News and Opinion from Sisters, Oregon
News and Opinion from Sisters, Oregon
Sisters activist Mike Morgan lacks standing to sue the Sisters School District over its issuance of full faith and credit obligations without a vote of the local electorate, according to a ruling released last Thursday by the Oregon Supreme Court.
Morgan sued in 2008 to stop the district from making any further payments on $2.1 million in full faith and credit obligations the district issued in 2007 to fund replacement of the elementary school roof and other facilities needs. The Deschutes County Circuit Court ruled in 2009 that he lacked standing to bring action. The Oregon Court of Appeals agreed.
The Oregon Supreme Court, in a unanimous opinion on January 17, affirmed the court of appeals ruling on the question of standing. The ruling ends the matter.
Morgan's suit argued that the full faith and credit obligations agreed to by the school board on March 12, 2007, are in fact bonds and the school board should not have obligated the district without a vote of the taxpayers.
No court has ruled on the merits of the issue Morgan raised, although Deschutes County Circuit Court Judge Alta Brady did offer an advisory opinion, finding that the district acted legally under Oregon law.
The case - strictly on the narrow issue of standing - went to the Oregon Court of Appeals, which upheld the lower court, then on to the Oregon Supreme Court, which heard arguments last spring before ruling last week.
The high court rejected each of Morgan's claims.
Morgan's claim of standing hinged in part on the argument that the school district's activities increased the likelihood that it would have to seek voter approval of additional bonds to pay the debt, and that he consequently would be impacted as a taxpayer within the district.
In announcing its decision the court stated that, "The Court ... held that Morgan lacked taxpayer standing to bring suit because he alleged a financial injury based on a series of hypothetical contingencies, and the alleged injury was therefore inadequate to satisfy the requirements of standing ..."
The court also noted that Morgan did not "seek relief" (ie. asking that the court order referral to the voters) that could remedy the denial of his right to vote on the financing arrangement."
Morgan told The Nugget that he didn't seek an election because the window of time between the approval of the instruments and their sale was too narrow to seek a referral to the voters before the bonds were sold. He further noted that, "we considered asking for an order to force an election, but there was case law suggesting that would be ineffective because the cat was already out of the bag; i.e., an election could not undo the sale that had already been completed."
While he expressed satisfaction at the outcome and displeasure over its cost, Sisters Schools Superintendent Jim Golden also acknowledged that he likely would not have sought funding without voter approval.
"I'm very satisfied that the district prevailed," Golden told The Nugget. "There is a place for concerned citizens like Mr. Morgan to express their constitutional rights, so I respect that. I would say that my own personal opinion is that I may have gone in a different direction than the district did (regarding the original approval of full faith and credit obligations)... I probably would most always have asked for voter approval."
Golden was not happy about the expense incurred in the five-year tussle with Morgan.
"However," he said, "it's a bit of a shame that the district probably ended up having to spend $100,000 of its own money that could have gone toward teachers or funding our schools."
Morgan, who says he's personally into the action for about $80,000, also expressed distaste for the costs the district incurred in the case - and he has his own opinion as to who's to blame.
"It's a shame the district has spent tens of thousands of dollars and wasted five years arguing that a voter and taxpayer in the district lacks standing to challenge its decision to sell obligations that, at the very least, could have been submitted to the voters at any time for approval and made this action moot," he said. "That was not considered because the law-firm, Mersereau & Shannon LLP, as bond council to the district, has opined hundreds of times that ORS 271.390 allows the sale of full faith and credit obligations without referral to the electorate. The district's law-firm has a self-interest conflict that prohibited such a recommendation."
The fundamental issue of the legality of FF&C instruments remains unadjudicated.
The use of such instruments to fund public projects is common and in recent years has become more controversial. The Deschutes County Sheriff's Office considered issuing full faith and credit obligation to fund a jail expansion, but backed away due to potential legal risks.
Morgan believes that the issue, which has statewide and even national implications, is too big and too fraught for the courts to address, and he criticizes the media for not paying more attention to the subject.
"It's gone so far, it's a huge hairball and the courts don't want to touch it," he said. "The supreme court did what the Judge Brady court did and what the court of appeals did - and that was to avoid the issue."
For their part, the school district is happy to put the issue in the rear-view mirror.
"We're very satisfied with the outcome; we're ready to move on and get ready to ask our voters for local option," Superintendent Golden said.
To view the full Oregon Supreme Court decision, click on the link provided at www.nuggetnews.com.
Jim Cornelius is editor in chief of The Nugget and author of “Warriors of the Wildlands: True Tales of the Frontier Partisans.” A history buff, he explores frontier history across three centuries and several continents on his podcast, The Frontier Partisans. For more information visit www.frontierpartisans.com.
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