City of Athens Board Of Education v. McMinn County, Tennessee
2014 Tenn. App. LEXIS 873
| Tenn. Ct. App. | 2014Background
- Dispute over how McMinn County taxes for education are apportioned among LEAs; statute 49-3-315(a) requires apportionment of “all school funds for current operation and maintenance” among LEAs by WFTEADA; County allocated funds from its general purpose school fund to Cities but did not apportion funds from the Educational Capital Projects Fund.
- County contends capital projects funds are not “for current operation and maintenance,” thus not subject to apportionment.
- City School Boards argue the statute requires apportionment of all county-collected school funds, regardless of designation, including capital project funds.
- Trial court granted summary judgment for County, concluding capital project funds are not subject to apportionment.
- Appellate court affirms, holding that the statute excludes capital project funds from mandatory apportionment; applying traditional capital-vs-operating distinctions recognized in prior Tenn. cases.
- Court emphasizes statutory language is clear and would require rewriting to extend apportionment to capital funds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 49-3-315(a) require apportionment of capital project funds? | City argues all school funds must be apportioned. | McMinn contends only current operation and maintenance funds are required to be apportioned. | No; capital project funds are excluded from apportionment. |
| Are capital project funds used for future capital outlay within the statute’s scope? | Funds designated for capital projects should be prorated. | Capital outlays are not current O&M funds and thus not subject to apportionment. | Capital project funds are not subject to prorated apportionment. |
Key Cases Cited
- Southern v. Beeler, 195 S.W.2d 857 (Tenn. 1946) (distinguishes capital repair funding from operating funds for division)
- State ex rel. Cope v. Davidson County, 277 S.W.2d 396 (Tenn. 1955) (capital-building funds not part of operating expenses; not required to divide)
- City of Harriman v. Roane Cnty., 553 S.W.2d 904 (Tenn. 1977) (recognizes distinction between capital funds and operating funds; funds for capital projects not compelled to be shared)