Wallace v. Iowa State Bd. of Educ.

• Decision Date: 31 July 2009
• Docket Number: No. 07-0943.,07-0943.
• Citation: 770 N.W.2d 344
• Parties: Marc R. WALLACE, Gregory A. Wells, Shannon Boswell, Mike Murray, Gayle J. Murray, Kathleen L. Gingerich, Tracy Lynch, and Scott D. Neal, Appellants, v. IOWA STATE BOARD OF EDUCATION, Appellee, Des Moines Independent Community School District Board of Directors, Intervenor-Appellee.
• Court: Iowa Supreme Court

770 N.W.2d 344

Marc R. WALLACE, Gregory A. Wells, Shannon Boswell, Mike Murray, Gayle J. Murray, Kathleen L. Gingerich, Tracy Lynch, and Scott D. Neal, Appellants, v. IOWA STATE BOARD OF EDUCATION, Appellee Des Moines Independent Community School District Board of Directors, Intervenor-Appellee.

No. 07-0943.

Supreme Court of Iowa.

July 31, 2009.

Bruce E. Johnson of Cutler Law Firm, P.C., West Des Moines, for appellants.

Thomas J. Miller, Attorney General, and Jeanie K. Vaudt, Assistant Attorney General, for appellee Iowa State Board of Education.

Andrew J. Bracken of Ahlers & Cooney, P.C., Des Moines, for intervenor-appellee Des Moines Independent Community School District Board of Directors.

HECHT, Justice.

The Iowa State Board of Education (ISBE) affirmed the Des Moines Independent Community School District's decision to close five schools. The appellants sought judicial review of the ISBE's decision. The district court affirmed the decision of the ISBE. On alternate grounds, we likewise affirm.

I. Factual and Procedural Background.

In 1998, the General Assembly authorized a local option tax on sales and services for the purpose of raising revenue for school infrastructure improvements. See Iowa Code ch. 422E (1999).¹ The school districts in Polk County subsequently proposed, and the voters approved, a "Schools First" plan which called for the collection of a one-percent tax for a period of ten years commencing on July 1, 2000. The plan, insofar as it is relevant to this case, included a needs assessment for sixty school buildings in the Des Moines Independent Community School District (the District), provided a list of improvements projected for each school building should adequate tax revenue be generated, and represented "[m]ergers [would] only be undertaken with extensive public input."

In the fall of 2004, the District's staff undertook a top-to-bottom review of the plan's status. Focus groups were utilized and information was gathered from persons who had been involved in the design and construction of sixteen construction projects already completed under the plan at a cost in excess of $110,000,000. The staff also conducted, as part of the review, a study of the school buildings that had not yet been improved under the plan, focusing upon the anticipated cost of projects contemplated at each venue. The information gathered in the course of the review was presented by the staff in a report to the District's school board at its meeting on February 15, 2005. The report revealed forecasts projecting tax revenue available for school improvements would fall short of earlier projections while costs of construction had increased during the plan's existence. The general discussion of the staff report during the February 15 board meeting included strategic options for dealing with the projected revenue shortfall and cost increases, including the possibility of school closures and postponement of some of the anticipated improvements.²

The board scheduled meetings in April 2005 to solicit public input on the status of the plan. The District's administrative staff presented to the board in early May 2005 a summary of the information derived from those meetings. The staff's recommendations for closure of six schools were presented in writing to the board later in the same month and discussed during the board's meeting on May 31, 2005. A timeline was approved by the board on May 31 for publication of proposed plan adjustments including six school closings, solicitation of additional public input, and decision by the board. After several additional public meetings were held, the board voted on July 12, 2005 to close five schools including Moore Elementary, Edmunds Academy, Adams Elementary, Cowles Elementary, and Central Campus.³

The plaintiff-taxpayers challenged the District's decision by filing an appeal affidavit with the ISBE.⁴ They claimed the decision should be set aside because the District failed to comply with two administrative rules propounded by the ISBE prescribing procedural steps to be followed by school districts when making school closure decisions.⁵ The District intervened in the administrative proceeding, challenging the ISBE's authority to promulgate rules limiting the District's discretion to close the five schools. In the alternative, the District claimed it substantially complied with the ISBE's rules in closing the schools. The ISBE affirmed the school closure decision, concluding it had authority to adopt rules regulating school closures and finding the District substantially complied with them.

The plaintiff-taxpayers filed a petition requesting judicial review of the ISBE's decision. The district court affirmed the ISBE's ruling, concluding the ISBE had authority to issue the rules in question and finding the record adequately supported the ISBE's determination that the District substantially complied with the applicable administrative rules.

On appeal to this court, the plaintiff-taxpayers contend the ISBE erred in its application of administrative rules regulating the District's school closing decision. In particular, the plaintiff-taxpayers assert the ISBE erred (1) in failing to conclude the process followed by the District in deciding to close the schools violated ISBE's rule 281-19.1 because the process did not "provide a full opportunity for public participation" or provide sufficient "public notice, public consideration and public involvement," and (2) in concluding the District substantially complied with the procedural steps mandated by rule 281-19.2. The District asserts the ISBE lacks authority to promulgate rules regulating school closure decisions, and in the alternative, that if such rules were within the ISBE's authority, the agency correctly concluded the District substantially complied with them. The ISBE contends it was authorized by the legislature to promulgate the subject rules and asserts it correctly concluded the District substantially complied with those rules.

II. Scope of Review.

We review on appeal the decision of the ISBE, not the decision of the local district board. Keeler v. Iowa State Bd. of Pub. Instruction, 331 N.W.2d 110, 111 (Iowa 1983). Iowa Code chapter 17A governs judicial review of agency actions and defines the role of the courts as appellate in nature. Iowa Planners Network v. Iowa State Commerce Comm'n, 373 N.W.2d 106, 108 (Iowa 1985); see Iowa Code § 17A.19(10) (2005). We may reverse, modify, affirm or remand to the agency for further proceedings if the agency's action is affected by errors of law or is not supported by substantial evidence. Sherman v. Pella Corp., 576 N.W.2d 312, 316 (Iowa 1998); see Iowa Code § 17A. 19(10)(f).

III. Discussion.

In a 1977 agency decision, the State Board of Public Instruction (now known as the ISBE) recommended procedures for consideration by school districts contemplating school closings. See In re Norman Barker, et al., 1 D.P.I. App. Dec. 145 (1977). The board adopted administrative rules in 2003 incorporating the essence of the former "recommended procedures":

281-19.1 Policy. The board of directors of a school district has discretion as to the number of attendance centers it shall operate within the district. The process for determining whether to close an attendance center must involve public notice, public consideration and public involvement. The policies set forth in rule 281-19.2 are meant to ensure full opportunity for public participation in the relevant events. It is intended that the policies shall be implemented by local boards in such a way as will most reasonably accommodate the specific facts and circumstances surrounding the decision with which the local board is faced.

218-19.2 Attendance center closing procedure. When making a decision regarding whether to close an attendance center within its district, the board of directors of a school district shall substantially comply with all of the following steps.

19.2(1) The board shall establish a timeline in advance for carrying out the procedures involved in making the decision on the matter, focusing all aspects of the timeline upon the anticipated date that the board will make its final decision.

19.2(2) The board shall inform segments of the community within its district that the matter is under consideration by the board. This shall be done in a manner reasonably calculated to apprise the public of that information.

19.2(3) The board shall seek public input in all study and planning steps involved in making the decision.

19.2(4) The board and groups and individuals selected by the board shall carry out sufficient research, study and planning. The research, study and planning shall include consideration of, at a minimum, student enrollment statistics, transportation costs, financial gains and losses, program offerings, plant facilities, and staff assignment.

19.2(5) The board shall promote open and frank public discussion of the facts and issues involved.

19.2(6) The board shall make a proper record of all steps taken in the making of the decision.

19.2(7) The board shall make its final decision in an open meeting with record made thereof.

Iowa Admin. Code rs. 281-19.1, .2 (2005).

The District asserts these administrative rules are void because the legislature did not give the ISBE authority to propound them. Agency rules are ordinarily given "`the force and effect of law,'" provided they are "`"reasonable and consistent with legislative enactments."'" Stone Container Corp. v. Castle, 657 N.W.2d 485, 489 (Iowa 2003) (quoting Greenwood Manor v. Iowa Dep't of Pub. Health, 641 N.W.2d 823, 835 (Iowa 2002)). However, agencies have "`no inherent power and [have] only such authority as [they are] conferred by statute or is necessarily inferred from the power expressly granted.'" Zomer v. W. River Farms, Inc., 666 N.W.2d 130, 132 (Iowa 2003) (quoting Schmidt v. Iowa State Bd. of Dental Exam'rs, 423 N.W.2d 19, 21 (...