Vandalia-Butler Schools sues city, claims decades of tax funding wasn’t distributed correctly

VANDALIA — The Vandalia-Butler City School District has filed a lawsuit against the City of Vandalia seeking up to 30 years of funding the district said it’s never received but was entitled to.

As reported on News Center 7 at 5 and 11, the lawsuit follows the school district’s “lengthy pursuit” of fair funding.

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The district sued the city due to “breaches of revenue sharing related to tax abated properties,” the spokesperson said.

The lawsuit cites part of the Ohio Revised Code that outlines how certain tax revenue to the city should be allocated to the school district. The district spokesperson said the City of Vandalia has been delinquent in providing this funding for up to 30 years.

“In the absence of a negotiated revenue sharing agreement, the City of Vandalia is required to compensate the school district and distribute a portion of the tax revenue in an amount equal to fifty percent of the difference between the amount of taxes levied and collected by the municipal corporation on the incomes of new employees in the calendar year ending on the day the payment is required to be made, and the amount of any infrastructure costs incurred in that calendar year.”

The district claims they have suffered a “financial burden” without this funding. The lawsuit seeks to have it restored.

A spokesperson from the City of Vandalia said this dispute is due to an “update to revenue-sharing regulations that went into effect under state law in 1994 but were not implemented by the city and the school district.”

City officials determined that depending on the applicable statute of limitations, it may owe the district between two to six years of back payments.

On April 1, Vandalia passed a resolution “authorizing the city to make six years of payments totaling $3,355,750.52 over the next four years plus the statutory payments going forward,” according to its spokesperson.

According to Montgomery County Court of Common Pleas documents, the district claims they are owed over $10 million.

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“The District has attempted to resolve this issue amicably with the City for most of this school year and has not reached what the District believes is a fair agreement. The City has stated it will not engage in further negotiation. Consequently, the District has made a very difficult decision to file a lawsuit against the City of Vandalia over these financial matters,” Vandalia-Butler City School District Superintendent Rob O’Leary said.

The city’s spokesperson said the district accepted the authorized payments totaling $1,350,467.63 on April 12. They said this payment accounts for the two most recent years.

“The city will continue to work towards a fair and equitable solution that is good for the community as a whole and is within the confines of the law,” the city’s spokesperson said.

“We want to be good partners and support economic development in our area, but we also cannot stand by idly while the City of Vandalia neglects its responsibilities to our students, staff, and community. We regret legal action has become necessary, but after several failed attempts to solve the matter amicably, we have no other choice. Our priority is to ensure that our students receive the education they deserve, and we will work to secure the resources needed to fulfill this commitment,” Vandalia-Butler School District Board of Education President Holly Herbst said.

We will continue to follow this story.

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