When the Mislick Property was purchased in 2017, the first selectman of Deep River – the town hosting all of the Region 4 school properties — broached the topic of the district paying taxes to the town.
“The reality is I believe and Deep River believes that there should be some sort of compensation for the schools that are all located in our town,” said First Selectman Angus McDonald.
At the Wednesday night meeting, after an executive session discussion with legal advisors from Shipman and Goodwin, the Region 4 Board of Education said they would be working with the three towns – Chester, Essex and Deep River – to find a solution and avoid litigation between Deep River and the school district
The Region 4 middle school and high school have been located in Deep River for almost 70 years, and the district has never before paid taxes or payments in lieu of taxes to the town.
“For us to open up that discussion won’t go anywhere, but with the new purchase, the idea was that as long as it isn’t being used for school purposes we should continue to get something,” McDonald said.
The property, which was purchased using $379,000 from a fund that the school district did not actually have, was planned to be used for new athletic fields. The eight, formerly subdivided acres, however, have yet to be used for any education or athletic use.
When McDonald first proposed the payments, former Superintendent Ruth Levy rejected the idea.
“She said no. Period. Then we sent her a tax bill,” McDonald said. “I didn’t want to spend anywhere near as much as they spent on attorney fees, but I wanted the conversation to continue.”
Two years later, taxes are still accruing on the property. According to McDonald, about $12,000 annually. Although McDonald said he knew of other districts that do pay taxes or payments to the host town, that’s not the case with either Region 18 or Region 13.
“We are a tax-exempt organization,” said Region 18 Superintendent Ian Neviaser. Neviaser said he had never heard of a regional school district that did pay taxes or payments in lieu of taxes.
Patrice McCarthy, Deputy Director and General Counsel for the Connecticut Association of Boards of Education, said she did not know of any regional school districts that pay a fee to their host town.
“I am not aware of any arrangement such as you described,” she said. “The financial and facilities arrangements are addressed as part of the agreement created when a regional school district is formed.”
State law allows regional boards of education to rent or purchase land from towns for school purposes.
The legislation states that the school district, “as part of the purchase price may assume and agree to pay any bonds or other capital indebtedness issued by a town for any land and buildings so purchased.”
Under the previous superintendent, McDonald discussed the idea of a $10,000 payment in lieu of taxes with the first selectman of Chester and Essex, the other member towns of Region 4. With the hiring of a new district superintendent in 2019, and the confusion over the legality of the purchase and the school districts’ mismanaged bank accounts McDonald agreed to put the discussion on the back burner.
“Given the nightmare that’s going on, I think I would suggest waiting a bit. It might be too much to hit the new superintendent with this bill just as he starts. It’s a mess there,” wrote Norm Needleman, first selectman of Essex in an email to the other first selectmen on June 7, 2019.
McDonald said he is just making sure the conversation will continue at some point, but it’s not a high priority considering the other difficulties, including the resignation of the school district’s business manager.
“Let’s let things settle down, let the superintendent get his footing. I think he’s doing a terrific job,” McDonald said. “That purchase was, well you know, hopefully we get that resolved. Hopefully this will all be a non-issue 20 years from now.”
Bidding for legal services
For more than 16 years, the law firm Shipman and Goodwin has provided legal services to Region 4, said Lon Seidman, the chair of the Essex board, as they have for other districts in the region. The firm advised the district on the purchase of the Mislick property and the lengthy appeal process of freedom of information requests made by resident James Carey to the district.
“I suspect the relationship goes back decades. Each year, usually in June, the boards all vote to authorize legal representation for the following year. Each board individually needs to approve Shipman as the legal counsel – this includes the Supervision District,” Seidman said.
There is no provision or contract that binds the district to a set number of years with the firm.
In May of 2019 a request for proposal for legal services was begun by the Supervision District in Region 4, but the departure of Superintendent Levy and the hiring Brian White to the post led the board to abandon the effort.
“The district issued the legal services RFP last year. Seven proposals came in including Shipman’s. I believe the process started before Ruth announced her retirement and was wrapping up during the superintendent search process,” Seidman said. “The committee that reviewed the RFP materials ultimately decided that it was not a good idea to change law firms at the same time we had a leadership transition. In particular, I felt the new superintendent should have significant input on what legal services we ultimately use given the complexity of the district.”
Seidman said that the boards will revisit the RFP at some point in the future.
In the region, for many years, Old Saybrook schools, Lyme Old-Lyme schools and Region 13 schools similarly engaged Shipman and Goodwin to provide legal services.
“We have used Shipman and Goodwin almost exclusively since our last RFP. Before that, we used different firms for different reasons,” said Jan Perruccio, superintendent in Old Saybrook. “Different factors are considered when deciding to go out for an RFP or RFQ. For example, the transportation contract has been every five years in recent history. We don’t go out more frequently than that because it is hard to get a company to bid for a shorter period. Other services, such as legal or financial services, require time to build a history of the understanding of an organization, so there is an attempt to maintain consistency.”
In Lyme-Old Lyme, superintendent Ian Neviaser said that the Board of Education would go out to bid for legal services “if we weren’t satisfied with the services we were receiving or if we felt we were paying too much for those services.”
The district has not gone out to bid for more than a decade.