Suit could jeopardize funding for school districts
By Joann Groff joann@theacorn.com

A lawsuit filed Monday by a Ventura County school district could result in monetary losses for districts all over the Conejo Valley and beyond.

Santa Paula Elementary School District filed suit against the jointpowers agency that provides insurance for all 22 school districts with a presence in Ventura County, including Conejo Valley, Las Virgenes, Moorpark, Oak Park, Pleasant Valley and Simi Valley.

The districts contribute a proportional share of money to the Ventura County Schools SelfFunding Authority, a liability risk pool that covers losses from thirdparty claims.

"That's the difficult part," said Jeff Baarstad, deputy superintendent of business services at the Conejo Valley Unified School District. Baarstad also serves on the executive committee of the funding authority.

"It isn't an insurance company," Baarstad said, "all the districts belong to it and contribute to it. This can be portrayed as a little district going after a big corporation, but it's really one of our own members suing the other 21 members."

The suit stems from a 2004 case in which the funding authority appointed a lawyer to represent the Santa Paula district in litigation with a construction company.

"This is what we need to do for our kids," said Santa Paula board member Gary Marshall. "I would assume any other district would do the same. This is not something we took lightly. We recognize our image, and we certainly hope that once the other districts see the full picture, they'll understand why we filed the suit."

"A successful resolution for Santa Paula means more money from all the other districts," Baarstad said. "All the money belongs to the school districts. It could come directly out of that fund, and depending on size of judgment, it could impact rates (charged districts) in the following year."

The largest districts, Conejo and Simi Valley, contribute more than $1 million a year to the agency. About half the amount collected goes into the pool used to pay claims; the rest funds administrative costs.

The Las Virgenes district contributes almost $580,000; Moorpark and Pleasant Valley each add about $257,000.

The suit filed Sept. 24 in Ventura County Superior Court alleges that the funding authority refused to honor a claim despite having obtained a legal opinion advising that it should be covered. The Santa Paula district contends that opinion was concealed from the board but discovered through a Public Records Act request.

"When we questioned the VCSSFA's decision, we encountered harassment, threats and intimidation," Santa Paula school board President Ofelia De La Torre said. "More than $1 million is at issue, and the board simply cannot walk away from this claim."

The suit also alleges the agency's administrator denied the claim because appropriate levels of insurance had not been secured.

During the 2004 litigation in question, the Santa Paula district asserts it had an opportunity to favorably settle the case but the funding agency "abandoned" its defense the night before the trial, refusing to pay a $750,000 settlement and anything above $350,000 in defense costs.

In order to cover the costs, Santa Paula refinanced a bond for $283,480. The district is suing for this cost, as well as the $750,000 settlement and litigation costs.

In an effort to avoid the legal action, the Santa Paula district was encouraged to participate in an alternative dispute resolution process. In this (ADR) process, the judgment stands, and the district cannot appeal in state or federal court. An appeal must go before the group that originally judged the claim.

"In a sense it is suing (the other districts)," said Santa Paula board member Michelle Kolbeck. "But the ADR was the only thing they offered us. We'd have to give up our legal rights and we didn't feel that we could do that to taxpayers of Santa Paula.

"In the last correspondence we received from them, their lawyers said that we had to submit to an independent judge they'd select. We can't appeal, can't object and it's binding. That's when we filed the lawsuit."

Marshall said he and other board members would be "more than willing" to discuss the issue in a mediation setting.