Copyright Arizona Capitol Times
Key Points: School districts sue career technical education facility over funding agreement Districts claim CTE programs run on campus are not receiving fair share of funds East Valley Institute of Technology claims change improves accountability Nine school districts plan to sue the East Valley Institute of Technology, claiming a funding structure proposed by the career technical education district short changes programs offered on school campuses. In negotiating the terms of an intergovernmental agreement, EVIT proposed a decrease in the percentage of state funds passed through to member school districts to run satellite programs, or CTE classes offered on school campuses rather than at EVIT’s central campus. The CTED opted to provide additional funding only if school districts met certain performance benchmarks. But school districts, which bear the cost of running a satellite CTE program, argue that the current proposal fails to properly reimburse districts and disproportionately benefits EVIT. “EVIT has never explained how it intends to use the considerable additional funding it proposes withholding from the Districts for the Districts’ benefit,” Vidula Patki, attorney for the schools wrote. Meanwhile, EVIT leadership claims the proposed changes to reduce funding and implement performance metrics stem from a need for greater accountability, and in negotiations, the CTED claimed that nothing in state law sets a minimum for allocating satellite funding. “CTE has the ability to truly change the lives of our students, but it needs to be done fiscally responsibly,” EVIT Superintendent Chad Wilson said. “We talk about this being a financial issue, but it’s also really a performance issue. What EVIT wanted to do is to increase the performance of our students at both the central and the satellite campus, while at the same time being far more attuned to where the dollars are being spent.” Career technical education districts and school districts are required by state law to sort out finances, oversight and responsibility through intergovernmental agreements. Part of this pact requires EVIT to pass through and pay districts a percentage of state average daily membership funding to support satellite programs. Under the prior agreement, EVIT agreed to fund 85% of districts in fiscal year 2023, 86% in 2024, and 87% in 2025, and, historically, according to the district’s complaint, all prior IGAs have ranged from 79% to 87%. The most recent IGA expired at the end of June. And in proposals, districts sought a 90% passthrough rate, while EVIT sought to decrease funding each fiscal year, starting with a 4% cut to 83% in the first year. In the second year, EVIT would reduce funding again to 78%, though with the offer for an additional 1% if 75% of EVIT satellite programs have persistence rates of at least 30% and another 1% if 100% of instructors satisfy a metric set out in the Industry Related Educational Effectiveness quality indicator. The percentage would drop an additional 3% to 75% in the next fiscal year, though again with increased funding contingent on specific metrics. In the third year, districts could receive an additional 2% by reaching 32% persistence rates, another 1% if at least 70% of students enrolled in the final course of a program earn a certificate, and another 1% if instructors hit the benchmark for educational effectiveness.EVIT and the districts continued to negotiate, securing an extension of the current IGA until the end of August. Since then, however, negotiations have stalled and parties have lawyered up. The districts claimed the reduction in funding violated state law requiring a proportionate share between the two, but EVIT contended nothing in statute “requires the CTED to distribute any minimum amount of satellite ADM funding to member districts.” On Oct. 24, Patki and Andrew Pappas, attorneys for the school districts, sent a demand letter threatening legal action if EVIT did not agree to a clean extension of the past IGA through FY2026, negotiate with districts collectively on outstanding terms and agree to wrap up negotiations by December. After convening in executive session on Oct. 28, the board unanimously rejected the district’s counsel and greenlit its own counsel to defend EVIT in court. In response to the demand letter, Trish Stuhan, attorney for EVIT, claimed the existing funding structure “fails to ensure fiscal responsibility, accountability, and the high standards expected by EVIT’s students, families, and taxpayers.” And, given an expired agreement, EVIT’s counsel informed the districts they would no longer be making quarterly payments. Though Stuhan noted the EVIT governing board voted to allow districts to use money in its CTED Fund 596 account to keep satellite programs going this school year. “Although EVIT regrets that the Districts have chosen litigation over continued negotiation, EVIT is prepared to mount a vigorous defense,” Stuhan wrote. Counsel for Apache Junction, Cave Creek, Chandler, Fountain Hills, Gilbert, Higley, J.O. Combs, Tempe Union and Queen Creek school districts noted a plan to file by Oct. 29. At the time of deadline, the districts had yet to file a complaint in Maricopa County Superior Court. “EVIT does not have limitless discretion to determine how much funding generated by satellite CTE enrollment to pass on to the Districts,” attorney Andrew Pappas wrote. “To the contrary, EVIT may retain only that portion of the funding generated by satellite courses that it uses to support the satellite programs, and it must seek the Districts’ assent regarding the portion of funding it retains.” Though nine districts sued, three, Mesa Public Schools, Scottsdale Unified School District and American Leadership Academy, have agreed to the IGA.
