Court rules against AOS 77 and Calais

Neither AOS 77 nor the City of Calais and the Calais School Department got what they were seeking in an exchange of lawsuits following Calais' withdrawal from the AOS. If both sides had been granted their claims and counter-claims, they would have exchanged nearly the same amount of funding. With the claims by both the AOS and Calais being denied, they won't exchange any money.
After Calais withdrew from the Sunrise County School System in July 2013, the AOS filed suit against the city for payment of its 37% share of the remaining four years of the AOS superintendent's contract. Since the contract does not expire until June 2017, that would amount to $125,280. However, Superintendent James Underwood has announced he will be resigning in May 2015, so the amount would be about $62,640.
Calais, in turn, filed a counter-claim, seeking its 37% share of the undesignated fund balance held by the AOS at the end of the 2012-13 fiscal year. That amount was $70,554.
In the summary judgment issued on December 9, Washington County Superior Court Justice William Stokes denied both claims. He agreed with Calais that its four representatives on the AOS 77 school board were acting as members of that board and were not authorized to contractually bind their municipality in the event of a withdrawal. The superintendent's contract was not between Underwood and the 11 member school units; rather it was between him and the AOS. In the decision, Stokes writes, "Sunrise County School System has failed to carry its burden of demonstrating that the Calais representatives to the AOS 77 school board, when acting as members of that school board, had the authority to bind either the City of Calais or the Calais School Department." He also found that there was no basis in either the reorganization plan or the interlocal agreement of the Sunrise County School System for holding Calais liable for the continuing contractual obligations with the superintendent.
The AOS also had asserted a claim for equitable relief against Calais because of the financial hardships that would be imposed on the remaining school units, but Stokes writes, "The essential flaw in this argument is that it fails to recognize that Calais was able to withdraw from AOS 77 because the interlocal agreement between the member school units explicitly allowed such withdrawal and, by its terms, imposed no continuing obligations on Calais after the date of withdrawal."
Concerning the counter-claim by Calais, Stokes found that the AOS school board has the clear authority to manage any undesignated fund balance at the end of a fiscal year. He ruled that holding a section of the interlocal agreement to require the AOS school board "to distribute its property, including any undesignated fund balance, upon the demand of any member school unit (including a member that has decided to withdraw) would significantly undermine the authority and ability of the school board to manage its budget and carry out its mandated responsibilities under the reorganization plan and the interlocal agreement."
It's not expected that the decision will be appealed by either party.