Over the last three academic years, dating back to the 2013-14 school term, Morgan Hill Unified School District has spent more than $1.2 million on legal expenses as the cost has climbed annually.
A comparison with nearby school districts shows that this category of expenses can fluctuate dramatically from one year to the next. MHUSD Superintendent Steve Betando said, locally at least, this fluctuation is largely due to the unpredictable nature of legal challenges and needs for attorneys’ services the district faces.
During this three-year time frame, the yearly hit to the school district budget has more than doubled from $272,427 in 2013-14 to $580,096 in 2015-16, according to district records acquired by the Times through a California Public Records Act request.
Specifically, Betando blamed an increase in issues related to school board governance, board communications and charter school petitions coupled with special education litigation for the steady rise in the district’s legal expenses.
“Those three matters—board issues, charter challenges and special education costs—make up a large portion of the increased costs,” said Betando, who also noted that “legal expenses do not start and end in alignment with the calendar year.”
Board President Bob Benevento described the 2015-16 school year as a unique one as far as legal expenses impacting the district’s budget.
“I think this was an exceptional year where there was a confluence of many items coming before the district, including real estate transactions, civil and other litigation, contract negotiations, the trustee area voting decision process, as well as some question about charter schools,” Benevento explained.
Unique challenges
While MHUSD’s legal expenses have increased each year under Betando’s tenure, neighboring Gilroy Unified School District has seen its legal expenses decline from $506,913 in 2014-15 to $485,367 in 2015-16. GUSD has a larger student population than MHUSD with more than 11,000 students. GUSD is comprised of eight elementary schools, three middle schools, two high schools, an advanced college prep high school and a continuation school. MHUSD has 14 total schools serving about 8,700 students.
Neither South County school district eclipsed that of Santa Clara Unified School District, which spent nearly $1.2 million on legal expenses in 2014-15 and $781,743 last school year. However, SCUSD serves about 15,300 students with 27 schools, including 17 elementary sites.
And none of those local districts amassed more than the Santa Clara County Office of Education, which dedicated more than $3.3 million for legal expenses over the same two-year time period. Comparingly, MHUSD totaled $1,262,101 over the last three school years.
“We don’t compare our fees with other districts as each has its own challenges,” said Betando, who also pointed to additional MHUSD legal fees for reviewing its eventual change from an at-large to a trustee area election system. “A district could have one case that costs $500,000 or 20 cases that total $100,000. We would like to predict cost but (we) cannot.”
In June, MHUSD’s board of education approved a $350,000 legal expenses budget for the upcoming 2016-17 school year. But the district has surpassed that figure each of the last two years ($409,578 in 2014-15).
“We certainly do all we can to try to keep costs down but sometimes making certain that we have effective legal representation does just that in the end,” Betando added.
While the district cannot prevent lawsuits from being filed against them—such as ongoing civil cases from the aftermath of former elementary school teacher John Loyd’s child molestation conviction—school officials make the final call on whether to take action against another entity. One example, brought up last month by Trustee David Gerard who was opposed to the action, is MHUSD’s losing court battle against the Santa Clara County Office of Education and its board for approving the Voices-Morgan Hill charter petition.
A judge ruled against the district, which spent $73,000 in legal fees that also included a cross complaint filed by Voices. The county office has requested MHUSD reimburse them about $14,500 of its $85,896 total legal expenses in that matter, according to SCCOE’s Public Information Officer Ken Blackstone.
“Only a small percentage of fees and costs are potentially recoverable from MHUSD under the applicable statute,” Blackstone noted.
Trustee disagreement
The local school board has been split on key issues involving litigation with Benevento, Vice President Ron Woolf and Trustee Donna Ruebusch showing confidence in district leadership’s decisions while Trustees Rick Badillo, Gino Borgioli and David Gerard have questioned them.
“We can’t afford to continue to throw money away on legal expenses,” said Badillo, who believes that same money would have been better spent on teachers and programs. “I hope this is a wake-up call for the district and the community.”
Badillo is one of three trustees up for reelection in November, along with Benevento and new Trustee Tom Arnett.
“The (legal expenses) information is a matter of public record and any trustee who speaks to that as being a waste of money is acting from a personal or political agenda,” Benevento added.
Badillo, however, said the superintendent has been evasive when he, along with other trustees, have asked about the district’s legal expenses.
“The trustees have been asking for years,” he said.
The school board trustees are given details from existing and potential litigation during closed session at each school board meeting.
At the Aug. 2 meeting under consent items, the board approved the law firm Liebert Cassidy Whitmore for legal services for the 2016-17 year. That firm joins others that the district keeps on contract from year to year, including Lozano Smith and Orbach, and Huff Suarez and Henderson.
Lozano Smith specializes in areas such as bargaining/labor negotiation, Brown Act/Public Records Act issues and California Environmental Quality Act (CEQA), DTSC compliance. Orbach Huff Suarez & Henderson focus on construction and facilities law. Liebert Cassidy Whitmore specializes in employment, education and labor law.
Betando added: “Law firms are selected for their experience in specific areas. Cases are assigned and are generally kept with individual firms as our representation because to transfer cases from firm to firm is cumbersome and expensive.”
MHUSD LEGAL COSTS
2013-14: $272,427
2014-15: $409,578
2015-16: $580,096
IN COMPARISON
Legal costs for nearby school districts
Gilroy Unified School District
2014-15: $506,913
2015-16: $485,367
Santa Clara Unified School District
2014-15: $1,171,453
2015-16: $781,743
Santa Clara County Office of Education
2014-2016: $3,311,278
