Montana Attorney General Steve Bullock has determined that the Ennis School District improperly used nonvoted adult education and transportation funds to build a $9 million school.
In a letter dated Dec. 9 to Madison County Attorney Chris Christensen, Bullock said the district’s transfer of funds from the two accounts into a flex fund for the construction project goes against state law requiring that capital projects come from levies that voters approved.
“If the trustees can generate nonvoted property taxes for capital investments that would otherwise require voter approval, the Legislature’s objective for taxpayer oversight is nullified,” Bullock said in an 11-page letter. “I cannot construe a nonvoted levy fund such as adult education to authorize the same types of expenditures as a voter-approved fund such as a building reserve fund.”
Marc Glines, Ennis school board chairman, said he had not read Bullock’s letter and would not comment on the findings.
Elizabeth Kaleva, a Missoula lawyer representing the district, did not return a telephone call Tuesday seeking comment.
The letter came after Christensen requested an opinion from Bullock’s office following several complaints from school district residents over the use of the nonvoted levies to finance the new school.
The rural district has levied the highest adult education property taxes in the state and later transferred much of that money into a separate fund to pay for the construction.
Last year, the state Office of Public Instruction found that it was OK to do that as long as the building was used for adult education.
Bullock in his determination said the district’s auditor indicated that just shy of half of the overall square footage — 49 percent — of the new school was for adult education. Kindergarten through eighth grade would take up a third of the building’s use at 36 percent and transportation would use the remaining 15 percent.
But Bullock said that doesn’t matter. And he noted that the adult education fund is larger than the district’s general fund to pay for operations and maintenance.
“Whether or not a certain square footage of building space is used for adult education is not determinative, since no amount of adult education funding sources can be used to construct classroom space or any other capital expenditures,” he said.
Lisa Frye, a district board member, said she was not surprised by the ruling. She said the use of the adult education and transportation funds to build a school troubled her long before she was elected to the board this year.
And she said the adult education funds are being misspent in other ways that she’s voted against this year. “We’re also paying a huge number of our employee salaries out of those two funds as well that have job descriptions nowhere near adult education,” she said.
Frye said it will take drastic changes to fix the problems with the finances within the district. She said a first step would be for the four board members and Superintendent Doug Walsh, who made the decisions to transfer the funds, to resign so the district can begin to get its finances in order.
Bullock also said in his ruling that several interests can demand a thorough accounting of the district’s finances and said repayment to the adult education and transportation funds could be required.
“If there is a basis for civil or criminal liability, those remedies may be pursued by the school board, the county, or any other citizen with standing as provided by law,” he said.