funding via Minn. Statute 465.035.”
Part of the reason this has gotten so messy is because, Sulem stated, “The court of appeals reversed itself and determined that charter schools were not public corporations even though they had been treated as such by earlier courts. MAT then counseled that to legally fund the charter school, the towns would need to look elsewhere to see if specific programs offered by the charter school would qualify for funding in a different manner such as a contract for service between the town and the school if so authorized by the voters at the annual meeting under 365.0, subd. 14. The school is a non-profit but the maximum payment for service contracts is $10,000 cumulative for all such contracts entered into by the town.”
Sulem then pointed out, “It should be noted that the law does not take into account how people feel about a proposed expenditure and the town’s denial of contributing should not be taken as opposition to the school itself or what others are trying to achieve.
“The most noble projects a person could think of must still pass the statutory authority and public purpose test. It is MAT’s role to minimize liability risks for member townships. As an attorney for MAT I am obligated to interpret the law without taking sides as to a desired outcome.
“If people generally think the idea is good, then they can support a statutory change to allow townships and others to provide financial support, although the board should always be the final source of approval of the expenditure of public funds.”
Until the state changes its laws, for now it seems that Minnesota townships will not be able to contribute much to charter schools. Senator Tom Bakk is working with legislators to see that this change will happen, but if and when that does happen, will it be in time to save Birch Grove Community School?
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