Roosevelt School Lawsuit

Missoula Group Wants Roosevelt School Sale Voided, School Board Trustees to Pay

By Brenna Moore, 5-31-06

Good Schools Missoula, Inc., a new organization advocating for quality schools in Missoula County, has filed a lawsuit against the Missoula County Public School District and several of its School Board trustees. The group claims the trustees are individually liable for the financial discrepancies resulting from the breach of their fidiciary duties in the lease and sale of Roosevelt School.

The organization's lawsuit, filed May 17, alleges fiscal irresponsibilty on the part of the trustees' for selling Roosevelt School at a price that was below market value to the Loyola Sacred Heart High School Foundation, said Dan Funsch, Acting President of Good Schools Missoula, Inc.

Lawsuits were filed and dismissed directly following the $1.5 million sale of the Roosevelt Elementary School to the Missoula Catholic Schools last spring. At the center of the controversy was the sale price, especially in light of two other bids from other companies: the Five Valleys Arts and Cultural Center and the Intermountain Institute for Science and Applied Mathematics. According to court documents, the latter offered a bid of $1.7 million, an offer that was $200,000 more than Loyola's bid.

While Loyola held a five-year lease of Roosevelt School, Loyola expressed interest in purchasing the school near the end of the first-term of the lease. With the new purchase interest, the Missoula County Public School District proposed a school sale referendum for the November 2004 election, and Catholic voters were openly encouraged by Loyola to vote in favor of the sale, according to the lawsuit.

Open competitive bidding was refused by the district, which preferred sealed proposals, Funsch said. Court papers state that the district also demanded that all bidders expedite their best proposal, making it impossible for the alternate bidders to guarantee their offer.

"What we're doing is trying to hold the school trustees accountable for selling Roosevelt School below its market value," Funsch said. "(The district) didn't even accept the highest offer for Roosevelt Public School."

As of Wednesday, May 31, the district hadn't yet been served with the court papers and hadn't read the lawsuit, said Missoula County Public Schools Chairwoman Jenda Hemphill. Since the district hasn't been provided with the papers, officials were unable Wednesday to comment on the lawsuit, Hemphill said.

Good Schools Missoula, Inc. is a Montana non-profit membership corporation organized with the goal of improving Missoula's public schools for the benefit of the school children, the community and Missoula citizens. The group's suit asks that the judge in the case void the sale of Roosevelt School, void the sale in equity and surcharge the breaching trustees individually for the loss of funds to the beneficiaries of Roosevelt School.

The group also stated that the sale of Roosevelt School will increase property taxes, a reduction in opportunities for children who attend school in District 1, increased classroom congestion and reduced resources. Increased class sizes, children having to be bussed to distant facilities, traffic increases and increased workload for teachers are also negative impacts listed within group's lawsuit.

If the sale is deemed void, the building would be returned to public sale but the lease won't be affected, although it should be brought up to reflect the building's market value, Funsch said. Once the building is under public ownership again, the group would like to invite other companies to bid on the purchase of the property, he said.

If the sale is validated, the lawsuit then charges the trustees to pay the difference between the highest offer on the building and what the building was sold for, a sum of about $200,000, Funsch said.

The School Board Trustees are individually liable for financial discrepancies in breaching their fiduciary duties that they have to the Missoula County Public School District, said the group's attorney Roy Andes.

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