School Bd. of Chesterfield County v. School Bd. of City of Richmond

• Citation: 219 Va. 244,247 S.E.2d 380
• Decision Date: 31 August 1978
• Docket Number: No. 761640,761640
• Parties: SCHOOL BOARD OF CHESTERFIELD COUNTY v. SCHOOL BOARD OF the CITY OF RICHMOND, State Board of Education, W. E. Campbell, Superintendent of Public Instruction, and Charles B. Walker, Comptroller of the Commonwealth of Virginia. Record
• Court: Virginia Supreme Court

Page 380

247 S.E.2d 380

219 Va. 244

SCHOOL BOARD OF CHESTERFIELD COUNTY v. SCHOOL BOARD OF the CITY OF RICHMOND, State Board of Education, W. E. Campbell, Superintendent of Public Instruction, and Charles B. Walker, Comptroller of the Commonwealth of Virginia.

Record No. 761640.

Supreme Court of Virginia.

Aug. 31, 1978.

Frederick T. Gray, Frederick T. Gray, Jr., Richmond (Oliver D. Rudy, Commonwealth's Atty., Williams, Mullen & Christian, Richmond, on brief), for appellant.

Walter H. Ryland, Deputy Atty. Gen., Horace H. Edwards, Richmond (Anthony F. Troy, Atty. Gen., William H. Hefty, Asst. Atty. Gen., C. B. Mattox, Jr., City Atty., J. Neale Lawler, Asst. City Atty., Mays, Valentine, Davenport & Moore, Richmond, on brief), for appellees.

Before I'ANSON, C. J., and CARRICO, HARRISON, COCHRAN, HARMAN, POFF and COMPTON, JJ.

HARMAN, Justice.

This appeal presents a question of the proper construction of subparagraph 4 in paragraph a of Item 573, basic school aid fund, in the Act adopted by the General Assembly appropriating public funds for the 1974-76 biennium. Acts, 1974, c. 681. More precisely, the outcome of this appeal turns on the meaning of the term "ADM" as used in subparagraph 4.

The original suit was instituted on June 14, 1976, by the School Board of the City of Richmond (City Board) against the respondents, State Board of Education (State Board), W. E. Campbell, Superintendent of Public Instruction (State Superintendent), and Charles B. Walker, Comptroller of the Commonwealth of Virginia (State Comptroller), claiming that the State Board and State Superintendent, using erroneous "school population" data, had improperly computed the City Board's share of the basic school aid fund appropriated for the 1974-76 biennium, and had certified this erroneous computation to the State Comptroller, resulting in an underpayment from such fund to the City Board of $1,071,391. Since the biennium would end on June 30, 16 days after suit was filed, and any unexpended sums in the appropriation would revert to the general fund of the Commonwealth, the City Board asked that the respondents be ordered to correct the erroneous data, to recompute the City Board's share of basic school aid fund for the biennium and to disburse the fund accordingly. The City Board also sought to temporarily enjoin the respondents from making disbursements from the basic school aid fund to reduce it below the amount claimed by the City Board.

On the following day, June 15, the original respondents filed a third-party cross-bill alleging that if they were obligated to the City Board "for any or all of the monies claimed", the State Board was entitled to recover $1,309,663 from the School Board of Chesterfield County (County Board) for sums mistakenly paid from the basic school aid fund by the State Board to the County Board during the 1974-76 biennium.

On June 25, 1976, the County Board filed its answer to the original bill and third-party cross-bill. It also filed a cross-bill in which it alleged the original respondents, using erroneous "average daily membership" or "ADM" data as the basis of their computations, had failed to pay the County Board the sum of $1,117,497 in basic school aid funds to which it was entitled during the biennium.

Because the controversy could not be resolved before the biennium ended on June 30, the trial court, on June 29, 1976, ordered the original respondents to pay $2,458,570, the remaining amount calculated to be due to the City Board ¹ and County Board ² during the biennium by the State Board's original computations, and this sum has been held and administered under the trial court's direction since that time.

Certain background information is both necessary and helpful to an understanding of the issues. In 1970 the City of Richmond (City) annexed approximately 23 square miles of Chesterfield County (County). On the effective date of this annexation, 3352 students living in the area annexed by the City were attending the public schools in the County operated by the County Board and 515 students living in the County were attending the public schools in the area annexed to the City operated by the City Board. Under an agreement between the City Board and the County Board, those students were permitted to continue to attend the schools which they were attending prior to annexation, and each board paid tuition to the other for those students living in its jurisdiction who attended the schools operated by the other board. Since the share of each locality in the basic school aid fund for the 1968-70 biennium was directly related to the number of students in "average daily attendance or ADA" in that locality, Acts, 1968, c. 806, Item 564, the State Board, by agreement of City Board and County Board, adjusted the ADA data of each to give credit to that locality for tuition students attending school in the other jurisdiction. The same plan for payments and adjustments continued during the 1970-71 school year.

In 1972 the Governor of Virginia appointed a "task force" to study and review the apportionment of the localities of state funds for public education. This task force recommended, and the 1974 General Assembly adopted, a complex new formula for the apportionment of state basic school aid funds to the localities to give each locality credit for local effort. The differing interpretations given to the language delineating one factor in this formula, the composite index of local ability-to-pay (composite index), gave rise to this litigation. Acts, 1974, c. 681, provides, in pertinent part "This appropriation shall be apportioned to the public schools by the Board of Education under rules and regulations promulgated by it to effect all of the following provisions stated herein.

"a. Definitions

"1. 'Average daily membership', or 'ADM' the average daily membership for the first seven (7) months (or equivalent period) of the school year in which State funds are distributed from this appropriation.

"4. 'Composite index of local ability-to-pay' an index figure computed for each locality. The composite index is the sum of 1/3 the index of wealth per pupil in ADM and 1/6 the index of wealth per capita (Bureau of Census population estimates 1971); the State average in the composite index is 50. The indexes of wealth are determined by combining the following constituent index elements with the indicated weighting: (1) true values of real estate and public service corporations as reported by the State Department of Taxation for the calendar year 1971 50 per cent; (2) individual income level for the calendar year 1971 as determined by Tayloe Murphy Institute at the University of Virginia 40 per cent; (3) the sales for the calendar year 1971 which are subject to the State general sales and use tax...