East Central Community School District v. Mississippi Bend Area Education Agency ( 2012 )

IN THE SUPREME COURT OF IOWA
No. 11–1498
Filed May 11, 2012
EAST CENTRAL COMMUNITY
SCHOOL DISTRICT,
Appellant,
vs.
MISSISSIPPI BEND AREA
EDUCATION AGENCY,
Appellee.
Appeal from the Iowa District Court for Jackson County, Mary E.
Howes, Judge.
Appellant asserts the appellee acted unlawfully in approving for
submission to the voters a petition proposing a consolidation of two
school districts. AFFIRMED.
Andrew J. Bracken and Amanda G. Wachuta of Ahlers & Cooney,
P.C., Des Moines, for appellant.
Mikkie R. Schiltz and Wendy S. Meyer of Lane & Waterman LLP,
Davenport, for appellee.
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APPEL, Justice.
In this case, we consider whether an area education agency (AEA)
acted lawfully when it approved for submission to the voters a petition
that proposed a consolidation of the Preston and East Central
Community School Districts. East Central seeks to block the measure
from being placed before the voters. In support of its position, East
Central asserts that the AEA approval of the petition for submission to
the voters is legally flawed because the AEA failed to comply with a
statutory requirement that it develop a plan for the AEA district.
Further, East Central maintains that the AEA failed to make a required
statutory finding that the consolidation proposed in the petition was in
conformity with the plan. The district court rejected the claims.
On appeal, we conclude that the AEA acted lawfully in approving
submission of the petition to the voters.
I. Background Facts and Proceedings.
This case involves two small school districts, Preston and East
Central Community School Districts. The certified enrollment in Preston
in October 2010 was 335.9 students and 370.1 students for East
Central. Of these students, thirty-two and fifty, respectively, enrolled
outside of the districts.
In 1986, the Mississippi Bend AEA (MBAEA) developed what was
entitled “Reorganization Plan” (Plan). The Plan contains page after page
of data about the school districts within the MBAEA. The Plan also
includes seven alternate reorganization plans for schools within the
MBAEA that had less than three hundred students enrolled in the
districts. Public hearings were held in connection with the Plan, after
which the Plan was reviewed and adopted by the MBAEA Board (Board).
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In December 2000, the MBAEA consulted with the Iowa
Department of Education (department) in updating the Plan. Preston
requested the department to prepare a feasibility report addressing the
possible merger of Preston and East Central. The report praised East
Central and Preston for how well they had worked together and
suggested a merger as an alternative. The Plan was revised, a public
hearing was held, and the Board again adopted it in August. The 2000
survey conducted of the East Central and Preston Community School
Districts was included in the Plan as an appendix.
In 2005, Preston and East Central again requested the department
to address the possibility of a merger. The 2005 study addressed
reorganization and noted that the two schools operating as independents
was “not the most efficient use of time and resources, and [did] not allow
for ‘best practice’ in the educational program.”
In 2008, a petition was circulated to determine if there was
support for a merger of the two school districts. Over seven hundred
citizens in the two districts signed the petitions requesting the school
boards and administrators to work together and consider the option of
reorganization. No petition, however, was filed with the MBAEA
requesting that school reorganization be submitted to the voters.
In January 2010, Preston and East Central representatives along
with representatives of a third school district, the Northeast Community
School District (Northeast), held discussions regarding the possibility of
expanding collaboration to increase the quality of education for students.
The meetings included discussion of potential reorganization options.
On May 3, a petition for reorganization of East Central and Preston
was filed with the MBAEA. Approximately thirty-three percent of the
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registered voters in the East Central district and fifty-four percent of all
registered voters in the Preston district signed the petition.
As a result of the filing of the petition, Dr. Glenn Pelecky, Chief
Administrator of the MBAEA, sent a letter dated May 10, 2010, to Board
members providing the Board with information regarding the
reorganization process and a history of the cooperative efforts involving
Preston and East Central. The matter was discussed further on May 12
at a regular board meeting and board retreat.
The MBAEA and East Central at this point requested the
department to conduct a study regarding the proposed merger. The
department prepared a feasibility report dated May 21, 2010, regarding
the future options for Preston, East Central, and Northeast. The
department concluded that a merger between Preston and East Central
was not an appropriate “intermediate step” if the goal was to join
Preston, East Central, and Northeast. The department noted, however,
that the discussions regarding reorganization of Preston, East Central,
and Northeast had been ongoing for ten years without any result.
On June 4, Pelecky sent to members of the Board a packet of
materials. The June packet included the most recent report from the
department, the 1986 Reorganization Plan (as amended), and letters from
community members.
On June 7, Pelecky sent to Board members additional materials,
including an objection requesting that the petition be dismissed; copies
of objections requesting boundary changes; and a basket of documents
from the superintendent of East Central, Jim House, which included a
PowerPoint presentation, financial materials, data related to enrollments,
information related to high school classes, and sharing agreements
between East Central and Northeast.
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The Board held a hearing on the petition on June 16. After
hearing almost four hours of testimony, the Board voted to “grant the
approval for moving ahead with the community vote” on the question of
the reorganization of Preston and East Central. A subsequent hearing on
June 30 established the boundaries of the proposed merged district.
East Central filed an action in district court seeking to invalidate
the action of the Board approving the petition. East Central argued,
among other things, that the 1986 Reorganization Plan, along with its
amendments, was flawed because it did not contain a specific plan for
the merger of the Preston and East Central Community School Districts.
East Central further claimed that the Board failed to make a necessary
factual finding, namely, that the merger proposed in the petition was in
conformity with the MBAEA’s Plan. The MBAEA filed a motion for
summary judgment, claiming that as a matter of law there was no
requirement that the MBAEA Plan specifically describe a merger between
Preston and East Central and that the action of the Board approving the
petition was in accordance with law. The district court granted summary
judgment, and this appeal followed.
II. Scope of Review.
We consider the school reorganization process as a local legislative
matter. Templeton Indep. Sch. Dist. v. Carroll Cnty. Bd. of Educ., 228
N.W.2d 1, 3 (Iowa 1975). In engaging in judicial review, we are careful to
consider only legal questions and do not substitute our judgment for the
wisdom or practicality of a proposed reorganization. In re Lone Tree
Cmty. Sch. Dist., 159 N.W.2d 522, 525 (Iowa 1968). Our review is limited
to determining whether the agency has exceeded its jurisdiction or has
taken an action that is arbitrary, unreasonable, and unsupported by
substantial evidence in the record. Templeton, 228 N.W.2d at 3. We
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have defined arbitrary or unreasonable action in the school
reorganization context as action “without rational basis; unconsidered,
willful and irrational choice of conduct.” Id. (citation and internal
quotation marks omitted). In reviewing school consolidation matters, we
“will not draw fine, technical lines or indulge inferences that would
invalidate a reorganization plan.” Hedrick Cmty. Sch. Dist. v. S. Prairie
Area Educ. Agency 15, 433 N.W.2d 746, 751 (Iowa 1988). We make all
inferences in favor of the legality of official steps. Id.
III. Discussion.
A. Positions of the Parties.
1. Lack of specific plan for merger of Preston and East Central.
East Central maintains that under Iowa Code chapter 275 (2011), the
MBAEA must develop a “plan” that specifically discusses a proposed
merger between East Central and Preston before a petition for merger
may be approved by the MBAEA and placed on the ballot. East Central
cites provisions of Iowa Code sections 275.2, 275.4, and 275.5 which use
the terms “plans” and “definite plans” in describing the responsibilities of
the Board.
The MBAEA counters that there is no requirement that its Plan
include a specific proposal for merger of school districts in which more
than three hundred students are enrolled. Because enrollment in both
Preston and East Central was above the three hundred student
threshold, the MBAEA maintains that it had no obligation under Iowa
Code chapter 275 to develop such a plan.
2. Failure to determine compliance with plan. East Central
maintains that under Iowa Code section 275.5, an AEA board
considering whether to pass a proposed merger of school districts onto
the voters must first “determine whether the petition complies with the
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plans which had been adopted by the board.” Iowa Code § 275.5. East
Central notes that the provision requiring a determination of compliance
with plans is declared to be mandatory by Iowa Code section 275.9.
East Central then canvasses the record in this case and concludes
that there is a genuine issue of material fact as to whether the Board
actually made the determination that the proposed merger complied with
its plans. East Central notes that the official Board minutes do not
indicate that the Board voted on this precise issue. East Central
recognizes that there is evidence to the contrary in the record, but
maintains that summary judgment should not have been granted to the
Board on this issue.
The MBAEA responds that the action of the Board is legislative, not
judicial, and points out that judicial review is limited to determining
whether the Board exceeded its jurisdiction or acted in an arbitrary,
unreasonable, or unsupported manner. The MBAEA contends that the
standard to be applied is one of substantial compliance. The MBAEA
argues that implicit in the Board’s vote granting the petition is a finding
that the proposed merger complied with the plans that had been adopted
by the Board.
B. Statutory Framework. In order to facilitate consolidation of
smaller local school districts, the legislature enacted Iowa Code chapter
275. Iowa Code chapter 275 establishes a framework for school
reorganization in Iowa. Originally, the county school boards had
responsibilities for planning the reorganization of school districts, but
beginning in July 1975, the AEAs replaced the county boards as the
facilitator of school reorganization. See Hedrick, 433 N.W.2d at 747
(citing 1974 Iowa Acts ch. 1172, § 9).
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The declared policy of Iowa Code chapter 275 is to “encourage
economical and efficient school districts which will ensure an equal
educational opportunity to all children of the state.” Iowa Code
§ 275.1(2). In order to meet these objectives, the AEAs are required to
develop “detailed studies and surveys of the school districts within the
area education agency and all adjacent territory.” Id. § 275.1(3). The
studies and surveys were to include information about
the adequacy of the educational program, pupil enrollment,
property valuations, existing buildings and equipment,
natural community areas, road conditions, transportation,
economic factors, individual attention given to the needs of
students, the opportunity of students to participate in a wide
variety of activities related to the total development of the
student, and other matters that may bear on educational
programs meeting minimum standards required by law.
Id. § 275.2.
This information is designed to “provid[e] for reorganization of
school districts in order to effect more economical operation and the
attainment of higher standards of education in the schools.” Id.
§ 275.1(3).
In 1984, the legislature amended Iowa Code chapter 275 to require
that “the plans shall also include suggested alternate plans that
incorporate the school districts in the area education agency into
reorganized districts that meet the enrollment standards specified in
section 275.3 [of enrollment of at least three hundred students].” Id.
§ 275.2. Iowa Code section 275.9 reinforces the importance of the
substantive provisions in Iowa Code sections 275.1 through 275.5 by
noting that compliance with these sections is mandatory. Id. § 275.9.
The process for merger or consolidation begins with a citizen
petition that is submitted to the AEA. Id. § 275.12. Following receipt of
a petition, the AEA is directed to “review its plans and determine whether
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the petition complies with the plans which had been adopted by the
board.” Id. § 275.5. If the petition “does not comply” with the plans
adopted by the board, the board “shall conduct further surveys pursuant
to section 275.4 prior to the date set for the hearing upon the petition”
and present the results of such surveys at the public hearing. Id. If the
petition does comply with the plan, the board may set a hearing on the
petition without further surveys. Id.
Within ten days after the petition is filed, the AEA administrator
sets a date for the filing of objections and for the public hearing. Id.
§ 275.14. If the petition is not dismissed and the board determines that
additional information is needed to fix boundaries, the hearing may be
continued for thirty days. Id. § 275.15(3). After the hearing on the
petition, the AEA may approve a reorganization plan for submission to
the voters. Id. § 275.18(1).
C. Applicable Caselaw. Our school reorganization cases have
long recognized two twin concepts. First, our cases have emphasized
that a reviewing court should “liberally construe” the law relating to
matters of reorganization of school districts. Allerton-Clio-Lineville Cmty.
Sch. Dist. v. Cnty. Bd. of Educ., 258 Iowa 846, 849, 140 N.W.2d 722, 724
(1966). Second, our cases have recognized that precise and exact
compliance with school reorganization statutes is not essential;
substantial compliance will suffice. Turnis v. Bd. of Educ., 252 Iowa 922,
933, 109 N.W.2d 198, 205 (1961). Life has been breathed into these
principles in a series of school reorganization cases.
In Board of Education of Audubon County v. Joint Board of
Education, 196 N.W.2d 423 (Iowa 1972), we considered a challenge to a
school consolidation. In Audubon County, the joint board did not
expressly fix the method of electing directors of the new school district.
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Audubon Cnty., 196 N.W.2d at 426–27. Iowa Code section 275.12(4)
(1971) authorized the board to review and to change the method
proposed in the petition. Id. at 427. We held that by approval of the
petition, the method of electing directors proposed was necessarily
approved. Id. We further held that by approving the petition, the board
necessarily approved boundary changes that did not conform to the
county plan. Id. In reaching these results, the Audubon County court
emphasized that school reorganization statutes are to be “liberally
construed.” Id.
Next, we decided Bloom v. Arrowhead Area Education Agency, 270
N.W.2d 594 (Iowa 1978). The question in Bloom was closely related,
though not identical, to one of the issues in this case. In Bloom,
Arrowhead AEA decided to adopt plans of county boards in its area as its
tentative plan rather than develop a new tentative plan on its own.
Bloom, 270 N.W.2d at 597. The county plans, however, did not provide
for reorganization of the school districts. Id. The question in Bloom was
whether the tentative plan, as adopted by the AEA, met the statutory
requirement that a tentative plan be developed within sixty days of the
submission of a petition. See id. (citing Iowa Code § 275.5 (1977)). We
held that the tentative plan was sufficient to comply with the statute,
even though it did not specifically call for the reorganization of the school
districts as proposed in the petition. Bloom, 270 N.W.2d at 597. We
further emphasized that while reorganization was encouraged by Iowa
Code chapter 275, it was not required or compelled. Id.
In Hedrick, the Hedrick Community School District challenged the
action of an AEA in approving a petition calling for a vote on the merger
of Hedrick and the Pekin School Districts. Hedrick, 433 N.W.2d at 750.
Among other things, the plaintiff claimed that the AEA failed to include
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alternate plans in its reorganization plan and failed to review the matter
on its merits after a hearing. Id.
Before considering the merits in Hedrick, we reviewed the proper
framework for evaluating school district reorganization decisions. We
noted that because reorganization is a legislative rather than a judicial
function, our review was limited to review for substantial compliance that
did not include reevaluation of the wisdom of the judgment of the AEA.
Id. at 750–51. We further observed that judicial interference in local
legislative matters would occur only when the agency had exceeded its
jurisdiction or taken an action that is arbitrary, unreasonable, or
unsupported by substantial evidence in the record. Id. The Hedrick
court emphasized that all inferences in favor of the legality of the official
steps would be observed. Id.
With respect to the plaintiff’s challenge to the adequacy of the AEA
plan that did not specifically propose or contemplate reorganization of
school districts with enrollments over three hundred students, we held in
Hedrick that the statute imposed no such requirement. We emphasized
that the legislature did not mandate reorganizations, but only
encouraged them. Id. at 751. We held that an AEA plan that contained
no specific plans to propose mergers for school districts with enrollments
greater than three hundred students, but did consider reorganization of
school districts with less than three hundred students, was legally
sufficient under Iowa Code chapter 275. Id. at 752–53.
The plaintiff in Hedrick also claimed that the AEA board did not
consider the matter on the merits as required by Iowa Code section
275.15 (1985). Id. Apparently, the board took only six minutes to
approve the reorganization petition. Id. at 753. We rejected the claim.
Id. We noted that the AEA board had been considering reorganization
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possibilities for several months prior to the day that the petitions were
actually approved. Id. Further, we noted that the AEA board had given
tentative approval to the alternate plan that recommended the merger of
Hedrick and Pekin. Id. As a result, we found substantial compliance
with the statutory requirements. Id.
Finally, in Armstrong-Ringsted Community School District v.
Lakeland Area Education Agency, 597 N.W.2d 776 (Iowa 1999), we
considered a case in a much different posture. In Armstrong-Ringsted,
residents of a school district challenged the dismissal of a petition
seeking to combine school districts. Armstrong-Ringsted, 597 N.W.2d at
776–77. During the pendency of the proposed merger of Lincoln Central
and Armstrong-Ringsted, another petition was filed, this one proposing a
merger of Lincoln Central and the Estherville School Districts. Id. at
777. The Lakeland AEA declined to approve the first petition and sent
the second petition to the voters, which was approved. Id. Citing
Hedrick, we emphasized that reorganization is a legislative, not a judicial
process, and that our review was limited to determining whether the AEA
“exceeded its jurisdiction or has taken an action that is arbitrary,
unreasonable or unsupported by substantial evidence in the record.” Id.
at 777–78 (citation and internal quotation marks omitted).
D. Application of Law to Facts.
1. Requirement of plan that specifically includes merger between
Preston and East Central. We begin by considering East Central’s first
contention, namely, that the MBAEA failed to meet its statutory mandate
because its Plan did not specifically describe a merger between Preston
and East Central.
We begin our analysis by noting that there is no provision in Iowa
Code chapter 275 that requires an AEA to develop a specific plan of
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mergers for all school districts within its geographic area. Indeed, such a
task would be virtually impossible in an area with twenty-two school
districts and literally hundreds of potential combinations. Instead, Iowa
Code section 275.1 simply requires the AEA board to
develop detailed studies and surveys of the school districts
within the area education agency . . . for the purpose of
providing for reorganization of school districts in order to
effect more economical operation and the attainment of
higher standards of education in the schools.
Iowa Code § 275.1(3) (2011). Iowa Code section 275.2 states that an AEA
board plan shall “include suggested alternate plans that incorporate the
school districts in the area education agency into reorganized districts”
only with respect to school districts that meet the less than three-
hundred pupil enrollment standard contained in Iowa Code section
275.3. Id. § 275.2. By requiring that the AEA prepare plans for merger
of school districts with less than three hundred pupils, the implication is
that plans need not be developed for school districts that do not meet
that threshold. Meinders v. Dunkerton Cmty. Sch. Dist., 645 N.W.2d 632,
637 (Iowa 2002) (express inclusion of specific requirement implies
exclusion of others not mentioned).
In evaluating the claim raised in this case, it is important to
recognize that the AEA board has no power to take the initiative and
direct school districts to reorganize. It cannot, acting on its own, submit
reorganization to the voters. Instead, the AEA board acts as a resource
for school officials and citizens who are interested in potential
reorganization. When local citizens propose such school reorganization,
the AEA board then serves as a gatekeeper to ensure that the proposed
merger meets applicable legal requirements and establishes the
appropriate boundaries for the school districts subject to the potential
merger.
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In this case, the Plan and the testimony of Dr. Pelecky revealed
that the criteria applied by the Board for evaluating compliance with the
Plan were twofold. First, there needed to be sufficient public support for
the reorganization as reflected in the filing of a valid petition to
reorganize the school districts. Second, the resulting district must have
at least three hundred enrolled students.
The implication of the Plan was that the MBAEA would not lead the
way by proposing specific school reorganizations with respect to school
districts with enrollment over three hundred students, but would instead
defer to citizens to initiate such a school reorganization through the
petition process. The MBAEA would review a petition, but not shape
public dialogue in advance through its planning process for school
districts over three hundred enrolled students other than by providing
studies and surveys.
We do not consider the wisdom of the MBAEA’s approach, but only
its legal sufficiency. In Bloom, we approved a plan that did not have
specific proposals for reorganization. Bloom, 270 N.W.2d at 597. While
the statute now requires alternative reorganization plans for school
districts that fall below the threshold of three hundred enrolled students,
there is no similar requirement with respect to school districts with over
three hundred enrolled students. See Hedrick, 433 N.W.2d at 752 (“[T]he
1984 change in the law . . . mandates the development of alternate plans
for the reorganization of school districts with less than 300 students.”).
Consistent with Bloom and the language of Hedrick, we hold that there is
no legal requirement that the MBAEA Board’s plan contain a specific
proposal for the merger of school districts with more than three hundred
enrolled students prior to approval of a petition submitted by the voters.
2. Alleged failure to make specific determination of compliance with
plan. We next consider the assertion of East Central that the MBAEA
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acted improperly by approving the submission of the merger proposed in
the citizen petition because the MBAEA did not make a specific finding
that the petition was in accordance with the MBAEA Plan as required by
Iowa Code section 275.5.
We again agree with the MBAEA. When an AEA considers whether
to place a proposed merger on the ballot for voters to consider, it is
acting in a legislative capacity, not a judicial capacity. See Hedrick, 433
N.W.2d at 750. Substantial compliance is the standard used to measure
the conformance of actions taken by the AEA to approve a merger with
applicable legal requirements. Id. at 750. When an AEA board acting in
its legislative capacity determined to “grant the approval for moving
ahead with the community vote,” inherent in that action is a finding that
all statutory prerequisites have been met. See Hedrick, 433 N.W.2d at
752; Audubon Cnty., 196 N.W.2d at 428. While it might have been more
transparent if the MBAEA Board held public discussion and voted on the
predicate issues necessary to approve submission of a proposed merger
to the voters, we do not believe the failure to do so requires invalidation
of the action of the Board.
IV. Conclusion.
For the above reasons, we conclude that the MBAEA was not
required to develop a specific plan of merger between the Preston and
East Central School Districts prior to approval of submission of a citizen
petition to the voters of the districts. We further conclude that by
approving the submission of the issue to the voters, the Board made an
implied finding that all the statutory requisites were met. As a result,
the decision of the district court in this matter is affirmed.
AFFIRMED.
All justices concur except Waterman, J., who takes no part.