Legal bill skyrockets — along with frustration — as West Bath suit against school district stretches into second year

Jan. 31--WEST BATH, Maine -- As a lawsuit pitting one community in Regional School Unit 1 against three others continues with no end in sight, officials in one of the towns plan to ask residents to dig deeper to pay the mounting legal costs.

The city of Bath and the towns of Arrowsic and Woolwich have spent nearly $150,000 to date defending themselves against -- and counter-suing -- the town of West Bath. West Bath is suing the three communities and Regional School Unit 1 in an attempt to recoup $1.9 million it says the town overpaid to the regional school district during its first four years as a consolidated system.

More than a year after West Bath launched its legal effort to recoup the $1.9 million, the suit remains unresolved, prompting Woolwich to schedule a special town meeting on Monday to ask for more funding for legal bills.

On Monday, Woolwich residents will vote on whether to add $15,000 to a litigation fund, which is now empty due to the ongoing legal battle.

Voters approved $6,000 for the fund, but Woolwich has spent $13,003 to date, Town Administrator Lynette Eastman said Tuesday.

"We don't know how much longer this is going to go on, and how much more we are going to have to spend for it," she said.

Arrowsic residents may soon face the same decision. Selectwoman Sukie Heard said Tuesday that that town has, to date, spent $17,612 in legal costs related to the RSU 1 dispute, and will likely have to hold a special town meeting to appropriate more money for legal fees unless the suit is resolved soon.

The city of Bath has spent $111,662 on the suit to date, and finance director Juli Millett said she will likely have to return to the City Council to request more once a contingency account has been drained.

To date, the school district has paid $5,000 in legal fees related to the suit, according Superintendent Patrick Manuel. That amount represents payment of an insurance deductible. The school district's insurance company is now paying any additional legal fees related to the suit, which Melissa Hewey, the attorney representing the RSU, on Friday estimated at $35,000 to $50,000.

Meanwhile, West Bath appropriated $61,500 in fiscal year 2014 for all legal fees, and as of Tuesday had spent $54,884 -- $38,297 of which funded the suit against the district, according to Town Administrator Jonathan Davis. Another $10,000 has been approved to cover further legal costs, if necessary.

"We will proceed as has been going on," Davis said Tuesday. "We're not anticipating stopping for any reason."

In December, RSU 1, the city of Bath and the towns of Arrowsic and Woolwich asked a judge to rule in their favor. On Thursday, the town of West Bath filed a motion opposing that request.

Meanwhile, West Bath voters on Jan. 21 voted to begin the process of withdrawing from the school district.

And as the communities begin to craft their 2014 budgets, officials say the wait for a resolution of the suit is frustrating.

"We've been told it could be awhile," Heard, the Arrowsic selectwoman, said Tuesday. "It's like having the Sword of Damocles hanging over our head. We need resolution one way or another because it's hard to plan."

The regional school district -- composed of Bath and four of the five towns in the former School Union 47 -- was created with passage of a special law, LD 910, in 2007. RSU 1 came into being in 2008 with a unique governance and funding model, different from the school-district consolidation model pushed by then-Gov. John Baldacci's administration.

That cost-sharing formula was calculated by factoring in one-third of a town's pupil count, one-third of the town's population and one-third of the town's property valuation.

But in 2012, several towns argued that the formula was only applied to the district's costs that exceed the state's Essential Programs and Services model, which the Department of Education uses to determine state subsidies for education. The rest was calculated according to the state's EPS funding methods -- a decision based on an oral legal opinion provided when the district was created.

In March 2012, the RSU 1 board changed its formula so that all costs are calculated through the "one-third" formula. West Bath argues that it overpaid the district $1.9 million because the formula was applied differently from 2008 to 2011.

However, the school district and the three communities argue that West Bath representatives agreed on the cost-sharing formula for each of the four years in question.

A fifth community in the district, Phippsburg, was also overcharged, according to West Bath officials, but not enough to warrant inclusion in the suit.

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