Budget Dispute Mediation:
Local School Boards and County Commissions
In 1997, N.C.G.S. 115C-431 was amended
to provide for an optional, pre-litigation, mediation
step if a local board of education believed that the
funding allocated to them by the board of county commissioners
is insufficient to carry out their legal obligations.
This consideration usually arises in June, as both boards
are making decisions about their respective budgets.
Since 1997, between zero and five budget mediations
have occurred annually. A list of mediations by year
and county is below.
For an overview of the mediation process, see the Fact
Sheet below.
In June 2007, the General Assembly passed HB 1519 Modify School Funding Mediation Law. The session law can be found at http://www.ncga.state.nc.us/Sessions/2007/Bills/House/PDF/H1519v5.pdf.
For confidential consultation on this form of mediation,
including how to seek potential mediators, contact John
Stephens at (919) 962-5190.
Resources
1. Fact Sheet – overview
of the law
2. Uses of budget mediation, 1997-2006
3. Articles about the law and its
uses in particular counties
Financial Relationship: Board of Education (BOE) and Board of County Commissioners (BCC)
By law, the BCC and BOE must separately adopt their budgets prior to July 1 for the fiscal year of July 1 to June 30. The BOE prepares its budget based on expected revenues from two primary sources: the state legislature and the BCC. Traditionally, the BCC has provided funds for the capital needs of the BOE. Depending on the BOE’s request, and the BCC’s funding decision, funds from the BCC may be used for either current expenses or capital expenses or both.
The following Fact Sheet summarizes N.C. General Statute 115C-431. The statutory language may be viewed here: (Chapter 115C - Elementary and Secondary Education)
FACT SHEET
Mediation of school board-county commission budget disputes
Purpose: To create an opportunity to settle differences and to avoid litigation
Key provisions of N.C. General Statute 115C-431
1) A seven-day time period following the commissioners adoption of their budget:
a) For the board of education to determine that the amount appropriated to the local current expense fund, or the capital outlay fund, or both is not sufficient to support a system of free public schools, and
b) For the chairman of the board of education and the chairman of the board of county commissioners to arrange a joint meeting of the two boards
2) A mediator is selected by agreement of the two boards, or appointed by the senior resident superior court judge
3) A two-step dispute resolution process:
a) A public, joint meeting of the two boards moderated by the mediator and, if there is no a resolution, either board may request
b) Mediation sessions attended by the chairs of both boards, attorneys for both boards, finance officers of board boards, the county manager, and the school superintendent (known as “working groups”).
4) The mediation sessions of the working groups are private. Evidence of statements made and conduct occurring in mediation are not subject to discovery and are inadmissible in any court action. However, no evidence otherwise discoverable is inadmissible merely because it is presented or discussed in a mediation.
5) The mediator may not disclose any information about the mediation and may not make any recommendations or statements of findings or conclusions.
6) Mediation proceeds until a resolution is reached, until the mediator determines that an impasse exists, or until August 1. Mediation may continue beyond August 1 if the two sides agree. If mediation goes beyond August 1, the board of county commissioners will appropriate and begin payment of an amount equal to the previous fiscal year's appropriation to the schools.
7) The two boards share equally the mediator's compensation and expenses.
8) If mediation fails to produce a resolution, the board of education may bring a lawsuit in Superior Court
Use of mediation since N.C.G.S.
115C-431 was revised in 1997
-
1997: Pamlico County, Wake County
-
1998: Burke County, Moore County,
Union County
-
-
2000: Guilford County, Northampton
County
-
2001: Cumberland County, Northampton
County, Pamlico County
-
2002: None
-
2003: Union County
-
2004: Cabarrus County, Iredell County,
Moore County
- 2005: Bladen County, Burke County, Halifax County, Scotland County, Wayne County
- 2006: Beaufort County, Madison County, Pender County* (*mediation was scheduled under the statute, but a settlement was reached prior to the parties meeting in mediation)
- 2007: Graham County, Pamlico County*, Union County
* Mediation was unsuccessful and legal action followed, including a NC Court of Appeals decision in February, 2008.1
School Law Bulletin articles
on county commission-school board budget mediation
From 1998-2006, four articles have appeared in The
School of Government’s School Law Bulletin that
pertain to N.C. General Statute 115C-431, the law
since 1997 governing pre-litigation mediation of local
school board appeals of a county commission’s
allocation for public schools.
The Coplin and Stephens (2005) and Stephens and Michel
(1998) articles include lessons learned and recommendations
for parties considering mediation, using mediation,
and guidance for mediators. Updated June 2, 2006
Spring 2006 (Publication date: 2005)
School
Law Bulletin, Vol. 36, No. 2, Spring 2005
Stephanie Coplin and John B. Stephens. School Budget
Mediation: Three Cases from 2004
2001
School
Law Bulletin, Vol. 32, No. 2, Spring 2001
Jill Wilson: A School Funding Dispute: Guilford County
Note: Ms. Wilson represented the Guilford County Board
of Education in the budget dispute process of 2000.
1998
School Law Bulletin, Vol. 29, No. 2, Spring 1998
School Funding Disputes
C.
Thomas Powell: Development of the Law pp. 20–28.
John
B. Stephens & Matthew J. Michel: Mediate, Don’t
Litigate pp. 29–42.
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