In re Dunbarton Sch. Dist.

169 N.H. 50

141 A.3d 1152

APPEAL OF DUNBARTON SCHOOL DISTRICT (New Hampshire State Board of Education)

No. 2015–0030

Supreme Court of New Hampshire.

Argued: September 24, 2015

Opinion Issued: May 13, 2016

Sulloway & Hollis, P.L.L.C., of Concord (Edward M. Kaplan and Sarah S. Murdough on the brief, and Mr. Kaplan orally), for Goffstown School District.

Devine, Millimet & Branch, Professional Association, of Manchester (Daniel E. Will and Joshua M. Wyatt on the brief, and Mr. Will orally), for Dunbarton School District.

Joseph A. Foster, attorney general (Brian W. Buonamano, assistant attorney general, by brief), for New Hampshire State Board of Education, as amicus curiae.

DALIANIS, C.J.

The Dunbarton School District (Dunbarton) appeals a decision of the New Hampshire State Board of Education (Board) which determined that Dunbarton is liable to the Goffstown School District (Goffstown) for its proportional share of Goffstown's obligation on a 20–year construction bond approved in 2001 for renovations to the Goffstown High School. We reverse.

I. Background

The pertinent facts follow. Enacted in 1963, RSA chapter 195–A allows the establishment of Authorized Regional Enrollment Area (AREA) schools. See Laws 1963, ch. 277. The purpose of the statute is "to increase educational opportunities within the state by encouraging the establishment of area schools in the receiving districts which will serve the receiving district and the sending districts throughout a natural social and economic region ... to permit efficient use of such area school facilities and to provide improved instruction." RSA 195–A:2, I (2008). The statute sets forth detailed procedures for establishing an AREA plan, see RSA 195–A:3 (Supp.2015), and for the periodic review of AREA plans and withdrawal of districts from the AREA, see RSA 195–A:14 (2008).

Under the statute, an " ‘[a]rea school’ " is defined as "an authorized regional enrollment area school, which may be elementary or secondary, and which when approved ... shall be the assigned school for all the resident elementary or secondary pupils of the school districts or portions thereof within the region which it is established to serve." RSA 195–A:1, IV (2008). A " ‘[s]ending district’ " is defined as "any school district or portion thereof which sends its resident pupils to an area school located in a receiving district, paying tuition therefor to the receiving district." RSA 195–A:1, V (2008). A " ‘[r]eceiving district’ " is defined as "a school district in which an area school is located." RSA 195–A:1, VI (2008).

An AREA plan must include, among other things, a formula for the calculation of tuition. RSA 195–A:3, V(d) (Supp.2015). " ‘Tuition’ " is defined as "the sum of money which each sending district is obligated to pay to the receiving district to defray the cost of education" and "may include an annual rental charge per pupil." RSA 195–A:1, IX (2008). " ‘Annual rental charge per pupil’ " is defined as "that additional payment included in tuition ... which represents a fair charge for building occupancy. It may also include a fair charge for any debt service and reduction of principal, which may become due between date of bond issue and date of building occupancy." RSA 195–A:1, X (2008).

In 1971, Goffstown, Dunbarton, and the New Boston School District entered into a written AREA plan pursuant to which Goffstown was designated the receiving school district and Dunbarton and New Boston were designated the sending school districts. The plan established an annual tuition rate that included a rental charge of two percent. At the time the parties entered into this AREA plan, the statute did not require that an AREA plan contain a term of duration. See Laws 1969; 347:2.

In 1998, the Goffstown Building Needs Study Committee recommended a $10 million plan for renovations and additions to the Goffstown High School and the development of plans for an additional elementary school. The Goffstown school board decided to delay putting the question to public vote for one year. In 1999, a similar renovation plan was recommended by the committee but it was defeated in March 2000. Thereafter, a High School Building Study Committee was formed and, subsequently, it proposed an $11,995,000 plan to renovate Goffstown High School.

In November 2000, a written memorandum was sent on behalf of the Goffstown School Board to the school boards of Dunbarton and New Boston, notifying them that "the Goffstown School District will be proposing a building project at the March 2001 School District Meeting. The total cost of the project is $11,995,000. The Board is proposing a 20–year bond. The project encompasses renovations and additions to the Goffstown AREA High School." In March 2001, Goffstown voters authorized the Goffstown School District to issue bonds to raise $11,995,000 for the "Renovation/Addition Project" for the Goffstown AREA High School. See RSA 195–A:7 (2008) ("[T]he construction of additions or alterations to existing buildings, ... shall be the responsibility of the receiving district.... A receiving district may borrow money for such purposes.").

In 1999, the legislature amended RSA chapter 195–A to require that AREA plans have a minimum term of 10 years "unless otherwise provided by mutual agreement of the school districts." Laws 1999, 15:1. Accordingly, in January 2004, Goffstown, Dunbarton, and New Boston agreed to a new written AREA plan to replace the 1971 plan. The 2004 AREA plan established a term of 10 years, with July 1, 2004 as the start date. Among other things, the plan established an annual tuition rate that included a rental charge of two and one-half percent effective July 1, 2005, to be recalculated based upon appraisals of the Goffstown middle school and high school buildings "performed every five years commencing in 2008." The plan provided that "[o]n the effective date of this Agreement, any former AREA agreements between Goffstown, New Boston and Dunbarton shall become void." In April 2004, the Board certified that the plan was "lawfully adopted."

Before the 2014 expiration of the parties' AREA plan, an AREA planning review board, comprised of representatives from each of the three participating school districts, reviewed the 2004 plan and discussed possible amendments to be included in a new plan. See RSA 195–A:14, I. The review board subsequently submitted a proposed AREA plan that, with the Board's approval, would be voted upon in all three districts at the 2013 annual school district meetings. In January 2013, the Board approved the amended AREA plan. At the same time, the Board approved a plan to form a new AREA school designating Bow as the receiving district and Dunbarton as the sending district. Dunbarton and Bow voters approved the Dunbarton/Bow AREA plan, and Dunbarton voters rejected the amended Goffstown/Dunbarton/New Boston AREA plan.

In January 2014, Goffstown requested a hearing before the Board to determine Dunbarton's remaining obligation on the 2001 bond. At a pre-hearing conference, the parties agreed to submit memoranda on the legal issue of whether Dunbarton "is or is not responsible for capital costs after the expiration of the AREA Agreement." After reviewing the parties' written submissions, the hearing officer determined that, upon receiving notice from Goffstown in 2001 that it was going to renovate and make additions to the high school and was proposing a 20–year bond to finance the project, Dunbarton was required, pursuant to RSA 195–A:14, VI, to initiate a withdrawal study four months before the vote or it would remain obligated on the bond.

The hearing officer reasoned that, "[b]y initiating the withdrawal study, Dunbarton would have put Goffstown on notice prior to the bond as to the potential additional financial risk on the bond without Dunbarton remaining part of the AREA." Thus, although the 2004 AREA plan expired June 30, 2014, "Dunbarton was clearly on notice back in 2001 that there was a twenty (20) year bond, and had the opportunity to initiate a withdrawal study at that point in time so that Goffstown would be on notice of the possible financial ramifications of Dunbarton withdrawing from the AREA." Accordingly, the hearing officer recommended that the Board find that Dunbarton remains financially obligated with respect to the high school construction bond. The Board voted to accept the hearing officer's report and adopted his recommendation. Dunbarton's request for reconsideration was denied, and this appeal followed.

II. Standard of Review

RSA chapter 541 governs our review of Board decisions. See RSA 21–N:11, III (2012). Under RSA 541:13, a party seeking to set aside a decision of the Board has the burden of demonstrating that the decision "is clearly unreasonable or unlawful." RSA 541:13 (2007). We will not disturb the Board's decision, except for errors of law, unless we are satisfied, by a clear preponderance of the evidence before us, that it is "unjust or unreasonable." Id. The Board's findings of fact are presumed prima facie lawful and reasonable. Id. We review the Board's rulings on issues of law de novo. See Appeal of Hillsborough County Nursing Home, 166 N.H. 731, 733, 103 A.3d 1186 (2014).

To resolve the issues before us, we must engage in statutory interpretation. The interpretation of a statute is a question of law, which we review de novo. Favazza v. Braley, 160 N.H. 349, 351, 999 A.2d 1088 (2010). In matters of statutory interpretation, we are the final arbiters of the legislature's intent as expressed in the words of the statute considered as a whole. Id. In construing its meaning, we first examine the language found in the statute, and when possible, we ascribe the plain and ordinary meanings to the words used. Id. We interpret legislative intent from the statute as written and will not consider what the legislature might have said or add language that the legislature did not see fit to include. Strike Four v. Nissan N. Am., ...