LITTLE ROCK — The Arkansas Supreme Court entered the fray on Friday over the $635,000 buyout of former Little Rock School District Superintendent Roy Brooks.
The Supreme Court issued a terse order - "Temporary stay granted" - in response to a motion for "extraordinary injunctive relief" from a group of school-district taxpayers that is challenging the constitutionality of using tax revenue to make severance payments to Brooks.
However, the request for an injunction to stop the payments and the resulting court order came a day after the bulk of the checks were written and distributed.
"This petition for extraordinary relief is too late in seeking a stay of payments already made," Morgan "Chip" Welch, an attorney for the district, wrote in response to the motion filed by the taxpayer group.
"They seek this new relief on Friday afternoon literally a day late (and several dollars short)!"Welch wrote.
John Gill, an attorney for the taxpayer group headed by school-district parent Teresa Gray, said in an interview that the district and its attorneys were well aware of the taxpayers' case against the School Board that was before the Supreme Court and should have delayed any payments until the case is decided by the court.
"What we have said from the outset is what the School Board has done is wrong, and until theSupreme Court decides whether it is right or wrong, they act at their peril," Gill warned about the district payments.
"A payment isn't made until the check clears the bank," Gill added, "so one of the ways they can take care of it is to stop payment on those checks - if the checks have, in fact, gone out."
The activity at the Supreme Court on Friday capped a week in which the School Board held a hastily called meeting Tuesday evening to approve a proposed financial settlement between the board and Brooks.
The settlement was put into final written form Wednesday and then signed by Brooks, his attorney, two School Board officers and the board's attorney Wednesday and Thursday.
The agreement called for the preparation of seven checks, including one of $350,101.74 to Brooks and another of $193,069.42 to Brooks' attorneys at the Williams & Anderson law firm.
The other checks in amounts ranging from $5,076 to $49,014 were earmarked for various insurance, investment and retirement organizations, some based in Arkansas and others based outside the state.
Five of the seven checks - including one written to Brooks - were distributed Thursday, according an affidavit by Mark Milhollen, the district's chief financial officer, that was submitted by Welch to the Supreme Court on Friday.
One check to the Federal Insurance Contributions Act program, which covers Social Security and other government benefits for workers, and another to the Arkansas Teacher Retirement System, have been set aside to be paid on their customary due dates.
The taxpayer group filed suit earlier this summer opposing a publicly funded buyout of Brooks, arguing that taxpayer money is to be used for the maintenance and operation of a school district.
Severance pay - or paying someone with tax revenue to not work - is not part of the maintenance and operation of a school system, they said.
Pulaski County Circuit Judge Tim Fox, however, concluded that the Little Rock district's plan to buy out the superintendent was constitutional, prompting the taxpayer group to take the case to the state high court.
In their motion for an injunction to stop the payment of the settlement funds, the plaintiffs in the case "do respectfully request and implore" the court to prevent the actual payment of $635,000 in public school funds to Brooks and six other entities that have been designated to receive payments.
None of the seven entities are parties in the lawsuit. Attorneys for the taxpayers group warned that if the court decides in favor of the taxpayer group, the distribution of the funds now will make it "extremely difficult, if not impossible, for these public school funds to later be recovered" by either the district or by the taxpayer group.
Additionally, if the taxpayers are successful in their case but the distributed money cannot be recovered, the money will have to be paid by all taxpayers to replenish the school district's depleted treasury with additional ad valorem school taxes.
The group further argued that the court's regular fall term begins on Sept. 6, only 13 days away, and that no party would be hurt by a delay of payments until a court decision is reached.
Welch, the school district attorney, on Friday filed a "Suggestion of Mootness and Motion to Dismiss" in response to the request for the injunction.
He argued that the settlement negotiated by the board and Brooks this week is broader than just severance pay; it is a financial settlement of all claims that Brooks has against the district, and it pays Brooks for his legal fees and for his cooperation in some lawsuits involving the district.
The agreement also required Brooks to drop his federal court case against the district, including a request for legal fees.
Welch argued that the claims in the taxpayer group's lawsuit and appeal are moot because the settlement is broader than a severance package, because the payments have been made, and because Brooks and other recipients of the money were never made parties in the lawsuit.
In an interview, Welch discounted any argument that the school district is obligated to direct its bank to stop payment on the seven checks as a result of the Supreme Court's stay.
"That will just get the district sued," Welch said. "The court doesn't say to do that. Plus the checks have been delivered, and if you were to pay him the money and get him to dismiss his court case and then jerk the check, you would just get sued for it, and he would win."
Gill said the Supreme Court has stayed or halted all action on the Brooks payments until the court gets a chance to rule on it.
"The School Board had full knowledge that this appeal was lodged with the Supreme Court and the appeal had not been decided," Gill said. "If they have made the payment, then they have acted at their peril, taken a risk of adverse consequences in doing so."
He argued that stopping payment on the checks should be considered.
"What they have done is spend taxpayer money," Gill said. "That money doesn't belong to the School Board but to the taxpayers. They are guardians of that money, and that money is entrusted to them to be spent wisely. Knowing that this lawsuit is out there and rushing out with an eleventhhour meeting [to approve the settlement] with nobody in attendance from what the newspapers reported and making the payments and when, by most calculations Dr. Brooks is supposed to be working through today [Friday], they have certainly demonstrated that they are not good guardians of the taxpayers' money."
Asked if there was significance in the fact that the taxpayer group sought an injunction and the court granted a stay, Gill said the two are the same thing.
Welch said Friday's court order "doesn't say much about what it is that was granted. I'm assuming that it has something to do with paying Brooks any more money, but all that is left to be paid is his FICA and teacher retirement. We're not paying that until the middle of the month anyway. I suppose that is a victory but not much of one. I don't think it says to stop the checks or do any of those things."
Clayborne Stone, one of Brooks' attorneys with the Williams & Anderson law firm, declined to make comment on the appeal and the court order Friday and its effect on Brooks.
Little Rock School District officials have said the $635,000 is being charged to the district's 2006-07 budget because the board's vote to buy out the superintendent was May 24 before the June 30 end of the fiscal year. The district had total operating expenses of $229.7 million last year, and $285 million in costs when federal and other special programs are included. The district ended the school year with almost $12.8 million in operating fund reserves, up from the $12.2 million that was projected at the start of the school year.
Besides Gray, other named plaintiffs in the case before the Supreme Court are Keith Broach, Renita L. Thompson, Steven B. Thompson, Eleanor Burress and Marnita Bisbee.
They are named as individuals and as representatives of the similarly situated class of patrons and taxpayers in the Little Rock district.
Besides Gill, attorneys for the plaintiffs are Roger Fitzgibbon and Kelly NcNulty of the Gill Elrod Ragon Owen & Sherman law firm; Don Trimble of the Trimble Law Firm; and Eugene G. Sayre of the Jack Nelson Jones Fink Jiles & Gregory law firm.
Front Section, Pages 1, 8 on 08/25/2007