The Ivanhoe School District has been ordered to pay more than $1 million in damages to Hendricks School District.
A decision by an independent arbitrator awarded the Hendricks School District $1,225,501 payable by the Ivanhoe School District, for breach by Ivanhoe of the Interdistrict Cooperation Agreement between the two parties.
"They breached a contract in June 2011," said Hendricks Public School Business Manager Mary Swenson, "an agreement that's been in force since 1990, in one form or another."
Prior to 2011, Hendricks operated grades K-6 and Ivanhoe grades 7-12. In June 2011, the Ivanhoe School Board voted 4-2 in favor of a motion to become a K-12 school district.
According to the 10-page decision issued on Aug. 24, by arbitrator Carol Berg O'Toole, the issue was framed as, what are the damages resulting from Ivanhoe's breach of the agreement?
According to the document, Hendricks argued damages incurred included the cost of running a grade 7-12 program on short notice for the 2011-2012 school year and the 2012-2013 school year, as a result of which Hendricks went into statutory operating debt for the first time in its history.
Hendricks also cited loss of revenue from food service and the Community (Service) Education Fund for summer recreation programming.
Ivanhoe argued Hendricks' damages were only the amount or revenue lost from Ivanhoe students not attending Hendricks schools, which should take into consideration amounts Hendricks saved by not having to educate them, according to the document.
Ivanhoe's post-arbitration brief stated Hendricks, "has merely thrown all of its expenses and revenue figures at the arbitrator without any explanation or analysis as to what effect, if any, the termination of the agreement has had upon the amounts listed."
However, O'Toole rejected the argument.
"Hendricks proved their actual losses from the breach with certainty," O'Toole wrote in her decision. "Besides substantial data from the school district's audits, testimony was given from those who experienced the losses first-hand. The proof was convincing."
According to Dan Deitte, superintendent of the Ivanhoe School District, in response to an email inquiry, a school district with a judgement against it has the option to levy the full amount of the judgement over a three year period without a vote from the taxpayers.
"The Ivanhoe School Board has not made a final decision if they will or will not appeal the arbitrator's decision," Deitte said in the email. "That will be discussed in the near future."