C.T. Marhula: Attorney General's Opinion Has Interesting Implications For School Districts


On May 13, 2014, the Attorney General’s Office issued an opinion that stated, “The Grand Forks School District may contribute to its building fund from both a voter approved ten-mill building fund levy, as well as from its unlimited mill fund levy.”

Before you panic, this is a good result for everyone.  First, the District does not have the cloud of refunding an unauthorized levy hanging over its head.  Maybe they can quit discussing reductions in force and wage freezes as advocated by some incumbents.  There now can be a clear issue between the 7 incumbents and the 15 challengers.  The 7 incumbents have approved over $40m in improvements without a public vote.  They do not want a vote on the total mill levy, and this opinion will give them the authority to increase the mill levy to any amount they want for at least 2015.   It will be up to challengers to accept this status quo or offer a clear alternative.

The opinion also clarifies to the legislature the clear state of the law.  This should play out in fall elections and the next session.  The Opinion states, “…The governing body of the school district may create the building fund by appropriating and setting up in its budget for an amount not in excess of twenty percent of (total appropriations)… 1945 AGO.   General Fund moneys  can be used to…construct school buildings…1996 AGO… a school board may lawfully transfer money from its general fund to its building fund…1991 ND Supreme Court decision.”

The current NDCC, not addressed in the Opinion, states:

57-15-14.2. (Effective for the first two taxable years beginning after December 31, 2012) School district levies.  

1.  …The proceeds of this levy must be deposited into the school district’s general fund and used in accordance with this subsection. The proceeds may not be transferred into any other fund.  

2.  miscellaneous fund… The proceeds may not be transferred into any other fund.(Effective after the first two taxable years beginning after December 31, 2012) Milllevies requiring board action – Proceeds to general fund account. …Proceeds from levies established pursuant to this section and funds provided to school districts pursuant to chapter 15.1-27 may not be transferred to the building fund within the school district.

Much, if not all the law was passed in 2009; after all the precedents the AGO lists.  I am looking forward to Majority Leader Carlson’s take that 2009 Legislation can be trumped by a 1945 AGO.  Uff-da.

Most people I have talked also believe this means Williston and Bismarck (unlimited levies) can set their 2015 levy for all funds at any amount they want.  Minot, and other districts can levy 20% of total budget for buildings without a public vote.

This is serious issue that needs experienced and knowledgeable legislators.  Hopefully, Carlson will yield to Senator Holmberg and Representative Delmore to craft a path forward that will meet the needs of all stakeholders.