Nicholson v. Red Willow County School Dist.

• Decision Date: 15 July 2005
• Docket Number: No. S-03-1296.,S-03-1296.
• Citation: 270 Neb. 140,699 N.W.2d 25
• Parties: Frances Louise NICHOLSON, appellant, v. RED WILLOW COUNTY SCHOOL DISTRICT NO. 0170, also known as Twin Valley Public Schools, a political subdivision of the State of Nebraska, et al., appellees.
• Court: Nebraska Supreme Court

699 N.W.2d 25

270 Neb. 140

Frances Louise NICHOLSON, appellant, v. RED WILLOW COUNTY SCHOOL DISTRICT NO. 0170, also known as Twin Valley Public Schools, a political subdivision of the State of Nebraska, et al., appellees.

No. S-03-1296.

Supreme Court of Nebraska.

July 15, 2005.

Steve Williams and John F. Recknor, of Recknor, Williams & Wertz, Lincoln, for appellant.

Kelley Baker, Karen A. Haase, and Neal Stenberg, of Harding, Shultz & Downs, Lincoln, for appellees Red Willow County School Districts Nos. 0170 and 0109.

HENDRY, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

PER CURIAM.

NATURE OF CASE

Frances Louise Nicholson challenges the constitutionality of bond issues passed by the voters of two Nebraska school districts as part of the school districts' reorganization. She argues that the school districts' combination of the two bond issues violated Neb. Const. art. VIII, § 4.

BACKGROUND

This case was tried on the following stipulated facts: Nicholson resides and owns property in Red Willow County School District No. 0170 (Twin Valley), a Class II school district. She does not own property in the adjacent Red Willow County School District No. 0109 (Republican Valley), a Class III school district.

On January 29, 2003, the boards of education of Twin Valley and Republican Valley each voted to approve a petition to reorganize the districts with each other. The reorganization petition sought to dissolve both Twin Valley and Republican Valley, effective August 1, and create a single new Class III school district in their place (the reorganized district). The reorganization petition was contingent upon the approval of separate bond issues in both Twin Valley and Republican Valley.

Separate bond elections were held in both school districts on March 25, 2003. The voters of Twin Valley approved, by a vote of 296 to 266, the issuance of bonds by Twin Valley in the amount of $3,495,000 for the purpose of paying the costs of land acquisition, constructing a school building, and providing for necessary furniture and apparatus for such a building. Nicholson voted in the Twin Valley bond election. Republican Valley voters approved, by a vote of 296 to 272, the issuance of bonds by Republican Valley in the amount of $3,495,000 for the same purposes as the Twin Valley bond issue. The eventual issuance of the bonds in each school district was not only contingent upon a successful election in the other school district, but also upon the approval of the reorganization petition as required by law. On May 9, the State Committee for the Reorganization of School Districts (State Committee) approved the reorganization petition.

The aggregate assessed value of all taxable property in Twin Valley was, as last reported by the Red Willow County assessor, $129,187,800. The most recently reported aggregate assessed value of all taxable property in Republican Valley was $86,684,569. In the absence of the reorganization petition, an amount of approximately 21 to 22 cents per $100 of taxable valuation would have been levied on Twin Valley property owners to redeem that school district's bond issue of $3,495,000, while Republican Valley property owners would have been levied 35 to 36 cents per $100 of taxable valuation to redeem the $3,495,000 bond issue in their school district. However, under the terms of the reorganization petition, the two separate bond issues would be combined for a total bond issue of $6,990,000 and repaid by the property owners of the reorganized district over approximately 22 years. Thus, all property owners in the reorganized district will pay a bond levy in the amount of 26.3 cents per $100 of taxable valuation. The reorganized district's authority to combine the bond issues of Twin Valley and Republican Valley stems from section II(E) of the reorganization petition, which provides in full:

E. Bonded Indebtedness and Authority To Issue Bonds. Neither the Twin Valley Public School District nor the Republican Valley Public School District has any bonded indebtedness existing on the date of the signing of this Petition. However, if the voters of both the existing Twin Valley Public School District and the existing Republican Valley Public School District vote to authorize the issuance of bonds in elections in both school districts, any authority to issue bonds, and any bonded indebtedness created pursuant to such authority which exists on the effective date of the dissolution and reorganization of the existing Twin Valley Public School District and the existing Republican Valley Public School District shall become the authority and/or obligation of the New School District.

Nicholson initiated this action on May 2, 2003. Her complaint sought injunctive relief preventing issuance of the bonds and implementation of the reorganization petition. She also sought a declaration that the reorganization petition and Neb.Rev.Stat. § 79-422(1) (Reissue 2003) are unconstitutional under Neb. Const. art. VIII, § 4.

On October 16, 2003, the district court denied Nicholson's request for declaratory and injunctive relief and dismissed her complaint. Upon Nicholson's motion, the court entered an order nunc pro tunc on November 10, repeating its earlier findings that § 79-422(1) and the merger and bond issues were constitutional and that the bond issues and reorganization petition were "lawful in all respects." Nicholson filed her notice of appeal on November 13, and we moved the case to our docket.

ASSIGNMENTS OF ERROR

Nicholson assigns that the district court erred in finding that (1) the bond issues and reorganization petition were lawful in all respects, (2) § 79-422(1) is constitutional, and (3) the merger and bond issues of the school districts are constitutional.

STANDARD OF REVIEW

A jurisdictional question which does not involve a factual dispute is determined by an appellate court as a matter of law. Cox Nebraska Telecom v. Qwest Corp., 268 Neb. 676, 687 N.W.2d 188 (2004).

ANALYSIS

In this appeal, Nicholson challenges the constitutionality of bond issues passed by the voters of Twin Valley and Republican Valley as a part of the school districts' reorganization. However, before reaching the legal issues presented for review, it is the duty of an appellate court to settle jurisdictional issues. Gabel v. Polk Cty. Bd. of Comrs., 269 Neb. 714, 695 N.W.2d 433 (2005). After this case was initially argued, we ordered additional briefing and argument on the issue of whether Nicholson's remedy was to appeal the May 9, 2003, decision of the State Committee pursuant to Neb.Rev.Stat. § 79-413(4) (Reissue 2003) or whether Twin Valley's and Republican Valley's reorganization plan is subject to collateral attack. We begin with a review of current Nebraska law governing school reorganizations.

SCHOOL DISTRICT REORGANIZATION METHODS

There are two methods available to accomplish a school district reorganization: the petition method and the election method.

[I]t is critical that one recognize the distinction between effecting a school reorganization by what is commonly referred to as the "petition method" as opposed to effecting a reorganization by the "election method." The differences are important. While in both instances the electors of the affected districts have a voice, their manner of exercising that voice is significantly different. While the ultimate authority for changing the boundaries by either the petition method or the election method rests with the electors of the several districts involved, the effect of their action is quite different. Under the petition method, once a sufficient number of legal voters of each district have signed a petition, the superintendent [now the State Committee for the Reorganization of School Districts] must then act in accordance with the statute. See Neb.Rev.Stat. § 79-402 (Reissue 1976) [now codified at § 79-413]. Under the petition form of reorganization, the provisions of the statutes are mandatory and jurisdictional and the failure to comply with the requirements set out in the statutes generally causes the action taken by the county superintendent to be void. See State ex rel. Larson v. Morrison, 155 Neb. 309, 51 N.W.2d 626 (1952). Likewise, where proper petitions are filed, it is the mandatory duty of the superintendent to hold a hearing and, if the petitions are sufficient, to change the boundaries as requested. See School Dist. No. 49 v. Kreidler, 165 Neb. 761, 87 N.W.2d 429 (1958).

On the other hand, under the election method, a plan of reorganization is not effected until it is submitted at a special election to all the electors of the districts within the county whose boundaries are in any manner changed by the plan of reorganization and approved by a majority of all electors voting within each voting unit included in the proposed plan. § 79-426.15 [now codified at § 79-447]. It is this final special election which causes the reorganization to take place, and requirements regarding the giving of notice and the holding of preliminary hearings prior to the special election, while important, are not jurisdictional.

Eriksen v. Ray, 212 Neb. 8, 12-13, 321 N.W.2d 59, 62 (1982).

The election method is governed by the Reorganization of School Districts Act, Neb.Rev.Stat. §§ 79-432 to 79-451 (Reissue 2003). That is not the method used by Twin Valley and Republican Valley to create the reorganized district in this case. Instead, our case arose from a reorganization accomplished by the petition method. The statutes governing the petition method are found at Neb.Rev.Stat. §§ 79-413 to 79-422 (Reissue 2003).

PETITION METHOD: PROCEDURES

A reorganization utilizing the petition method may be initiated in one of two ways: by a petition signed by voters or by the actions of the districts' school boards.

Section 79-413(1) allows for the creation of a new school district from other districts by a petition signed by voters. It provides that the State...